The Leader in Photonics

Transcription

1 The Leader in Photonics August 2015

2 Forward-Looking Statements & Non-GAAP Measurement Forward-Looking Statements The statements in this presentation that relate to guidance, projections, future plans, business opportunities, estimates, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with business and economic conditions, customer and/or supplier contract cancellations, manufacturing risks, competitive factors, successful introductions of new products, uncertainties pertaining to customer orders, demand for products and services, growth and development of markets for the Company's products and services, and other risks identified in our filings made with the Securities and Exchange Commission, including, most recently, our Form 10-Q for the quarter ended April 4, Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forwardlooking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are encouraged to refer to the risk disclosures described in the Company s Form 10-K for the fiscal year ended September 27, 2014, our most recent Form10-Q and subsequent reports and 8-K s, as applicable. Non-GAAP Measurement The Company s statements regarding its historical pro forma net income, pro forma EBITDA% and pro forma EPS results are non-gaap financial measures. Historical pro forma net income, pro forma EBITDA% and pro forma EPS exclude those items set forth on the applicable slide and you should refer to those slides and the reconciliation for further information. The Company neither updates nor confirms any guidance regarding the future operating results of the Company which may have been given prior to this presentation. All images copyrighted by Coherent, Inc P. 2

3 The Photonics Company Provider of Photonics Solutions - Primarily Lasers for Commercial and Scientific Research Applications Founded in 1966 Materials 15% Processing Revenue Mix TTM TTM Sales $798.2 Million TTM Orders $742.4 Million 2,524 Employees OEM Components & Instrumentation 21% 15% Scientific Research & Gov. Programs 49% Microelectronics Sales 26% U.S. and 74% International Geographic Sales Distribution TTM Approximately 427 Patents, 147 Pending 17% Europe 51% 26% Asia Pacific 6% R.O.W. US Note: Photonics is the Merger of Lasers, Optics and Electronics Source: Company management as of 07/04/15 P. 3

4 Diversified Markets and Applications Technology Portfolio Microelectronics Materials Processing OEM Components & Instrumentation Scientific Research & Government Programs Primary Application Focus FPD, API, Semi Marking, Engraving, Cutting and Welding Diagnostic & Therapeutic Medical, Defense and Display Ultrafast Growth vs Market SAM Position Competitors NEWP, JDSU, Trumpf IPGP, Trumpf, RSTI JDSU, NEWP, Private Companies NEWP, GSIG, Private Companies Growth Opportunities OLED, Smartphones, Tablets, Strengthened Glass Cutting High Power Materials Processing Laser Eye Care Dental Attosecond Physics P. 4

5 Acquisition of Tinsley Optics Tinsley Optics was a division of L-3 Communications specializing in large format optics for excimer laser annealing (ELA), defense and aerospace applications Coherent acquired the Tinsley assets in a cash transaction on July 27, 2015 The acquisition provides supply chain protection for Coherent and its customers for Gen 5 and larger ELA systems (>1000mm) Coherent will continue to support non-ela customers predominantly for ground and space-based telescopes We expect the business to generate $ million in FY16 sales and become accretive by Q4FY16 Tinsley will operate as part of Coherent Integrated Optical Systems (IOS) located in Richmond, CA P. 5

6 Acquisition of Raydiance Inc. Raydiance was a venture backed start-up specializing in short pulse processing for the automotive fuel injector and medical device manufacturing Coherent acquired the Raydiance assets in a cash transaction on July 24, 2015 The acquisition expands Coherent s know-how and IP position in the developing micromachining market Coherent will provide ongoing support for the installed user base including new systems, parts and service We expect the business to generate $ million in FY16 sales and become accretive by Q4FY16 It will operate as part of Coherent Integrated Optical Systems (IOS) located in Richmond, CA P. 6

7 HighLight FL High Power Fiber Laser Platform Target Applications Cutting, welding, brazing and additive manufacturing Key Attributes Power 1kw to 4kW, scalable to higher power Modular architecture with high flexibility for OEM modules or complete systems High-quality, high-throughput metal processing especially with highly reflective materials Robust design for harsh industrial environments Vertical integration enables reliability and cost P. 7

8 5 Micron Laser Key Attributes Industry s first commercial high power 5 micron laser Unique wavelength enables more efficient processing of certain materials Ability to achieve up to 50% smaller spot size than CO 2 Leverages Coherent s industry leading CO 2 platform and with similar Cost-of-ownership 230W average power. Future models scalable to higher powers Target Applications PCB via drilling extended CO2 capability to drill <40 micron vias Polymer Film Cutting ability to process difficult materials Ultra-thin Glass Processing ability to cut free-form Medical Therapy high water absorption advantage P. 8

9 Monaco Industrial Femtosecond Laser Key Attributes Ideal for highest edge / surface quality in insulators, metals and semiconductors Pulse width tunable (400 10,000 fs) to match optimum material removal rates Up to 1MHz rep rate / 40W power for highest throughput / lowest costs per part Compact all fiber architecture enables low cost and future performance scaling Target Applications Glass cutting for microelectronics Thin film processing for microelectronics Lasik flap cutting and cataract procedures Automotive engine parts including fuel injectors Medical device manufacturing including stents P. 9

10 Performa Income Statement Metrics $1,000 $ Millions except earnings per share $800 $600 $400 $200 $- Bookings Revenue FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1'15 Q2'15 Q3'15 25% 20% 15% 10% 5% 0% Pro Forma EBITDA% 17.0% 19.5% 18.4% 17.8% 17.2% 18.7% 17.6% 18.4% 13.5% 7.1% FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1'15 Q2'15 Q3'15 $5.00 $4.00 $3.00 $2.00 $1.00 $- Pro Forma EPS FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1'15 Q2'15 Q3'15 Note:. Pro Forma EBITDA% and EPS exclude stock related compensation charges, intangibles amortization, inventory step up per purchase price accounting and exceptional items such as impairment charges, major restructuring costs, historical financial restatement and litigation costs, and non-recurring tax expenses or benefits. P. 10

11 Balance Sheet $ Millions July 4, 2015 Sept 27, 2014 Cash, equivalents & investments Accounts receivable Inventories Other current assets PP&E, net Long term assets $ $ Total Assets $ $ Current liabilities Long term liabilities Equity $ $ Total Liabilities & Stockholders Equity $ $ Sep FY Sep FY08 Sep FY09 Sep FY Sep FY11 Sep Sep Sep FY12 FY13 FY14 Cash Balance Dec FY15 Mar FY15 Jun FY15 Historical stock repurchases FY08 $ M FY10 $ 43.3 M FY11 $ M FY12 $ 25.0 M Q1FY15 $ 17.3 M Q2FY15 $ 7.7 M Q3FY15 $ 0.0 M P. 11

12 Reconciliation to GAAP and Non-GAAP Financials Quarter to Date Q3 15 Q2 15 Q1 15 GAAP net income $13,264 $18,413 $17,430 GAAP net income per diluted share $ 0.53 $ 0.74 $ 0.69 Stock based compensation 3,293 3,479 3,960 Intangibles amortization 1,432 1,540 1,607 Customs audit 1, Impairment of investment 1, Non-recurring tax benefit 0 0 (1,118) Non-GAAP net income $20,552 $23,432 $21,879 Non-GAAP net income per diluted share $ 0.82 $ 0.94 $ 0.87 Quarter to Date Q3 15 Q2 15 Q1 15 Net Income % of revenue 7.0% 9.0% 8.7% Income tax expense 2.6% 2.8% 3.1% Interest and other (income) expense, net 0.4% (0.6%) 0.6% Depreciation and amortization 4.2% 4.1% 4.1% Customs audit 0.7% 0.0% 0.0% Impairment of investment 1.1% 0.0% 0.0% Stock based compensation 2.4% 2.3% 2.2% Pro Forma EBITDA % of revenue 18.4% 17.6% 18.7% P. 12