10-KPeriod: FY2004

COHERENT CORP. Annual Report, Year Ended Jun 30, 2004

Filed September 13, 2004For Securities:COHR

Summary

II-VI Incorporated (now Coherent Corp.) presents its fiscal year 2004 10-K, highlighting robust revenue growth and increased profitability. The company experienced an 18% rise in revenues, reaching $150.8 million, driven by strong demand across all its key segments, particularly in Infrared Optics. Net earnings saw a significant increase of 49% to $17.3 million, reflecting improved operational efficiencies, yield enhancements, and cost control measures. The company's strategic focus on high-technology materials and vertical integration continues to yield positive results. Significant investments in research and development, coupled with strategic acquisitions, position II-VI for continued growth in its diverse markets, including industrial lasers, military infrared, and advanced semiconductor materials. The company anticipates further revenue and earnings growth in fiscal year 2005, projecting revenues between $167 million and $172 million.

Key Highlights

  • 1Revenue increased by 18% to $150.8 million in fiscal year 2004, driven by strong demand across all business segments.
  • 2Net earnings surged by 49% to $17.3 million ($1.18 per diluted share) in fiscal year 2004, up from $11.6 million ($0.81 per diluted share) in fiscal year 2003.
  • 3Bookings increased by 19% to $162.8 million in fiscal year 2004, indicating strong future revenue potential, with backlog growing 20% to $69.0 million.
  • 4The Infrared Optics segment showed significant strength, with revenues up 19% and segment earnings up 18%, driven by demand in industrial laser applications and aftermarket sales.
  • 5The company made strategic acquisitions, including certain assets from Coherent Inc. for UV filters and a 75% interest in II-VI LOT Suisse S.a.r.l. for infrared optics distribution.
  • 6Investments in research and development totaled $12.1 million in fiscal year 2004, focusing on Silicon Carbide substrates, UV filters, and Cadmium Zinc Telluride materials.
  • 7The company anticipates continued market strengthening in fiscal year 2005, projecting revenues between $167 million and $172 million and diluted EPS between $1.35 and $1.43.

Frequently Asked Questions

Revenue growth in fiscal year 2004 was primarily driven by strong worldwide demand across all business segments, particularly the Infrared Optics segment, which saw increased shipments to both Original Equipment Manufacturers (OEMs) and aftermarket customers. The growth in infrared optics was also fueled by demand for higher-powered CO2 lasers and increased industrial material processing.

Profitability significantly improved in fiscal year 2004 due to a combination of factors including an 18% increase in revenues, operational improvements across all segments leading to higher gross margins, production efficiencies, yield improvements, and effective cost control programs. The Infrared Optics segment and the eV PRODUCTS division were key contributors to this earnings improvement.

II-VI Incorporated operates in five primary markets: Infrared Optics, Near-Infrared Optics, Military Infrared Optics, Compound Semiconductor Group (including solid-state radiation sensors and silicon carbide substrates), and lasers/laser gain materials. The company's strategy involves continued investment to gain market share, enhancing its reputation for quality and customer service, pursuing strategic acquisitions and alliances, focusing on military infrared systems programs, extending technology leadership in sensor fields, and leveraging its materials growth expertise for silicon carbide.

The company anticipates continued strengthening of its addressable markets and projects revenues for fiscal year 2005 to range between $167 million and $172 million, with diluted earnings per share projected to be between $1.35 and $1.43.