Exhibit 99.1
| |
|
|
|
|
CONTACT:
|
|
Tim Mammen
Chief Financial Officer
IPG Photonics Corporation
(508) 373-1100
|
|
David Calusdian
Executive Vice President
Sharon Merrill Associates, Inc.
(617) 542-5300 |
IPG PHOTONICS REPORTS RECORD REVENUE ON 29% SALES GROWTH
AND 27% INCREASE IN NET INCOME IN THIRD QUARTER OF 2008
Sales of Fiber Lasers for Materials Processing Applications Increase by 47 Percent
Company Reports Gains Across all Geographic Markets
OXFORD, Mass. — November 6, 2008 — IPG Photonics Corporation (Nasdaq: IPGP), the world leader in
high-power fiber lasers and amplifiers, today reported that revenues for the third quarter of 2008
increased by 29% to $62.0 million and net income increased by 27% to $10.9 million compared with
third quarter of 2007. For the first nine months of 2008, revenues increased 28% to $170.9 million
from $133.6 million in the comparable period in 2007 and net income increased by 28% to $27.6
million from $21.6 million in the same period last year. Revenue growth for the quarter was driven
by sales of the Company’s fiber lasers used for materials processing applications, which increased
by 47% from the third quarter of 2007 to $51.0 million, as well as strong sales to North American,
European and Asian markets.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
| |
|
September 30, |
|
|
|
|
|
|
September 30, |
|
|
|
|
| (In millions, except per share data) |
|
2008 |
|
|
2007 |
|
|
% Change |
|
|
2008 |
|
|
2007 |
|
|
% Change |
|
Revenue |
|
$ |
62.0 |
|
|
$ |
47.9 |
|
|
|
29 |
% |
|
$ |
170.9 |
|
|
$ |
133.6 |
|
|
|
28 |
% |
Gross margin |
|
|
47.4 |
% |
|
|
45.3 |
% |
|
|
|
|
|
|
47.3 |
% |
|
|
45.9 |
% |
|
|
|
|
Operating income |
|
$ |
17.1 |
|
|
$ |
12.8 |
|
|
|
33 |
% |
|
$ |
42.4 |
|
|
$ |
34.0 |
|
|
|
25 |
% |
Operating margin |
|
|
27.6 |
% |
|
|
26.7 |
% |
|
|
|
|
|
|
24.8 |
% |
|
|
25.4 |
% |
|
|
|
|
Net income |
|
$ |
10.9 |
|
|
$ |
8.6 |
|
|
|
27 |
% |
|
$ |
27.6 |
|
|
$ |
21.6 |
|
|
|
28 |
% |
Earnings per diluted share |
|
$ |
0.23 |
|
|
$ |
0.19 |
|
|
|
21 |
% |
|
$ |
0.60 |
|
|
$ |
0.47 |
|
|
|
28 |
% |
Comments on the Third Quarter
“The industrial marketplace continues to embrace our fiber lasers as a more reliable, robust,
efficient and flexible manufacturing solution that also provides the financial advantages of lower
costs and higher throughput compared with conventional processes,” said Dr. Valentin Gapontsev, IPG
Photonics’ Chief Executive Officer.
“This acceptance of our technology, combined with our geographic and application diversity, has
once again enabled IPG to report revenues and net income at the top of our guidance range,” said
Dr. Gapontsev. “Our materials processing market, where fiber lasers have clearly demonstrated their operational
superiority, continues to be our strongest revenue driver,” continued Dr. Gapontsev. “Our revenues
in this market experienced a 47% year-over-year increase for the quarter. Geographically, all of our major markets
achieved at least double-digit gains, with sales to Japan increasing by 110%. Sales of our medium
powered lasers more than doubled and pulsed laser sales continued to be strong with a 42% increase
over the prior year, driven by demand for photovoltaic manufacturing and marking applications.”
IPGP
Q3 Results/2
Operating income increased 33% to $17.1 million for the third quarter of 2008, up from $12.8
million for the same period in 2007. Earnings per diluted share increased 21% to $0.23 from $0.19
a year ago. Operating expenses for the third quarter of 2008 were $12.3 million, or 20% of
revenue, compared with $8.9 million, or 19% of revenue, in the third quarter of 2007.
For the first nine months of 2008, operating income increased 25% to $42.4 million, up from $34.0
million for the same period in 2007. Earnings per diluted share increased 28% to $0.60 from $0.47
a year ago. Operating expenses were $38.4 million, or 22% of revenue, in the first nine months of
2008, compared with $27.4 million, or 20% of revenue, in the nine-month period a year ago.
Cash and cash equivalents increased to $44.3 million on September 30, 2008, compared with $38.0
million on December 31, 2007, primarily as a result of $25.0 million of cash provided by operating
activities, proceeds from the liquidation of marketable securities of $5.5 million and net proceeds
from the Company’s credit lines of $4.4 million, offset by capital expenditures and investments in
intangible assets of $29.5 million. For the third quarter of 2008, cash provided by operating
activities was $13.4 million and capital expenditures and cash used in investing activities totaled
$10.3 million.
Business Outlook and Financial Guidance
“As we enter what promises to be one of the most challenging economic times in recent memory, we
believe that IPG and its products are well positioned,” stated Dr. Gapontsev. “Our cost structure
is among the lowest in the industry and our fiber lasers provide manufacturers with many compelling
operational and competitive advantages.”
“We expect high power laser sales to remain strong in the fourth quarter. However, we expect that
this strength will be offset by lower sales of our pulsed laser products in certain Asian markets.
Also, the effect of a weakening Euro has lowered our estimates by approximately $3.0 million,”
stated Dr. Gapontsev.
For the fourth quarter of 2008, IPG Photonics expects continued year-over-year revenue and earnings
per share growth with revenues in the range of $57 million to $62 million, and earnings per diluted
share in the range of $0.19 to $0.23 based on 46,375,000 common shares, which include 44,685,000
basic common shares outstanding and 1,690,000 potentially dilutive options at September 30, 2008.
Conference Call Reminder
The Company will hold a conference call to review its financial results and business highlights
today, November 6, 2008 at 10:00 a.m. ET. The conference call will be webcast live over the
Internet 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) 856-1965 or (719)
325-4816. Interested parties that are unable to listen to the live call may access an archived
version of the webcast 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
IPGP
Q3 Results/3
pioneered the development and commercialization of optical fiber-based lasers for use
in a wide range of applications such as materials processing, advanced applications,
telecommunications and medical applications. 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,
those relating to increasing demand for the Company’s products from existing and new customers,
improved gross margins, growth rates in Europe and Asia, increased orders in the U.S. and
elsewhere, expected shipment dates for new orders, and the Company’s revenue and EPS guidance for
the fourth quarter of 2008. 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 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,
manufacturing risks, 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 March 13, 2008) 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-G
IPGP
Q3 Results/4
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
| |
|
|
|
|
|
(in thousands, except per share data) |
|
|
|
|
|
NET SALES |
|
$ |
62,012 |
|
|
$ |
47,905 |
|
|
$ |
170,882 |
|
|
$ |
133,610 |
|
COST OF SALES |
|
|
32,590 |
|
|
|
26,200 |
|
|
|
90,113 |
|
|
|
72,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
29,422 |
|
|
|
21,705 |
|
|
|
80,769 |
|
|
|
61,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,735 |
|
|
|
2,488 |
|
|
|
10,585 |
|
|
|
7,233 |
|
Research and development |
|
|
4,130 |
|
|
|
2,354 |
|
|
|
11,451 |
|
|
|
6,871 |
|
General and administrative |
|
|
4,468 |
|
|
|
4,049 |
|
|
|
16,331 |
|
|
|
13,279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
12,333 |
|
|
|
8,891 |
|
|
|
38,367 |
|
|
|
27,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME |
|
|
17,089 |
|
|
|
12,814 |
|
|
|
42,402 |
|
|
|
33,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE) INCOME, Net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (expense) income, net |
|
|
(194 |
) |
|
|
198 |
|
|
|
(472 |
) |
|
|
711 |
|
Other (expense) income, net |
|
|
(103 |
) |
|
|
309 |
|
|
|
433 |
|
|
|
345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other (expense) income |
|
|
(297 |
) |
|
|
507 |
|
|
|
(39 |
) |
|
|
1,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES |
|
|
16,792 |
|
|
|
13,321 |
|
|
|
42,363 |
|
|
|
35,028 |
|
PROVISION FOR INCOME TAXES |
|
|
(5,310 |
) |
|
|
(3,505 |
) |
|
|
(13,365 |
) |
|
|
(11,623 |
) |
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES |
|
|
(589 |
) |
|
|
(1,259 |
) |
|
|
(1,404 |
) |
|
|
(1,847 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
|
10,893 |
|
|
|
8,557 |
|
|
|
27,594 |
|
|
|
21,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.24 |
|
|
$ |
0.20 |
|
|
$ |
0.62 |
|
|
$ |
0.50 |
|
Diluted |
|
$ |
0.23 |
|
|
$ |
0.19 |
|
|
$ |
0.60 |
|
|
$ |
0.47 |
|
WEIGHTED AVERAGE SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
44,685 |
|
|
|
43,362 |
|
|
|
44,380 |
|
|
|
43,083 |
|
Diluted |
|
|
46,375 |
|
|
|
45,731 |
|
|
|
46,184 |
|
|
|
45,656 |
|
IPGP
Q3 Results/5
IPG
PHOTONICS CORPORATION
CONSOLIDATED BALANCE SHEETS
| |
|
|
|
|
|
|
|
|
| |
|
September 30, |
|
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
| |
|
(in thousands) |
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
44,339 |
|
|
$ |
37,972 |
|
Marketable securities, at fair value |
|
|
— |
|
|
|
6,950 |
|
Accounts receivable, net |
|
|
39,503 |
|
|
|
33,946 |
|
Inventories, net |
|
|
72,797 |
|
|
|
60,412 |
|
Income taxes receivable |
|
|
1,015 |
|
|
|
3,145 |
|
Prepaid expenses and other current assets |
|
|
9,228 |
|
|
|
7,071 |
|
Deferred income taxes |
|
|
6,871 |
|
|
|
6,195 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
173,753 |
|
|
|
155,691 |
|
DEFERRED INCOME TAXES |
|
|
2,813 |
|
|
|
2,795 |
|
PROPERTY, PLANT, AND EQUIPMENT, Net |
|
|
112,479 |
|
|
|
96,369 |
|
OTHER ASSETS |
|
|
14,872 |
|
|
|
8,466 |
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
303,917 |
|
|
$ |
263,321 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Revolving line-of-credit facilities |
|
$ |
16,001 |
|
|
$ |
11,218 |
|
Current portion of long-term debt |
|
|
1,333 |
|
|
|
— |
|
Accounts payable |
|
|
10,031 |
|
|
|
9,444 |
|
Accrued expenses and other liabilities |
|
|
19,712 |
|
|
|
13,160 |
|
Deferred income taxes |
|
|
865 |
|
|
|
564 |
|
Income taxes payable |
|
|
1,462 |
|
|
|
96 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
49,404 |
|
|
|
34,482 |
|
|
|
|
|
|
|
|
DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES |
|
|
2,842 |
|
|
|
4,204 |
|
|
|
|
|
|
|
|
LONG-TERM DEBT |
|
|
18,356 |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
MINORITY INTERESTS |
|
|
4,896 |
|
|
|
4,455 |
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Common stock |
|
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
|
279,364 |
|
|
|
275,506 |
|
Accumulated deficit |
|
|
(62,903 |
) |
|
|
(90,497 |
) |
Accumulated other comprehensive income |
|
|
11,954 |
|
|
|
15,167 |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
228,419 |
|
|
|
200,180 |
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
303,917 |
|
|
$ |
263,321 |
|
|
|
|
|
|
|
|