PR Newswire | Feb 10, 2021 04:06PM EST

02/10 15:05 CST

Coherent, Inc. Reports First Fiscal Quarter Results SANTA CLARA, Calif., Feb. 10, 2021

SANTA CLARA, Calif., Feb. 10, 2021 /PRNewswire/ -- 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 DETAILSFor 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 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, inthousands, 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

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.

Changes in deferred compensation plan liabilities are included in cost of sales and operating expenses while gains and(B) 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 wasincome 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, netof 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.



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(D) 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.

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

The fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019 included a non-recurring income tax charge of $8,614 ($0.35 per diluted share), $2,817 ($0.12 per diluted share) and $149 ($0.01 per diluted share),(F) 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.

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

ASSETS Jan. 2, 2021 Oct. 3, 2020

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, (otherthan 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.comfor product and financial updates.

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SOURCE Coherent, Inc.