01—Abstract
Summary
Summary of the 10-Q filed May 7, 2021. Cited figures are marked; the original filing is the authoritative source.
Coherent Corp. (COHR) reported a strong financial performance for the nine months ended March 31, 2021, with revenues increasing significantly by 41% to $2.3 billiona, driven by the inclusion of Finisar's operations and growth in consumer electronics and communications markets.
The company's profitability also saw a substantial improvement, with net earnings available to common shareholders reaching $194.9 millionb for the nine-month period, a stark contrast to a net loss of $118.3 million in the prior year. This turnaround is attributed to increased revenues, improved gross margins, and strategic cost management, although SG&A expenses rose due to acquisition-related costs for the pending Coherent acquisition. The company's liquidity remains robust, with significant cash and cash equivalents of $1.5 billion at period-end.
Key strategic developments include the pending acquisition of Coherent, Inc., which is expected to close by the end of calendar year 2021, and a significant equity investment from Bain Capital. The company also made strategic acquisitions, including Ascatron AB and INNOViON Corporation, to strengthen its technology platform. These initiatives position Coherent Corp. for continued growth and market leadership.
02—Key points
Key Highlights
- Revenue growth of 41% year-over-year for the nine months ended March 31, 2021, reaching $2.3 billion.
- Significant improvement in profitability, with net earnings available to common shareholders of $194.9 million for the nine months, compared to a net loss of $118.3 million in the prior year.
- Robust cash position with $1.5 billion in cash and cash equivalents as of March 31, 2021.
- Pending acquisition of Coherent, Inc., a major strategic move expected to close by the end of 2021.
- Secured substantial equity investment from Bain Capital, including $750 million in Series B-1 Convertible Preferred Stock.
- Strategic acquisitions of Ascatron AB and INNOViON Corporation to enhance the silicon carbide technology platform.
- Strong performance in both Photonic Solutions and Compound Semiconductors segments, with significant revenue and operating income growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2021, Coherent Corp. kept $0.10.
- Revenue$783.2M100.0%
- Cost of revenue−$493.2M63.0%
- Gross profit$290.0M37.0%
- Operating costs−$204.9M26.2%
- Operating income$85.1M10.9%
- Interest, other & tax−$4.0M0.5%
- Net income$81.1M10.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed May 7, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $783.23M$627.04M | +24.9% |
| Cost of Revenue | $493.24M$381.11M | +29.4% |
| Gross Profit | $289.99M$245.93M | +17.9% |
| R&D Expenses | $83.23M$94.76M | −12.2% |
| SG&A Expenses | $121.68M$82.13M | +48.1% |
| Operating Expenses | $689.75M$593.70M | +16.2% |
| Operating Income | $85.08M$69.04M | +23.2% |
| Interest Expense | $13.03M$28.53M | −54.3% |
| Net Income | $81.09M$5.92M | +1269.6% |
| EPS (Basic) | $0.71$0.07 | +914.3% |
| EPS (Diluted) | $0.66$0.06 | +1000.0% |
| Shares Outstanding (Basic) | 104.77M91.08M | +15.0% |
| Shares Outstanding (Diluted) | 116.30M93.44M | +24.5% |
05—Questions
Frequently Asked Questions
What is the current status of the Coherent acquisition?
As of March 31, 2021, II-VI Incorporated (now Coherent Corp.) and Coherent, Inc. had entered into a definitive merger agreement. The transaction is subject to customary closing conditions, including regulatory approvals and shareholder votes, and was expected to be completed by the end of calendar year 2021.
How has the company's financial performance improved year-over-year?
The company has shown a significant turnaround in financial performance. For the nine months ended March 31, 2021, revenues increased by 41% to $2.3 billion, and net earnings available to common shareholders were $194.9 million, a substantial improvement from a net loss of $118.3 million in the same period last year. This is driven by increased revenues, improved gross margins, and strategic cost management.
What is the company's current liquidity position?
The company maintains a strong liquidity position, with cash and cash equivalents totaling $1.5 billion as of March 31, 2021. This provides ample resources to fund operations, investments, and strategic initiatives.
What are the key strategic drivers for the company's growth?
Key growth drivers include the pending acquisition of Coherent, Inc., strategic acquisitions to bolster its technology platforms (like Ascatron AB and INNOViON Corporation), strong demand in the communications and consumer electronics markets, and continued investment in research and development.
06—Continue