10-QPeriod: Q3 FY2011

COHERENT CORP. Quarterly Report for Q3 Ended Mar 31, 2011

Filed May 9, 2011For Securities:COHR

Summary

Coherent Corp. (COHR) reported strong financial performance for the nine months ending March 31, 2011, with significant increases in revenue and net earnings compared to the prior year. The company's revenue grew by 60% to $371.0 million, driven by broad-based demand across its business units, including substantial contributions from acquisitions like Photop Technologies. Net earnings attributable to II-VI Incorporated more than doubled to $60.6 million, with diluted earnings per share rising to $1.90. This growth was supported by operational efficiencies, improved gross margins, and a favorable tax rate, partly due to foreign operations. The balance sheet reflects growth in assets, with total assets increasing to $601.9 million from $509.0 million in the prior year. This expansion is supported by increases in current assets like cash, receivables, and inventories, as well as property, plant, and equipment, reflecting investments in capacity and acquisitions. The company maintained a healthy cash position and generated strong operating cash flow, providing ample liquidity and supporting ongoing strategic initiatives, including capital expenditures and acquisitions.

Financial Highlights

45 data points
Beta

Revenue

$130.00M

40.7% Gross Margin

Net Income

$23.12M

17.8% Net Margin

EPS (Diluted)

$0.36

Total Assets

$601.87M

Cash & Equivalents

$128.48M

Free Cash Flow

$12.48M

Financial Statements
Beta
Revenue$130.00M
Cost of Revenue$77.15M
Gross Profit$52.85M
R&D Expenses$3.89M
SG&A Expenses$23.29M
Operating Expenses$102.93M
Interest Expense$34K
Net Income$23.12M
EPS (Basic)$0.37
EPS (Diluted)$0.36
Shares Outstanding (Basic)62K
Shares Outstanding (Diluted)64K

Key Highlights

  • 1Revenue for the nine months ended March 31, 2011, increased by 60% to $371.0 million, compared to $231.9 million in the prior year.
  • 2Net earnings attributable to II-VI Incorporated for the nine months ended March 31, 2011, surged to $60.6 million, a 168% increase from $22.6 million in the prior year.
  • 3Diluted earnings per share (EPS) for the nine months ended March 31, 2011, rose significantly to $1.90 from $0.74 in the prior year.
  • 4Total assets grew to $601.9 million as of March 31, 2011, up from $509.0 million as of June 30, 2010, driven by acquisitions and operational expansion.
  • 5Net cash provided by operating activities remained robust at $59.7 million for the nine months ended March 31, 2011.
  • 6The company successfully integrated recent acquisitions, notably Photop Technologies and Max Levy Autograph, Inc., contributing to revenue growth.
  • 7Gross margin improved to 41% for the nine months ended March 31, 2011, from 39% in the prior year, indicating enhanced operational efficiency and favorable product mix.

Frequently Asked Questions

The substantial increase in revenue and earnings was primarily driven by a combination of strong product demand across all business units, operational efficiencies leading to improved gross margins, and the successful integration of recent acquisitions, particularly Photop Technologies. Additionally, a more favorable tax rate due to foreign operations and a one-time reversal of unrecognized tax benefits contributed to the earnings growth.

The company's financial position strengthened, with total assets increasing to $601.9 million, reflecting growth in cash, receivables, inventories, and property, plant, and equipment, supported by acquisitions and capital expenditures. Liquidity remains strong, evidenced by robust operating cash flow of $59.7 million and ample cash and cash equivalents of $128.5 million as of March 31, 2011. The company also has significant available borrowing capacity under its credit facility.

The acquisitions of Photop Technologies and Max Levy Autograph, Inc. have had a positive impact. Photop Technologies significantly contributed to revenue growth in the Near-Infrared Optics segment, especially for the nine-month period where it was included for a longer duration. Max Levy Autograph, Inc., acquired in December 2010, is integrated into the Military & Materials segment and its operating results were noted as insignificant to the overall financial results for this period, suggesting a longer-term integration and impact is anticipated.

The filing indicates strong performance and positive trends across most segments. The Infrared Optics segment saw robust growth driven by high-power CO2 laser system demand. The Near-Infrared Optics segment experienced significant growth, largely due to Photop's contribution in telecommunications markets, though VLOC saw a decrease in bookings due to a specific government contract. The Military & Materials segment showed steady growth, particularly in PRM due to demand for selenium and tellurium. The Compound Semiconductor Group demonstrated strong bookings and revenue growth, boosted by new product lines and government contracts.