Coherent Corp. · NYSE:COHR
Coherent — Investor Presentation (September 2008)
20 slides from Coherent's investor presentation, Sep 3, 2008
Slide 1: The Leader in Photonics
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Slide 2: Forward-Looking Statements & Non-GAAP Measurement
Forward-Looking Statements & Non-GAAP Measurement Forward-Looking Statements The statements in this presentation that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with business and economic conditions, c
Slide 3: The Photonics Company
The Photonics Company Provider of Photonics Solutions − Primarily Lasers for Commercial and Scientific Research Applications • Founded in 1966 • TTM Sales $616.2 Million • TTM Orders $616.3 Million • ~2,225 Employees • Sales 32% U.S. and 68% International • 411 Patents, 103 Pending _________________
Slide 4: Our Strategy and Objectives
Our Strategy and Objectives • Leverage the depth & breadth of our technology portfolio to optimize growth and performance • Create new markets through internal and independent application development • Continue to lead the revolution in commercial lasers • Complement internal product/market developm
Slide 5: Market Leading Position with Multiple Growth Vectors
Market Leading Position with Multiple Growth Vectors W eld Cu ing ttin ,J M g, oin icr Dr S Et om illi ing f/H ch at D e fg . En ing ' l P ng M . ,E ro y fg gr ce e av t M Pr a vin x po ss H gh m oje g, sin ing Li c om . c tin M g le ec Re ar e E l ad g ki n T n s. le c M in g, g o oe ea C ic r l W
Slide 6: Diversified Applications
Diversified Applications Applications Revenue Revenue Mix Mix (TTM (TTM as as of of 6/28/08) 6/28/08) • TAM ~$1B, 5-year CAGR 10-15% Materials Processing Microelectronics • Mask writing, semiconductor inspection, OEM Components & Instrumentation* 16% marking, flat panel display, solar and advanced 2
Slide 7: Product Development Principles
Product Development Principles • 90% market-customer driven programs, 10% technology-driven • Revenue, share and margin growth • Key metrics • Market-enabling reliability • Market-enabling performance • Total cost of ownership (application dependent) • Platforms favored with 5-10 years of runway • I
Slide 8: The Power of Platforms: Optically Pumped Semiconductor (OPS)
The Power of Platforms: Optically Pumped Semiconductor (OPS) • Electrical Input: 40W-400W (up to10X more efficient than other laser sources) • Output Power: 10 mW-10W • Output Wavelengths: 460 nm-1060 nm • Characteristics: Reliable, Efficient, Compact, Air-Cooled • Units Shipped to Date: >17,000 • M
Slide 9: The Power of Platforms: Future Developments
The Power of Platforms: Future Developments • Microelectronics and materials processing represent the two largest core market growth opportunities for Coherent • In September 2007, we announced that we would introduce at least two new platforms into these markets over the next 12 – 18 months • We in
Slide 10: Recent Product Introduction: Talisker
Recent Product Introduction: Talisker • A scalable high peak and average power picosecond fiber-based platform for material processing that combines minimum thermal damage and high throughput in the infrared, visible, or ultraviolet. • Focused on reliability in rugged industrial environments – oscil
Slide 11: Recent Product Introduction: Talisker - Effect of Pulse Duration
Recent Product Introduction: Talisker - Effect of Pulse Duration Superior Reliability & Performance September 2008 P. 11
Slide 12: Recent Product Introduction: DIAMOND E-400
Recent Product Introduction: DIAMOND E-400 • Target markets include cutting, marking, glass processing and converting • First pulsed sealed off CO2 laser with 400W average and >1kW peak power • Integrated but detachable RF Power Supply • Outstanding Mode Quality (M2 <1.2) • Focused on Reliability •
Slide 13: E-400 Total Operating Cost Analysis
E-400 Total Operating Cost Analysis 300% K-250-OEM E-400 K-500-OEM 300 W Competition 250% 600 W Competition 200% 150% 100% 50% Higher COO in first 3 years than K250 and 300W Competition due to purge, higher energy consumption laser & chiller 0% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Slide 14: Optics Outsourcing/Exit of Auburn (CA) Facility
Optics Outsourcing/Exit of Auburn (CA) Facility • We are outsourcing optics manufacturing to privately-held Research Electro-Optics (REO) of Boulder, Colorado • Decision was based upon technical and financial competitiveness in the optics market • Other functions (C&C, IT, etc.) are being relocated
Slide 15: Attractive Financial Profile
Attractive Financial Profile Solid Solid Revenue Revenue Growth Growth 8.6% ($ millions) CAGR $700.0 $584.7 $601.2 $600.0 $495.0 $516.3 $500.0 $397.3 $406.2 $400.0 $300.0 $200.0 $100.0 $-- FY'02 FY'03 FY'04 FY'05 FY'06 FY'07 EBITDA targets of 19-23% exiting fiscal year 2010 • Material cost reduction
Slide 16: Attractive Financial Profile: Powerful Cash Generation
Attractive Financial Profile Powerful Powerful Cash Cash Generation Generation ($ millions) $450 $388 $400 $362 $350 $293 $300 $250 $218 $197 $200 $185 $143 $150 $100 $50 $0 FY'04 FY'05 FY'06 FY'07 Q1'08 Q2'08 Q3'08 Cash Balance (Net of Debt) Result of Dutch Tender Offer • Acquired ~8 million shares
Slide 17: Q3 Fiscal 2008 Financials (Pro Forma)
Q3 Fiscal 2008 Financials (Pro Forma) Q3’ 08 Q2’ 08 Q3’ 07 Orders $ 149.1 $ 148.6 $ 139.2 Sales $ 157.0 $ 155.9 $ 142.6 Gross Profit 45.3% 43.5% 40.4% Period Expenses $ 55.5 $ 52.3 $ 55.9 Net Income $ 12.7 $ 12.8 $ 4.8 EPS $ 0.53 $ 0.40 $ 0.15 Backlog $ 188.6 $ 199.3 $ 184.9 Note: Pro Forma results
Slide 18: Reconciliation GAAP to Pro Forma Net Income
Reconciliation GAAP to Pro Forma Net Income Q3’08 Q3’08 Q2’08 Q2’08 Q3’07 Q3’07 GAAP net income (loss) $8,402 $6,125 ($763) GAAP net income per diluted share $0.35 $0.19 ($0.02) Stock option investigation and related restatement of financial statements, and litigation expenses 935 1,528 1,775 Stock-
Slide 19: The Market Leading Photonics Platform
The Market Leading Photonics Platform An An Established Established History History of of Highly Highly Diversified Diversified Markets Markets Market Market and and Technology Technology and and Products Products Leadership Leadership Exceptional Exceptional Cash Cash Flow Flow Multiple Multiple Gr
Slide 20: Superior Reliability & Performance September 2008 P. 20
9/2/2008 P. 20 Superior Reliability & Performance September 2008