SANTA CLARA, Calif., Aug. 4 /PRNewswire-FirstCall/ -- Coherent, Inc. (Nasdaq: COHR) today announced financial results for its third fiscal quarter ended July 4, 2009, posting net sales of $98.5 million and a net loss, on a U.S. generally accepted accounting principles (GAAP) basis, of $7.0 million ($0.29 per share). These results compare to net sales of $157.0 million and net income of $8.4 million, or $0.35 per diluted share, for the third quarter of fiscal 2008.
Non-GAAP net loss for the third quarter of fiscal 2009 was $2.2 million or $0.09 per share after excluding after tax stock-related compensation expense of $1.4 million ($0.06 per share), restructuring expense of $3.4 million, net of tax ($0.14 per share) and an after tax charge of $0.1 million related to litigation resulting from our internal stock option investigation ($0.00 per share). Net income for the third quarter of fiscal 2008 included after tax stock-related compensation expense of $2.0 million ($0.08 per diluted share), restructuring expense of $1.4 million, net of tax ($0.06 per diluted share) and an after tax charge of $0.9 million related to litigation resulting from our internal stock option investigation ($0.04 per diluted share). Excluding these charges, non-GAAP net income for the third quarter of fiscal 2008 was $12.7 million or $0.53 per diluted share.
In comparison, net sales for the second quarter of fiscal 2009 were $105.4 million and net loss, on a GAAP basis, was $9.1 million ($0.38 per share). Non-GAAP net income for the second quarter of fiscal 2009 was $0.3 million or $0.01 per diluted share after excluding after tax stock-related compensation expense of $2.0 million ($0.08 per share), restructuring expense of $4.5 million, net of tax ($0.18 per share), an after tax charge of $0.4 million related to litigation resulting from our internal stock option investigation ($0.01 per share) and a non-cash tax expense resulting from a recently enacted change in state tax law of $2.7 million ($0.11 per share).
Orders received during the three months ended July 4, 2009 of $88.6 million decreased 40.5% from the same prior year period and decreased by 5.5% compared to orders received in the immediately preceding quarter. The book-to-bill ratio was 0.90, resulting in backlog of $137.6 million at July 4, 2009 compared to a backlog of $145.9 million at April 4, 2009 and a backlog of $188.6 million at June 28, 2008.
As of July 4, 2009, year-to-date sales were $328.3 million and a net loss on a GAAP basis of $30.8 million ($1.27 per share), as compared to the prior year period sales of $457.3 million and a net income of $19.3 million ($0.66 per diluted share). Orders received for the nine month period ended July 4, 2009 were $285.8 million, compared to $452.5 million in orders received during the same period a year ago.
"In what has been a difficult macroeconomic environment, Coherent satisfied several key operational objectives for the third quarter, including quarterly revenues at the high-end of guidance, good cash generation, and the completion of another major component of our footprint consolidation by exiting the Munich facility. We also executed against our market and product roadmap by introducing a suite of laser solutions targeted at the high-power materials processing market and extensions to our OPS platform for the instrumentation and research markets. These products will allow us to access new markets and strengthen our position in existing markets," said John Ambroseo, Coherent's President and CEO.
"We anticipate that total orders will begin their recovery in the current fiscal quarter, led by microelectronics systems and service, and continue through fiscal 2010. As these orders convert to revenue, we can begin to realize the benefits from our footprint consolidation projects that have thus far been masked by the pullback in revenue," he concluded.
Summarized statement of operations information is as follows (unaudited,
in thousands except per share data):
Three Months Ended Nine Months Ended
------------------ -----------------
July 4, April 4, June 28, July 4, June 28,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Net sales $98,479 $105,422 $157,024 $328,289 $457,262
Cost of sales (A)(B)(E) 64,865 65,815 87,765 204,679 260,385
------ ------ ------ ------- -------
Gross profit 33,614 39,607 69,259 123,610 196,877
Operating expenses:
Research &
development (A)(B)(E) 15,529 15,610 19,076 45,917 56,823
Selling,
general &
administrative (A)(B)
(C)(E) 29,223 27,962 39,480 80,813 115,682
Impairment of
goodwill(D) - - - 19,286 -
Intangibles
amortization 1,907 1,894 2,165 5,744 6,600
----- ----- ----- ----- -----
Total operating
expenses 46,659 45,466 60,721 151,760 179,105
------ ------ ------ ------- -------
Income (loss) from
operations (13,045) (5,859) 8,538 (28,150) 17,772
Other income
(expense), net(E)
3,329 (1,600) 2,779 (2,501) 12,923
----- ------ ----- ------ ------
Income (loss) before
income taxes (9,716) (7,459) 11,317 (30,651) 30,695
Provision (benefit) for
income taxes(F) (2,701) 1,671 2,915 173 11,439
------ ----- ----- --- ------
Net income (loss) $(7,015) $(9,130) 8,402 $(30,824) $19,256
======= ======= ===== ======== =======
Net income (loss) Per
share:
Basic $(0.29) $(0.38) $0.36 $(1.27) $0.67
====== ====== ===== ====== =====
Diluted $(0.29) $(0.38) $0.35 $(1.27) $0.66
====== ====== ===== ====== =====
Shares used in
computation:
Basic 24,331 24,258 23,514 24,245 28,775
====== ====== ====== ====== ======
Diluted 24,331 24,258 24,110 24,245 29,314
====== ====== ====== ====== ======
(A) Stock-related compensation expense included in operating results is
summarized below:
Stock-related compensation
expense Three Months Ended Nine Months Ended
------------------ -----------------
July 4, April 4, June 28, July 4, June 28,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Cost of sales $200 $177 $484 $660 $1,629
Research & development 249 239 561 683 1,688
Selling, general &
administrative 1,039 2,009 2,275 4,260 7,657
----- ----- ----- ----- -----
Impact on income (loss)
from operations $1,488 $2,425 $3,320 $5,603 $10,974
------ ------ ------ ------ -------
For the quarters ended July 4, 2009, April 4, 2009 and June 28, 2008, the impact on net income (loss), net of tax was $1,368 ($0.06 per share), $1,972 ($0.08 per share) and $2,031 ($0.08 per diluted share), respectively. For the nine months ended July 4, 2009 and June 28, 2008, the impact on net income (loss), net of tax was $4,493 ($0.19 per share) and $7,698 ($0.26 per diluted share), respectively.
(B)Restructuring costs included in operating results are summarized below:
Restructuring costs Three Months Ended Nine Months Ended
------------------ -----------------
July 4, April 4, June 28, July 4, June 28,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Cost of sales $2,621 $3,153 $1,328 $8,796 $1,328
Research & development 799 824 273 2,089 273
Selling, general &
administrative 1,469 1,023 601 3,110 601
----- ----- --- ----- ---
Impact on income
(loss) from
operations $4,889 $5,000 $2,202 $13,995 $2,202
------ ------ ------ ------- ------
For the quarters ended July 4, 2009, April 4, 2009 and June 28, 2008, the impact on net income (loss), net of tax was $3,354 ($0.14 per share), $4,463 ($0.18 per share) and $1,374 ($0.06 per diluted share), respectively. For the nine months ended July 4, 2009 and June 28, 2008, the impact on net income (loss), net of tax was $10,429 ($0.43 per share) and $1,374 ($0.05 per diluted share), respectively.
(C) The quarter ended July 4, 2009 includes $108 ($74 net of tax ($0.00 per share)) of costs related to litigation resulting from our internal stock option investigation. The quarter ended April 4, 2009 includes $398 ($356 net of tax ($0.01 per share)) of costs related to litigation resulting from our internal stock option investigation. The quarter ended June 28, 2008 includes $1,533 ($935 net of tax ($0.04 per diluted share)) of costs related to litigation resulting from our internal stock option investigation. The nine months ended July 4, 2009 includes $948 ($699 net of tax ($0.03 per share)) of costs related to litigation resulting from our internal stock option investigation. The nine months ended June 28, 2008 includes $8,787 ($5,313 net of tax ($0.18 per diluted share)) of costs related to our restatement of financial statements and litigation resulting from our internal stock option investigation.
(D) The nine months ended July 4, 2009 include a $19,286 ($0.80 per share) non-cash charge for the impairment of all of the goodwill of our Commercial Lasers and Components segment.
(E) Changes in deferred compensation plan liabilities are included in cost of sales and operating expenses while gains and losses on deferred compensation plan assets are included in other income (expense) net. Deferred compensation expense (benefit) included in operating results is summarized below:
Deferred compensation
expense (benefit) Three Months Ended Nine Months Ended
------------------ -----------------
July 4, April 4, June 28, July 4, June 28,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Cost of sales $87 $(54) $35 $(141) $37
Research &
development 309 (96) 161 (775) 130
Selling, general &
administrative 2,431 (1,001) 1,035 (4,354) 392
----- ------- ----- ------ ---
Impact on income
(loss) from
operations $2,827 $(1,151) $1,231 $(5,270) $559
------ ------- ------ ------- ----
For the quarters ended July 4, 2009, April 4, 2009 and June 28, 2008, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was income of $2,259, expense of $1,222 and income of $773, respectively. For the nine months ended July 4, 2009 and June 28, 2008, the impact on other income (expense) net was expense of $5,761 and income of $596, respectively.
(F) The nine months ended July 4, 2009 and the quarter ended April 4, 2009 include a tax charge of $2,666 ($0.11 per share) resulting from a recently enacted change in state tax law. The nine months ended June 28, 2008 include a tax charge of $1,394 ($0.05 per diluted share) in connection with a dividend from one of our European subsidiaries.
Summarized balance sheet information is as follows (unaudited, in
thousands):
July 4, Sept. 27,
2009 2008
---- ----
ASSETS
------
Current assets:
Cash, cash equivalents and short-term investments $221,888 $218,094
Restricted cash -- 2,645
Accounts receivable, net 75,120 96,611
Inventories 109,039 120,519
Prepaid expenses and other assets 78,231 71,914
------ ------
Total current assets 484,278 509,783
Property and equipment, net 99,418 100,996
Other assets 175,451 195,604
------- -------
Total assets $759,147 $806,383
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term obligations $8 $9
Accounts payable 18,226 26,333
Other current liabilities 82,244 86,985
------ ------
Total current liabilities 100,478 113,327
Other long-term liabilities 88,231 94,621
Total stockholders' equity 570,438 598,435
------- -------
Total liabilities and stockholders' equity $759,147 $806,383
======== ========
Reconciliation of GAAP to Non-GAAP net income (unaudited, in thousands,
net of tax):
Three Months Ended Nine Months Ended
------------------ -----------------
July 4, April 4, June 28, July 4, June 28,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
GAAP net income (loss) $(7,015) $(9,130) $8,402 $(30,824) $19,256
Stock option
investigation and
related restatement of
financial statements,
and litigation
expenses 74 356 935 699 5,313
Stock-related
compensation expense 1,368 1,972 2,031 4,493 7,698
Impairment of goodwill -- -- -- 19,286 --
Restructuring costs 3,354 4,463 1,374 10,429 1,374
One-time tax expense -- 2,666 -- 2,666 1,394
--- ----- --- ----- -----
Non-GAAP net income
(loss) $(2,219) $327 $12,742 $6,749 $35,035
======== ==== ======= ====== =======
Non-GAAP net income per
share (loss) $(0.09) $0.01 $0.53 $0.28 $1.20
====== ===== ===== ===== =====
The Company's conference call scheduled for 1:30 p.m. PT today will include discussions relative to the third quarter results and some comments regarding forward looking guidance on future operating performance. Readers are encouraged to refer to the risk disclosures described in the Company's reports on Forms 10-K, 10-Q and 8-K, as applicable and as filed from time-to-time by the Company.
Forward-Looking Statements
This press release contains forward-looking statements, as defined under the Federal securities laws. These forward-looking statements include the statements in this press release that relate to whether and the timing of when new products will allow Coherent to access new markets and strengthen its position in existing markets, the timing and impact of a recovery for total orders and the components thereof, including microelectronics systems and service and the timing and impact to Coherent of a realization of benefits from its footprint consolidation projects. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Factors that could cause actual results to differ materially include risks and uncertainties, including, but not limited to, risks associated with quarterly and annual fluctuations in our net sales and operating results, our exposure to risks associated with worldwide economic slowdowns, our ability to increase our sales volumes and decrease our costs, the impact that our operations and potential acquisitions will have on interest, taxes, depreciation and amortization measurements, changes to the Company's tax rate as a result of government action, customer acceptance and adoption of our new product offerings, and other risks identified in the Company's SEC filings. Readers are encouraged to refer to the risk disclosures described in the Company's reports on Forms 10-K, 10-Q and 8-K, as applicable and as filed from time-to-time by the Company. Actual results, events and performance may differ materially from those presented herein. 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.
Founded in 1966, Coherent, Inc. is a world leader in providing photonics based solutions to the commercial and scientific research markets and part of the Russell 2000. 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 athttp://www.coherent.com/ for product and financial updates.
