10-QPeriod: Q3 FY2010

COHERENT CORP. Quarterly Report for Q3 Ended Mar 31, 2010

Filed May 7, 2010For Securities:COHR

Summary

COHERENT CORP. (COHR) reported a strong third quarter for fiscal year 2010, with revenues increasing by 52% year-over-year to $97.5 million. This growth was primarily driven by the successful integration of its recent acquisition, Photop Technologies, Inc., which contributed significantly to the Near-Infrared Optics segment's performance. Overall net earnings attributable to II-VI Incorporated surged by 114% to $10.3 million, or $0.33 per diluted share. The company also saw a substantial increase in bookings, up 77% year-over-year, indicating robust demand across its key segments, particularly Infrared Optics and Military & Materials. The balance sheet reflects significant growth in total assets, largely due to the Photop acquisition, which added $62.3 million in goodwill. While the company's debt levels remain relatively low, it has maintained a strong liquidity position with $97.2 million in cash and cash equivalents and significant available borrowing capacity. Management expresses confidence in its ability to fund operations and growth initiatives.

Financial Highlights

26 data points
Beta

Revenue

$97.53M

39.8% Gross Margin

Net Income

$10.31M

10.6% Net Margin

EPS (Diluted)

$0.17

Cash & Equivalents

$97.20M

Free Cash Flow

$19.58M

Financial Statements
Beta
Revenue$97.53M
Cost of Revenue$58.70M
Gross Profit$38.83M
R&D Expenses$3.24M
SG&A Expenses$18.98M
Operating Expenses$83.08M
Interest Expense$1K
Net Income$10.31M
EPS (Basic)$0.17
EPS (Diluted)$0.17

Key Highlights

  • 1Revenue increased by 52% year-over-year to $97.5 million for the three months ended March 31, 2010.
  • 2Net earnings attributable to II-VI Incorporated more than doubled, increasing by 114% to $10.3 million for the quarter.
  • 3Diluted Earnings Per Share (EPS) grew by 106% to $0.33 for the three months ended March 31, 2010.
  • 4Bookings saw a significant increase of 77% year-over-year, reaching $109.9 million, indicating strong future demand.
  • 5The acquisition of Photop Technologies, Inc., completed in January 2010, significantly contributed to revenue and asset growth, adding $36.3 million in goodwill.
  • 6Total assets grew by approximately 31% to $483.4 million from $368.3 million year-over-year, largely due to the acquisition.
  • 7The company maintained a strong liquidity position with $97.2 million in cash and cash equivalents.

Frequently Asked Questions

The acquisition of Photop Technologies, Inc. on January 4, 2010, had a significant positive impact on the company's financial results for the quarter ended March 31, 2010. Photop's results were included for the first time, contributing $20.2 million in revenue and positively impacting segment earnings, particularly in the Near-Infrared Optics segment. The acquisition also added $36.3 million in goodwill to the balance sheet and resulted in an increase in total assets and liabilities.

The company demonstrated substantial growth compared to the prior year's quarter. Revenues increased by 52% to $97.5 million, driven by increased demand across key segments and the inclusion of Photop. Net earnings attributable to II-VI Incorporated more than doubled, growing by 114% to $10.3 million. This strong performance translated into a 106% increase in diluted EPS, rising to $0.33 from $0.16 in the prior year's quarter.

The company maintains a strong liquidity position with $97.2 million in cash and cash equivalents and $59.1 million in available borrowing capacity under its credit facility. Management believes its cash flow from operations, cash reserves, and borrowing capacity are sufficient to fund working capital needs, capital expenditures, debt payments, and internal growth for the remainder of fiscal year 2010 and into fiscal year 2011. The significant increase in bookings also signals positive momentum for future revenue generation.

The Infrared Optics segment saw a 30% increase in revenue, driven by improved industrial markets. The Near-Infrared Optics segment experienced exceptional growth with a 225% revenue increase, largely due to the Photop acquisition. The Military & Materials segment reported a 13% revenue increase, primarily from demand for raw materials at PRM and the sapphire product line at EEO. The Compound Semiconductor Group's revenue grew by 13%, boosted by WBG's silicon carbide wafer shipments, though Marlow experienced lower demand.