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8-K - FORM 8-K - IPG PHOTONICS CORP | b87541e8vk.htm |
EX-10.1 - EX-10.1 - IPG PHOTONICS CORP | b87541exv10w1.htm |
Exhibit 99.1
CONTACT:
|
Tim Mammen | David Calusdian | ||
Chief Financial Officer | Executive Vice President | |||
IPG Photonics Corporation | Sharon Merrill Associates, Inc. | |||
(508) 373-1100 | (617) 542-5300 |
IPG PHOTONICS REPORTS RECORD REVENUE AND NET INCOME
FOR SECOND QUARTER 2011
FOR SECOND QUARTER 2011
Sales Grow 81% to $122 Million and Net Income Increases to $30.7 Million
High Power and Pulsed Laser Sales for Materials Processing Applications Drive Growth
High Power and Pulsed Laser Sales for Materials Processing Applications Drive Growth
OXFORD, Mass. August 2, 2011 IPG Photonics Corporation (NASDAQ: IPGP) today reported
financial results for the second quarter of 2011 ended June 30, 2011.
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||
(In millions, except per share data) | 2011 | 2010 | % Change | 2011 | 2010 | % Change | ||||||||||||||||||
Revenue |
$ | 121.9 | $ | 67.3 | 81 | % | $ | 221.9 | $ | 118.5 | 87 | % | ||||||||||||
Gross margin |
54.7 | % | 45.3 | % | 54.2 | % | 43.1 | % | ||||||||||||||||
Operating income |
$ | 46.1 | $ | 15.7 | $ | 80.2 | $ | 21.0 | ||||||||||||||||
Operating margin |
37.8 | % | 23.4 | % | 36.2 | % | 17.8 | % | ||||||||||||||||
Net income attributable to IPG Photonics Corporation |
$ | 30.7 | $ | 10.3 | $ | 53.8 | $ | 13.7 | ||||||||||||||||
Earnings per diluted share |
$ | 0.63 | $ | 0.22 | $ | 1.11 | $ | 0.29 |
Management Comments
IPG reported another quarter of record top- and bottom-line results in the second quarter on
broad-based demand strength, said Dr. Valentin Gapontsev, IPG Photonics Chief Executive Officer.
Revenues grew an impressive 81% compared with the second quarter of 2010. As a result of
excellent demand across most product lines and geographies, we reported 22% sequential growth over
our strong first quarter of 2011. We also achieved gross margins of 54.7% and grew earnings per
diluted share to $0.63 from $0.22 in the second quarter of 2010.
Once again, marking, welding and cutting applications were our key sales drivers, resulting in an
88% increase in materials processing this quarter, said Dr. Gapontsev. High power and pulsed
lasers were the primary product lines contributing to the sales growth, demonstrating 134% and 52%
year-over-year sales growth, respectively. Materials processing represented 88% of our total sales
in the second quarter of 2011. Telecom and advanced applications were up 175% and 16%,
respectively, and medical decreased 23% from last year. Geographically, sales increased in every
region, with China and Europe the strongest performers with sales up 129% and 87%, respectively. We
also saw solid traction in North America, which grew 60% year over year.
For the year to date, we have generated $27.0 million in cash from operations and invested $23.0
million in capital expenditures, said Dr. Gapontsev. We ended the quarter with $188.2 million in
cash, an increase of $27.6 million in the second quarter of 2011, which included $20.0 million
proceeds from the purchase of an interest in our Russian subsidiary through the exercise of
previously issued warrants. We are on track to spend approximately $50.0 million in 2011 in
additional manufacturing capacity, application laboratories and sales
facilities, excluding acquisitions.
IPGP Q2 2011 Results/2
Business Outlook and Financial Guidance
The acceptance of fiber lasers has reached a tipping point in several of our end markets,
particularly within materials processing, said Dr. Gapontsev. Our goals now are to ensure that
we have the ability to keep pace with demand, continue our technological superiority, reduce costs
through research and develop new application labs for fiber lasers. To do that, we are investing in
R&D and building capacity to meet future growth in demand.
IPG Photonics expects revenues in the range of $120 million to $130 million for the third quarter
of 2011. The Company anticipates earnings per diluted share in the range of $0.56 to $0.68 based
on 48,610,000 common shares, which includes 47,310,000 basic common shares outstanding and
1,300,000 potentially dilutive options at June 30, 2011. Expected earnings per diluted share for
the third quarter reflect higher spending in the quarter in connection with the upcoming patent
litigation trial commencing in September 2011, and an increase in net income attributable to the
redeemable, non-controlling interest following the exercise of the warrants in the second quarter
of 2011.
As discussed in more detail below, actual results may differ from this guidance due to various
factors including but not limited to product demand, competition and general economic conditions.
This guidance is subject to the risks outlined in the Companys reports with the SEC, and assumes
that exchange rates remain at present levels.
Conference Call Reminder
The Company will hold a conference call to review its financial results and business highlights
today, August 2, 2011 at 10:00 a.m. ET. The conference call will be webcast live and can be
accessed on the Investors section of the Companys website at www.ipgphotonics.com. The
conference call also can be accessed by dialing (877) 709-8155 or (201) 689-8881. Interested
parties that are unable to listen to the live call may access an archived version of the webcast,
which will be available for one year on IPGs website.
About IPG Photonics Corporation
IPG Photonics Corporation is the world leader in high-power fiber lasers and amplifiers. Founded
in 1990, IPG pioneered the development and commercialization of optical fiber-based lasers for use
in a wide range of applications such as materials processing, advanced, telecommunications and
medical. Fiber lasers have revolutionized the industry by delivering superior performance,
reliability and usability at a lower total cost of ownership compared with conventional lasers,
allowing end users to increase productivity and decrease operating costs. IPG has its headquarters
in Oxford, Massachusetts, and has additional plants and offices throughout the world. For more
information, please visit www.ipgphotonics.com.
Safe Harbor Statement
Information and statements provided by the Company and its employees, including statements in this
press release, that relate to future plans, events or performance are forward-looking statements.
These statements involve risks and uncertainties. Any statements in this press release that are
not statements of historical fact are forward-looking statements, including, but not limited to,
spending on capital expenditures in 2011, ensuring that the Company has the ability to keep pace
with demand, continued technological superiority, reducing costs through research, developing new
application labs for fiber lasers, investing in R&D, building capacity to meet future growth in
demand, and revenue and earnings per share expectations for the third quarter of 2011. Factors
that could cause actual results to differ materially include risks and uncertainties, including
risks associated with the strength or weakness of the business conditions in industries and
geographic markets that the Company serves, particularly the effect of economic downturns;
reduction in customer capital expenditures; potential
IPGP Q2 2011 Results/3
order cancellations and push-outs and financial and credit market issues; the Companys ability to
penetrate new applications for fiber lasers and increase market share; the rate of acceptance and
penetration of IPGs products; effective management of growth; level of fixed costs from its
vertical integration; intellectual property infringement claims and litigation; including the
outcome of the September 2011 patent trial regarding claims asserted by IMRA America; interruption
in supply of key components, including from transportation disruptions from natural and man-made
events; manufacturing risks; inventory write-downs; foreign currency fluctuations; competitive
factors, including declining average selling prices; building and expanding field service and
support operations; uncertainties pertaining to customer orders; demand for products and services;
development of markets for the Companys products and services; and other risks identified in the
Companys SEC filings. Readers are encouraged to refer to the risk factors described in the
Companys Annual Report on Form 10-K (filed with the SEC on March 15, 2011) and its periodic
reports filed with the SEC, as applicable. Actual results, events and performance may differ
materially. Readers are cautioned not to rely on the forward-looking statements, which speak only
as of the date hereof. The Company undertakes no obligation to update the forward-looking
statements that may be made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
IPGP Q2 2011 Results/4
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
NET SALES |
$ | 121,936 | $ | 67,258 | $ | 221,894 | $ | 118,462 | ||||||||
COST OF SALES |
55,230 | 36,797 | 101,522 | 67,454 | ||||||||||||
GROSS PROFIT |
66,706 | 30,461 | 120,372 | 51,008 | ||||||||||||
OPERATING EXPENSES: |
||||||||||||||||
Sales and marketing |
5,847 | 4,932 | 10,795 | 9,270 | ||||||||||||
Research and development |
6,610 | 4,729 | 12,341 | 8,887 | ||||||||||||
General and administrative |
8,333 | 7,384 | 16,502 | 14,212 | ||||||||||||
(Gain) loss on foreign exchange |
(206 | ) | (2,295 | ) | 514 | (2,403 | ) | |||||||||
Total operating expenses |
20,584 | 14,750 | 40,152 | 29,966 | ||||||||||||
OPERATING INCOME |
46,122 | 15,711 | 80,220 | 21,042 | ||||||||||||
OTHER EXPENSE, Net: |
||||||||||||||||
Interest expense, net |
(170 | ) | (191 | ) | (376 | ) | (399 | ) | ||||||||
Other expense, net |
(618 | ) | (26 | ) | (610 | ) | (92 | ) | ||||||||
Total other expense |
(788 | ) | (217 | ) | (986 | ) | (491 | ) | ||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES |
45,334 | 15,494 | 79,234 | 20,551 | ||||||||||||
PROVISION FOR INCOME TAXES |
(13,827 | ) | (5,149 | ) | (24,349 | ) | (6,782 | ) | ||||||||
NET INCOME |
31,507 | 10,345 | 54,885 | 13,769 | ||||||||||||
LESS: NET
INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
771 | 39 | 1,081 | 66 | ||||||||||||
NET INCOME
ATTRIBUTABLE TO IPG PHOTONICS CORPORATION |
$ | 30,736 | $ | 10,306 | $ | 53,804 | $ | 13,703 | ||||||||
NET INCOME
ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE: |
||||||||||||||||
Basic |
$ | 0.65 | $ | 0.22 | $ | 1.14 | $ | 0.30 | ||||||||
Diluted |
$ | 0.63 | $ | 0.22 | $ | 1.11 | $ | 0.29 | ||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: |
||||||||||||||||
Basic |
47,310 | 46,220 | 47,205 | 46,159 | ||||||||||||
Diluted |
48,610 | 47,333 | 48,650 | 47,262 |
IPGP Q2 2011 Results/5
IPG PHOTONICS CORPORATION
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(In thousands, except share and per | ||||||||
share data) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 188,196 | $ | 147,860 | ||||
Accounts receivable, net |
73,284 | 55,399 | ||||||
Inventories, net |
109,273 | 72,470 | ||||||
Income taxes receivable |
4,419 | 2,663 | ||||||
Prepaid expenses and other current assets |
17,179 | 13,816 | ||||||
Deferred income taxes |
7,449 | 8,593 | ||||||
Total current assets |
399,800 | 300,801 | ||||||
DEFERRED INCOME TAXES |
4,267 | 4,489 | ||||||
INTANGIBLE ASSETS, NET |
7,736 | 7,131 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET |
141,902 | 120,683 | ||||||
OTHER ASSETS |
7,676 | 8,751 | ||||||
TOTAL |
$ | 561,381 | $ | 441,855 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Revolving line-of-credit facilities |
$ | 7,205 | $ | 6,841 | ||||
Current portion of long-term debt |
1,586 | 1,333 | ||||||
Accounts payable |
14,884 | 9,510 | ||||||
Accrued expenses and other liabilities |
50,732 | 50,105 | ||||||
Deferred income taxes |
8,866 | 3,387 | ||||||
Income taxes payable |
7,555 | 11,594 | ||||||
Total current liabilities |
90,828 | 82,770 | ||||||
DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES |
4,661 | 1,735 | ||||||
LONG-TERM DEBT, NET OF CURRENT PORTION |
16,758 | 15,644 | ||||||
REDEEMABLE NONCONTROLLING INTERESTS |
46,730 | 24,903 | ||||||
Total liabilities |
158,977 | 125,052 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
IPG PHOTONICS CORPORATION STOCKHOLDERS EQUITY: |
||||||||
Common stock, $0.0001 par value, 175,000,000 shares authorized;
47,437,688 shares issued and outstanding at June 30, 2011;
46,988,566 shares issued and outstanding at December 31, 2010 |
5 | 5 | ||||||
Additional paid-in capital |
325,783 | 310,218 | ||||||
Retained earnings |
59,371 | 5,567 | ||||||
Accumulated other comprehensive income |
17,000 | 810 | ||||||
Total IPG Photonics Corporation stockholders equity |
402,159 | 316,600 | ||||||
NONCONTROLLING INTERESTS |
245 | 203 | ||||||
Total stockholders equity |
402,404 | 316,803 | ||||||
TOTAL |
$ | 561,381 | $ | 441,855 | ||||
IPGP Q2 2011 Results/6
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income |
$ | 54,885 | $ | 13,769 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
11,955 | 10,514 | ||||||
Provisions for inventory, warranty & bad debt |
7,056 | 4,475 | ||||||
Other |
12,057 | (3,657 | ) | |||||
Changes in assets and liabilities that provided (used) cash: |
||||||||
Accounts receivable/payable |
(12,040 | ) | (8,549 | ) | ||||
Inventories |
(35,660 | ) | (9,515 | ) | ||||
Other |
(11,261 | ) | 16,401 | |||||
Net cash provided by operating activities |
26,992 | 23,438 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchases of property, plant and equipment |
(22,786 | ) | (8,701 | ) | ||||
Acquisition of businesses, net of cash acquired |
(450 | ) | (4,108 | ) | ||||
Other |
112 | 117 | ||||||
Net cash used in investing activities |
(23,124 | ) | (12,692 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Line-of-credit facilities |
134 | 510 | ||||||
Principal payments on long-term borrowings |
(666 | ) | (667 | ) | ||||
Sale of redeemable noncontrolling interests |
19,973 | | ||||||
Exercise of
employee stock options, issuances under employee stock purchase plan and related tax benefit from exercise |
10,247 | 1,266 | ||||||
Net cash provided by financing activities |
29,688 | 1,109 | ||||||
EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |
6,780 | (4,120 | ) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
40,336 | 7,735 | ||||||
CASH AND CASH EQUIVALENTS Beginning of period |
147,860 | 82,920 | ||||||
CASH AND CASH EQUIVALENTS End of period |
$ | 188,196 | $ | 90,655 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
||||||||
Cash paid for interest |
$ | 514 | $ | 515 | ||||
Income taxes paid |
$ | 14,905 | $ | 3,504 | ||||