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| 8-K - FORM 8-K - IPG PHOTONICS CORP | d343095d8k.htm |
Exhibit 99.1
| CONTACT: | Tim Mammen | David Calusdian | ||
| Chief Financial Officer | Executive Vice President | |||
| IPG Photonics Corporation | Sharon Merrill | |||
| (508) 373-1100 | (617) 542-5300 |
IPG PHOTONICS REPORTS 23% REVENUE GROWTH FOR FIRST QUARTER 2012
High-Power Laser Sales Drive Growth
30% Increase in First Quarter Net Income
OXFORD, Mass. – May 1, 2012 – IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the first quarter ended March 31, 2012.
| Three Months Ended March 31, |
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| (In millions, except per share data) | 2012 | 2011 | % Change | |||||||||
| Revenue |
$ | 123.2 | $ | 100.0 | 23 | % | ||||||
| Gross margin |
55.8 | % | 53.7 | % | ||||||||
| Operating income |
$ | 45.2 | $ | 34.1 | 32 | % | ||||||
| Operating margin |
36.7 | % | 34.1 | % | ||||||||
| Net income attributable to IPG Photonics Corporation |
$ | 29.9 | $ | 23.1 | 30 | % | ||||||
| Earnings per diluted share |
$ | 0.61 | $ | 0.47 | 30 | % | ||||||
Management Comments
“We began 2012 with a strong quarter,” said Dr. Valentin Gapontsev, IPG Photonics’ Chief Executive Officer. “Revenues increased 23% from the prior year and net income grew by 30%. We continued to perform well across most geographic regions, while sales of high-power lasers for materials processing applications and other applications drove much of the revenue growth.”
“Materials processing sales accounted for approximately 84% of total revenues, resulting in a 19% increase year over year as we continued to penetrate the cutting, welding and marking and engraving applications with IPG’s high-power fiber lasers,” said Dr. Gapontsev. “Other applications (telecom, advanced and medical) were up 48% year over year, primarily driven by advanced applications, which benefited from the sale of multiple high-power lasers. High-power laser sales increased 42% year over year, with strength coming from North America, Europe and China, primarily for the automotive manufacturing industry.”
“We ended the quarter with a strong balance sheet with $377.1 million in cash and cash equivalents and $18.5 million in short-term investments following our successful follow-on offering in March 2012,” said Dr. Gapontsev. “During the first quarter, IPG generated $27.0 million in cash from operations and invested $13.8 million in capital expenditures. Our capex target range for 2012 is $55 to $60 million as we expand our manufacturing capacity and add to our network of application laboratories and sales facilities.”
IPGP Q1 2012 Results/ 2
Business Outlook and Financial Guidance
“Order flow continues to be robust,” said Dr. Gapontsev. “In North America, manufacturers are increasingly using fiber lasers in a broader range of industrial materials processing applications, which resulted in strong year-on-year sales growth for the region. Europe and China are performing better than expected considering the macro-economic factors in each region. Operationally, we are focused on identifying new opportunities for expansion, including developing specialized laser systems to meet customers’ needs and penetrating more deeply into the micro processing market with our QCW lasers. The range of applications for our fiber lasers continues to expand and we plan to capitalize on that growth with our superior technology, reliable and cost-effective products, and volume manufacturing capabilities.”
IPG Photonics expects revenue in the range of $128 million to $138 million for the second quarter of 2012. The Company anticipates earnings per diluted share in the range of $0.60 to $0.70 based on 52,103,000 diluted common shares, which includes 50,967,000 basic common shares outstanding and 1,136,000 potentially dilutive options at March 31, 2012.
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 Company’s 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, May 1, 2012 at 10:00 a.m. ET. The conference call will be webcast live and can be accessed on the “Investors” section of the Company’s 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 approximately one year on IPG’s 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 diverse applications, primarily materials processing. 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, order flow continuing to be robust, increasing use by manufacturers of fiber lasers in a broader range of industrial materials processing applications, performance in Europe and China better than expected, identifying new opportunities for expansion, expanding the range of applications for our fiber lasers, capitalizing on growth in this range, and revenue and earnings per share expectations for the second quarter of 2012. Factors that could cause actual results to differ materially include risks and
IPGP Q1 2012 Results/ 3
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 order cancellations and push-outs and financial and credit market issues; the Company’s ability to penetrate new applications for fiber lasers and increase market share; the rate of acceptance and penetration of IPG’s products; effective management of growth; level of fixed costs from its vertical integration; intellectual property infringement claims and litigation; 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 Company’s products and services; and other risks identified in the Company’s SEC filings. Readers are encouraged to refer to the risk factors described in the Company’s Annual Report on Form 10-K (filed with the SEC on February 27, 2012) 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 Q1 2012 Results/ 4
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| (in thousands, except per share data) | ||||||||
| NET SALES |
$ | 123,192 | $ | 99,958 | ||||
| COST OF SALES |
54,508 | 46,292 | ||||||
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| GROSS PROFIT |
68,684 | 53,666 | ||||||
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| OPERATING EXPENSES: |
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| Sales and marketing |
5,132 | 4,948 | ||||||
| Research and development |
7,140 | 5,731 | ||||||
| General and administrative |
9,949 | 8,169 | ||||||
| Loss on foreign exchange |
1,286 | 720 | ||||||
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| Total operating expenses |
23,507 | 19,568 | ||||||
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| OPERATING INCOME |
45,177 | 34,098 | ||||||
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| OTHER EXPENSE, Net: |
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| Interest expense, net |
(129 | ) | (206 | ) | ||||
| Other (expense) income, net |
(1,094 | ) | 8 | |||||
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| Total other expense |
(1,223 | ) | (198 | ) | ||||
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| INCOME BEFORE PROVISION FOR INCOME TAXES |
43,954 | 33,900 | ||||||
| PROVISION FOR INCOME TAXES |
(13,406 | ) | (10,522 | ) | ||||
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| NET INCOME |
30,548 | 23,378 | ||||||
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
633 | 310 | ||||||
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| NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION |
$ | 29,915 | $ | 23,068 | ||||
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| NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE: |
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| Basic |
$ | 0.63 | $ | 0.49 | ||||
| Diluted |
$ | 0.61 | $ | 0.47 | ||||
| WEIGHTED AVERAGE SHARES OUTSTANDING: |
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| Basic |
48,446 | 47,099 | ||||||
| Diluted |
49,582 | 48,690 | ||||||
IPGP Q1 2012 Results/ 5
IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF STOCK-BASED COMPENSATION
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In thousands) | 2012 | 2011 | ||||||
| Cost of sales |
$ | 460 | $ | 521 | ||||
| Sales and marketing |
252 | 565 | ||||||
| Research and development |
303 | 280 | ||||||
| General and administrative |
983 | 1,241 | ||||||
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| Total stock-based compensation |
1,998 | 2,607 | ||||||
| Tax benefit recognized |
(607 | ) | (879 | ) | ||||
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| Net stock-based compensation |
$ | 1,391 | $ | 1,728 | ||||
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IPGP Q1 2012 Results/ 6
IPG PHOTONICS CORPORATION
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2012 | 2011 | |||||||
| (In thousands, except share and per | ||||||||
| share data) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: |
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| Cash and cash equivalents |
$ | 377,071 | $ | 180,234 | ||||
| Short-term investments |
18,451 | 25,451 | ||||||
| Accounts receivable, net |
88,426 | 75,755 | ||||||
| Inventories, net |
123,430 | 116,978 | ||||||
| Prepaid income taxes and income taxes receivable |
14,434 | 13,285 | ||||||
| Prepaid expenses and other current assets |
14,251 | 11,855 | ||||||
| Deferred income taxes, net |
11,615 | 10,899 | ||||||
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| Total current assets |
647,678 | 434,457 | ||||||
| DEFERRED INCOME TAXES, NET |
5,321 | 4,830 | ||||||
| INTANGIBLE ASSETS, NET |
5,727 | 6,157 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET |
169,876 | 155,202 | ||||||
| OTHER ASSETS |
6,303 | 7,486 | ||||||
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| TOTAL |
$ | 834,905 | $ | 608,132 | ||||
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| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES: |
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| Revolving line-of-credit facilities |
$ | 9,652 | $ | 7,057 | ||||
| Current portion of long-term debt |
1,575 | 1,613 | ||||||
| Accounts payable |
13,488 | 11,122 | ||||||
| Accrued expenses and other liabilities |
44,014 | 47,285 | ||||||
| Deferred income taxes, net |
9,690 | 5,405 | ||||||
| Income taxes payable |
24,720 | 21,230 | ||||||
| Total current liabilities |
103,139 | 93,712 | ||||||
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| OTHER LONG-TERM LIABILITIES |
9,881 | 8,961 | ||||||
| LONG-TERM DEBT, NET OF CURRENT PORTION |
15,132 | 15,726 | ||||||
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| Total liabilities |
128,152 | 118,399 | ||||||
| REDEEMABLE NONCONTROLLING INTERESTS |
48,387 | 46,123 | ||||||
| COMMITMENTS AND CONTINGENCIES |
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| IPG PHOTONICS CORPORATION STOCKHOLDERS’ EQUITY: |
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| Common stock, $0.0001 par value, 175,000,000 shares authorized; 50,967,452 shares issued and outstanding at March 31, 2012; 47,616,115 shares issued and outstanding at December 31, 2011 |
5 | 5 | ||||||
| Additional paid-in capital |
504,243 | 332,585 | ||||||
| Retained earnings |
153,241 | 122,833 | ||||||
| Accumulated other comprehensive income (loss) |
877 | (12,100 | ) | |||||
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| Total IPG Photonics Corporation stockholders’ equity |
658,366 | 443,323 | ||||||
| NONCONTROLLING INTERESTS |
— | 287 | ||||||
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| Total equity |
658,366 | 443,610 | ||||||
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| TOTAL |
$ | 834,905 | $ | 608,132 | ||||
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IPGP Q1 2012 Results/ 7
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| (In thousands) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
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| Net income |
$ | 30,548 | $ | 23,378 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization |
6,215 | 5,658 | ||||||
| Provisions for inventory, warranty & bad debt |
3,799 | 3,806 | ||||||
| Other |
6,611 | 8,259 | ||||||
| Changes in assets and liabilities that provided (used) cash: |
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| Accounts receivable/payable |
(11,501 | ) | 1,043 | |||||
| Inventories |
(4,027 | ) | (13,720 | ) | ||||
| Other |
(4,640 | ) | (18,270 | ) | ||||
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| Net cash provided by operating activities |
27,005 | 10,154 | ||||||
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| CASH FLOWS FROM INVESTING ACTIVITIES: |
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| Purchases of property, plant and equipment |
(13,779 | ) | (9,587 | ) | ||||
| Proceeds from short-term investments |
7,001 | — | ||||||
| Acquisition of businesses, net of cash acquired |
— | (450 | ) | |||||
| Other |
149 | 149 | ||||||
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| Net cash used in investing activities |
(6,629 | ) | (9,888 | ) | ||||
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| CASH FLOWS FROM FINANCING ACTIVITIES: |
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| Line-of-credit facilities |
2,694 | (415 | ) | |||||
| Principal payments on long-term borrowings |
(360 | ) | (333 | ) | ||||
| Purchase of noncontrolling interests |
(700 | ) | — | |||||
| Tax benefits from exercise of employee stock options |
1,048 | 3,108 | ||||||
| Exercise of employee stock options and issuances under employee stock purchase plan |
749 | 4,884 | ||||||
| Proceeds from follow-on public offering, net of offering expenses |
168,268 | — | ||||||
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| Net cash provided by financing activities |
171,699 | 7,244 | ||||||
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| EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |
4,762 | 5,248 | ||||||
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| NET INCREASE IN CASH AND CASH EQUIVALENTS |
196,837 | 12,758 | ||||||
| CASH AND CASH EQUIVALENTS — Beginning of period |
180,234 | 147,860 | ||||||
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| CASH AND CASH EQUIVALENTS — End of period |
$ | 377,071 | $ | 160,618 | ||||
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| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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| Cash paid for interest |
$ | 251 | $ | 255 | ||||
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| Cash paid for income taxes |
$ | 6,755 | $ | 8,865 | ||||
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