10-QPeriod: Q3 FY2008

COHERENT CORP. Quarterly Report for Q3 Ended Mar 31, 2008

Filed May 9, 2008For Securities:COHR

Summary

Coherent Corp. (COHR) reported a strong fiscal third quarter ending March 31, 2008, with significant year-over-year growth in revenue and net earnings. Total revenues reached $80.96 million, a 25% increase from the prior year's $64.84 million, driven by robust demand across most business segments and contributions from recent acquisitions, HIGHYAG Lasertechnologie GmbH and Pacific Rare Specialty Metals & Chemicals, Inc. (PRM). Net earnings saw a substantial 30% jump to $13.05 million, or $0.43 per diluted share, compared to $10.05 million, or $0.33 per diluted share, in the same period last year. The company also reported a significant increase in bookings, up 44% year-over-year, indicating strong future revenue potential. The balance sheet shows a healthy increase in cash and cash equivalents to $62.13 million, alongside a reduction in total debt, strengthening the company's financial position.

Key Highlights

  • 1Total revenues increased by 25% to $80.96 million for the three months ended March 31, 2008, compared to $64.84 million for the same period in 2007.
  • 2Net earnings grew by 30% to $13.05 million ($0.43 per diluted share) from $10.05 million ($0.33 per diluted share) year-over-year.
  • 3Bookings showed substantial growth, increasing by 44% to $93.74 million in the current quarter compared to $65.26 million in the prior year's quarter.
  • 4The company acquired HIGHYAG Lasertechnologie GmbH in January 2008 and Pacific Rare Specialty Metals & Chemicals, Inc. in June 2007, with both acquisitions contributing to revenue growth.
  • 5Cash and cash equivalents significantly increased to $62.13 million as of March 31, 2008, up from $32.62 million at June 30, 2007.
  • 6Total debt decreased to $4.02 million as of March 31, 2008, down from $14.99 million at June 30, 2007.
  • 7The company has decided to sell its x-ray and gamma-ray radiation division (eV PRODUCTS, Inc.), which is now reported as a discontinued operation.

Frequently Asked Questions

The primary driver of the revenue increase was strong demand across most of the company's business segments and the contribution from recent acquisitions, HIGHYAG Lasertechnologie GmbH and Pacific Rare Specialty Metals & Chemicals, Inc. (PRM). Higher volumes and improved operational performance also played a significant role.

The acquisitions of HIGHYAG and PRM contributed approximately $6.0 million to revenues in the current quarter. While these acquisitions have lower gross margins than the company's historical averages, they have contributed to overall revenue growth and segment-specific performance improvements.

Coherent Corp. has announced its intention to sell the eV PRODUCTS division. As a result, this business is now classified and reported as a discontinued operation in the financial statements for all periods presented.

The company's liquidity position is strong, with cash and cash equivalents increasing to $62.13 million as of March 31, 2008. Total debt has also decreased significantly. Management believes that cash flow from operations, existing cash reserves, and available borrowing capacity will be sufficient to fund working capital, capital expenditures, debt payments, and internal growth for fiscal years 2008 and 2009.