EX-99.1 2 a08-27691_1ex99d1.htm EX-99.1

Exhibit 99.1

 

@coherent                                                                                                                                        PRESS RELEASE

 

Editorial Contact:

 

For Release:

Leen Simonet

 

IMMEDIATE

(408) 764-4161

 

November 5, 2008

 

 

No. 1177

 

Coherent, Inc. Reports Fourth Fiscal Quarter Results

 

SANTA CLARA, CA, November 5, 2008 — Coherent, Inc. (Nasdaq: COHR) today announced financial results for its fourth fiscal quarter ended September 27, 2008, posting net sales of $142.0 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $4.1 million, or $0.17 per diluted share, compared to net sales of $158.9 million and a net loss of $1.3 million, or $(0.04) per diluted share, for the fourth quarter of fiscal 2007.

 

Net income for the fourth quarter of fiscal 2008 included an after tax charge of $0.2 million related to litigation resulting from our internal stock option investigation ($0.01 per diluted share), after tax stock-related compensation expense of $1.3 million ($0.05 per diluted share) and restructuring expense of $2.6 million, net of tax ($0.11 per diluted share). Excluding these charges, non-GAAP net income was $8.2 million or $0.34 per diluted share. Net income for the fourth quarter of fiscal 2007 included an after tax charge of $1.7 million ($0.05 per diluted share) of internal stock option investigation costs, after tax stock-related compensation expense of $0.9 million ($0.03 per diluted share), $12.6 million, net of tax, of capital loss on the sale of our Auburn facility ($0.40 per diluted share), the write-off of unamortized costs related to our previous debt issuance of $2.6 million, net of tax ($0.08 per diluted share), a capital gain of $3.6 million, net of tax, on the sale of our Condensa facility ($0.11 per diluted share) and $0.7 million of gain, net of tax, related to the sale of substantially all of the assets of CIOL  ($0.02 per diluted share). Excluding these charges and credits, non-GAAP net income for the fourth quarter of fiscal 2007 was $12.2 million or $0.39 per diluted share.

 

Net sales for the third quarter of fiscal 2008 were $157.0 million and net income, on a GAAP basis, was $8.4 million ($0.35 per diluted share).  Net income for the third quarter of fiscal 2008 included an after tax charge of $0.9 million related to litigation resulting from our internal stock option investigation ($0.04 per diluted share), after tax stock-related compensation expense of $2.0 million ($0.08 per diluted share) and restructuring expense of $1.4 million, net of tax ($0.06 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.

 

Orders received during the three months ended September 27, 2008 of $141.5 million decreased 13.6% from the same prior year period and decreased by 5.1% compared to orders received in the immediately preceding quarter.  The book-to-bill ratio was 1.0, resulting in backlog of $183.5 million at September 27, 2008 compared to a backlog of $188.6 million at June 28, 2008 and a backlog of $188.4 million at September 29, 2007.

 

For the fiscal year ended September 27, 2008, Coherent posted net sales of $599.3 million and net income of $23.4 million ($0.83 per diluted share) compared to the prior year sales of $601.2 million and net income of $16.0 million ($0.50 per diluted share).  Orders received for the fiscal year ended September 27, 2008 were $594.0 million, compared to $591.0 million in orders received for the fiscal year ended September 29, 2007.

 

“An unprecedented set of macroeconomic events led to a disappointing fourth quarter, especially within the microelectronics segment.  While there will be ample debate over the timing of a market recovery, we have taken a number of actions to help Coherent weather and emerge from the current environment with a strong product portfolio, income statement and balance sheet.  In particular, we continue to drive operational efficiency through our footprint strategy and recent workforce reductions, which are very prudent given uncertain market conditions.  We are also pursuing market share gains through the introduction of highly differentiated products, such as the Chameleon™ Vision™.  Launched in August 2008, the Vision™ delivers unrivaled performance for biological imaging in a compact, user friendly package,” said John Ambroseo, Coherent’s President and CEO.

 

At September 27, 2008, Coherent’s cash, cash equivalents and short term investments totaled $218.1 million, representing a decrease of $143.7 million compared to September 29, 2007. The decrease includes the use of

 


 

approximately $228 million for the repurchase of Coherent common stock under the previously announced tender offer ended March 19, 2008.

 

“We remain fully committed to expanding EBITDA as evidenced by our recent announcement regarding the consolidation of our Munich facility into our Göttingen site. Coupled with our planned exit from our Auburn, California facility, the annual benefits from these two footprint moves will be $8-10 million with the full run-rate savings beginning in July 2009. While these are key elements to EBITDA expansion, revenue and mix are equally important. Based upon current market conditions, it will be difficult to achieve the revenue and product mix assumptions in the original EBITDA plan. Accordingly, the shape of an economic recovery will be the ultimate arbiter of our EBITDA performance exiting fiscal 2010,” Ambroseo said.

 


 

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

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

Sept. 27,

 

June 28,

 

Sept. 29,

 

Sept. 27,

 

Sept. 29,

 

 

 

2008

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

142,000

 

$

157,024

 

$

158,920

 

$

599,262

 

$

601,153

 

Cost of sales (A) (B)

 

86,971

 

87,765

 

92,494

 

347,356

 

351,145

 

Gross profit

 

55,029

 

69,259

 

66,426

 

251,906

 

250,008

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research & development (A) (B)

 

17,464

 

19,076

 

18,047

 

74,287

 

74,590

 

In-process research and development

 

—

 

—

 

—

 

—

 

2,200

 

Selling, general & administrative (A) (B) (C)

 

30,694

 

39,480

 

43,979

 

146,376

 

153,697

 

Restructuring, impairment and other charges

 

—

 

—

 

—

 

—

 

248

 

Intangibles amortization

 

2,051

 

2,165

 

2,174

 

8,651

 

8,152

 

Total operating expenses

 

50,209

 

60,721

 

64,200

 

229,314

 

238,887

 

Income from operations

 

4,820

 

8,538

 

2,226

 

22,592

 

11,121

 

Other income, net

 

1,772

 

2,779

 

1,415

 

14,695

 

17,802

 

Income before income taxes

 

6,592

 

11,317

 

3,641

 

37,287

 

28,923

 

Provision for income taxes(D)

 

2,445

 

2,915

 

4,967

 

13,884

 

12,972

 

Net income (loss)

 

$

4,147

 

$

8,402

 

(1,326

)

$

23,403

 

$

15,951

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

$

0.36

 

$

(0.04

)

$

0.85

 

$

0.51

 

Diluted

 

$

0.17

 

$

0.35

 

$

(0.04

)

$

0.83

 

$

0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computation:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

23,696

 

23,514

 

31,417

 

27,505

 

31,398

 

Diluted

 

24,372

 

24,110

 

31,417

 

28,054

 

32,024

 

 

(A)       The quarter ended September 27, 2008 includes $1,952 ($1,308 net of tax ($0.05 per diluted share)) of stock-related compensation expense.   Pretax stock-related compensation expense is recorded in the statement lines as follows: $264 to cost of sales; $282 to research and development; and $1,406 to selling, general and administrative. The quarter ended June 28, 2008 includes $3,320 ($2,031 net of tax ($0.08 per diluted share)) of stock-related compensation expense.   Pretax stock-related compensation expense is recorded in the statement lines as follows: $484 to cost of sales; $561 to research and development; and $2,275 to selling, general and administrative. The quarter ended September 29, 2007 includes $1,090 ($938 net of tax ($0.03 per diluted share)) of stock-related compensation expense.   Pretax stock-related compensation expense is recorded in the statement lines as follows: $300 to cost of sales; $192 to research and development; and $598 to selling, general and administrative. The fiscal year ended September 27, 2008 includes $12,925 ($9,006 net of tax ($0.32 per diluted share)) of stock-related compensation expense.   Pretax stock-related compensation expense is recorded in the statement lines as follows: $1,893 to cost of sales; $1,970 to research and development; and $9,062 to selling, general and administrative.  The fiscal year ended September 29, 2007 includes $10,374 ($7,170 net of tax ($0.22 per diluted share)) of stock-related compensation expense.   Pretax stock-related compensation expense is recorded in the statement lines as follows: $1,809 to cost of sales; $1,899 to research and development; and $6,666 to selling, general and administrative.

 

(B)       The quarter ended September 27, 2008 includes $3,602 ($2,566 net of tax ($0.11 per diluted share)) of restructuring costs primarily related to the exit of our Auburn, California facility, the consolidation of our German DPSS manufacturing into one location in Germany and headcount reductions due to the evolving economic situation.  Pretax restructuring costs are recorded in the statement lines as follows: $2,662 to cost of sales; $406 to research and development; and $534 to selling, general and administrative.  The quarter ended June 28, 2008 includes $2,202 ($1,374 net of tax ($0.06 per diluted share)) of restructuring costs primarily related to the exit of our Auburn, California facility.  Pretax restructuring costs are recorded in the statement lines as follows: $1,328 to cost of sales; $273 to research and development; and $601 to selling, general and administrative.  The fiscal year ended September 27, 2008 includes $5,804 ($3,940 net of tax ($0.14 per diluted share)) of restructuring costs primarily related to the exit of our Auburn, California facility, the consolidation of

 


 

our German DPSS manufacturing into one location in Germany and headcount reductions due to the evolving economic situation.  Pretax restructuring costs are recorded in the statement lines as follows: $3,990 to cost of sales; $679 to research and development; and $1,135 to selling, general and administrative.

 

(C)       The quarter ended September 27, 2008 includes $302 ($184 net of tax ($0.01 per diluted 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 quarter ended September 29, 2007 includes $2,748 ($1,677 net of tax ($0.05 per diluted share)) of costs related to our internal stock option investigation and related litigation.  The fiscal year ended September 27, 2008 includes $9,089 ($5,496 net of tax ($0.20 per diluted share)) of costs related to our restatement of financial statements and litigation resulting from our internal stock option investigation.  The fiscal year ended September 29, 2007 includes $11,694 ($7,045 net of tax ($0.22 per diluted share)) of costs related to our internal stock option investigation.

 

(D)       During the fiscal year ended September 27, 2008, the Company incurred a tax charge of $1,394 ($0.05 per diluted share) in connection with a dividend from one of our European subsidiaries. Fiscal year ended September 29, 2007 includes a tax benefit of $2,147 ($0.07 per diluted share) due to reinstatement of the research and development tax credit.

 

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

 

 

 

Sept. 27,
2008

 

Sept. 29,
2007

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash, cash equivalents and short-term investments

 

$

218,094

 

$

361,823

 

Restricted cash(A)

 

2,645

 

2,460

 

Accounts receivable, net

 

96,611

 

102,314

 

Inventories

 

120,519

 

112,893

 

Prepaid expenses and other assets

 

71,914

 

86,088

 

Total current assets

 

509, 783

 

665,578

 

Property and equipment, net

 

100,996

 

104,305

 

Other assets

 

195,604

 

177,717

 

Total assets

 

$

806,383

 

$

947,600

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of long-term obligations

 

$

9

 

$

9

 

Accounts payable

 

26,333

 

27,849

 

Other current liabilities

 

86,985

 

100,887

 

Total current liabilities

 

113,327

 

128,745

 

Other long-term liabilities

 

94,621

 

47,869

 

Total stockholders’ equity

 

598,435

 

770,986

 

Total liabilities and stockholders’ equity

 

$

806,383

 

$

947,600

 

 

(A)       Represents cash for remaining close out costs associated with our purchase of the remaining outstanding shares of Lambda Physik AG.

 


 

Reconciliation of GAAP to Non-GAAP net income (loss) (unaudited, in thousands, net of tax):

 

 

 

Three Months Ended

 

Year Ended

 

 

 

Sept. 27,
2008

 

June 28,
2008

 

Sept. 29,
2007

 

Sept. 27,
2008

 

Sept. 29,
2007

 

GAAP net income (loss)

 

$

4,147

 

$

8,402

 

$

(1,326

)

$

23,403

 

$

15,951

 

Stock option investigation and related restatement of financial statements, and litigation expenses

 

184

 

935

 

1,677

 

5,496

 

7,045

 

Stock-related compensation expense

 

1,308

 

2,031

 

938

 

9,006

 

7,170

 

Capital gain on sale of Condensa facility

 

—

 

—

 

(3,566

)

—

 

(3,566

)

Capital loss on sale of Auburn campus

 

—

 

—

 

12,569

 

—

 

12,569

 

Write-off of unamortized capitalized deferred bond issuance costs

 

—

 

—

 

2,614

 

—

 

2,614

 

In-process research and development

 

—

 

—

 

—

 

—

 

2,200

 

Restructuring costs

 

2,566

 

1,374

 

—

 

3,940

 

—

 

Gain on sale of substantially all assets of CIOL

 

—

 

—

 

(681

)

—

 

(681

)

One-time tax expense (benefit)

 

—

 

—

 

—

 

1,394

 

(2,147

)

Non-GAAP net income

 

$

8,205

 

$

12,742

 

$

12,225

 

$

43,239

 

$

41,155

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per diluted share

 

$

0.34

 

$

0.53

 

$

0.39

 

$

1.54

 

$

1.29

 

 

The Company’s conference call scheduled for 1:30 p.m. PT today will include discussions relative to the current 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 our ability to weather and emerge from the current environment with a strong product portfolio, our ability to drive operational efficiency, our ability to introduce highly differentiated products, the amount and timing of savings from our footprint moves, and any future market share gains.   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, our ability to successfully achieve the benefits from the outsourcing of our optics manufacturing, 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 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