Coherent Loses $7M in Q3

Laser maker Coherent Inc. posted a loss of $7 million, or 29 cents a share, for the third quarter of 2009, compared with a net gain of $8.4 million, or 35 cents a share, for the same period a year ago.
Net sales for the third quarter of 2009 were $98.5 million, plunging more than 60 percent from the year-ago quarter’s $157 million in sales.

Orders received during the quarter were $88.6 million, the company said, a decrease of more than 40 percent over the year-ago quarter, and 5.5 percent less than those received during the second quarter of 2009. As of July 4, year-to-date sales totaled $328.3 million, compared with prior year sales of $457.3 million. Year-to-date net loss is $30.8 million, compared with a net income of $19 million a year ago for the same period.

“In what has been a difficult macroeconomic environment, Coherent satisfied several key operational objectives for the third quarter, including quarterly revenues at the high-end of guidance, good cash generation and the completion of another major component of our footprint consolidation by exiting the Munich facility,” said John Ambroseo, Coherent president and CEO, in a statement. “We also executed against our market and product road map by introducing a suite of laser solutions targeted at the high-power materials processing market and extensions to our OPS platform for the instrumentation and research markets. These products will allow us to access new markets and strengthen our position in existing markets.”

Coherent Executive Vice President and Chief Financial Officer Helene Simonet outlined the results of the company’s recent restructuring efforts during an earnings call Tuesday.

“Our head count at the end of the third quarter stood at 1736, which reflects a reduction of 100 people compared to last quarter and a reduction of almost 500 people, or 22 percent, when compared to the head count a year ago,” Simonet said. She added that the company completed closure of its Munich facility during the quarter and exited the St. Louis facility ahead of schedule as well as vacated the leased building in San Jose, Calif., and consolidated sales offices in Japan.

“We are now focusing on the last leg of the footprint reduction plan, which is the exit of Finland,” she said. “We anticipate completing the closure of Finland by the end of fiscal 2010, at which point the cumulative benefits will reach the high end of the previously announced savings range of $11.5 million to $14.5 million.”

“With the exit of Rhonda in St. Louis completed ahead of schedule, we have one remaining project: the spin-up of our new epitaxial growth facility in Sunnyvale, California, and the subsequent closure of our current facility in Tampere, Finland,” Ambroseo said during the call. “This is a very important program, as semiconductor devices are used in roughly 40 percent of the company’s revenue, either in direct sales or components of larger systems.”

Looking ahead to the outlook for the rest of the year, Ambroseo said, “We anticipate that total orders will begin their recovery in the current fiscal quarter, led by microelectronics systems and service, and continue through fiscal 2010. As these orders convert to revenue, we can begin to realize the benefits from our footprint consolidation projects that have thus far been masked by the pullback in revenue.”

For more information, visit: www.coherent.com