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
May 1, 2013
Date of Report (Date of earliest event reported)
IPG PHOTONICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 001-33155 | 04-3444218 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) |
50 Old Webster Road
Oxford, Massachusetts 01540
(Address of Principal Executive Offices, including Zip Code)
Registrants telephone number, including area code: (508) 373-1100
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)) |
Item 2.02. Results of Operations and Financial Condition
On May 1, 2013, IPG Photonics Corporation (the Company) announced its financial results for the quarter ended March 31, 2013. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information on this Form 8-K (including Exhibit 99.1) shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
99.1 | Press Release issued by IPG Photonics Corporation on: May 1, 2013 |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.
IPG PHOTONICS CORPORATION | ||||||
May 1, 2013 | By: | /s/ Timothy P.V. Mammen | ||||
Timothy P.V. Mammen | ||||||
Vice President and Chief Financial Officer |
EXHIBIT NUMBER |
DESCRIPTION | |
99.1 | Press Release issued by IPG Photonics Corporation on: May 1, 2013 |
CONTACT:
Tim Mammen | David Calusdian |
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Chief Financial Officer | Executive Vice President |
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IPG Photonics Corporation | Sharon Merrill |
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(508) 373-1100 | (617) 542-5300 |
IPG PHOTONICS REPORTS 15% REVENUE GROWTH FOR FIRST QUARTER 2013
Materials Processing Applications Sales Increase 29%
Order Flow Remains Strong
OXFORD, Mass. May 1, 2013 IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the first quarter ended March 31, 2013.
Three Months Ended March 31, | ||||||||||||
(In millions, except per share data) | 2013 | 2012 | % Change | |||||||||
Revenue |
$ | 141.9 | $ | 123.2 | 15 | % | ||||||
Gross margin |
53.3 | % | 55.8 | % | ||||||||
Operating income |
$ | 49.6 | $ | 45.2 | 10 | % | ||||||
Operating margin |
35.0 | % | 36.7 | % | ||||||||
Net income attributable to IPG Photonics Corporation |
$ | 35.1 | $ | 29.9 | 17 | % | ||||||
Earnings per diluted share |
$ | 0.67 | $ | 0.61 | 10 | % |
Management Comments
IPGs core materials processing business grew by 29% year-over-year and comprised 94% of our revenues, said Dr. Valentin Gapontsev, IPG Photonics Chief Executive Officer. Gross margins of 53.3% recovered from Q4 due to improved product mix, lower component costs and enhanced manufacturing efficiency. Order flow remains firm with a book-to-bill ratio solidly in excess of 1. The strong growth in our core materials processing applications was partially offset by lower sales in other applications.
In materials processing, we reported a record quarter for high power laser sales, which increased 19% year-over-year, said Dr. Gapontsev. Strong materials processing sales were also driven by growth across all regions, particularly, Asia and Europe. In addition, during Q1 we received our largest automotive contract in our history from a major German manufacturer.
Cash and cash equivalents decreased from $384.1 million to $355.7 million due to the payment of German corporation taxes related to 2011 and 2012 of approximately $32 million and capital and acquisition related expenditures that totaled $23.3 million, Dr. Gapontsev said.
Business Outlook and Financial Guidance
The fundamentals that drive our business remain intact with strong order flow and sequentially improving margins. We are continuing to develop new industry-leading products and applications which should generate future growth. The core materials processing applications continue to drive growth as they gain significant market share from legacy technologies. Our scale, technological and cost advantages drive customer acceptance and make IPG the top choice for many laser processing applications. Our guidance for the second quarter takes into consideration these improving dynamics, concluded Dr. Gapontsev.
IPG Photonics expects revenue in the range of $155 million to $165 million for the second quarter of 2013. The Company anticipates earnings per diluted share in the range of $0.72 to $0.82 based on 52,350,000 diluted common shares, which includes 51,407,000 basic common shares outstanding and 943,000 potentially dilutive options at March 31, 2013.
As discussed in more detail below, actual results may differ from this guidance due to various factors including, but not limited to, product demand, competition and general economic conditions. This guidance is subject to the risks outlined in the Companys reports with the SEC, and assumes that exchange rates remain at present levels.
Conference Call Reminder
The Company will hold a conference call to review its financial results and business highlights today, May 1, 2013 at 10:00 a.m. ET. The conference call will be webcast live and can be accessed on the Investors section of the Companys website at www.ipgphotonics.com. The conference call also can be accessed by dialing (877) 709-8155 or (201) 689-8881. Interested parties that are unable to listen to the live call may access an archived version of the webcast, which will be available for approximately one year on IPGs website.
About IPG Photonics Corporation
IPG Photonics Corporation 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 diverse applications, primarily materials processing. 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, IPGs continuing development of new industry-leading products and applications which should generate future growth, gaining significant market share from legacy technologies, customer acceptance being driven by IPGs scale, technological and cost advantages and making IPG the top choice for many laser processing applications, improving dynamics, and guidance for the second quarter of 2013. Factors that could cause actual results to differ materially include risks and uncertainties, including risks associated with the strength or weakness of the business conditions in industries and geographic markets that the Company serves, particularly the effect of downturns in the markets IPG serves; uncertainties and adverse changes in the general economic conditions of markets; the Companys ability to penetrate new applications for fiber lasers and increase market share; the rate of acceptance and penetration of IPGs products; high levels of fixed costs from IPGs vertical integration; the appropriateness of the Companys manufacturing capacity for the level of demand; competitive factors, including declining average selling prices; the effect of acquisitions and investments; inventory write-downs; foreign currency fluctuations; intellectual property infringement claims and litigation; interruption in supply of key components; manufacturing risks; building and expanding field service and support operations; inability to manage risks associated with international customers and operations; and other risks identified in the Companys SEC filings. Readers are encouraged to refer to the risk factors described in the Companys Annual Report on Form 10-K (filed with the SEC on February 28, 2013) 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.
IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
(in thousands, except per share data) | ||||||||
NET SALES |
$ | 141,852 | $ | 123,192 | ||||
COST OF SALES |
66,211 | 54,508 | ||||||
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GROSS PROFIT |
75,641 | 68,684 | ||||||
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OPERATING EXPENSES: |
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Sales and marketing |
5,868 | 5,132 | ||||||
Research and development |
8,798 | 7,140 | ||||||
General and administrative |
11,810 | 9,949 | ||||||
(Gain) loss on foreign exchange |
(481 | ) | 1,286 | |||||
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Total operating expenses |
25,995 | 23,507 | ||||||
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OPERATING INCOME |
49,646 | 45,177 | ||||||
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OTHER INCOME (EXPENSE), Net: |
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Interest expense, net |
(53 | ) | (129 | ) | ||||
Other income (expense), net |
70 | (1,094 | ) | |||||
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Total other income (expense) |
17 | (1,223 | ) | |||||
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INCOME BEFORE PROVISION FOR INCOME TAXES |
49,663 | 43,954 | ||||||
PROVISION FOR INCOME TAXES |
(14,536 | ) | (13,406 | ) | ||||
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NET INCOME |
35,127 | 30,548 | ||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
| 633 | ||||||
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NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION |
$ | 35,127 | $ | 29,915 | ||||
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NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE: |
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Basic |
$ | 0.68 | $ | 0.63 | ||||
Diluted |
$ | 0.67 | $ | 0.61 | ||||
WEIGHTED AVERAGE SHARES OUTSTANDING: |
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Basic |
51,407 | 48,446 | ||||||
Diluted |
52,350 | 49,582 |
IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF STOCK-BASED COMPENSATION
Three Months Ended March 31, | ||||||||
(In thousands) | 2013 | 2012 | ||||||
Cost of sales |
$ | 676 | $ | 460 | ||||
Sales and marketing |
284 | 252 | ||||||
Research and development |
382 | 303 | ||||||
General and administrative |
1,190 | 983 | ||||||
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Total stock-based compensation |
2,532 | 1,998 | ||||||
Tax benefit recognized |
(817 | ) | (607 | ) | ||||
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Net stock-based compensation |
$ | 1,715 | $ | 1,391 | ||||
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IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF ACQUISITION RELATED COSTS IN COST OF SALES
Three Months Ended March 31, | ||||||||
(In thousands) | 2013 | 2012 | ||||||
Cost of sales |
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Step-up of inventory (1) |
$ | 406 | $ | | ||||
Amortization of intangible assets (2) |
182 | 308 | ||||||
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Total acquisition related costs |
$ | 588 | $ | 308 | ||||
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(1) | Amount relates to Microsystems step-up adjustment on inventory sold during the period |
(2) | Amount relates to intangible amortization expense during periods presented including amortization of acquired patents |
IPG PHOTONICS CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | |||||||
2013 | 2012 | |||||||
(In thousands, except share and per share data) |
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ASSETS | ||||||||
CURRENT ASSETS: |
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Cash and cash equivalents |
$ | 355,715 | $ | 384,053 | ||||
Accounts receivable, net |
102,793 | 96,630 | ||||||
Inventories |
142,096 | 139,618 | ||||||
Prepaid income taxes and income taxes receivable |
14,397 | 13,071 | ||||||
Prepaid expenses and other current assets |
23,265 | 18,639 | ||||||
Deferred income taxes, net |
11,105 | 12,948 | ||||||
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Total current assets |
649,371 | 664,959 | ||||||
DEFERRED INCOME TAXES, NET |
2,344 | 2,107 | ||||||
GOODWILL |
3,258 | 2,898 | ||||||
INTANGIBLE ASSETS, NET |
11,412 | 7,510 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET |
218,995 | 210,563 | ||||||
OTHER ASSETS |
6,878 | 7,461 | ||||||
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TOTAL |
$ | 892,258 | $ | 895,498 | ||||
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LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES: |
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Revolving line-of-credit facilities |
$ | 9,802 | $ | 2,442 | ||||
Current portion of long-term debt |
1,529 | 1,505 | ||||||
Accounts payable |
14,575 | 17,783 | ||||||
Accrued expenses and other liabilities |
50,138 | 51,451 | ||||||
Deferred income taxes, net |
2,875 | 9,831 | ||||||
Income taxes payable |
9,191 | 42,443 | ||||||
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Total current liabilities |
88,110 | 125,455 | ||||||
DEFERRED INCOME TAXES AND OTHER LONG-TERM LIABILITIES |
18,398 | 13,102 | ||||||
LONG-TERM DEBT, NET OF CURRENT PORTION |
12,525 | 14,014 | ||||||
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Total liabilities |
119,033 | 152,571 | ||||||
COMMITMENTS AND CONTINGENCIES |
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IPG PHOTONICS CORPORATION STOCKHOLDERS EQUITY: |
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Common stock, $0.0001 par value, 175,000,000 shares authorized; 51,432,894 shares issued and outstanding at March 31, 2013; 51,359,247 shares issued and outstanding at December 31, 2012 |
5 | 5 | ||||||
Additional paid-in capital |
515,755 | 511,039 | ||||||
Retained earnings |
270,104 | 234,977 | ||||||
Accumulated other comprehensive loss |
(12,639 | ) | (3,094 | ) | ||||
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Total IPG Photonics Corporation stockholders equity |
773,225 | 742,927 | ||||||
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TOTAL |
$ | 892,258 | $ | 895,498 | ||||
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IPG PHOTONICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
$ | 35,127 | $ | 30,548 | ||||
Adjustments to reconcile net income to net cash (used) provided by operating activities: |
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Depreciation and amortization |
7,217 | 6,215 | ||||||
Provisions for inventory, warranty & bad debt |
3,705 | 3,799 | ||||||
Other |
6,359 | 6,611 | ||||||
Changes in assets and liabilities that used cash: |
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Accounts receivable/payable |
(10,186 | ) | (11,501 | ) | ||||
Inventories |
(6,984 | ) | (4,027 | ) | ||||
Other |
(46,577 | ) | (4,640 | ) | ||||
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Net cash (used) provided by operating activities |
(11,339 | ) | 27,005 | |||||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property, plant and equipment |
(17,746 | ) | (13,779 | ) | ||||
Proceeds from sales of property, plant and equipment |
89 | | ||||||
Proceeds from short-term investments |
| 7,001 | ||||||
Acquisition of businesses |
(5,555 | ) | | |||||
Other |
375 | 149 | ||||||
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Net cash used in investing activities |
(22,837 | ) | (6,629 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Line-of-credit facilities |
7,482 | 2,694 | ||||||
Principal payments on long-term borrowings |
(1,640 | ) | (360 | ) | ||||
Purchase of noncontrolling interests |
| (700 | ) | |||||
Tax benefits from exercise of employee stock options |
1,464 | 1,048 | ||||||
Exercise of employee stock options and issuances under employee stock purchase plan |
720 | 749 | ||||||
Proceeds from follow-on public offering, net of offering expenses |
| 168,268 | ||||||
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Net cash provided by financing activities |
8,026 | 171,699 | ||||||
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EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS |
(2,188 | ) | 4,762 | |||||
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
(28,338 | ) | 196,837 | |||||
CASH AND CASH EQUIVALENTS Beginning of period |
384,053 | 180,234 | ||||||
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CASH AND CASH EQUIVALENTS End of period |
$ | 355,715 | $ | 377,071 | ||||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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Cash paid for interest |
$ | 88 | $ | 251 | ||||
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Cash paid for income taxes |
$ | 47,813 | $ | 6,755 | ||||
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