8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 10, 2021

COHERENT, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33962	94-1622541
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification Number)

5100 Patrick Henry Drive

Santa Clara, CA 95054

(Address of principal executive offices, including zip code)

(408) 764-4000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	COHR	The NASDAQ Stock Market LLC
		Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02.        Results of Operations and Financial Condition

On February 10, 2021, Coherent, Inc. (“Coherent”) issued a press release regarding its financial results for the fiscal quarter ended January 2, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.

NON-GAAP FINANCIAL MEASURES: Coherent utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing its overall business performance, for making operating decisions and for forecasting and planning future periods. Coherent considers the use of non-GAAP financial measures helpful in assessing its current financial performance, ongoing operations and prospects for the future. Ongoing operations are the ongoing revenue and expenses of the business, excluding certain costs and expenses that Coherent does not anticipate to recur on a quarterly basis or which do not reflect ongoing operations. While Coherent uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Coherent does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, Coherent believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance. In assessing the overall health of its business, Coherent excluded items in the following general categories described below:

Net income and net income per diluted share.  Coherent has excluded certain recurring and non-recurring items in order to enhance investors’ understanding of its ongoing operations and to compare these results across multiple fiscal periods, particularly where a one-time event may have an impact in one fiscal quarter and not another.

Each of the non-GAAP financial measures described above should not be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP. Further, investors are cautioned that there are inherent limitations associated with the use of each of these non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and many of the adjustments to the GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in Coherent’s financial results for the foreseeable future. In addition, other companies, including other companies in Coherent’s industry, may calculate non-GAAP financial measures differently than Coherent does, limiting their usefulness as a comparative tool.

ITEM 9.01.    Financial Statements and Exhibits

(d)    Exhibits

Exhibit No.	Description
99.1	Press Release Dated February 10, 2021
104.0	Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	COHERENT, INC.
Date: February 10, 2021
	By: /s/ Kevin Palatnik
	Kevin Palatnik
	Executive Vice President and
	Chief Financial Officer

EX-99.1

Exhibit 99.1

February 10, 2021

Press Release No. 1488

For Immediate Release:

Coherent, Inc. Reports First Fiscal Quarter Results

SANTA CLARA, CA, February 10, 2021 -- Coherent, Inc. (NASDAQ, COHR), one of the world’s leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of scientific, commercial and industrial applications, today announced financial results for its first fiscal quarter ended January 2, 2021.

FINANCIAL HIGHLIGHTS

	Three Months Ended
	Jan. 2, 2021		Oct. 3, 2020		Dec. 28, 2019
GAAP Results
(in millions, except per share data)
Net sales	$	326.1	$	316.8	$	320.8
Net income	$	0.1	$	7.7	$	5.8
Diluted EPS	$	0.01	$	0.32	$	0.24
Non-GAAP Results
(in millions, except per share data)
Net income	$	26.7	$	24.5	$	20.7
Diluted EPS	$	1.09	$	1.01	$	0.86

FIRST FISCAL QUARTER DETAILS

For the first quarter of fiscal 2021, Coherent announced net sales of $326.1 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $0.1 million, or $0.01 per diluted share.

These results compare to net sales of $320.8 million and net income of $5.8 million, or $0.24 per diluted share, for the first quarter of fiscal 2020 and net sales of $316.8 million and net income of $7.7 million, or $0.32 per diluted share, for the fourth quarter of fiscal 2020.

Non-GAAP net income for the first quarter of fiscal 2021 was $26.7 million, or $1.09 per diluted share. Non-GAAP net income for the first quarter of fiscal 2020 was $20.7 million, or $0.86 per diluted share. Non-GAAP net income for the fourth quarter of fiscal 2020 was $24.5 million, or $1.01 per diluted share. Reconciliations of GAAP to non-GAAP financial measures for the

Exhibit 99.1

three months ended January 2, 2021, October 3, 2020 and December 28, 2019 appear in the financial statements portion of this release under the heading “Reconciliation of GAAP to Non-GAAP net income.”

“We started well into our fiscal 2021 with strong results for the first quarter. We grew bookings and revenue sequentially as well as year-over-year, with our book to bill greater than one across all our end markets. Microelectronics orders were strong in the quarter within our display, semicap and API businesses, along with encouraging Aerospace & Defense orders where our U.S. manufacturing base and product portfolio are highly valued,” said Andy Mattes, Coherent President and CEO. “Our continued focus on operational excellence yielded improved margins and non-GAAP EPS and further improved our already strong balance sheet.”

Summarized statement of operations information is as follows (unaudited, in thousands, except per share data):

	Three Months Ended
	Jan. 2, 2021		Oct. 3, 2020		Dec. 28, 2019
Net sales	$	326,053	$	316,751	$	320,771
Cost of sales(A)(B)(C)(D)(E)	206,057		204,518		211,518
Gross profit	119,996		112,233		109,253
Operating expenses:
Research & development(A)(B)(D)	28,221		28,821		28,680
Selling, general & administrative(A)(B)(D)(E)	74,228		73,081		68,551
Amortization of intangible assets(C)	597		616		1,432
Total operating expenses	103,046		102,518		98,663
Income from operations	16,950		9,715		10,590
Other income (expense), net(B)	(2,289)		436		(3,034)
Income before income taxes	14,661		10,151		7,556
Provision for income taxes(F)	14,517		2,462		1,763
Net income	$	144	$	7,689	$	5,793
Net income per share:
Basic	$	0.01	$	0.32	$	0.24
Diluted	$	0.01	$	0.32	$	0.24
Shares used in computations:
Basic	24,264		24,193		23,971
Diluted	24,455		24,360		24,160

(A)Stock-based compensation expense included in operating results is summarized below (all footnote amounts are unaudited, in thousands, except per share data):

Stock-based compensation expense	Three Months Ended
	Jan. 2, 2021		Oct. 3, 2020		Dec. 28, 2019
Cost of sales	$	2,272	$	1,884	$	1,182
Research & development	1,199		1,554		561
Selling, general & administrative	8,714		10,273		6,049
Impact on income from operations	$	12,185	$	13,711	$	7,792

Exhibit 99.1

For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact on net income, net of tax was $10,613 ($0.43 per diluted share), $11,485 ($0.47 per diluted share) and $6,936 ($0.29 per diluted share), respectively.

(B)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 included in operating results is summarized below:

Deferred compensation expense	Three Months Ended
	Jan. 2, 2021		Oct. 3, 2020		Dec. 28, 2019
Cost of sales	$	11	$	28	$	113
Research & development	295		504		243
Selling, general & administrative	1,806		3,614		1,799
Impact on income from operations	$	2,112	$	4,146	$	2,155

For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact on other income (expense), net from gains or losses on deferred compensation plan assets was income of $2,296, $4,735 and $2,292, respectively.

(C)Amortization of intangibles is included in cost of sales and operating expenses as summarized below:

Amortization of intangibles	Three Months Ended
	Jan. 2, 2021		Oct. 3, 2020		Dec. 28, 2019
Cost of sales	$	2,017	$	2,346	$	10,880
Amortization of intangible assets	597		616		1,432
Impact on income from operations	$	2,614	$	2,962	$	12,312

For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact on net income, net of tax was $2,270 ($0.09 per diluted share), $2,138 ($0.09 per diluted share), and $8,942 ($0.37 per diluted share), respectively.

(D)For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact of restructuring charges, net of a gain on the sales leaseback of a facility in the quarter ended October 3, 2020, was $5,383 ($4,473 net of tax ($0.18 per diluted share)), $129 ($226 net of tax ($0.01 per diluted share)), and $933 ($666 net of tax ($0.03 per diluted share)), respectively.

(E)For the fiscal quarter ended December 28, 2019, selling, general & administrative expense includes a legal settlement related to an asset recovery of $1,365 ($1,106 net of tax ($0.05 per diluted share)).

(F)The fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019 included a non-recurring income tax chargeof $8,614 ($0.35 per diluted share), $2,817 ($0.12 per diluted share) and $149 ($0.01 per diluted share), respectively. The fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019 included a charge of $611 ($0.03 per diluted share), a charge of $149 ($0.00 per diluted share) and a benefit of $714 ($0.03 per diluted share) of excess tax charges (benefits) for employee stock-based compensation, respectively.

Exhibit 99.1

Summarized balance sheet information is as follows (unaudited, in thousands):

	Jan. 2, 2021		Oct. 3, 2020
ASSETS
Current assets:
Cash, cash equivalents, restricted cash and short-term investments	$	544,376	$	476,369
Accounts receivable, net	226,199		220,289
Inventories	416,381		426,756
Prepaid expenses and other assets	91,814		88,250
Total current assets	1,278,770		1,211,664
Property and equipment, net	260,207		245,678
Other assets	350,659		370,154
Total assets	$	1,889,636	$	1,827,496
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	$	17,136	$	16,817
Accounts payable	62,412		60,225
Other current liabilities	217,115		191,016
Total current liabilities	296,663		268,058
Long-term liabilities	641,095		632,214
Total stockholders’ equity	951,878		927,224
Total liabilities and stockholders’ equity	$	1,889,636	$	1,827,496

Reconciliation of GAAP to non-GAAP net income (unaudited, in thousands, (other than per share data), net of tax):

	Three Months Ended
	Jan. 2, 2021		Oct. 3, 2020		Dec. 28, 2019
GAAP net income	$	144	$	7,689	$	5,793
Stock-based compensation expense	10,613		11,485		6,936
Amortization of intangible assets	2,270		2,138		8,942
Restructuring charges and other	4,473		226		666
Non-recurring tax expense	8,614		2,817		149
Tax charge (benefit) from stock-based compensation expense	611		149		(714)
Other impairment/asset charges (recoveries)	—		—		(1,106)
Non-GAAP net income	$	26,725	$	24,504	$	20,666
Non-GAAP net income per diluted share	$	1.09	$	1.01	$	0.86

Founded in 1966, Coherent, Inc. is one of the world’s leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of scientific, commercial and industrial customers. Our common stock is listed on the Nasdaq Global Select Market and is part of the Russell 1000 and Standard & Poor’s MidCap 400 Index. For more information about Coherent, visit the company's website at 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

XML

Document and Entity Information	Feb. 10, 2021
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Feb. 10, 2021
Entity Registrant Name	COHERENT, INC
Entity Incorporation, State or Country Code	DE
Entity File Number	001-33962
Entity Tax Identification Number	94-1622541
Entity Address, Address Line One	5100 Patrick Henry Drive
Entity Address, City or Town	Santa Clara
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95054
City Area Code	408
Local Phone Number	764-4000
Written Communications	false
Soliciting Material	false
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Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	COHR
Entity Emerging Growth Company	false
Entity Central Index Key	0000021510
Amendment Flag	false
The NASDAQ Stock Market LLC
Entity Information [Line Items]
Security Exchange Name	NASDAQ
NASDAQ/NGS (GLOBAL SELECT MARKET)
Entity Information [Line Items]
Security Exchange Name	NASDAQ