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 second fiscal quarter ended April 2, 2022.
FINANCIAL HIGHLIGHTS
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Three Months Ended |
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Six Months Ended |
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Apr. 2, 2022 |
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Jan. 1, 2022 |
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Apr. 3, 2021 |
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Apr. 2, 2022 |
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Apr. 3, 2021 |
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GAAP Results |
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(in millions, except per share data) |
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Net sales |
$ |
370.2 |
|
$ |
384.5 |
|
$ |
374.0 |
|
|
$ |
754.7 |
|
$ |
700.0 |
|
Net income (loss) |
$ |
33.7 |
|
$ |
30.3 |
|
$ |
(158.2 |
) |
|
$ |
63.9 |
|
$ |
(158.1 |
) |
Diluted EPS |
$ |
1.35 |
|
$ |
1.21 |
|
$ |
(6.49 |
) |
|
$ |
2.57 |
|
$ |
(6.50 |
) |
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Non-GAAP Results |
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(in millions, except per share data) |
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Net income |
$ |
42.5 |
|
$ |
57.7 |
|
$ |
35.2 |
|
|
$ |
100.2 |
|
$ |
61.9 |
|
Diluted EPS |
$ |
1.70 |
|
$ |
2.32 |
|
$ |
1.42 |
|
|
$ |
4.02 |
|
$ |
2.52 |
|
SECOND FISCAL QUARTER DETAILS
For the second quarter of fiscal 2022, Coherent announced net sales of $370.2 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $33.7 million, or $1.35 per diluted share.
These results compare to net sales of $374.0 million and net loss of $158.2 million, or $6.49 per diluted share, for the second quarter of fiscal 2021 and net sales of $384.5 million and net income of $30.3 million, or $1.21 per diluted share, for the first quarter of fiscal 2022. The net loss in the second quarter of fiscal 2021 includes $179.2 million, net of tax, in merger and acquisition costs, primarily due to a merger agreement termination fee paid to Lumentum Holdings Inc.
Non-GAAP net income for the second quarter of fiscal 2022 was $42.5 million, or $1.70 per diluted share. Non-GAAP net income for the second quarter of fiscal 2021 was $35.2 million, or $1.42 per diluted share. Non-GAAP net income for the first quarter of fiscal 2022 was $57.7 million, or $2.32 per diluted share. Reconciliations of GAAP to non-GAAP financial measures for the three months ended April 2, 2022, January 1, 2022 and April 3, 2021 and six months ended April 2, 2022 and April 3, 2021 appear in the financial statements portion of this release under the heading “Reconciliation of GAAP to Non-GAAP net income.”
Summarized statement of operations information is as follows (unaudited, in thousands, except per share data): |
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Three Months Ended |
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Six Months Ended |
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|
Apr. 2, 2022 |
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Jan. 1, 2022 |
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Apr. 3, 2021 |
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Apr. 2, 2022 |
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Apr. 3, 2021 |
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Net sales |
$ |
370,204 |
|
|
$ |
384,507 |
|
|
$ |
373,982 |
|
|
$ |
754,711 |
|
|
$ |
700,035 |
|
Cost of sales(A)(B)(C)(D) |
|
215,670 |
|
|
|
216,943 |
|
|
|
232,957 |
|
|
|
432,613 |
|
|
|
439,014 |
|
Gross profit |
|
154,534 |
|
|
|
167,564 |
|
|
|
141,025 |
|
|
|
322,098 |
|
|
|
261,021 |
|
Operating expenses: |
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|
|
|
|
|
|
|
|
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Research & development(A)(B)(D) |
|
31,679 |
|
|
|
29,769 |
|
|
|
32,007 |
|
|
|
61,448 |
|
|
|
60,228 |
|
Selling, general & administrative(A)(B)(D) |
|
66,517 |
|
|
|
93,774 |
|
|
|
72,662 |
|
|
|
160,291 |
|
|
|
146,890 |
|
Merger and acquisition costs(E) |
|
1,044 |
|
|
|
977 |
|
|
|
231,996 |
|
|
|
2,021 |
|
|
|
231,996 |
|
Amortization of intangible assets(C) |
|
563 |
|
|
|
565 |
|
|
|
596 |
|
|
|
1,128 |
|
|
|
1,193 |
|
Total operating expenses |
|
99,803 |
|
|
|
125,085 |
|
|
|
337,261 |
|
|
|
224,888 |
|
|
|
440,307 |
|
Income (loss) from operations |
|
54,731 |
|
|
|
42,479 |
|
|
|
(196,236 |
) |
|
|
97,210 |
|
|
|
(179,286 |
) |
Other expense, net(B) |
|
(5,729 |
) |
|
|
(6,185 |
) |
|
|
(2,526 |
) |
|
|
(11,914 |
) |
|
|
(4,815 |
) |
Income (loss) before income taxes |
|
49,002 |
|
|
|
36,294 |
|
|
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(198,762 |
) |
|
|
85,296 |
|
|
|
(184,101 |
) |
Provision (benefit) for income taxes (F) |
|
15,326 |
|
|
|
6,029 |
|
|
|
(40,547 |
) |
|
|
21,355 |
|
|
|
(26,030 |
) |
Net income (loss) |
$ |
33,676 |
|
|
$ |
30,265 |
|
|
$ |
(158,215 |
) |
|
$ |
63,941 |
|
|
$ |
(158,071 |
) |
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Net income (loss) per share: |
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Basic |
$ |
1.36 |
|
|
$ |
1.23 |
|
|
$ |
(6.49 |
) |
|
$ |
2.60 |
|
|
$ |
(6.50 |
) |
Diluted |
$ |
1.35 |
|
|
$ |
1.21 |
|
|
$ |
(6.49 |
) |
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$ |
2.57 |
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$ |
(6.50 |
) |
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Shares used in computations: |
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Basic |
|
24,708 |
|
|
|
24,542 |
|
|
|
24,389 |
|
|
|
24,625 |
|
|
|
24,326 |
|
Diluted |
|
24,935 |
|
|
|
24,919 |
|
|
|
24,389 |
|
|
|
24,927 |
|
|
|
24,326 |
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(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 |
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Six Months Ended |
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Apr. 2, 2022 |
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Jan. 1, 2022 |
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Apr. 3, 2021 |
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Apr. 2, 2022 |
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Apr. 3, 2021 |
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Cost of sales |
$ |
1,971 |
|
$ |
1,731 |
|
$ |
1,989 |
|
$ |
3,702 |
|
$ |
4,261 |
Research & development |
|
1,158 |
|
|
1,236 |
|
|
1,030 |
|
|
2,394 |
|
|
2,229 |
Selling, general & administrative(1) |
|
5,914 |
|
|
28,940 |
|
|
6,073 |
|
|
34,854 |
|
|
14,787 |
Impact on income (loss) from operations |
$ |
9,043 |
|
$ |
31,907 |
|
$ |
9,092 |
|
$ |
40,950 |
|
$ |
21,277 |
|
|
For the fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021, the impact on net income (loss), net of tax was $7,655 ($0.31 per diluted share), $29,613 ($1.20 per diluted share) and $7,746 ($0.31 per diluted share), respectively. For the six months ended April 2, 2022 and April 3, 2021, the impact on net income (loss), net of tax was $37,268 ($1.48 per diluted share) and $18,359 ($0.75 per diluted share), respectively. |
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(1) |
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The fiscal quarter ended January 1, 2022 includes a $19.7 million stock-based compensation expense resulting from the acceleration of vesting of restricted stock units for certain executives. |
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(B) |
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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 (benefit) included in operating results is summarized below: |
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Deferred compensation expense (benefit) |
Three Months Ended |
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Six Months Ended |
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|
Apr. 2, 2022 |
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Jan. 1, 2022 |
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Apr. 3, 2021 |
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Apr. 2, 2022 |
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Apr. 3, 2021 |
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Cost of sales |
$ |
(28 |
) |
|
$ |
(6 |
) |
|
$ |
11 |
|
$ |
(34 |
) |
|
$ |
22 |
Research & development |
|
(306 |
) |
|
|
(71 |
) |
|
|
293 |
|
|
(377 |
) |
|
|
588 |
Selling, general & administrative |
|
(1,405 |
) |
|
|
(415 |
) |
|
|
1,818 |
|
|
(1,820 |
) |
|
|
3,624 |
Impact on income (loss) from operations |
$ |
(1,739 |
) |
|
$ |
(492 |
) |
|
$ |
2,122 |
|
$ |
(2,231 |
) |
|
$ |
4,234 |
For the fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021, the impact on other income (expense), net from gains or losses on deferred compensation plan assets was expense of $1,604, expense of $300 and income of $2,692, respectively. For the six months ended April 2, 2022 and April 3, 2021, the impact on other income (expense), net from gains or losses on deferred compensation plan assets was expense of $1,904 and income of $4,988, respectively. |
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(C) |
Amortization of intangibles is included in cost of sales and operating expenses as summarized below: |
Amortization of intangibles |
Three Months Ended |
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Six Months Ended |
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|
Apr. 2, 2022 |
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Jan. 1, 2022 |
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Apr. 3, 2021 |
|
Apr. 2, 2022 |
|
Apr. 3, 2021 |
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Cost of sales |
$ |
267 |
|
$ |
818 |
|
$ |
1,855 |
|
$ |
1,085 |
|
$ |
3,872 |
Amortization of intangible assets |
|
563 |
|
|
565 |
|
|
596 |
|
|
1,128 |
|
|
1,193 |
Impact on income (loss) from operations |
$ |
830 |
|
$ |
1,383 |
|
$ |
2,451 |
|
$ |
2,213 |
|
$ |
5,065 |
|
|
For the fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021, the impact on net income (loss), net of tax was $699 ($0.03 per diluted share), $1,190 ($0.05 per diluted share) and $2,159 ($0.09 per diluted share), respectively. For the six months ended April 2, 2022 and April 3, 2021, the impact on net income (loss), net of tax was $1,889 ($0.08 per diluted share) and $4,429 ($0.18 per diluted share), respectively. |
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(D) |
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For the fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021, the impact of restructuring charges (gains) was a gain of $2,284 ($1,768 net of tax ($0.07 per diluted share)), gain of $10 ($7 net of tax ($0.00 per diluted share)) and charge of $3,659 ($3,059 net of tax ($0.12 per diluted share)), respectively. For the six months ended April 2, 2022 and April 3, 2021, the impact of restructuring charges (gains) was a gain of $2,294 ($1,775 net of tax ($0.07 per diluted share)) and charge of $9,042 ($7,532 net of tax ($0.31 per diluted share)), respectively. |
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(E) |
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For the fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021, we incurred merger and acquisition costs of $1,044 ($806 net of tax ($0.03 per diluted share)), $977 ($755 net of tax ($0.03 per diluted share)) and $231,996 ($179,217 net of tax ($7.34 per diluted share)), respectively. For the six months ended April 2, 2022 and April 3, 2021, we incurred merger and acquisition costs of $2,021 ($1,561 net of tax ($0.06 per diluted share)) and $231,996 ($179,217 net of tax ($7.34 per diluted share)), respectively. The merger and acquisition costs for the three and six months ended April 3, 2021 were primarily due to a termination fee paid to Lumentum Holdings Inc. of $217,600. |
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|
(F) |
|
The fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021 included non-recurring income tax charges of $1,613 ($0.06 per diluted share), $514 ($0.02 per diluted share) and $1,854 ($0.07 per diluted share), respectively. The fiscal quarters ended April 2, 2022, January 1, 2022 and April 3, 2021 included $184 ($0.01 per diluted share), $4,630 ($0.19 per diluted share) and $598 ($0.02 per diluted share), of excess tax benefits for employee stock-based compensation, respectively. The six months ended April 2, 2022 and April 3, 2021 included non-recurring income tax charges of $2,127 ($0.09 per diluted share) and $10,468 ($0.43 per diluted share), respectively. The six months ended April 2, 2022 and April 3, 2021 included a benefit of $4,814 ($0.19 per diluted share) and a charge of $13 ($0.00 per diluted share) of excess tax charges (benefits) for employee stock-based compensation, respectively. |
Summarized balance sheet information is as follows (unaudited, in thousands): |
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Apr. 2, 2022 |
|
Oct. 2, 2021 |
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ASSETS |
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Current assets: |
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|
|
||
Cash, cash equivalents, restricted cash and short-term investments |
$ |
403,477 |
|
$ |
458,061 |
Accounts receivable, net |
|
262,956 |
|
|
249,389 |
Inventories |
|
417,275 |
|
|
392,241 |
Prepaid expenses and other assets |
|
91,884 |
|
|
79,594 |
Total current assets |
|
1,175,592 |
|
|
1,179,285 |
Property and equipment, net |
|
305,916 |
|
|
302,613 |
Other assets |
|
388,887 |
|
|
407,032 |
Total assets |
$ |
1,870,395 |
|
$ |
1,888,930 |
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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|
|
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Current liabilities: |
|
|
|
||
Short-term borrowings |
$ |
9,571 |
|
$ |
18,395 |
Accounts payable |
|
106,071 |
|
|
104,539 |
Other current liabilities |
|
238,321 |
|
|
259,281 |
Total current liabilities |
|
353,963 |
|
|
382,215 |
Long-term liabilities |
|
582,238 |
|
|
638,530 |
Total stockholders’ equity |
|
934,194 |
|
|
868,185 |
Total liabilities and stockholders’ equity |
$ |
1,870,395 |
|
$ |
1,888,930 |
Reconciliation of GAAP to Non-GAAP net income, net of tax (unaudited, in thousands, other than per share data): |
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|
Three Months Ended |
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Six Months Ended |
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|
Apr. 2, 2022 |
|
Jan. 1, 2022 |
|
Apr. 3, 2021 |
|
Apr. 2, 2022 |
|
Apr. 3, 2021 |
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GAAP net income (loss) |
$ |
33,676 |
|
|
$ |
30,265 |
|
|
$ |
(158,215 |
) |
|
$ |
63,941 |
|
|
$ |
(158,071 |
) |
Stock-based compensation expense |
|
7,655 |
|
|
|
29,613 |
|
|
|
7,746 |
|
|
|
37,268 |
|
|
|
18,359 |
|
Amortization of intangible assets |
|
699 |
|
|
|
1,190 |
|
|
|
2,159 |
|
|
|
1,889 |
|
|
|
4,429 |
|
Restructuring charges (gains) and other |
|
(1,768 |
) |
|
|
(7 |
) |
|
|
3,059 |
|
|
|
(1,775 |
) |
|
|
7,532 |
|
Non-recurring tax expense |
|
1,613 |
|
|
|
514 |
|
|
|
1,854 |
|
|
|
2,127 |
|
|
|
10,468 |
|
Tax charge (benefit) from stock-based compensation expense |
|
(184 |
) |
|
|
(4,630 |
) |
|
|
(598 |
) |
|
|
(4,814 |
) |
|
|
13 |
|
Merger and acquisition costs |
|
806 |
|
|
|
755 |
|
|
|
179,217 |
|
|
|
1,561 |
|
|
|
179,217 |
|
Non-GAAP net income |
$ |
42,497 |
|
|
$ |
57,700 |
|
|
$ |
35,222 |
|
|
$ |
100,197 |
|
|
$ |
61,947 |
|
Non-GAAP net income per diluted share |
$ |
1.70 |
|
|
$ |
2.32 |
|
|
$ |
1.42 |
|
|
$ |
4.02 |
|
|
$ |
2.52 |
|
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220511005966/en/
Contacts
Kevin Palatnik
EVP & Chief Financial Officer
+1 (408) 764-4110
Kevin.Palatnik@coherent.com
