Exhibit 99.1
@coherent | | PRESS RELEASE |
Editorial Contact: | | For Release: |
Leen Simonet | | IMMEDIATE |
(408) 764-4161 | | April 27, 2004 |
| | No. 875 |
| | | |
Coherent, Inc. Second Quarter Results Include Improved Gross Margin and Higher Orders
Coherent, Inc. (Santa Clara, CA) (NASDAQ:COHR) today announced financial results for its second fiscal quarter ended April 3, 2004, posting sales of $125.8 million and income from continuing operations of $2.9 million ($0.09 per diluted share). Second quarter 2004 earnings include a gain of $0.2 million ($0.01 per diluted share) from discontinued operations, resulting in net income of $3.1 million ($0.10 per diluted share).
Orders received during the quarter ended April 3, 2004 grew substantially to $137.4 million, representing a 33% increase over the prior year quarter and an 8% increase to orders received in the immediately preceding quarter. Backlog of $158.1 million at April 3, 2004 compared to a backlog of $146.6 million at December 27, 2003.
Sales and net income from continuing operations for the corresponding prior year quarter were $103.5 million and $1.9 million ($0.07 per diluted share), respectively. In comparison, the immediately preceding quarter’s results were $108.0 million in sales and a net loss of $0.3 million ($0.01 per share).
John Ambroseo, Coherent’s President and Chief Executive Officer commented, “The improvement in gross margin from 38.4% in the first quarter to 41.0% in the second quarter, is encouraging as we continue to benefit from higher sales volumes and a favorable product mix. Additionally, I’m especially pleased to report the rate of new orders continued to expand in the second fiscal quarter, given the strong bookings delivered in the first quarter.”
Year-to-date sales of $233.8 million and net income of $2.8 million ($0.09 per diluted share) compared to the prior year period sales of $205.5 million and a net loss of $18.6 million ($0.64 per share). Orders received for the six month period ended April 3, 2004 were $264.2 million, representing a 34% increase over orders received in the same period last year.
Electro-Optics segment sales of $103.9 million for the three months ended April 3, 2004 were 31% higher than sales during the comparable prior year period and 15% higher than the three months ended December 27, 2003. Incoming orders of $109.1 million represent a 30% improvement over the second fiscal quarter of 2003, an increase of 2% from orders received in the immediately preceding quarter, and another all-time high for the segment. Sales and incoming orders for the six months ended April 3, 2004 were $194.6 million and $215.8 million, 24% and 32% higher, respectively, than during the same period a year ago.
Lambda Physik segment sales of $21.9 million for the three months ended April 3, 2004 represent a decrease of 10% from the corresponding prior year period, and a 26% increase from the immediately preceding quarter. Incoming orders of $28.3 million for the second quarter of fiscal 2004 were 47% higher than the second fiscal quarter of 2003, and represent a 40% improvement in orders from the immediately preceding first fiscal quarter of 2004. Sales and incoming orders for the six months ended April 3, 2004 were $39.2 million and $48.4 million, respectively, and were 19% lower and 44% higher than the same period last year.
Ambroseo continued, “On May 5, 2004, the stockholders of Lambda Physik AG will approve the squeeze out resolution, and in accordance with the German Stock Corporation Act we will take the steps necessary to acquire 100% ownership interest. At that time we can fully integrate Lambda Physik into the Coherent organization and begin to realize the synergies from the combined organizations.”
Summarized statement of operations financial information is as follows (unaudited, in thousands except per share data):
| | Three Months Ended | | Six Months Ended | |
| | Apr. 3,
2004 (A) | | Dec. 27,
2003 | | Mar. 29,
2003 | | Apr. 3,
2004 (A) | | Mar. 29,
2003 | |
| | | | | | | | | | | |
Net sales | | $ | 125,808 | | $ | 107,951 | | $ | 103,512 | | $ | 233,759 | | $ | 205,542 | |
Cost of sales (B) | | 74,235 | | 66,517 | | 62,521 | | 140,752 | | 124,108 | |
Gross profit | | 51,573 | | 41,434 | | 40,991 | | 93,007 | | 81,434 | |
Operating expenses: | | | | | | | | | | | |
Research & development | | 15,538 | | 14,921 | | 12,261 | | 30,459 | | 23,933 | |
Selling, general & administrative | | 29,132 | | 25,958 | | 25,923 | | 55,090 | | 49,587 | |
Restructuring, impairment and other charges (C) | | — | | 237 | | 405 | | 237 | | 20,464 | |
Goodwill impairment (D) | | — | | — | | 2,358 | | — | | 2,358 | |
Intangibles amortization | | 1,770 | | 1,929 | | 947 | | 3,699 | | 1,782 | |
Total operating expenses | | 46,440 | | 43,045 | | 41,894 | | 89,485 | | 98,124 | |
Income (loss) from operations | | 5,133 | | (1,611 | ) | (903 | ) | 3,522 | | (16,690 | ) |
Other income (expense), net (E) (F) | | 174 | | 418 | | 4,795 | | 592 | | (4,974 | ) |
Income (loss) from continuing operations before income taxes and minority interest | | 5,307 | | (1,193 | ) | 3,892 | | 4,114 | | (21,664 | ) |
Provision (benefit) for income taxes | | 2,567 | | (554 | ) | 2,033 | | 2,013 | | (3,317 | ) |
Income (loss) from continuing operations before minority interest | | 2,740 | | (639 | ) | 1,859 | | 2,101 | | (18,347 | ) |
Minority interest | | 145 | | 333 | | 68 | | 478 | | (209 | ) |
Income (loss) from continuing operations | | 2,885 | | (306 | ) | 1,927 | | 2,579 | | (18,556 | ) |
Income from discontinued operations | | 218 | | — | | — | | 218 | | — | |
Net income (loss) | | $ | 3,103 | | $ | (306 | ) | $ | 1,927 | | $ | 2,797 | | $ | (18,556 | ) |
| | | | | | | | | | | |
Net income (loss) per diluted share: | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | 0.09 | | $ | (0.01 | ) | $ | 0.07 | | $ | 0.08 | | $ | (0.64 | ) |
Income from discontinued operations, net of income taxes | | 0.01 | | — | | — | | 0.01 | | — | |
Net income (loss) | | $ | 0.10 | | $ | (0.01 | ) | $ | 0.07 | | $ | 0.09 | | $ | (0.64 | ) |
| | | | | | | | | | | |
Shares used in computation: | | | | | | | | | | | |
Basic | | 30,121 | | 30,001 | | 29,265 | | 30,061 | | 29,200 | |
Diluted | | 30,551 | | 30,001 | | 29,503 | | 30,442 | | 29,200 | |
(A) | The three months and six months ended April 3, 2004 represent a 14-week and 27-week period, respectively. |
| |
(B) | Cost of sales in the quarter ended March 29, 2003 included an additional inventory reserve requirement of $2,743 ($1,220 after-tax and net of minority interest ($0.04 per diluted share)) due to lower forecasted outlook in Lambda Physik’s lithography business. |
| |
(C) | The quarter ended December 28, 2002 includes a $13,378 ($8,288 after-tax ($0.28 per diluted share)) charge related to the termination of activities in the Telecom Actives Group, a $3,060 ($2,672 after-tax ($0.09 per diluted share)) charge related to our exit from the passive telecom market and a $3,723 ($2,306 after-tax ($0.08 per diluted share)) allowance against a note receivable. |
| |
(D) | Goodwill impairment charges in the quarter ended March 29, 2003 were $2,358 ($1,769 net of minority interest ($0.06 per diluted share)). |
| |
(E) | The quarter ended December 28, 2002 includes an impairment charge on the Lumenis shares held by Coherent of $10,212 ($10,212 after-tax ($0.35 per diluted share)). |
| |
(F) | The March 29, 2003 quarter end includes a $4,400 ($1,953 after-tax and net of minority interest ($0.07 per diluted share)) settlement fee related to the cancellation of a customer contract received by Lambda Physik. |
Summarized balance sheet information is as follows (unaudited, in thousands):
| | Apr. 3,
2004 | | Sept. 27,
2003 (A) | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash, cash equivalents and short-term investments | | $ | 141,578 | | $ | 134,671 | |
Restricted cash, cash equivalents and short-term investments (B) | | 15,282 | | 15,284 | |
Short-term equity investments | | — | | 277 | |
Accounts receivable, net | | 91,775 | | 73,118 | |
Inventories | | 106,353 | | 100,147 | |
Prepaid expenses and other assets | | 56,657 | | 75,485 | |
Total current assets | | 411,645 | | 398,982 | |
Property and equipment, net | | 167,443 | | 146,399 | |
Restricted cash, cash equivalents and short-term investments (B) | | 38,811 | | 38,660 | |
Other assets | | 121,125 | | 125,324 | |
Total assets | | $ | 739,024 | | $ | 709,365 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Current portion of long-term obligations | | $ | 14,351 | | $ | 14,140 | |
Accounts payable | | 21,311 | | 17,632 | |
Other current liabilities | | 66,285 | | 69,341 | |
Total current liabilities | | 101,947 | | 101,113 | |
Long-term obligations | | 27,643 | | 27,911 | |
Other long-term liabilities | | 43,136 | | 36,483 | |
Total stockholders’ equity | | 566,298 | | 543,858 | |
Total liabilities and stockholders’ equity | | $ | 739,024 | | $ | 709,365 | |
(A) | Derived from audited financial statements for the year ended September 27, 2003. |
| |
(B) | Represents cash, cash equivalents and short-term investments at April 3, 2004 restricted under the Star Medical notes payable arrangement ($45,542), for the purchase of the remaining outstanding shares of Lambda Physik AG ($8,176) and other ($375). |
Reconciliation of GAAP to Non-GAAP summarized statement of operations (unaudited, in thousands, after-tax and net of minority interest):
| | Three Months Ended | | Six Months Ended | |
| | Apr. 3,
2004 | | Dec. 27,
2003 | | Mar. 2
2003 | | Apr. 3,
2004 | | Mar. 29
2003 | |
GAAP net income (loss) | | $ | 3,103 | | $ | (306 | ) | $ | 1,927 | | $ | 2,797 | | $ | (18,556 | ) |
Gain on contract settlements (1) | | — | | — | | (1,953 | ) | — | | (1,953 | ) |
Goodwill impairment (2) | | — | | — | | 1,769 | | — | | 1,769 | |
Restructuring, impairment and other charges | | — | | 142 | | — | | 142 | | 13,266 | |
Write-down of Lumenis investment | | — | | — | | — | | — | | 10,212 | |
Discontinued operations | | (218 | ) | — | | — | | (218 | ) | — | |
Non-GAAP net income (loss) | | $ | 2,885 | | $ | (164 | ) | $ | 1,743 | | $ | 2,721 | | $ | 4,738 | |
| | | | | | | | | | | |
Non-GAAP net income (loss) per share | | $ | 0.09 | | $ | (0.01 | ) | $ | 0.06 | | $ | 0.09 | | $ | 0.16 | |
(1) | Net of minority interest of ($1,015). |
(2) | Net of minority interest of $589. |
The Company’s conference call scheduled for 1:30 p.m. PDT today will include discussions relative to the current quarter results and some comments regarding forward looking guidance on future operating performance.
The statements in this press release that relate to future plans, events or performance, including statements such as the ability to realize synergies from the combined organizations are forward-looking statements. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated to currency adjustments, contract cancellations, manufacturing risks, competitive factors, and uncertainties pertaining to customer orders, demand for products and services, and development of markets for the Company’s products and services and other risks identified in the Company’s SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update these forward-looking statements as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
The Company may provide non-GAAP financial measures (as defined by the SEC in Regulation G) in our earnings conference call and in any other company presentations during the quarter. Non-GAAP financial measures are intended to supplement the user’s overall understanding of the Company’s current financial performance and its future prospects. Any non-GAAP financial measures are not intended to replace the Company’s GAAP results. The Company’s intention is to include the most directly comparable GAAP financial measures and a reconciliation of the differences between each non-GAAP financial measure used and the most directly comparable GAAP financial measure.
Readers are encouraged to refer to the risk disclosures described in the Company’s reports on Forms 10-K, 10-Q and 8K, as applicable.
Founded in 1966, Coherent, Inc. is a Standard & Poor’s SmallCap 600 company and a world leader in providing photonics based solutions to the commercial and scientific research markets. Please direct any questions to Leen Simonet, Chief Financial Officer at 408-764-4161. For more information about Coherent, visit the Company’s Web site at http://www.coherent.com/ for product and financial updates.
5100 Patrick Henry Dr. . P. O. Box 54980, Santa Clara, California 95056–0980 . Telephone (408) 764-4000
