Delaware
(State or Other Jurisdiction
of Incorporation)
|
001-33155
(Commission File No.)
|
04-3444218
(IRS Employer
Identification No.)
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common Stock, par value $0.0001 per share | IPGP | Nasdaq Global Select Market |
Exhibit Number | Exhibit Description | |||||||
Exhibit 99.1 | ||||||||
Exhibit 104 | Inline XBRL for the cover page of this Current Report on Form 8-K. | |||||||
IPG PHOTONICS CORPORATION | ||||||||||||||
October 31, 2023 | By: | /s/ Timothy P.V. Mammen | ||||||||||||
Timothy P.V. Mammen | ||||||||||||||
Senior Vice President and Chief Financial Officer |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
(In millions, except per share data and percentages) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||||
Revenue | $ | 301.4 | $ | 349.0 | (14) | % | $ | 988.5 | $ | 1,096.0 | (10) | % | ||||||||||||||||||||||||||
Gross margin | 44.1 | % | 43.1 | % | 43.2 | % | 45.1 | % | ||||||||||||||||||||||||||||||
Operating income | $ | 55.7 | $ | 93.2 | (40) | % | $ | 203.2 | $ | 258.0 | (21) | % | ||||||||||||||||||||||||||
Operating margin | 18.5 | % | 26.7 | % | 20.6 | % | 23.5 | % | ||||||||||||||||||||||||||||||
Net income attributable to IPG Photonics Corporation | $ | 55.0 | $ | 76.3 | (28) | % | $ | 177.5 | $ | 202.8 | (12) | % | ||||||||||||||||||||||||||
Earnings per diluted share | $ | 1.16 | $ | 1.47 | (21) | % | $ | 3.73 | $ | 3.93 | (5) | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||
Net sales | $ | 301,401 | $ | 349,006 | $ | 988,546 | $ | 1,096,008 | ||||||||||||||||||
Cost of sales | 168,499 | 198,582 | 561,015 | 601,419 | ||||||||||||||||||||||
Gross profit | 132,902 | 150,424 | 427,531 | 494,589 | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Sales and marketing | 22,243 | 19,383 | 63,518 | 58,767 | ||||||||||||||||||||||
Research and development | 24,708 | 25,436 | 70,990 | 89,494 | ||||||||||||||||||||||
General and administrative | 30,958 | 33,813 | 90,746 | 97,888 | ||||||||||||||||||||||
Gain on divestiture | — | (21,748) | — | (21,748) | ||||||||||||||||||||||
Impairment of long-lived assets | 1,237 | 919 | 1,237 | 919 | ||||||||||||||||||||||
Restructuring charges (recoveries), net |
(1,501) | — | (357) | — | ||||||||||||||||||||||
(Gain) loss on foreign exchange | (449) | (541) | (1,798) | 11,289 | ||||||||||||||||||||||
Total operating expenses | 77,196 | 57,262 | 224,336 | 236,609 | ||||||||||||||||||||||
Operating income | 55,706 | 93,162 | 203,195 | 257,980 | ||||||||||||||||||||||
Other income, net: | ||||||||||||||||||||||||||
Interest income, net | 11,569 | 3,625 | 28,366 | 4,732 | ||||||||||||||||||||||
Other income, net | 545 | 301 | 1,161 | 683 | ||||||||||||||||||||||
Total other income | 12,114 | 3,926 | 29,527 | 5,415 | ||||||||||||||||||||||
Income before provision of income taxes | 67,820 | 97,088 | 232,722 | 263,395 | ||||||||||||||||||||||
Provision for income taxes | 12,826 | 20,390 | 55,272 | 59,738 | ||||||||||||||||||||||
Net income | 54,994 | 76,698 | 177,450 | 203,657 | ||||||||||||||||||||||
Less: net income attributable to non-controlling interests | — | 434 | — | 853 | ||||||||||||||||||||||
Net income attributable to IPG Photonics Corporation | $ | 54,994 | $ | 76,264 | $ | 177,450 | $ | 202,804 | ||||||||||||||||||
Net income attributable to IPG Photonics Corporation per share: | ||||||||||||||||||||||||||
Basic | $ | 1.16 | $ | 1.48 | $ | 3.75 | $ | 3.94 | ||||||||||||||||||
Diluted | $ | 1.16 | $ | 1.47 | $ | 3.73 | $ | 3.93 | ||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||
Basic | 47,237 | 51,629 | 47,364 | 51,449 | ||||||||||||||||||||||
Diluted | 47,388 | 51,737 | 47,536 | 51,626 |
September 30, | December 31, | |||||||||||||
2023 | 2022 | |||||||||||||
(In thousands, except share and per share data) |
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ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 528,284 | $ | 698,209 | ||||||||||
Short-term investments | 605,207 | 479,374 | ||||||||||||
Accounts receivable, net | 229,597 | 211,347 | ||||||||||||
Inventories | 479,829 | 509,363 | ||||||||||||
Prepaid income taxes | 32,538 | 40,934 | ||||||||||||
Prepaid expenses and other current assets | 45,005 | 47,047 | ||||||||||||
Total current assets | 1,920,460 | 1,986,274 | ||||||||||||
Deferred income taxes, net | 79,583 | 75,152 | ||||||||||||
Goodwill | 38,265 | 38,325 | ||||||||||||
Intangible assets, net | 28,056 | 34,120 | ||||||||||||
Property, plant and equipment, net | 581,970 | 580,561 | ||||||||||||
Other assets | 24,530 | 28,848 | ||||||||||||
Total assets | $ | 2,672,864 | $ | 2,743,280 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt | $ | — | $ | 16,031 | ||||||||||
Accounts payable | 33,126 | 46,233 | ||||||||||||
Accrued expenses and other current liabilities | 174,517 | 202,764 | ||||||||||||
Income taxes payable | 12,066 | 9,618 | ||||||||||||
Total current liabilities | 219,709 | 274,646 | ||||||||||||
Other long-term liabilities and deferred income taxes | 69,204 | 83,274 | ||||||||||||
Total liabilities | 288,913 | 357,920 | ||||||||||||
Commitments and contingencies | ||||||||||||||
IPG Photonics Corporation equity: | ||||||||||||||
Common stock, $0.0001 par value, 175,000,000 shares authorized; 56,249,626 and 46,921,754 shares issued and outstanding, respectively, at September 30, 2023; 56,017,672 and 48,138,257 shares issued and outstanding, respectively, at December 31, 2022. |
6 | 6 | ||||||||||||
Treasury stock, at cost, 9,327,872 and 7,879,415 shares held at September 30, 2023 and December 31, 2022, respectively. |
(1,097,537) | (938,009) | ||||||||||||
Additional paid-in capital | 978,331 | 951,371 | ||||||||||||
Retained earnings | 2,753,966 | 2,576,516 | ||||||||||||
Accumulated other comprehensive loss | (250,815) | (204,524) | ||||||||||||
Total IPG Photonics Corporation equity | 2,383,951 | 2,385,360 | ||||||||||||
Total liabilities and equity | $ | 2,672,864 | $ | 2,743,280 |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | 177,450 | $ | 203,657 | ||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization | 52,678 | 69,852 | ||||||||||||
Impairment of long-lived assets and restructuring charges (recoveries), net |
(486) | 919 | ||||||||||||
Provisions for inventory, warranty & bad debt | 43,889 | 58,990 | ||||||||||||
Gain on divestiture | — | (21,748) | ||||||||||||
Other | 5,238 | 20,201 | ||||||||||||
Changes in assets and liabilities that (used) provided cash, net of acquisitions: |
||||||||||||||
Accounts receivable and accounts payable | (35,257) | 39,680 | ||||||||||||
Inventories | (20,736) | (148,959) | ||||||||||||
Other | (32,852) | (51,566) | ||||||||||||
Net cash provided by operating activities | 189,924 | 171,026 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of and deposits on property, plant and equipment | (85,256) | (84,552) | ||||||||||||
Proceeds from sales of property, plant and equipment | 30,425 | 837 | ||||||||||||
Purchases of short-term investments | (898,455) | (914,598) | ||||||||||||
Proceeds from short-term investments | 789,844 | 1,355,883 | ||||||||||||
Acquisitions of businesses, net of cash acquired | — | (2,000) | ||||||||||||
Proceeds from divestiture, net of cash sold | — | 52,141 | ||||||||||||
Other | 446 | (246) | ||||||||||||
Net cash (used in) provided by investing activities | (162,996) | 407,465 | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Principal payments on long-term borrowings | (16,031) | (17,829) | ||||||||||||
Proceeds from issuance of common stock under employee stock option and purchase plans less payments for taxes related to net share settlement of equity awards | (432) | 2,353 | ||||||||||||
Purchase of treasury stock, at cost | (159,528) | (382,885) | ||||||||||||
Purchase of non-controlling interests | — | (2,500) | ||||||||||||
Net cash used in financing activities | (175,991) | (400,861) | ||||||||||||
Effect of changes in exchange rates on cash and cash equivalents | (20,862) | (17,461) | ||||||||||||
Net (decrease) increase in cash and cash equivalents | (169,925) | 160,169 | ||||||||||||
Cash and cash equivalents — Beginning of period | 698,209 | 709,105 | ||||||||||||
Cash and cash equivalents — End of period | 528,284 | 869,274 | ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||
Cash paid for interest | $ | 1,110 | $ | 2,766 | ||||||||||
Cash paid for income taxes | $ | 55,001 | $ | 83,771 | ||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Amortization of intangible assets: | ||||||||||||||||||||||||||
Cost of sales | $ | 564 | $ | 796 | $ | 1,692 | $ | 3,024 | ||||||||||||||||||
Sales and marketing | 1,456 | 1,651 | 4,370 | 5,353 | ||||||||||||||||||||||
Total amortization of intangible assets | $ | 2,020 | $ | 2,447 | $ | 6,062 | $ | 8,377 | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cost of sales | $ | 1,503 | $ | 2,961 | $ | 6,664 | $ | 9,234 | ||||||||||||||||||
Sales and marketing | 1,362 | 1,191 | 4,045 | 3,709 | ||||||||||||||||||||||
Research and development | 2,330 | 986 | 6,171 | 5,889 | ||||||||||||||||||||||
General and administrative | 2,949 | 3,640 | 10,582 | 10,370 | ||||||||||||||||||||||
Total stock-based compensation | 8,144 | 8,778 | 27,462 | 29,202 | ||||||||||||||||||||||
Tax effect of stock-based compensation | (1,772) | (1,894) | (6,016) | (6,279) | ||||||||||||||||||||||
Net stock-based compensation | $ | 6,372 | $ | 6,884 | $ | 21,446 | $ | 22,923 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Excess tax benefit (detriment) on stock-based compensation | $ | (55) | $ | (114) | $ | (1,741) | $ | (2,254) | ||||||||||||||||||