10-QPeriod: Q3 FY2009

COHERENT CORP. Quarterly Report for Q3 Ended Mar 31, 2009

Filed May 8, 2009For Securities:COHR

Summary

This 10-Q filing for COHERENT CORP. (COHR) as of March 31, 2009, reveals a company navigating a challenging economic environment. While total assets saw a slight increase to $365.2 million, revenues and net earnings for the three and nine months ended March 31, 2009, declined significantly compared to the prior year. This downturn is attributed primarily to a weakening industrial market impacting the Infrared Optics and Near-Infrared Optics segments. Despite revenue pressures, the company has focused on cost reduction measures, including workforce reductions and decreased discretionary spending. The company maintains a solid cash position of $83.5 million and significant available borrowing capacity of $56.8 million, indicating sufficient liquidity to meet its short-term obligations. The divestiture of the eV PRODUCTS business as a discontinued operation is progressing. Looking ahead, management anticipates continued economic headwinds for the remainder of fiscal year 2009, with a cautious outlook for recovery in fiscal year 2010. The company is strategically managing its operations to align costs with reduced demand while seeking opportunities for growth in specific segments like military and materials.

Key Highlights

  • 1Revenues for the three months ended March 31, 2009, decreased by 21% to $64.1 million, and for the nine months ended March 31, 2009, increased slightly by 1% to $226.2 million, compared to the prior year periods.
  • 2Net earnings from continuing operations for the three months ended March 31, 2009, saw a significant drop of 50% to $6.7 million ($0.23 per diluted share) compared to $13.4 million ($0.44 per diluted share) in the prior year.
  • 3The Infrared Optics segment experienced a substantial decline in revenue (32% for the quarter) and segment earnings (57% for the quarter) due to weakness in the global industrial markets.
  • 4The company ended the period with $83.5 million in cash and cash equivalents and had $56.8 million available under its credit facility, indicating a stable liquidity position.
  • 5Bookings for the third quarter of fiscal 2009 decreased by 34% to $62.3 million, reflecting the broad impact of the global economic slowdown on customer demand.
  • 6The company is actively taking cost-reduction measures, including layoffs and reductions in discretionary spending, to mitigate the impact of the economic downturn.
  • 7The eV PRODUCTS business is being reported as a discontinued operation, and the company is progressing with its divestiture efforts.

Frequently Asked Questions

The primary reason for the decline in revenues and earnings is the significant downturn in the global industrial markets. This macroeconomic weakness has led to reduced demand from customers, particularly impacting the Infrared Optics and Near-Infrared Optics segments, resulting in lower shipments and margins.

The company is implementing several cost-saving measures, including workforce reductions, decreased discretionary spending, and reduced capital expenditures. They also maintain a strong liquidity position with $83.5 million in cash and cash equivalents and a substantial available credit facility, which provides flexibility to navigate the economic headwinds.

The eV PRODUCTS business is now classified and reported as a discontinued operation. The company is actively progressing with its divestiture efforts, indicating a strategic move to streamline operations and focus on core business areas.

The company anticipates that the difficult economic conditions will persist for the remainder of fiscal year 2009. They are expecting lower revenues for the fourth quarter compared to the recently completed third quarter and are continuing to implement cost-control measures.