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Coherent, Inc. Reports First Fiscal Quarter Results

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SANTA CLARA, Calif., Feb. 10, 2021 /PRNewswire/ -- Coherent, Inc. (NASDAQ: COHR), one of the world's leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of scientific, commercial and industrial applications, today announced financial results for its first fiscal quarter ended January 2, 2021.

Coherent Logo (PRNewsFoto/Coherent, Inc.) (PRNewsFoto/Coherent, Inc.)
Coherent Logo (PRNewsFoto/Coherent, Inc.) (PRNewsFoto/Coherent, Inc.)

FINANCIAL HIGHLIGHTS




Three Months Ended



Jan. 2, 2021

Oct. 3, 2020

Dec. 28, 2019

GAAP Results




(in millions, except per share data)




Net sales

$ 326.1

$ 316.8

$ 320.8

Net income

$ 0.1

$ 7.7

$ 5.8

Diluted EPS

$ 0.01

$ 0.32

$ 0.24





Non-GAAP Results




(in millions, except per share data)




Net income

$ 26.7

$ 24.5

$ 20.7

Diluted EPS

$ 1.09

$ 1.01

$ 0.86

FIRST FISCAL QUARTER DETAILS
For the first quarter of fiscal 2021, Coherent announced net sales of $326.1 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $0.1 million, or $0.01 per diluted share.

These results compare to net sales of $320.8 million and net income of $5.8 million, or $0.24 per diluted share, for the first quarter of fiscal 2020 and net sales of $316.8 million and net income of $7.7 million, or $0.32 per diluted share, for the fourth quarter of fiscal 2020.

Non-GAAP net income for the first quarter of fiscal 2021 was $26.7 million, or $1.09 per diluted share. Non-GAAP net income for the first quarter of fiscal 2020 was $20.7 million, or $0.86 per diluted share. Non-GAAP net income for the fourth quarter of fiscal 2020 was $24.5 million, or $1.01 per diluted share. Reconciliations of GAAP to non-GAAP financial measures for the three months ended January 2, 2021, October 3, 2020 and December 28, 2019 appear in the financial statements portion of this release under the heading "Reconciliation of GAAP to Non-GAAP net income."

"We started well into our fiscal 2021 with strong results for the first quarter. We grew bookings and revenue sequentially as well as year-over-year, with our book to bill greater than one across all our end markets. Microelectronics orders were strong in the quarter within our display, semicap and API businesses, along with encouraging Aerospace & Defense orders where our U.S. manufacturing base and product portfolio are highly valued," said Andy Mattes, Coherent President and CEO. "Our continued focus on operational excellence yielded improved margins and non-GAAP EPS and further improved our already strong balance sheet."

Summarized statement of operations information is as follows (unaudited, in thousands, except per share data):




Three Months Ended


Jan. 2, 2021

Oct. 3, 2020


Dec. 28, 2019





Net sales

$

326,053

$

316,751


$

320,771

Cost of sales(A)(B)(C)(D)(E)

206,057

204,518


211,518

Gross profit

119,996

112,233


109,253

Operating expenses:





Research & development(A)(B)(D)

28,221

28,821


28,680

Selling, general & administrative(A)(B)(D)(E)

74,228

73,081


68,551

Amortization of intangible assets(C)

597

616


1,432

Total operating expenses

103,046

102,518


98,663

Income from operations

16,950

9,715


10,590

Other income (expense), net(B)

(2,289)

436


(3,034)

Income before income taxes

14,661

10,151


7,556

Provision for income taxes (F)

14,517

2,462


1,763

Net income

$ 144

$ 7,689


$ 5,793






Net income per share:





Basic

$ 0.01

$ 0.32


$ 0.24

Diluted

$ 0.01

$ 0.32


$ 0.24






Shares used in computations:





Basic

24,264

24,193


23,971

Diluted

24,455

24,360


24,160









(A)

Stock-based compensation expense included in operating results is summarized below (all footnote amounts are unaudited,
in thousands, except per share data):

Stock-based compensation expense


Three Months Ended



Jan. 2, 2021

Oct. 3, 2020

Dec. 28, 2019

Cost of sales

$ 2,272

$ 1,884

$ 1,182

Research & development

1,199

1,554

561

Selling, general & administrative

8,714

10,273

6,049

Impact on income from operations

$ 12,185

$ 13,711

$ 7,792



For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact on net income, net
of tax was $10,613 ($0.43 per diluted share), $11,485 ($0.47 per diluted share) and $6,936 ($0.29 per diluted share),
respectively.



(B)

Changes in deferred compensation plan liabilities are included in cost of sales and operating expenses while gains and
losses on deferred compensation plan assets are included in other income (expense), net. Deferred compensation
expense included in operating results is summarized below:

Deferred compensation expense


Three Months Ended



Jan. 2, 2021

Oct. 3, 2020

Dec. 28, 2019

Cost of sales

$ 11

$ 28

$ 113

Research & development

295

504

243

Selling, general & administrative

1,806

3,614

1,799

Impact on income from operations

$ 2,112

$ 4,146

$ 2,155

For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact on other income
(expense), net from gains or losses on deferred compensation plan assets was income of $2,296, $4,735 and $2,292,
respectively.


(C)

Amortization of intangibles is included in cost of sales and operating expenses as summarized below:

Amortization of intangibles


Three Months Ended



Jan. 2, 2021

Oct. 3, 2020

Dec. 28, 2019

Cost of sales

$ 2,017

$ 2,346

$ 10,880

Amortization of intangible assets

597

616

1,432

Impact on income from operations

$ 2,614

$ 2,962

$ 12,312


For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact on net income, net
of tax was $2,270 ($0.09 per diluted share), $2,138 ($0.09 per diluted share), and $8,942 ($0.37 per diluted share),
respectively.



(D)

For the fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019, the impact of restructuring
charges, net of a gain on the sales leaseback of a facility in the quarter ended October 3, 2020, was $5,383 ($4,473 net
of tax ($0.18 per diluted share)), $129 ($226 net of tax ($0.01 per diluted share)), and $933 ($666 net of tax ($0.03 per
diluted share)), respectively.



(E)

For the fiscal quarter ended December 28, 2019, selling, general & administrative expense includes a legal settlement
related to an asset recovery of $1,365 ($1,106 net of tax ($0.05 per diluted share)).



(F)

The fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019 included a non-recurring income
tax charge of $8,614 ($0.35 per diluted share), $2,817 ($0.12 per diluted share) and $149 ($0.01 per diluted share),
respectively. The fiscal quarters ended January 2, 2021, October 3, 2020 and December 28, 2019 included a charge of
$611 ($0.03 per diluted share), a charge of $149 ($0.00 per diluted share) and a benefit of $714 ($0.03 per diluted
share) of excess tax charges (benefits) for employee stock-based compensation, respectively.

Summarized balance sheet information is as follows (unaudited, in thousands):




ASSETS

Jan. 2, 2021


Oct. 3, 2020

Current assets:


Cash, cash equivalents, restricted cash and short-term investments

$ 544,376


$ 476,369

Accounts receivable, net

226,199


220,289

Inventories

416,381


426,756

Prepaid expenses and other assets

91,814


88,250

Total current assets

1,278,770


1,211,664

Property and equipment, net

260,207


245,678

Other assets

350,659


370,154

Total assets

$ 1,889,636


$ 1,827,496





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Short-term borrowings

$ 17,136


$ 16,817

Accounts payable

62,412


60,225

Other current liabilities

217,115


191,016

Total current liabilities

296,663


268,058

Long-term liabilities

641,095


632,214

Total stockholders' equity

951,878


927,224

Total liabilities and stockholders' equity

$ 1,889,636


$ 1,827,496

Reconciliation of GAAP to non-GAAP net income (unaudited, in thousands, (other than per share data), net of tax):









Three Months Ended



Jan. 2, 2021


Oct. 3, 2020


Dec. 28, 2019

GAAP net income

$ 144


$ 7,689


$ 5,793

Stock-based compensation expense

10,613


11,485


6,936

Amortization of intangible assets

2,270


2,138


8,942

Restructuring charges and other

4,473


226


666

Non-recurring tax expense

8,614


2,817


149

Tax charge (benefit) from stock-based compensation expense

611


149


(714)

Other impairment/asset charges (recoveries)



(1,106)

Non-GAAP net income

$ 26,725


$ 24,504


$ 20,666

Non-GAAP net income per diluted share

$ 1.09


$ 1.01


$ 0.86

Founded in 1966, Coherent, Inc. is one of the world's leading providers of lasers, laser-based technologies and laser-based system solutions in a broad range of scientific, commercial and industrial customers. Our common stock is listed on the Nasdaq Global Select Market and is part of the Russell 1000 and Standard & Poor's MidCap 400 Index. For more information about Coherent, visit the company's website at www.coherent.com for product and financial updates.

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SOURCE Coherent, Inc.