10-QPeriod: Q3 FY2003

COHERENT CORP. Quarterly Report for Q3 Ended Mar 31, 2003

Filed May 14, 2003For Securities:COHR

Summary

II-VI Incorporated reported a significant increase in both revenue and net earnings for the third quarter of fiscal year 2003, compared to the same period in the prior year. Revenues grew by 18% to $32.4 million, while net earnings surged by over 150% to $3.0 million, translating to earnings per share of $0.21. This performance was driven by strong demand in the infrared optics market, increased shipments to international customers, and successful operational synergies. The company also saw a substantial increase in bookings, particularly in the infrared optics segment, signaling continued positive momentum. Management expressed confidence in their ability to fund working capital needs, capital expenditures, and debt payments through internally generated funds, cash reserves, and available borrowing capacity.

Key Highlights

  • 1Revenue for the third quarter of fiscal 2003 increased by 18% to $32.4 million, up from $27.4 million in the prior year's comparable quarter.
  • 2Net earnings more than doubled, reaching $3.0 million for the third quarter of fiscal 2003, compared to $1.2 million in the same period last year.
  • 3Earnings per diluted share rose to $0.21 for the third quarter of fiscal 2003, a significant improvement from $0.08 in the prior year.
  • 4Bookings increased by 2% for the third quarter to $37.1 million, driven by stronger demand in the infrared optics market.
  • 5The Infrared Optics segment showed robust growth with a 31% increase in revenue and an 87% increase in income from operations year-over-year for the quarter.
  • 6The company's cash position improved, with cash and cash equivalents standing at $13.2 million at March 31, 2003.
  • 7Gross profit margin improved significantly to 41% in the third quarter of fiscal 2003, up from 31% in the prior year's quarter, due to increased sales volume and operational efficiencies.

Frequently Asked Questions

The improved performance was primarily driven by strong demand in the infrared optics market, leading to increased revenues and bookings. Operational synergies, cost controls, and the integration of the II-VI/L.O.T. distribution subsidiary in Germany also contributed to higher gross margins and overall profitability.

The Infrared Optics segment experienced significant growth in both bookings and revenue. The Near-Infrared Optics segment saw improved income from operations despite relatively flat revenues. The Military Infrared Optics segment faced a decline in bookings and revenue, with a loss from operations for the quarter. The 'Other' category also reported an operating loss, although it decreased compared to the prior year.

Management believes that internally generated funds, existing cash reserves, and available borrowing capacity are sufficient to meet its working capital needs, capital expenditures, and scheduled debt payments for fiscal year 2003. Cash and cash equivalents stood at $13.2 million as of March 31, 2003.

During the quarter ended September 30, 2002 (reported in previous filings but impacting current results), the company acquired a 75% controlling interest in II-VI/L.O.T. GmbH, a European distributor, for approximately $2.8 million. This acquisition is included in the Infrared Optics segment and is contributing to revenue growth.