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OXFORD, Mass., May 06, 2008 (BUSINESS WIRE) -- IPG Photonics Corporation (Nasdaq: IPGP), the world leader in high-power fiber lasers and amplifiers, today reported that revenues for the first quarter of 2008 increased by 27% to $52.9 million and net income increased by 23% to $8.1 million from the first quarter of 2007. Revenue growth for the quarter was driven by sales of the Company's fiber lasers used for materials processing applications, which increased by 34% over the first quarter of 2007 to $44.2 million, as well as strong sales to European and Asian markets.
Three Months
Ended
March 31,
-------------
(In millions, except per share data) 2008 2007 % Change
---- ---- --------
Revenue $52.9 $41.8 27%
Gross margin 46.1% 46.3%
Operating income $12.5 $11.1 13%
Operating margin 23.7% 26.5%
Net income $ 8.1 $ 6.6 23%
Earnings per diluted share $0.18 $0.15 20%
Operating income increased 13% to $12.5 million for the first quarter of 2008, up from $11.1 million for the same period in 2007. Earnings per diluted share increased 20% to $0.18 from $0.15 a year ago. Operating expenses for the first quarter of 2008 were $11.9 million, or 22% of revenue, compared with $8.3 million, or 20% of revenue, in the first quarter of 2007.
Cash and cash equivalents were $38.7 million on March 31, 2008, compared with $38.0 million on December 31, 2007, primarily as a result of $5.4 million of cash provided by operating activities, proceeds from the sale of marketable securities of $4.5 million and net proceeds from the Company's credit lines of $3.3 million, offset by capital expenditures and investments in intangible assets of $13.0 million. In addition to cash and cash equivalents, short-term and long-term investments in auction rate securities were $2.5 million at March 31, 2008.
Comments on the First Quarter
"The growing acceptance of fiber lasers across a variety of applications, combined with our presence in the major markets for industrial lasers across the globe, resulted in another quarter of strong top- and bottom-line growth," said Dr. Valentin Gapontsev, IPG Photonics' Chief Executive Officer. "Strong shipments in the European Union and continued expansion into the high-growth markets of Russia, India, China and South Korea more than offset the softness we experienced in the U.S. which accounts for only 18% of our sales."
"In the first quarter of this year, pulsed laser sales increased 73% over the prior year, driven by strong demand for marking and photovoltaic (solar) applications. Pulsed lasers are IPG's largest revenue generator. Gross margins in Q1 grew to 46% from 43% in the fourth quarter, due to higher absorption of fixed costs as a result of improved yields and increased production, part of which resulted in an increase in inventories. We have overcome the production issues which impacted diode yields in the fourth quarter of 2007," added Dr. Gapontsev.
Business Outlook and Financial Guidance
"In international markets, we continue to see robust growth from existing OEMs, new customers and our presence in key high-growth Asian markets. In the U.S. and elsewhere, we are seeing substantially increased order flow in materials processing and telecommunications from the beginning of the year. Some of these orders will ship in the second quarter and the remainder is expected to ship during the following six to nine months," stated Dr. Gapontsev.
For the second quarter of 2008, IPG Photonics expects revenues in the range of $52 million to $56 million. The Company anticipates earnings per diluted share in the range of $0.15 to $0.19 based on 46,041,000 common shares, which include 44,095,000 basic common shares outstanding and 1,946,000 potentially dilutive options at March 31, 2008.
Conference Call Reminder
The Company will hold a conference call to review its financial results and business highlights today, May 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) 548-7903 or (719) 325-4871. 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 is the world leader in high-power fiber lasers and amplifiers. Founded in 1990, IPG 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 OEMs, diode yields, improved gross margins, growth rates in 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 second quarter of 2008. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated with 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, contract cancellations, manufacturing risks, 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
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
-------------------------------------
2008 2007
--------------------------- --------
(in thousands, except per share data)
NET SALES $52,876 $41,753
COST OF SALES 28,476 22,422
--------------------------- --------
GROSS PROFIT 24,400 19,331
--------------------------- --------
OPERATING EXPENSES:
Sales and marketing 3,147 1,909
Research and
development 2,874 2,129
General and
administrative 5,839 4,241
--------------------------- --------
Total operating
expenses 11,860 8,279
--------------------------- --------
OPERATING INCOME 12,540 11,052
--------------------------- --------
OTHER (EXPENSE) INCOME, Net:
Interest (expense)
income, net (95) 396
Other income, net 47 44
--------------------------- --------
Total other
(expense) income (48) 440
--------------------------- --------
INCOME BEFORE PROVISION FOR
INCOME TAXES AND MINORITY
INTERESTS IN CONSOLIDATED
SUBSIDIARIES 12,492 11,492
PROVISION FOR INCOME TAXES (3,997) (4,507)
MINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES (346) (372)
--------------------------- --------
NET INCOME $ 8,149 $ 6,613
=========================== ========
NET INCOME PER SHARE:
Basic $ 0.18 $ 0.15
Diluted $ 0.18 $ 0.15
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 44,095 42,909
Diluted 46,041 45,602
IPG PHOTONICS CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, December
31,
--------------------
2008 2007
--------- ---------
ASSETS (in thousands)
CURRENT ASSETS:
Cash and cash equivalents $ 38,698 $ 37,972
Marketable securities, at fair value 1,000 6,950
Accounts receivable, net 37,269 33,946
Inventories, net 69,630 60,412
Income taxes receivable 2,252 3,145
Prepaid expenses and other current
assets 9,308 7,071
Deferred income taxes 7,215 6,195
--------- ---------
Total current assets 165,372 155,691
DEFERRED INCOME TAXES 2,555 2,795
PROPERTY, PLANT, AND EQUIPMENT, Net 107,010 96,369
OTHER ASSETS 12,818 8,466
--------- ---------
TOTAL $287,755 $263,321
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line-of-credit facilities $ 15,336 $ 11,218
Accounts payable 11,364 9,444
Accrued expenses and other
liabilities 16,046 13,160
Deferred income taxes 1,305 564
Income taxes payable 1,353 96
--------- ---------
Total current liabilities 45,404 34,482
--------- ---------
DEFERRED INCOME TAXES 2,149 4,204
--------- ---------
LONG-TERM DEBT 20,000 20,000
--------- ---------
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS 4,801 4,455
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock 4 4
Additional paid-in capital 276,203 275,506
Accumulated deficit (82,348) (90,497)
Accumulated other comprehensive
income 21,542 15,167
--------- ---------
Total stockholders' equity 215,401 200,180
--------- ---------
TOTAL $287,755 $263,321
========= =========
SOURCE: IPG Photonics Corporation
IPG Photonics Corporation Tim Mammen, 508-373-1100 Chief Financial Officer or Sharon Merrill Associates, Inc. David Calusdian, 617-542-5300 Executive Vice President
Copyright Business Wire 2008
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