8-K

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):  July 29, 2010

COHERENT, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33962	94-1622541
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification Number)

5100 Patrick Henry Drive

Santa Clara, CA 95054

(Address of principal executive offices)

(408) 764-4000

(Registrant’s telephone number, including area code)

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:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-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 July 29, 2010, Coherent, Inc. (the “registrant” or “Coherent”) issued a press release regarding its financial results for the fiscal quarter ended July 3, 2010. A copy of the press release is furnished as Exhibit 99.1 to this report.

NON-GAAP FINANCIAL MEASURES: Coherent utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall business performance, for making operating decisions and for forecasting and planning future periods. Coherent considers the use of non-GAAP financial measures helpful in assessing its current financial performance, ongoing operations and prospects for the future. Ongoing operations are the ongoing revenue and expenses of the business, excluding certain costs that Coherent does not anticipate to recur on a quarterly basis or which do not reflect ongoing operations. While Coherent uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Coherent does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, Coherent believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance. In assessing the overall health of its business, Coherent excluded items in the following general categories described below:

Net income (loss) and net income (loss) per diluted share.  We have excluded certain recurring and non-recurring items  in order to enhance investors’ understanding of our ongoing operations and to compare these results across multiple fiscal periods, particularly where a one-time event may have an impact in one fiscal quarter and not another.

Each of the non-GAAP financial measures described above, and used herein, should not be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP. Further, investors are cautioned that there are inherent limitations associated with the use of each of these non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and many of the adjustments to the GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in Coherent’s financial results for the foreseeable future. In addition, other companies, including other companies in Coherent’s industry, may calculate non-GAAP financial measures differently than Coherent does, limiting their usefulness as a comparative tool.

ITEM 9.01.            Financial Statements and Exhibits

(d)           Exhibits

Exhibit No.	Description
99.1	Press release dated July 29, 2010

2

SIGNATURES

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, INC.
Date: July 29, 2010
	By:	/s/ Bret M. DiMarco
		Bret M. DiMarco
		Executive Vice President and
		General Counsel

3

EX-99.1

Exhibit 99.1

@coherent	PRESS RELEASE
Editorial Contact:		For Release:
Leen Simonet		IMMEDIATE
(408) 764-4161		July 29, 2010
		No. 1256

Coherent, Inc. Reports Record Quarterly Results

SANTA CLARA, CA, July 29, 2010 — Coherent, Inc. (NASDAQ, COHR), a world leader in providing photonics based solutions to the commercial and scientific research markets, today announced financial results for its third fiscal quarter ended July 3, 2010.

FINANCIAL HIGHLIGHTS

	Three Months Ended							Nine Months Ended
	July 3,		April 3,		July 4,			July 3,		July 4,
	2010		2010		2009			2010		2009
GAAP Results (in millions except per share data)
Bookings	$	180.6	$	164.5	$	88.6		$	503.5	$	285.8
Net sales	$	166.7	$	149.2	$	98.5		$	438.7	$	328.3
Net income (loss)	$	14.4	$	8.5	$	(7.0	)	$	27.1	$	(30.8	)
Diluted EPS	$	0.57	$	0.34	$	(0.29	)	$	1.08	$	(1.27	)
Non-GAAP Results (in millions except per share data)
Net income (loss)	$	16.8	$	11.3	$	(2.2	)	$	33.2	$	6.8
Diluted EPS	$	0.66	$	0.45	$	(0.09	)	$	1.33	$	0.28

THIRD FISCAL QUARTER DETAILS

For the third fiscal quarter ended July 3, 2010, Coherent announced record net sales of $166.7 million and net income, on a U.S. generally accepted accounting principles (GAAP) basis, of $14.4 million ($0.57 per diluted share).  These results compare to net sales of $98.5 million and net loss of $7.0 million, or $0.29 per share, for the third quarter of fiscal 2009.  Non-GAAP net income for the third quarter of fiscal 2010 was $16.8 million, or $0.66 per diluted share, and non-GAAP net loss for the third quarter of fiscal 2009 was $2.2 million, or $0.09 per share. Please see the reconciliation of GAAP to non-GAAP results included at the end of our release.

Net sales for the second quarter of fiscal 2010 were $149.2 million and net income, on a GAAP basis, was $8.5 million ($0.34 per diluted share).  Non-GAAP net income for the second quarter of fiscal 2010 was $11.3 million, or $0.45 per diluted share.

Bookings received during the three months ended July 3, 2010 of $180.6 million increased 103.7% from $88.6 million in the same prior year period and increased by 9.8% compared to bookings of $164.5 million in the immediately preceding quarter.  The book-to-bill ratio was 1.08, resulting in backlog of $230.2 million at July 3, 2010 compared to a backlog of $217.2 million at April 3, 2010 and a backlog of $137.6 million at July 4, 2009.

As of July 3, 2010, year-to-date sales were $438.7 million and net profit was $27.1 million ($1.08 per diluted share) on a GAAP basis compared to the prior year period sales of $328.3 million and a net loss on a GAAP basis of $30.8 million ($1.27 per share).  Bookings received for the nine month period ended July 3, 2010 were $503.5 million, compared to $285.8 million in bookings received during the same period a year ago.

Coherent ended the quarter with cash and short term investments of $254.0 million, a decrease of $11.1 million from cash and short term investments of $265.1 million at April 3, 2010.

“The third quarter operating income was not only the best in the company’s history, it also serves to demonstrate the combined benefits of our more efficient operating structure, higher revenue and favorable mix.  We are equally encouraged by record-setting orders as they reflect the alignment we have achieved with our customers.  Microelectronics bookings were particularly strong due to investments in LED manufacturing and mobile communications (i.e., smartphones).  Demand for lasers used in materials processing and instrumentation was also very healthy as we capitalize on market recovery and new product introductions,” said John Ambroseo, Coherent’s President and Chief Executive Officer.

CONFERENCE CALL REMINDER

The Company will host a conference call today to discuss its financial results at 1:30 P.M. Pacific (4:30 P.M. Eastern). A listen-only broadcast of the conference call can be accessed on the Company’s website at either http://www.coherent.com/Investors/ or http://www.earnings.com. For those who are not available to listen to the live broadcast, the call will be archived for approximately three months on both web sites.  A transcript of management’s prepared remarks can be found at http://www.coherent.com/Investors/.

Summarized statement of operations information is as follows (unaudited, in thousands except per share data):

	Three Months Ended								Nine Months Ended
	July 3,			April 3,		July 4,			July 3,		July 4,
	2010			2010		2009			2010		2009
Net sales	$	166,697		$	149,157	$	98,479		$	438,669	$	328,289
Cost of sales (A) (B) (E)	92,350			83,544		64,865			247,677		204,679
Gross profit	74,347			65,613		33,614			190,992		123,610
Operating expenses:
Research & development (A) (B) (E)	18,264			19,488		15,529			53,162		45,917
Selling, general & administrative (A) (B) (C) (E)	31,584			31,164		29,223			90,727		80,813
Impairment of goodwill(D)	—			—		—			—		19,286
Intangibles amortization	2,041			1,956		1,907			5,958		5,744
Total operating expenses	51,889			52,608		46,659			149,847		151,760
Income (loss) from operations	22,458			13,005		(13,045		)	41,145		(28,150		)
Other income (expense), net(E)	(185		)	1,492		3,329			2,099		(2,501		)
Income (loss) before income taxes	22,273			14,497		(9,716		)	43,244		(30,651		)
Provision for (benefit from) income taxes(F)	7,869			6,017		(2,701		)	16,181		173
Net income (loss)	$	14,404		$	8,480	$	(7,015	)	$	27,063	$	(30,824	)
Net income (loss) per share:
Basic	$	0.58		$	0.34	$	(0.29	)	$	1.09	$	(1.27	)
Diluted	$	0.57		$	0.34	$	(0.29	)	$	1.08	$	(1.27	)
Shares used in computation:
Basic	25,022			24,704		24,331			24,732		24,245
Diluted	25,438			24,996		24,331			25,037		24,245

(A) Stock-related compensation expense included in operating results is summarized below (all footnote amounts are unaudited, in thousands):

	Three Months Ended						Nine Months Ended
	July 3,		April 3,		July 4,		July 3,		July 4,
Stock-related compensation expense	2010		2010		2009		2010		2009
Cost of sales	$	233	$	256	$	200	$	708	$	660
Research & development	309		280		249		862		683
Selling, general & administrative	1,650		1,514		1,039		4,834		4,260
Impact on income (loss) from operations	$	2,192	$	2,050	$	1,488	$	6,404	$	5,603

For the quarters ended July 3, 2010, April 3, 2010, and July 4, 2009, the impact on net income (loss), net of tax was $1,590 ($0.06 per diluted share), $1,873 ($0.07 per diluted share) and $1,368 ($0.06 per share), respectively. For the nine months ended July 3, 2010 and July 4, 2009, the impact on net income (loss), net of tax was $4,982 ($0.19 per diluted share) and $4,493 ($0.19 per share), respectively.

(B) Restructuring costs included in operating results are summarized below:

	Three Months Ended						Nine Months Ended
	July 3,		April 3,		July 4,		July 3,		July 4,
Restructuring costs	2010		2010		2009		2010		2009
Cost of sales	$	549	$	707	$	2,621	$	1,565	$	8,796
Research & development	135		168		799		712		2,089
Selling, general & administrative	526		685		1,469		1,729		3,110
Impact on income (loss) from operations	$	1,210	$	1,560	$	4,889	$	4,006	$	13,995

For the quarters ended July 3, 2010, April 3, 2010 and July 4, 2009, the impact on net income (loss), net of tax was $786 ($0.03 per diluted share), $978 ($0.04 per diluted share) and $3,354 ($0.14 per share), respectively. For the nine months ended July 3, 2010 and July 4, 2009, the impact on net income (loss), net of tax was $2,577($0.10 per diluted share) and $10,430 ($0.43 per share), respectively.

(C) The quarter ended July 4, 2009 includes $108 ($74 net of tax ($0.00 per share)) of costs related to litigation resulting from our internal stock option investigation. The nine months ended July 3, 2010 includes $2,185 ($1,438 net of tax ($0.06 per diluted share)) net receipt from the settlement of litigation resulting from our internal stock option investigation.  The nine months ended July 4, 2009 includes $947 ($699 net of tax ($0.03 per share)) of costs related to litigation resulting from our internal stock option investigation.

(D) The nine months ended July 4, 2009 includes a $19,286 ($0.80 per diluted share) non-cash charge for the impairment of all of the goodwill of our Commercial Lasers and Components segment.

(E) Changes in deferred compensation plan liabilities are included in cost of sales and operating expenses while gains and losses on deferred compensation plan assets are included in other income (expense) net.  Deferred compensation expense (benefit) included in operating results is summarized below:

	Three Months Ended							Nine Months Ended
Deferred compensation	July 3,			April 3,		July 4,		July 3,		July 4,
expense (benefit)	2010			2010		2009		2010		2009
Cost of sales	$	(1	)	$	4	$	87	$	35	$	(141	)
Research & development	7			30		309		169		(775		)
Selling, general & administrative	(38		)	204		2,431		1,280		(4,354		)
Impact on income (loss) from operations	$	(32	)	$	238	$	2,827	$	1,484	$	(5,270	)

For the quarters ended July 3, 2010, April 3, 2010 and July 4, 2009, the impact on other income (expense) net from gains or losses on deferred compensation plan assets was expense of $341, income of $97 and income of $2,259, respectively. For the nine months ended July 3, 2010 and July 4, 2009, the impact on other income (expense) net was income of $819 and expense of $5,761, respectively.

(F) The nine months ended July 4, 2009 include a tax charge of $2,666 ($0.11 per share) resulting from changes in state tax law.

Summarized balance sheet information is as follows (unaudited, in thousands):

	July 3,2010		October 3,2009
ASSETS
Current assets:
Cash, cash equivalents and short-term investments	$	254,007	$	243,635
Restricted cash	625		—
Accounts receivable, net	98,355		74,235
Inventories	99,409		97,767
Prepaid expenses and other assets	69,916		67,133
Total current assets	522,312		482,770
Property and equipment, net	91,488		98,792
Other assets	171,547		172,042
Total assets	$	785,347	$	753,604
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term obligations	$	19	$	9
Accounts payable	31,844		21,639
Other current liabilities	100,181		64,694
Total current liabilities	132,044		86,342
Other long-term liabilities	82,325		91,691
Total stockholders’ equity	570,978		575,571
Total liabilities and stockholders’ equity	$	785,347	$	753,604

Reconciliation of GAAP to Non-GAAP net income (unaudited, in thousands, net of tax):

	Three Months Ended							Nine Months Ended
	July 3, 2010		April 3, 2010		July 4,2009			July 3,2010			July 4,2009
GAAP net income (loss)	$	14,404	$	8,480	$	(7,015	)	$	27,063		$	(30,824	)
Stock-related compensation expense	1,590		1,873		1,368			4,982			4,493
Restructuring costs	786		978		3,354			2,577			10,430
Stock option investigation and litigation expense (benefit)	—		—		74			(1,438		)	699
Impairment of goodwill	—		—		—			—			19,286
One-time tax expense	—		—		—			—			2,666
Non-GAAP net income (loss)	$	16,780	$	11,331	$	(2,219	)	$	33,184		$	6,750
Non-GAAP net income per diluted share	$	0.66	$	0.45	$	(0.09	)	$	1.33		$	0.28

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, as defined under the Federal securities laws. These forward-looking statements include the statements in this press release that relate to our new product introductions and any market recovery. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.  Factors that could cause actual results to differ materially include risks and uncertainties, including, but not limited to, risks associated with any general market recovery, our successful implementation of our customer design wins, our and our customers’ exposure to risks associated with worldwide economic slowdowns, the ability of our customers to forecast their own end markets, our ability to increase our sales volumes, our ability to accurately forecast future periods, customer acceptance and adoption of our new product offerings, level of government spending and continued purchases of our existing and new products and services, our ability to timely ship our products and our customers’ ability to accept such shipments, our ability to have our customers qualify our product offerings, and other risks identified in the Company’s SEC filings.  Readers are encouraged to refer to the risk disclosures and critical accounting policies and estimates described in the Company’s reports on Forms 10-K, 10-Q and 8-K, as applicable and as filed from time-to-time by the Company.  Actual results, events and performance may differ materially from those presented herein.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Company undertakes no obligation to update these forward-looking statements as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Founded in 1966, Coherent, Inc. is a world leader in providing photonics based solutions to the commercial and scientific research markets and part of the Russell 2000. Please direct any questions to Leen Simonet, Chief Financial Officer at 408-764-4161. For more information about Coherent, visit the Company’s Web site at http://www.coherent.com/ for product and financial updates.

5100 Patrick Henry Dr. ·P. O. Box 54980, Santa Clara, California 95056—0980 ·Telephone (408) 764-4000