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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2024
Coherent Corp.
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-39375 | 25-1214948 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
375 Saxonburg Boulevard
Saxonburg, Pennsylvania 16056
(Address of Principal Executive Offices) (Zip Code)
(724) 352-4455
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange on which registered |
||
| Common Stock, no par value | COHR | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On November 6, 2024 Coherent Corp. (the “Company”) issued a press release (“Press Release”), a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.
| Item 7.01. | Regulation FD Disclosure. |
A slide presentation to be used by senior management of the Company in connection its discussions with investors and others regarding the financial results is furnished as Exhibit 99.3.
The information in this Item 7.01 of this Current Report on Form 8-K, including the exhibits furnished pursuant to Item 9.01, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Item 7.01 of this Current Report on Form 8-K, including the Exhibit 99.2 furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit No. |
Description | |
| 99.1 | Press Release dated November 6, 2024 | |
| 99.2 | Investor Presentation | |
| 104.0 | Cover Page Interactive Data File (embedded within the inline XBRL document) | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Coherent Corp. | ||||||
| Date: November 6, 2024 | By: | /s/ Sherri Luther |
||||
| Sherri Luther | ||||||
| Chief Financial Officer and Treasurer | ||||||
Exhibit 99.1
|
|
Coherent Corp. 375 Saxonburg Blvd. Saxonburg, PA 16056-9499 |
PRESS RELEASE
COHERENT CORP. REPORTS FIRST QUARTER FISCAL 2025 RESULTS
| ● | Q1 REVENUE OF $1.35B, INCREASED 28% Y/Y |
| ● | Q1 GAAP GROSS MARGIN OF 34.1%, INCREASED 499 bps Y/Y; Q1 NON-GAAP GROSS MARGIN OF 37.7%, INCREASED 293 bps Y/Y |
| ● | Q1 GAAP EPS OF ($0.04), IMPROVED 94% Y/Y; Q1 NON-GAAP EPS OF $0.74, IMPROVED 357% Y/Y |
PITTSBURGH, Nov. 6, 2024 (GLOBE NEWSWIRE) – Coherent Corp. (NYSE: COHR) (“Coherent,” “We,” or the “Company”), a global leader in materials, networking, and lasers, announced financial results today for its fiscal first quarter ended September 30, 2024.
Revenue for the first quarter of fiscal 2025 was $1.35 billion, with GAAP gross margin of 34.1% and GAAP net loss of $(0.04) per diluted share. On a non-GAAP basis, gross margin was 37.7% with net income per diluted share of $0.74.
Jim Anderson, CEO, said, “We delivered solid growth in the September quarter on both a sequential and year-over-year basis, driven primarily by our AI-related Datacom transceivers. We also drove higher gross margin and operating margin. I continue to be excited by the opportunity to unlock significant long-term shareholder value.”
Sherri Luther, CFO, said, “I am pleased by our strong EPS growth, cash generation and debt reduction in the first quarter. Revenue growth and margin expansion drove strong sequential and year-over-year increases in our GAAP and Non-GAAP EPS. We also paid down $118 million of our outstanding debt.”
Selected First Quarter Financial Results and Comparisons (in millions, except per share data)
Table 1
| GAAP Financial Results (unaudited) | ||||||||||||||||||||
|
|
Q1 FY25 Q4 FY24 Q1 FY24 | Q/Q | Y/Y | |||||||||||||||||
| Revenues |
$ | 1,348 | $ | 1,314 | $ | 1,053 | 2.6% | 28.0% | ||||||||||||
| Gross Margin % |
34.1 | % | 32.9 | % | 29.1 | % | 126 bps | 499 bps | ||||||||||||
| R&D Expense % |
9.8 | % | 9.6 | % | 10.8 | % | 12 bps | (102) bps | ||||||||||||
| SG&A Expense % |
17.0 | % | 17.3 | % | 20.1 | % | (36) bps | (312) bps | ||||||||||||
| Operating Expenses |
$ | 385 | $ | 369 | $ | 328 | 4.4% | 17.3% | ||||||||||||
| Operating Income (Loss)(1) |
$ | 75 | $ | 63 | $ | (21) | 19.0% | (453.1)% | ||||||||||||
| Operating Margin (Loss) |
5.6 | % | 4.8 | % | (2.0) | % | 77 bps | 760 bps | ||||||||||||
| Net Earnings (Loss) Attributable to Coherent Corp. |
$ | 26 | $ | (48) | $ | (68) | (153.4)% | (138.3)% | ||||||||||||
| Diluted Loss Per Share |
$ | (0.04) | $ | (0.52) | $ | (0.65) | $ | 0.48 | $ | 0.61 | ||||||||||
(1) Operating Income (Loss) is defined as earnings (loss) before income taxes, interest expense, and other expense or income, net.
Selected First Quarter Financial Results and Comparisons (in millions, except per share data)
Table 1, continued
| Non-GAAP Financial Results (unaudited)(1) | ||||||||||||||||||||
|
|
Q1 FY25 Q4 FY24 Q1 FY24 | Q/Q | Y/Y | |||||||||||||||||
| Revenues |
$ | 1,348 | $ | 1,314 | $ | 1,053 | 2.6% | 28.0% | ||||||||||||
| Gross Margin % |
37.7 | % | 37.2 | % | 34.8 % | 49 bps | 293 bps | |||||||||||||
| R&D Expense % |
9.2 | % | 9.0 | % | 9.8 % | 27 bps | (57) bps | |||||||||||||
| SG&A Expense % |
11.3 | % | 11.3 | % | 12.4 % | (4) bps | (117) bps | |||||||||||||
| Operating Expenses |
$ | 276 | $ | 266 | $ | 234 | 3.7% | 18.0% | ||||||||||||
| Operating Income |
$ | 233 | $ | 223 | $ | 132 | 4.2% | 75.7% | ||||||||||||
| Operating Margin |
17.3 | % | 17.0 | % | 12.6% | 27 bps | 468 bps | |||||||||||||
| Net Earnings Attributable to Coherent Corp. |
$ | 150 | $ | 127 | $ | 55 | 18.2% | 172.2% | ||||||||||||
| Diluted Earnings Per Share |
$ | 0.74 | $ | 0.61 | $ | 0.16 | $ | 0.13 | $ | 0.58 | ||||||||||
2
(1) The Company has disclosed financial measurements in earnings release that present financial information considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although the Company’s management uses these measurements as an aid in monitoring the Company’s on-going financial performance. The non-GAAP net earnings attributable to Coherent Corp., the non-GAAP diluted earnings per share, the non-GAAP operating income, the non-GAAP gross margin, the non-GAAP research and development, the non-GAAP selling, general and administration, the non-GAAP operating expenses, the non-GAAP interest and other (income) expense, and the non-GAAP income tax (benefit), measure earnings and operating income (loss), respectively, excluding non-recurring or unusual items that are considered by management to be outside the Company’s standard operation and excluding certain non-cash items. EBITDA is an adjusted non-GAAP financial measurement that is considered by management to be useful in measuring the profitability between companies within the industry by reflecting operating results of the Company excluding non-operating factors. There are limitations associated with the use of non-GAAP financial measures, including that such measures may not be entirely comparable to similarly titled measures used by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance whether (i) items excluded from the non-GAAP financial measures will occur in the future or (ii) there will be cash costs associated with items excluded from the non-GAAP financial measures. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP. All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, restructuring charges (recoveries), integration and site consolidation expenses, integration transaction expenses, start-up costs related to the start-up of new devices for new customer applications, and various one-time adjustments. See Table 6 for the Reconciliation of GAAP measures to non-GAAP measures.
Product Highlights First Quarter Fiscal 2025
| ● | Lasers for silicon photonics: We announced a family of high-efficiency lasers to power 1.6T optical transceivers based on silicon photonics. |
| ● | Datacom transceiver multi-technology demonstration: At the European Conference on Optical Communications (ECOC’ 24) we demonstrated optical transceivers showcasing our differential EML and silicon photonics platforms |
| ● | ECOC’24 award for Data Center Innovation: Our Optical Circuit Switch (OCS) won the Best Product award. |
| ● | Launched industry’s first high optical output power L-band 800G ZR/ZR+ coherent transceiver. |
| ● | New industrial fiber laser: We announced our EDGE fiber laser series, a culmination of innovations to redefine value with best-in-class performance. |
Business Outlook – Second Quarter Fiscal 2025
| ● | Revenue for the second quarter of fiscal 2025 is expected to be between $1.33 billion and $1.41 billion. |
| ● | Gross margin percentage for the second quarter of fiscal 2025 is expected to be between 36% and 38% on a non-GAAP basis. |
| ● | Total operating expenses for the second quarter of fiscal 2025 are expected to be between $275 million and $295 million on a non-GAAP basis. |
| ● | Tax rate for the second quarter of fiscal 2025 is expected to be between 19% and 22% on a non-GAAP basis. |
| ● | EPS for the second quarter of fiscal 2025 is expected to be between $0.61 and $0.77 on a non-GAAP basis. |
3
Investor Conference Call / Webcast Details
Coherent will review the Company’s financial results for its first quarter of fiscal 2025 and business outlook on Wednesday, November 6, at 5:00 p.m. ET. A live webcast of the conference call will be available on the Investor Relations section of the Company’s website at coherent.com/company/investor-relations. The Company’s financial guidance will be limited to the comments on its public quarterly earnings call and the public business outlook statements contained in this press release.
The conference call will be recorded, and a replay will be available to interested parties who are unable to attend the live webcast starting on or about November 7, 2024.
Additional Information and Where to Find It
In connection with the conference call described above, the Company intends to post an investor presentation on the Company’s website at coherent.com/company/investor-relations/investor-presentations after market close on November 6, 2024. We also from time to time may post important information for investors on our website at coherent.com/company/investor-relations. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should review the Investor Relations page of our website referenced above, in addition to following the Company’s press releases, SEC filings, and public conference calls, presentations, and webcasts. Investors and security holders are able to obtain free copies of these documents through the Company’s website referenced above. Copies of the documents filed by the Company with the SEC may be obtained free of charge on the Company’s website at coherent.com/company/investor-relations/sec-filings. The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not part of, this release.
Forward-Looking Statements
This press release contains statements, estimates and projections that constitute “forward-looking statements” as defined under U.S. federal securities laws – including statements about our ability to unlock significant long-term shareholder value and our estimates and projections for our business outlook for the second quarter of fiscal 2025, each of which is made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause the Company’s actual results to differ materially from its historical experience and our present expectations or projections.
The Company believes that all forward-looking statements made by it herein have a reasonable basis, but there can be no assurance that management’s expectations, beliefs, or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements herein include but are not limited to: (i) the failure of any one or more of the assumptions stated herein to prove to be correct; (ii) the risks relating to forward-looking statements and other “Risk Factors”
4
identified from time to time in our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended June 30, 2024, and subsequently filed Quarterly Reports on Form 10-Q, which filings are available from the SEC; (iii) the substantial indebtedness the Company incurred in connection with its acquisition of Coherent, Inc. (the “Transaction”), the need to generate sufficient cash flows to service and repay such debt, and the Company’s ability to generate sufficient funds to meet its anticipated debt reduction goals; (iv) the possibility that the Company may not be able to continue its integration progress and/or take other restructuring actions, or otherwise be able to achieve expected synergies, operating efficiencies including greater scale, focus, resiliency, and lower operating costs, and other benefits within the expected time frames or at all and ultimately to successfully fully integrate the operations of Coherent with those of the Company; (v) the possibility that such integration and/or the restructuring actions may be more difficult, time-consuming, or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers, or suppliers) may be greater than expected in connection with the Transaction and/or the restructuring actions; (vi) any unexpected costs, charges, or expenses resulting from the Transaction and/or the restructuring actions; (vii) the risk that disruption from the Transaction and/or the restructuring actions materially and adversely affects the respective businesses and operations of the Company and Coherent, Inc.; (viii) potential adverse reactions or changes to business relationships resulting from the completion of the Transaction and/or the restructuring actions; (ix) the ability of the Company to retain and hire key employees; (x) the purchasing patterns of customers and end users; (xi) the timely release of new products and acceptance of such new products by the market; (xii) the introduction of new products by competitors and other competitive responses; (xiii) the Company’s ability to assimilate other recently acquired businesses, and realize synergies, cost savings, and opportunities for growth in connection therewith, together with the risks, costs, and uncertainties associated with such acquisitions; (xiv) the Company’s ability to devise and execute strategies to respond to market conditions; (xv) the risks to realizing the benefits of investments in R&D and commercialization of innovations; (xvi) the risks that the Company’s stock price will not trade in line with industrial technology leaders; and/or (xvii) the risks of business and economic disruption related to worldwide health epidemics or outbreaks that may arise. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or developments, or otherwise.
About Coherent
Coherent empowers market innovators to define the future through breakthrough technologies, from materials to systems. We deliver innovations that resonate with our customers in diversified applications for the industrial, communications, electronics, and instrumentation markets. Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide. For more information, please visit us at coherent.com.
Contact:
Paul Silverstein
Senior VP, Investor Relations & Corporate Communications
investor.relations@coherent.com
# # #
5
| Table 2 | ||||||||||||
| Coherent Corp. and Subsidiaries | ||||||||||||
| Condensed Consolidated Statements of Earnings (Loss)* | ||||||||||||
| THREE MONTHS ENDED | ||||||||||||
| $ Millions, except per share amounts (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
|
|||||||||
| Revenues |
$ | 1,348.1 | $ | 1,314.4 | $ | 1,053.1 | ||||||
| Costs, Expenses & Other Expense (Income) |
||||||||||||
| Cost of goods sold |
888.0 | 882.4 | 746.2 | |||||||||
| Research and development |
131.6 | 126.7 | 113.5 | |||||||||
| Selling, general and administrative |
229.0 | 228.0 | 211.7 | |||||||||
| Restructuring charges |
24.4 | 14.1 | 3.0 | |||||||||
| Interest expense |
66.6 | 67.8 | 73.3 | |||||||||
| Other expense (income), net |
(10.7 | ) | (14.5 | ) | (6.3 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
||||
| Total Costs, Expenses, & Other Expense |
1,328.8 | 1,304.5 | 1,141.4 | |||||||||
|
|
|
|
|
|
|
|
|
|
||||
| Earnings (Loss) Before Income Taxes |
19.3 | 9.9 | (88.3 | ) | ||||||||
| Income Taxes |
(5.6 | ) | 56.9 | (20.8 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
||||
| Net Earnings (Loss) |
24.9 | (47.0 | ) | (67.5 | ) | |||||||
| Net Earnings (Loss) Attributable to Noncontrolling Interests |
(1.0 | ) | 1.4 | — | ||||||||
|
|
|
|
|
|
|
|
|
|
||||
| Net Earnings (Loss) Attributable to Coherent Corp. |
$ | 25.9 | $ | (48.4 | ) | $ | (67.5 | ) | ||||
|
|
|
|
|
|
|
|
|
|
||||
| Less: Dividends on Preferred Stock |
31.8 | 31.4 | 30.2 | |||||||||
|
|
|
|
|
|
|
|
|
|
||||
| Net Loss Available to the Common Shareholders |
$ | (5.9 | ) | $ | (79.9 | ) | $ | (97.7 | ) | |||
|
|
|
|
|
|
|
|
|
|
||||
| Basic Loss Per Share |
$ | (0.04 | ) | $ | (0.52 | ) | $ | (0.65 | ) | |||
|
|
|
|
|
|
|
|
|
|
||||
| Diluted Loss Per Share |
$ | (0.04 | ) | $ | (0.52 | ) | $ | (0.65 | ) | |||
|
|
|
|
|
|
|
|
|
|
||||
| Average Shares Outstanding - Basic |
153.6 | 152.6 | 150.3 | |||||||||
| Average Shares Outstanding - Diluted |
153.6 | 152.6 | 150.3 | |||||||||
*Amounts may not recalculate due to rounding.
6
| Table 3 | ||||||||
| Coherent Corp. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets* | ||||||||
|
|
|
|
||||||
| $ Millions (unaudited) |
September 30, 2024 |
June 30, 2024 |
||||||
|
|
|
|
|
|||||
| Assets |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 1,019.6 | $ | 926.0 | ||||
| Restricted cash, current |
51.4 | 174.0 | ||||||
| Accounts receivable |
819.7 | 848.5 | ||||||
| Inventories |
1,386.1 | 1,286.4 | ||||||
| Prepaid and refundable income taxes |
25.2 | 26.9 | ||||||
| Prepaid and other current assets |
328.1 | 398.2 | ||||||
|
|
|
|
|
|
|
|||
| Total Current Assets |
3,630.3 | 3,660.1 | ||||||
| Property, plant & equipment, net |
1,875.3 | 1,817.3 | ||||||
| Goodwill |
4,595.6 | 4,464.3 | ||||||
| Other intangible assets, net |
3,514.7 | 3,503.2 | ||||||
| Deferred income taxes |
53.6 | 41.0 | ||||||
| Restricted cash, non-current |
711.4 | 689.6 | ||||||
| Other assets |
318.4 | 313.1 | ||||||
|
|
|
|
|
|
|
|||
| Total Assets |
$ | 14,699.3 | $ | 14,488.6 | ||||
|
|
|
|
|
|
|
|||
| Liabilities, Mezzanine Equity and Equity |
||||||||
| Current Liabilities |
||||||||
| Current portion of long-term debt |
$ | 69.9 | $ | 73.8 | ||||
| Accounts payable |
689.7 | 631.5 | ||||||
| Operating lease current liabilities |
41.9 | 40.6 | ||||||
| Accruals and other current liabilities |
556.5 | 597.9 | ||||||
|
|
|
|
|
|
|
|||
| Total Current Liabilities |
1,358.0 | 1,343.8 | ||||||
| Long-term debt |
3,918.8 | 4,026.4 | ||||||
| Deferred income taxes |
751.1 | 784.4 | ||||||
| Operating lease liabilities |
176.4 | 162.4 | ||||||
| Other liabilities |
226.3 | 225.4 | ||||||
|
|
|
|
|
|
|
|||
| Total Liabilities |
6,430.7 | 6,542.4 | ||||||
| Total Mezzanine Equity |
2,396.6 | 2,364.8 | ||||||
| Total Coherent Corp. Shareholders’ Equity |
5,501.1 | 5,210.1 | ||||||
| Noncontrolling interests |
370.9 | 371.4 | ||||||
|
|
|
|
|
|
|
|||
| Total Equity |
5,872.0 | 5,581.5 | ||||||
|
|
|
|
|
|
|
|||
| Total Liabilities, Mezzanine Equity and Equity |
$ | 14,699.3 | $ | 14,488.6 | ||||
|
|
|
|
|
|
|
|||
*Amounts may not recalculate due to rounding.
7
| Table 4 | ||||||||
| Coherent Corp. and Subsidiaries | ||||||||
| Condensed Consolidated Statements of Cash Flows* | THREE MONTHS ENDED | |||||||
|
|
|
|||||||
| $ Millions (unaudited) | Sep 30, 2024 |
Sep 30, 2023 |
||||||
|
|
|
|
||||||
| Cash Flows from Operating Activities |
||||||||
| Net cash provided by operating activities |
$ | 153.0 | $ | 198.8 | ||||
|
|
|
|
|
|||||
| Cash Flows from Investing Activities |
||||||||
| Additions to property, plant & equipment |
(92.0) | (62.2) | ||||||
| Proceeds from the sale of business |
27.0 | — | ||||||
| Other investing activities |
(0.8) | (2.0) | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(65.7) | (64.2) | ||||||
|
|
|
|
|
|||||
| Cash Flows from Financing Activities |
||||||||
| Payments on existing debt |
(117.9) | (18.7) | ||||||
| Proceeds from exercises of stock options and purchases under employee stock purchase plan |
24.4 | 14.9 | ||||||
| Payments in satisfaction of employees’ minimum tax obligations |
(32.0) | (13.9) | ||||||
| Other financing activities |
(0.2) | (0.3) | ||||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(125.7) | (17.9) | ||||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash and cash equivalents |
31.2 | (9.5) | ||||||
| Net increase (decrease) in cash and cash equivalents |
(7.2) | 107.3 | ||||||
| Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
1,789.7 | 837.6 | ||||||
|
|
|
|
|
|||||
| Cash, Cash Equivalents, and Restricted Cash at End of Period |
$ | 1,782.5 | $ | 944.9 | ||||
|
|
|
|
|
|||||
*Amounts may not recalculate due to rounding.
8
| Table 5 | ||||||||||||
| Segment Revenues* | THREE MONTHS ENDED | |||||||||||
|
|
|
|||||||||||
| $ Millions, except percentage amounts (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
||||||||||
| Revenues: |
||||||||||||
| Networking |
$ | 762.9 | $ | 679.8 | $ | 472.9 | ||||||
| Materials |
237.4 | 279.3 | 244.6 | |||||||||
| Lasers |
347.8 | 355.3 | 335.6 | |||||||||
|
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|
|
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|
|||||||
| Consolidated |
$ | 1,348.1 | $ | 1,314.4 | $ | 1,053.1 | ||||||
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|
|||||||
*Amounts may not recalculate due to rounding.
9
Table 6
| Reconciliation of GAAP Measures to Non-GAAP Measures* | THREE MONTHS ENDED | |||||||||||
|
|
|
|||||||||||
| $ Millions, except per share amounts (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
||||||||||
| Gross margin on GAAP basis | $ | 460.1 | $ | 432.0 | $ | 306.9 | ||||||
| Share-based compensation |
5.7 | 5.0 | 7.4 | |||||||||
| Amortization of acquired intangibles |
30.4 | 30.4 | 30.8 | |||||||||
| Integration, site consolidation and other(1) |
12.4 | 22.0 | 21.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Gross margin on non-GAAP basis | $ | 508.6 | $ | 489.4 | $ | 366.4 | ||||||
|
|
|
|
|
|
|
|||||||
| Research and development on GAAP basis | $ | 131.6 | $ | 126.7 | $ | 113.5 | ||||||
| Share-based compensation |
(5.3) | (5.2) | (8.0) | |||||||||
| Amortization of acquired intangibles |
(0.7) | (0.6) | (0.6) | |||||||||
| Start-up costs(2) |
— | — | (0.4) | |||||||||
| Integration, site consolidation and other(1) |
(1.3) | (3.2) | (1.4) | |||||||||
|
|
|
|
|
|
|
|||||||
| Research and development on non-GAAP basis | $ | 124.3 | $ | 117.7 | $ | 103.1 | ||||||
|
|
|
|
|
|
|
|||||||
| Selling, general and administrative on GAAP basis | $ | 229.0 | $ | 228.0 | $ | 211.7 | ||||||
| Share-based compensation |
(24.5) | (18.5) | (29.1) | |||||||||
| Amortization of acquired intangibles |
(40.8) | (40.7) | (41.3) | |||||||||
| Integration, site consolidation and other(1) |
(11.9) | (20.3) | (10.4) | |||||||||
|
|
|
|
|
|
|
|||||||
| Selling, general and administrative on non-GAAP basis | $ | 151.8 | $ | 148.5 | $ | 130.9 | ||||||
|
|
|
|
|
|
|
|||||||
| Restructuring charges on GAAP basis | $ | 24.4 | $ | 14.1 | $ | 3.0 | ||||||
| Restructuring charges(3) |
(24.4) | (14.1) | (3.0) | |||||||||
|
|
|
|
|
|
|
|||||||
| Restructuring charges on non-GAAP basis | $ | — | $ | — | $ | — | ||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) on GAAP basis | $ | 75.2 | $ | 63.2 | $ | (21.3) | ||||||
| Share-based compensation |
35.5 | 28.7 | 44.5 | |||||||||
| Amortization of acquired intangibles |
71.9 | 71.7 | 72.7 | |||||||||
| Start-up costs(2) |
— | — | 0.4 | |||||||||
| Restructuring charges(3) |
24.4 | 14.1 | 3.0 | |||||||||
| Integration, site consolidation and other(1) |
25.6 | 45.5 | 33.1 | |||||||||
|
|
|
|
|
|
|
|||||||
| Operating income on non-GAAP basis | $ | 232.6 | $ | 223.2 | $ | 132.4 | ||||||
|
|
|
|
|
|
|
|||||||
10
| Table 6 | ||||||||||||
| Reconciliation of GAAP Measures to Non-GAAP Measures* | ||||||||||||
| (Continued) | THREE MONTHS ENDED | |||||||||||
| $ Millions, except per share amounts (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
||||||||||
| Interest and other (income) expense, net on GAAP basis |
$ | 55.9 | $ | 53.3 | $ | 67.0 | ||||||
| Foreign currency exchange gains (losses), net |
(9.8) | (0.9) | 0.7 | |||||||||
| Transaction fees and financing(4) |
— | (2.0) | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Interest and other (income) expense, net on non-GAAP basis |
$ | 46.1 | $ | 50.4 | $ | 67.7 | ||||||
|
|
|
|
|
|
|
|||||||
| Income taxes on GAAP basis |
$ | (5.6) | $ | 56.9 | $ | (20.8) | ||||||
| Tax impact of non-GAAP measures |
31.9 | 33.8 | 30.5 | |||||||||
| Tax windfall from share-based compensation(5) |
10.9 | — | — | |||||||||
| Tax impact of valuation allowance for deferred tax assets(6) |
0.6 | (46.0) | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Income taxes on non-GAAP basis |
$ | 37.8 | $ | 44.7 | $ | 9.7 | ||||||
|
|
|
|
|
|
|
|||||||
| Net earnings (loss) attributable to Coherent Corp. on GAAP basis |
$ | 25.9 | $ | (48.4) | $ | (67.5) | ||||||
| Share-based compensation |
35.5 | 28.7 | 44.5 | |||||||||
| Amortization of acquired intangibles |
71.9 | 71.7 | 72.7 | |||||||||
| Foreign currency exchange (gains) losses |
9.8 | 0.9 | (0.7) | |||||||||
| Restructuring charges(3) |
24.4 | 14.2 | 3.0 | |||||||||
| Integration, site consolidation and other(1) |
25.6 | 45.5 | 33.1 | |||||||||
| Transaction fees and financing(4) |
— | 2.0 | — | |||||||||
| Start-up costs(2) |
— | — | 0.4 | |||||||||
| Tax impact of non-GAAP measures |
(31.9) | (33.8) | (30.5) | |||||||||
| Tax windfall from share-based compensation(5) |
(10.9) | — | — | |||||||||
| Tax impact of valuation allowance for deferred tax assets(6) |
(0.6) | 46.0 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Net earnings attributable to Coherent Corp. on non-GAAP basis |
$ | 149.7 | $ | 126.6 | $ | 55.0 | ||||||
|
|
|
|
|
|
|
|||||||
| Per share data: |
||||||||||||
| Net loss on GAAP basis |
||||||||||||
| Basic Loss Per Share |
$ | (0.04) | $ | (0.52) | $ | (0.65) | ||||||
| Diluted Loss Per Share |
$ | (0.04) | $ | (0.52) | $ | (0.65) | ||||||
| Net earnings on non-GAAP basis |
||||||||||||
| Basic Earnings Per Share |
$ | 0.77 | $ | 0.62 | $ | 0.16 | ||||||
| Diluted Earnings Per Share |
$ | 0.74 | $ | 0.61 | $ | 0.16 | ||||||
*Amounts may not recalculate due to rounding.
| (1) | Integration, site consolidation and other costs include retention and severance payments, expenses not included in restructuring charges related to site closures as well as other integration costs related to the acquisition of Coherent, Inc. Refer to table 7 for a more detailed description of these costs on a consolidated basis. |
| (2) | Start-up costs in operating expenses were related to the start-up of new devices for new customer applications. |
| (3) | Restructuring charges include loss on sale of a facility, severance, non-cash impairment charges for production assets and improvements on leased facilities and other costs related to the 2023 Restructuring Plan. |
| (4) | Transaction fees and financing includes debt extinguishment costs and various fees related to closing the Coherent transaction. |
| (5) | Windfall tax benefits were recorded on the vesting of share-based compensation. |
| (6) | Valuation allowance adjustments were related to an increase (decrease) in valuation allowance related to certain deferred tax assets resulting from the Company’s cumulative GAAP net loss that is not recognized for non-GAAP purposes given the historical non-GAAP net earnings. |
11
| Table 7 | ||||||||||||
| Components of Integration, Site Consolidation and Other Costs | ||||||||||||
| Excluded from Non-GAAP Operating Income* | ||||||||||||
| THREE MONTHS ENDED | ||||||||||||
| $ Millions (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
||||||||||
| Integration, site consolidation and other costs |
||||||||||||
| Consulting costs related to projects to integrate recent acquisitions into common technology systems and simplify legal entity structure |
$ | 11.4 | $ | 6.5 | $ | 6.6 | ||||||
| Manufacturing inefficiencies related to sites being shut down as part of our 2023 Restructuring Plan or Synergy and Site Consolidation Plan |
6.7 | 10.3 | 9.8 | |||||||||
| Charges for products that are end-of-life, including inventory, production equipment to produce those products |
4.4 | 4.9 | 6.5 | |||||||||
| Overlapping labor and travel for consolidation of sites |
3.8 | 6.4 | 2.8 | |||||||||
| Employee severance and retention costs for site consolidations as part of our Synergy and Site Consolidation Plan or other actions |
(1.3) | 4.2 | 3.5 | |||||||||
| Severance costs related to the retirement of our CEO/CFO/President |
0.6 | 13.2 | 1.7 | |||||||||
| Accelerated depreciation for equipment and leasehold improvements at sites included in our Synergy and Site Consolidation Plan |
— | — | 1.9 | |||||||||
| Direct damages from substation power failure/fire at manufacturing sites |
— | — | 0.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Integration, site consolidation and other costs |
$ | 25.6 | $ | 45.5 | $ | 33.1 | ||||||
|
|
|
|
|
|
|
|||||||
12
| Table 8 | ||||||||||||
| Reconciliation of GAAP Net Earnings (Loss), EBITDA and Adjusted EBITDA * | THREE MONTHS ENDED | |||||||||||
|
|
|
|||||||||||
| $ Millions, except percentage amounts (unaudited)
|
|
Sep 30, 2024 |
|
|
Jun 30, 2024 |
|
|
Sep 30, 2023 |
|
|||
|
|
|
|
||||||||||
| Net earnings (loss) on GAAP basis | $ | 24.9 | $ | (47.0) | $ | (67.5) | ||||||
| Income taxes |
(5.6) | 56.9 | (20.8) | |||||||||
| Depreciation and amortization |
137.7 | 143.7 | 138.4 | |||||||||
| Interest expense |
66.6 | 67.8 | 73.3 | |||||||||
| Interest income |
(12.8) | (13.1) | (3.7) | |||||||||
|
|
|
|
|
|
|
|||||||
| EBITDA(1) | $ | 210.8 | $ | 208.3 | $ | 119.7 | ||||||
|
|
|
|
|
|
|
|||||||
| EBITDA margin |
15.6 % | 15.8 % | 11.4 % | |||||||||
| Share-based compensation |
35.5 | 28.7 | 44.5 | |||||||||
| Foreign currency exchange (gains) losses |
9.8 | 0.9 | (0.7) | |||||||||
| Start-up costs(3) |
— | — | 0.4 | |||||||||
| Restructuring charges(4) |
24.4 | 14.2 | 3.0 | |||||||||
| Transaction fees and financing(5) |
— | 2.0 | — | |||||||||
| Integration, site consolidation and other(6) |
25.6 | 45.5 | 33.1 | |||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EBITDA(2) | 306.1 | 299.5 | 200.0 | |||||||||
| Less: adjusted EBITDA attributable to noncontrolling interests |
0.6 | (1.9) | — | |||||||||
|
|
|
|||||||||||
| Adjusted EBITDA attributable to Coherent Corp. | $ | 306.7 | $ | 297.6 | $ | 200.0 | ||||||
|
|
|
|||||||||||
| Adjusted EBITDA margin attributable to Coherent Corp. |
22.8 % | 22.6 % | 19.0 % | |||||||||
*Amounts may not recalculate due to rounding.
| (1) | EBITDA is defined as earnings before interest expense, interest income, income taxes, depreciation and amortization. |
| (2) | Adjusted EBITDA excludes non-GAAP adjustments for share-based compensation, certain restructuring, integration, and transaction expenses, debt extinguishment charges, start-up costs, and the impact of foreign currency exchange gains and losses. |
| (3) | Start-up costs in operating expenses were related to the start-up of new devices for new customer applications. |
| (4) | Restructuring charges include loss on sale of a facility, severance, non-cash impairment charges for production assets and improvements on leased facilities and other costs related to the 2023 Restructuring Plan. |
| (5) | Transaction fees and financing includes debt extinguishment costs and various fees related to closing the Coherent transaction. |
| (6) | Integration, site consolidation and other costs include retention and severance payments, expenses not included in restructuring charges related to site closures as well as other integration costs related to the acquisition of Coherent, Inc. Refer to table 7 for a more detailed description of these costs on a consolidated basis. |
13
| Table 9 | ||||||||||||
| GAAP Earnings (Loss) Per Share Calculation* | THREE MONTHS ENDED | |||||||||||
|
|
|
|||||||||||
| $ Millions, except per share amounts (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
||||||||||
| Numerator |
||||||||||||
| Net loss attributable to Coherent Corp. |
$ | 25.9 | $ | (48.4) | $ | (67.5) | ||||||
| Deduct Series B redeemable preferred dividends |
(31.8) | (31.4) | (30.2) | |||||||||
|
|
|
|
|
|
|
|||||||
| Basic loss available to common shareholders |
$ | (5.9) | $ | (79.9) | $ | (97.7) | ||||||
|
|
|
|
|
|
|
|||||||
| Diluted loss available to common shareholders |
$ | (5.9) | $ | (79.9) | $ | (97.7) | ||||||
|
|
|
|
|
|
|
|||||||
| Denominator |
||||||||||||
| Diluted weighted average common shares |
153.6 | 152.6 | 150.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| Basic loss per common share |
$ | (0.04) | $ | (0.52) | $ | (0.65) | ||||||
|
|
|
|
|
|
|
|||||||
| Diluted loss per common share |
$ | (0.04) | $ | (0.52) | $ | (0.65) | ||||||
|
|
|
|
|
|
|
|||||||
*Amounts may not recalculate due to rounding.
14
| Table 10 | ||||||||||||
| Non-GAAP Earnings Per Share Calculation* | ||||||||||||
| THREE MONTHS ENDED | ||||||||||||
|
|
|
|||||||||||
| $ Millions, except per share amounts (unaudited) | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
|||||||||
|
|
|
|
||||||||||
| Numerator |
||||||||||||
| Net earnings attributable to Coherent Corp. on non-GAAP basis |
$ | 149.7 | $ | 126.6 | $ | 55.0 | ||||||
| Deduct Series B redeemable preferred dividends |
(31.8) | (31.4) | (30.2) | |||||||||
|
|
|
|
|
|
|
|||||||
| Basic earnings available to common shareholders |
$ | 117.9 | $ | 95.2 | $ | 24.8 | ||||||
|
|
|
|
|
|
|
|||||||
| Diluted earnings available to common shareholders |
$ | 117.9 | $ | 95.2 | $ | 24.8 | ||||||
|
|
|
|
|
|
|
|||||||
| Denominator |
||||||||||||
| Weighted average shares |
153.6 | 152.6 | 150.3 | |||||||||
| Effect of dilutive securities: |
||||||||||||
| Common stock equivalents |
4.9 | 3.8 | 1.9 | |||||||||
|
|
|
|
|
|
|
|||||||
| Diluted weighted average common shares |
158.6 | 156.3 | 152.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Basic earnings per common share on non-GAAP basis |
$ | 0.77 | $ | 0.62 | $ | 0.16 | ||||||
|
|
|
|
|
|
|
|||||||
| Diluted earnings per common share on non-GAAP basis |
$ | 0.74 | $ | 0.61 | $ | 0.16 | ||||||
|
|
|
|
|
|
|
|||||||
*Amounts may not recalculate due to rounding.
15
Exhibit 99.2 INVESTOR PRESENTATION November 2024 Copyright 2024, Coherent. All rights reserved. 1
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements relating to future events and expectations, including our expectations regarding (i) our future financial and operational results; (ii) the growth and megatrends in the markets we serve including industrial, communications, electronics, and instrumentation; and (iii) improvement opportunities and shareholder value creation, each of which is based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The forward-looking statements in this investor presentation involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. The Company believes that all forward-looking statements made by it in this presentation have a reasonable basis, but there can be no assurance that management’s expectations, beliefs, or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements in this presentation include but are not limited to: (i) the failure of any one or more of the assumptions stated herein to prove to be correct; (ii) the risks relating to forward-looking statements and other risk factors that may be identified from time to time in filings of the Company; (iii) the substantial indebtedness the Company incurred in connection with its acquisition of Coherent, Inc. (the “Transaction”), the need to generate sufficient cash flows to service and repay such debt and the Company’s ability to generate sufficient funds to meet its anticipated debt reduction goals; (iv) the possibility that the Company may not be able to continue its integration progress on and/or take other restructuring actions, or otherwise be able to achieve expected synergies, operating efficiencies, including greater scale, focus, resiliency, and lower operating costs, and other benefits within the expected time frames or at all and ultimately to successfully fully integrate the operations of Coherent, Inc. (“Coherent”), with those of the Company; (v) the possibility that such integration and/or the restructuring actions may be more difficult, time-consuming, or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers, or suppliers) may be greater than expected in connection with the Transaction and/or the restructuring actions; (vi) any unexpected costs, charges, or expenses resulting from the Transaction and/or the restructuring actions; (vii) the risk that disruption from the Transaction and/or the restructuring actions materially and adversely affects the respective businesses and operations of the Company and Coherent; (viii) potential adverse reactions or changes to business relationships resulting from the completion of the Transaction and/or the restructuring actions; (ix) the ability of the Company to retain and hire key employees; (x) the purchasing patterns of customers and end users; (xi) the timely release of new products and acceptance of such new products by the market; (xii) the introduction of new products by competitors and other competitive responses; (xiii) the Company’s ability to assimilate other recently acquired businesses and realize synergies, cost savings, and opportunities for growth in connection therewith, together with the risks, costs, and uncertainties associated with such acquisitions; (xiv) the Company’s ability to devise and execute strategies to respond to market conditions; (xv) the risks to realizing the benefits of investments in R&D and commercialization of innovations; (xvi) the risks that the Company’s stock price will not trade in line with industrial technology leaders; and/or (xvii) the risks of business and economic disruption related to worldwide health epidemics or outbreaks that may arise. The Company disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or developments, or otherwise. Unless otherwise indicated in this presentation, all information in this presentation is as of November 6, 2024. This presentation contains non-GAAP financial measures and key metrics relating to the Company’s past performance. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As required by Regulation G, we have provided reconciliations of those measures to the most directly comparable GAAP measures in the section captioned “GAAP to NON-GAAP RECONCILIATION.” 2 Copyright 2024, Coherent. All rights reserved.
FROM A FOUNDATION OF MATERIALS AND IMAGINATION, WE ENABLE EXCITING MEGATRENDS COHERENT AT A GLANCE Year Founded NYSE 1971 COHR FY24 (1) Employees ≈26,000 $4.7B Revenue Available Research & Development 2,250+ $64B Market (1) Employees (CY2023) (1) Patents Locations 3,100+ 126 Materials, Components, VERTICAL Subsystems, Systems Countries 25 INTEGRATION and Service (1) As of June 30, 2024 3 Copyright 2024, Coherent. All rights reserved.
$4.7 BILLION OF REVENUE IN FY24 WELL DIVERSIFIED ACROSS TECHNOLOGY, PRODUCTS, AND GEOGRAPHIC MARKETS Segments Markets Regions North Communications Materials Europe America Industrial Lasers 15% 22% 29% 36% 48% China BY REPORTING (1) 13% BY MARKET BY REGION 56% SEGMENT 13% 8% Korea & Japan 3% 49% 8% Instrumentation Other Networking Electronics (1) Revenue by region is based on customer headquarter addresses. (2) Amounts may not calculate due to rounding. 4 Copyright 2024, Coherent. All rights reserved.
FOUR ATTRACTIVE GROWTH MARKETS AGGREGATE $64B TAM 14% FIVE-YEAR CAGR (2023-28) COMMUNICATIONS ELECTRONICS INSTRUMENTATION INDUSTRIAL TAM: $22B TAM: $23B TAM: $14B TAM: $5B CAGR: 9% CAGR: 14% CAGR: 20% CAGR: 8% Sources: LightCounting, Omdia, Sources: Optech Consulting, Sources: IDC, Morgan Stanley, Sources: Strategies Unlimited, TechInsight, Strategies Unlimited, Cignal AI, Yole, Dell’Oro Internal Research & Markets, Forbes, Yole, Markets & Markets, SDI (Strategic Estimates SEMI, Internal Estimates, DSCC Strategy Analytics, IdTechEx, Directions), Internal Estimates Internal Estimates Note: TAM based on CY2023 5 Copyright 2024, Coherent. All rights reserved.
INDUSTRIAL MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Precision manufacturing§ Fiber lasers for laser welding of batteries§ 50 years of experience in laser technology § UV lasers for OLED manufacturing § Long-term technology partner across all § Giga factories for EV battery processing laser architectures § Laser systems, subsystems, and § Advanced medical devices processing heads§ Broadest spectrum of laser and systems § Additive manufacturing technologies § Laser components, optics, crystals Semiconductor & display capital § One-stop shop for processing equipment § Ceramics, metal matrix composites, and equipment diamond§ Productivity enhancement through § Increasing laser content from ingot to innovation and knowhow packaged ICs § OLED for mobile and micro-LED for high- end TV and large displays Aerospace & Defense 6 Copyright 2024, Coherent. All rights reserved.
COMMUNICATIONS MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Datacom§ 100 to 800 Gbps datacom transceivers§ One of the largest suppliers of optical communications components § Increasing spend on cloud infrastructure § Pluggable coherent transceivers § Vertically integrated from material through § Artificial Intelligence/Machine Learning § Wavelength selective switches (WSS) subsystems, including coherent DSPs § Pluggable optical line subsystems (POLS) Telecom § Industry pioneer in broad range of § Open disaggregated systems§ Terrestrial and submarine pump lasers technology platforms § Pluggable coherent transceivers§ InP edge-emitting lasers and GaAs VCSELs § Industry leading investments in R&D § Global and flexible manufacturing footprint 7 Copyright 2024, Coherent. All rights reserved.
ELECTRONICS MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION § GaAs and InP optoelectronics Consumer electronics§ One of the broadest portfolios of optoelectronics, optics, and electronics § Advanced sensing § VCSELs and edge-emitting lasers § High-volume consumer electronics § AR/VR § Laser illumination modules experience § Wearables as health monitors § Wafer level optics and subassemblies § Differentiated, proprietary compound § Waveguide materials, diffractive optics Automotive semiconductor platforms § Silicon carbide substrates and § Increasing SiC electronics content in EVs • 150 mm gallium arsenide platform epiwafers • 200 mm silicon carbide platform § Automotive sensing: in-cabin and LiDAR § SiC MOSFET devices and modules • Leading indium phosphide platform • Decades of investment in high quality silicon carbide substrates § Cross-functional engineering and integration expertise 8 Copyright 2024, Coherent. All rights reserved.
INSTRUMENTATION MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Life Sciences § Materials, optics, lasers, § Life sciences (biotechnology, medical, and and thermoelectrics environmental) and scientific segment § Smart healthcare evolution, largely based on solutions technology§ Components to subassemblies and subsystems§ Custom solutions from proof-of-concept to § Point-of-care diagnostics manufacturing at scale § Optical, mechanical, electrical and § Personalized medicine software integration§ Rapid time to market of complete turnkey Scientific Instrumentation subassemblies and systems § ISO 9001 & 13485 § Environmental sustainability § One of the broadest product portfolios to support a wide range of applications § Advanced instrumentation § Extensive technology innovation for next- generation capabilities § Global manufacturing footprint and flexible supply chain partners 9 Copyright 2024, Coherent. All rights reserved.
FINANCIAL HIGHLIGHTS 10 Copyright 2024, Coherent. All rights reserved.
FY 2025 NON-GAAP Q1 EARNINGS RESULTS HIGHLIGHTS “I am pleased with our strong results for the first quarter of fiscal 2025. We delivered solid growth Revenue on both a sequential and year-over-year basis, driven primarily by our AI-related Datacom transceivers. We also drove higher gross margin and operating margin. I continue to be excited by the opportunity to unlock significant long-term shareholder value.” 28% Jim Anderson, CEO Q1 FY25/Q1 FY24 Q1 FY25 Revenue $1.35B Revenue by Market Gross Margin* Q1 FY25 Communications 68% Instrumentation Q1 FY25/Q1 FY24 Industrial 7% 30% Electronics 6% 293BP Industrial, Electronics, & Q1 FY25/Q1 FY24 57% 3% Instrumentation 37.7% in Q1 FY25 vs. 34.8% in Q1 FY24 Communications Q1 FY25/Q1 FY24 Highlights Earnings Per Share* 357% Q1 FY25/Q1 FY24 Announced a family of high-efficiency Optical Circuit Switch won the Best Datacom transceiver multi-technology $0.74 in Q1 FY25 vs. $0.16 in Q1 FY24 lasers to power 1.6T optical transceivers Product Award for Data Center demonstration showcasing our differential based on silicon photonics. Innovation at ECOC ’24. EML and silicon photonics platforms. • Non-GAAP based on earnings reported Nov. 6, 2024; see the GAAP to Non-GAAP Reconciliation section (p. 16). 11 Copyright 2024, Coherent. All rights reserved.
QUARTERLY REVENUE BY SEGMENT REVENUE DISTRIBUTION BY SEGMENT (1) Revenue Distribution Quarterly Revenue by Segment 1,600 1,348 1,314 1,400 Lasers 1,209 1,131 26% 1,200 1,053 Materials 18% 1,000 800 FY25Q1 600 400 200 0 57% FY24Q1 FY24 Q2 FY24 Q3 FY24Q4 FY25Q1 Lasers 336 354 351 355 348 Networking 473 524 619 680 763 Networking Materials 245 254 239 279 237 Note: Amounts may not calculate due to rounding. 12 Copyright 2024, Coherent. All rights reserved. Revenue ($M)
QUARTERLY REVENUE BY MARKET REVENUE DISTRIBUTION BY MARKET Quarterly Revenue Trend (1) Revenue Distribution 1,600 1,348 1,314 1,400 1,209 Industrial 1,131 1,200 1,053 Instrumentation 30% 1,000 7% 800 Electronics 6% 600 FY25Q1 400 200 0 FY24Q1 FY24Q2 FY24Q3 FY24Q4 FY25Q1 57% Instrumentation 99 99 98 101 91 Electronics 90 89 74 104 76 Communications 460 520 616 678 774 Industrial 404 423 421 431 407 Communications Note: Amounts may not calculate due to rounding. 13 Copyright 2024, Coherent. All rights reserved. Revenue ($M)
QUARTERLY REVENUE BY REGION REVENUE DISTRIBUTION BY REGION Quarterly Revenue Trend J Ja apa pan & n & 1,600 Kor Kore ea a 1,348 1,314 1,400 1,209 1,131 1,053 China 1,200 12% Europe 1,000 13% 13% 800 Other 3% 600 400 FY25Q1 200 0 FY24Q1 FY24Q2 FY24Q3 FY24Q4 FY25Q1 Other 27 28 30 36 37 China 132 162 154 173 170 60% Japan & Korea 148 158 155 167 165 Europe 190 160 182 182 169 North America 556 623 688 756 807 North America Note: Prior periods restated to conform to current period presentation. Note: Amounts may not calculate due to rounding. 14 Copyright 2024, Coherent. All rights reserved. Revenue ($M)
SECOND QUARTER FISCAL 2025 OUTLOOK REVENUE $1.33 – 1.41 billion NON-GAAP GROSS MARGIN 36% – 38% NON-GAAP OPERATING EXPENSES $275 – 295 million NON-GAAP TAX RATE 19% – 22% (1) NON-GAAP EARNINGS PER SHARE $0.61 – 0.77 (1) The Company does not provide reconciliations of forward-looking Non-GAAP EPS. The Company is unable, without unreasonable efforts, to forecast certain items required to develop a meaningful GAAP financial measure that is comparable to this forward-looking figure. 15 Copyright 2024, Coherent. All rights reserved.
GAAP TO NON-GAAP RECONCILIATION 16 Copyright 2024, Coherent. All rights reserved.
GROSS MARGIN RECONCILIATION $ Millions (Unaudited) Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Gross margin on GAAP basis 460 432 367 351 307 Share-based compensation 6 5 5 5 7 Amortization of acquired intangibles 30 30 31 30 31 Integration, site consolidation and other 12 22 30 22 21 Gross margin on non-GAAP basis 509 489 433 408 366 17 Copyright 2024, Coherent. All rights reserved.
OPERATING EXPENSE RECONCILIATION $ Millions (Unaudited) Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 R&D on GAAP basis 132 127 128 111 114 Share-based compensation (5) (5) (5) (5) (8) Amortization of acquired intangibles (1) (1) (1) (1) (1) Start-up costs — — (1) (1) (0) Integration, site consolidation and other (1) (3) (3) (3) (1) R&D on non-GAAP basis 124 118 118 102 103 SG&A on GAAP basis 229 228 205 209 212 Share-based compensation (25) (19) (16) (17) (29) Amortization of acquired intangibles (41) (41) (41) (41) (41) Integration, site consolidation and other (12) (20) (16) (18) (10) SG&A on non-GAAP basis 152 149 132 134 131 Restructuring on GAAP basis 24 14 (12) (2) 3 Restructuring charges (24) (14) 12 2 (3) Restructuring on non-GAAP basis — — — — — 18 Copyright 2024, Coherent. All rights reserved.
INCOME FROM OPERATIONS RECONCILIATION $ Millions (Unaudited) Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Op. income (loss) on GAAP basis 75 63 22 32 (21) Share-based compensation 36 29 26 27 45 Amortization of acquired intangibles 72 72 72 72 73 Start-up costs — — 1 1 0 Restructuring charges 24 14 12 (2) 3 Integration, site consolidation and other 26 46 49 42 33 Op. income on non-GAAP basis 233 223 182 172 132 Non-GAAP Op. Margin Percentage 17.3 % 17.0 % 15.1 % 15.2 % 12.6 % 19 Copyright 2024, Coherent. All rights reserved.
NET EARNINGS RECONCILIATION $ Millions (Unaudited) Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Net earnings (loss) attributable to Coherent 26 (48) (13) (27) (68) Corp. on GAAP basis Share-based compensation 36 29 26 27 45 Amortization of acquired intangibles 72 72 72 72 73 Start-up costs — — 1 1 0 Foreign currency exch. (gains) losses 10 1 3 6 (1) Restructuring charges 24 14 12 (2) 3 Integration, site consolidation and other 26 46 49 42 33 Transaction fees and financing — 2 — — — Tax impact of valuation allowance on deferred (1) 46 — — — tax assets Tax windfall from share-based compensation (11) — — — — Tax impact of non-GAAP measures (32) (34) (37) (33) (31) Net earnings attributable to Coherent Corp. on 150 127 113 86 55 non-GAAP basis 20 Copyright 2024, Coherent. All rights reserved.
NET EARNINGS PER COMMON SHARE $ (Unaudited) Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Net loss attributable to Coherent Corp., GAAP Basic Loss Per Share (0.04) (0.52) (0.29) (0.38) (0.65) Diluted Loss Per Share (0.04) (0.52) (0.29) (0.38) (0.65) Net earnings attributable to Coherent Corp., non-GAAP Basic Earnings Per Share 0.77 0.62 0.54 0.37 0.16 Diluted Earnings Per Share 0.74 0.61 0.53 0.37 0.16 21 Copyright 2024, Coherent. All rights reserved.
NET EARNINGS, GAAP, AND ADJUSTED EBITDA RECONCILIATION $ Millions (Unaudited) Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Net earnings (loss) on GAAP basis 25 (47) (16) (29) (68) Income taxes (benefit) (6) 57 (16) (9) (21) Depreciation and amortization 138 144 140 138 138 Interest expense 67 68 73 75 73 Interest income (13) (13) (13) (7) (4) EBITDA 211 208 168 168 120 EBITDA margin 15.6 % 15.8 % 13.9 % 14.9 % 11.4 % Share-based compensation 36 29 26 27 45 Foreign currency exch. (gains) losses 10 1 3 6 (1) Start-up costs — — 1 1 — Restructuring charges 24 14 12 (2) 3 Transaction fees and financing — 2 — — — Integration, site consolidation and other 26 46 49 42 33 Adjusted EBITDA 306 300 259 243 200 Less: adjusted EBITDA attributable to 1 (2) 2 0 — noncontrolling interests Adjusted EBITDA attributable to Coherent 307 298 261 243 200 Corp. Adjusted EBITDA margin attributable to 22.8 % 22.6 % 21.6 % 21.5 % 19.0 % Coherent Corp. 22 Copyright 2024, Coherent. All rights reserved.
