Coherent Corp. Reports Fiscal 2023 First Quarter Results

Rhea-AI Summary

Coherent Corp. (Nasdaq: COHR) reported a record revenue of $1.34 billion for Q1 FY23, a **69%** year-over-year increase, with **20%** organic growth. The company achieved a backlog of $3.05 billion, up **119%** year-over-year. Non-GAAP EPS was $1.04, bolstered by favorable FX impacts. However, GAAP EPS was negative at $(0.56), reflecting losses. The company anticipates Q2 revenue between $1,340 million and $1,400 million and full-year revenue between $5,250 million and $5,550 million.

Positive

• Record revenue of $1.34 billion, up 69% year-over-year.
• Organic revenue growth of 20% year-over-year.
• Record backlog of $3.05 billion, a 119% increase year-over-year.
• Non-GAAP EPS of $1.04, positively influenced by foreign exchange.
• Strong performance in Electronics and Communications segments.

Negative

• GAAP EPS reported at $(0.56), indicating a loss.
• GAAP operating income decreased to $42.5 million from $114.2 million sequentially.
• GAAP gross margin declined to 33.0% from 36.8% sequentially.

• Record Revenue of 1.34 Billion, Grew 69% Year-Over-Year
• Organic Revenue Growth of 20% Year-Over-Year
• Record Backlog of $3.05 Billion, Grew 119% Year-Over-Year
• GAAP EPS of $(0.56)
• Non-GAAP EPS of $1.04
  

PITTSBURGH, Nov. 09, 2022 (GLOBE NEWSWIRE) -- Coherent Corp. (Nasdaq:COHR) (“Coherent,” “We” or the “Company”) today reported results for its fiscal 2023 first quarter ended September 30, 2022.

“Our first quarter of FY23 was a great start to our new chapter as Coherent Corp. We achieved revenue of $1.34 billion with solid contributions from all three segments, growing 69% year-over-year, 20% organically and 13% year-over-year on a proforma basis. In the quarter, Electronics led the way with our sensing revenue in one of its two seasonally high quarters, and Communications contributed strong performance as well in both telecom and datacom, including record revenues from our datacom transceiver business as we continue to gain share in high-speed modules. Our non-GAAP diluted EPS was $1.04 and was affected favorably by FX by about $0.07 in the quarter. The company delivered very good earnings due to continued focus on revenue strength, cost controls, operating efficiencies and timely launches of industry leading new products,” said Dr. Vincent D. Mattera, Jr., Chair and CEO.

Dr. Mattera continued, “Our integration activities started strong and remain on track. The impact of current escalating trade tensions are not material to our business. We will continue to drive innovation, prudently directing our roughly $1 billion of investment again this year between R&D and cap ex to support our long-term growth.”

Table 1
Financial Metrics
$ Millions, except per share amounts and %
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Revenues		$	1,344.6			$	887.0			$	795.1
GAAP Gross Profit (3)		$	443.6			$	326.0			$	306.6
Non-GAAP Gross Profit (2)		$	542.2			$	343.4			$	317.7
GAAP Operating Income (1)		$	42.5			$	114.2			$	95.1
Non-GAAP Operating Income (2)		$	286.4			$	168.6			$	150.2
GAAP Net Earnings (Loss)		$	(38.7	)		$	43.6			$	74.5
Non-GAAP Net Earnings (2)		$	183.6			$	133.7			$	117.7
GAAP Diluted Earnings (Loss) Per Share		$	(0.56	)		$	0.23			$	0.50
Non-GAAP Diluted Earnings Per Share (2)		$	1.04			$	0.98			$	0.87
Other Selected Financial Metrics
GAAP gross margin (3)			33.0%				36.8%				38.6%
Non-GAAP gross margin (2)			40.3%				38.7%				40.0%
GAAP operating margin			3.2%				12.9%				12.0%
Non-GAAP operating margin (2)			21.3%				19.0%				18.9%
GAAP return on sales			(2.9)%				4.9%				9.4%
Non-GAAP return on sales (2)			13.7%				15.1%				14.8%

(1)	GAAP operating income is defined as earnings before income taxes, interest expense and other expense or income, net.
(2)	All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, restructuring, integration and transaction expenses, and start-up costs related to the start-up of new devices for new customer applications. See Table 4 for the Reconciliation of GAAP measures to non-GAAP measures.
(3)	GAAP gross profit for the three months ended September 30, 2021 has been updated to include amortization of developed technology intangible assets.

   

Outlook

The outlook for the second fiscal quarter ending December 31 2022 is revenue of $1,340 million to $1,400 million and earnings per diluted share on a non-GAAP basis of $0.88 to $1.00. This is at today’s exchange rate and today’s estimated tax impact of 23%. Both of these are subject to variability. For the non-GAAP earnings per share, we added back to the GAAP earnings pre-tax amounts of $83 million in amortization, $34 million in share-based compensation, $46 million related to the preliminary fair value adjustment on acquired inventory, and $20-30 million in transaction, integration and other related costs. Refer to Table 8 for the share count range for the aforementioned outlook. Non-GAAP adjustments are by their nature highly volatile and we have low visibility as to the range that may be incurred in the future.

The Company also expects full year revenue between $5,250 to $5,550 million, at today’s exchange rate.

Conference Call & Webcast Information

The Company will host a conference call at 9:00 a.m. Eastern Time on Wednesday, November 9, 2022 to discuss these results. Individuals wishing to participate in the webcast can access the event at the Company’s web site by visiting https://www.coherent.com/news/press-releases/coherent-corp-to-host-fy-2023-first-quarter-conference-call or via this link. Equity analysts and others who wish to participate in the question-and-answer session of the conference call can pre-register at this link to receive dial-in numbers and a unique PIN.

The call will be recorded, and a replay will be available to interested parties who are unable to attend the live event. This service will be available on the company’s website beginning November 9, 2022, at 4:00 p.m. ET.

About Coherent Corp.

Coherent Corp. (“Coherent”, the “Company,” “we,” “us” or “our”), a global leader in materials, networking and lasers, is a vertically integrated manufacturing company that develops, manufactures and markets engineered materials, optoelectronic components and devices, and lasers for use in industrial materials processing, optical communications, aerospace and defense, consumer electronics, semiconductor capital equipment, medical diagnostics and life sciences, automotive applications, machine tools, consumer goods and medical device manufacturing. Headquartered in Saxonburg, Pennsylvania, Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide. Coherent produces a wide variety of lasers, along with application-specific photonic and electronic materials and components, and deploys them in various forms, including integrated with advanced software to enable its customers. For more information, please visit us at coherent.com.

Forward-looking Statements

This press release contains forward-looking statements relating to future events and expectations that are based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The forward-looking statements in this press release involve risks and uncertainties, which could cause actual results, performance or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures.

The Company believes that all forward-looking statements made by it in this press release have a reasonable basis, but there can be no assurance that management’s expectations, beliefs, or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements in this press release include but are not limited to: (i) the failure of any one or more of the assumptions stated herein to prove to be correct; (ii) the risks relating to forward-looking statements and other “Risk Factors” discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 and additional risk factors that may be identified from time to time in filings of the Company; (iii) the substantial indebtedness the Company incurred in connection with its acquisition of Coherent, Inc. (the “Transaction”) and the need to generate sufficient cash flows to service and repay such debt; (iv) the possibility that the Company may be unable to achieve expected synergies, operating efficiencies and other benefits within the expected time-frames or at all and to successfully integrate operations of Coherent, Inc. (“Coherent”) with those of the Company; (v) the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the Transaction; (vi) any unexpected costs, charges or expenses resulting from the Transaction; (vii) the risk that disruption from the Transaction materially and adversely affects the respective businesses and operations of the Company and Coherent; (viii) potential adverse reactions or changes to business relationships resulting from the completion of the Transaction; (ix) the ability of the Company to retain and hire key employees; (x) the purchasing patterns of customers and end users; (xi) the timely release of new products, and acceptance of such new products by the market; (xii) the introduction of new products by competitors and other competitive responses; (xiii) the Company’s ability to assimilate recently acquired businesses, and realize synergies, cost savings, and opportunities for growth in connection therewith, together with the risks, costs, and uncertainties associated with such acquisitions; (xiv) the Company’s ability to devise and execute strategies to respond to market conditions; (xv) the risks to realizing the benefits of investments in R&D and commercialization of innovations; (xvi) the risks that the Company’s stock price will not trade in line with industrial technology leaders; and/or (xvii) the risks of business and economic disruption related to the currently ongoing COVID-19 outbreak and any other worldwide health epidemics or outbreaks that may arise. The Company disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or developments, or otherwise.

Use of Non-GAAP Financial Measures

The Company has disclosed financial measurements in this press release that present financial information considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although the Company's management uses these measurements as an aid in monitoring the Company's on-going financial performance. The non-GAAP net earnings, the non-GAAP earnings per share, the non-GAAP operating income, the non-GAAP gross profit, the non-GAAP internal research and development, the non-GAAP selling, general and administration, the non-GAAP interest and other (income) expense, and the non-GAAP income tax (benefit), measure earnings and operating income (loss), respectively, excluding non-recurring or unusual items that are considered by management to be outside the Company’s standard operation and excluding certain non-cash items. EBITDA is an adjusted non-GAAP financial measurement that is considered by management to be useful in measuring the profitability between companies within the industry by reflecting operating results of the Company excluding non-operating factors. There are limitations associated with the use of non-GAAP financial measures, including that such measures may not be entirely comparable to similarly titled measures used by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance whether (i) items excluded from the non-GAAP financial measures will occur in the future or (ii) there will be cash costs associated with items excluded from the non-GAAP financial measures. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

Coherent Corp. and Subsidiaries
Condensed Consolidated Statements of Earnings (Loss) (Unaudited)
($000 except per share data)
		Three Months Ended
		Sept 30,				Jun 30,			Sept 30,
			2022				2022			2021
Revenues		$	1,344,570			$	886,962		$	795,111
Costs, Expenses & Other Expense
Cost of goods sold			900,996				560,930			488,487
Internal research and development			121,084				95,917			88,966
Selling, general and administrative			280,014				115,862			122,608
Interest expense			61,889				48,502			12,191
Other expense (income), net			31,605				16,768			(7,582	)
Total Costs, Expenses, & Other Expense			1,395,588				837,979			704,670
Earnings (Loss) Before Income Taxes			(51,018	)			48,983			90,441
Income Taxes			(12,320	)			5,347			15,977
Net Earnings (Loss)		$	(38,698	)		$	43,636		$	74,464
Less: Dividends on Preferred Stock			35,577				17,291			17,082
Net Earnings (Loss) available to the Common Shareholders		$	(74,275	)		$	26,345		$	57,382
Basic Earnings (Loss) Per Share		$	(0.56	)		$	0.25		$	0.54
Diluted Earnings (Loss) Per Share		$	(0.56	)		$	0.23		$	0.50
Average Shares Outstanding - Basic			133,280				106,520			105,761
Average Shares Outstanding - Diluted			133,280				116,821			115,849

Coherent Corp. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
				September 30,				June 30,
					2022				2022
Assets
Current Assets
Cash, cash equivalents, and restricted cash				$	898,501			$	2,582,371
Accounts receivable					975,437				700,331
Inventories					1,346,940				902,559
Prepaid and refundable income taxes					23,205				19,585
Prepaid and other current assets					150,547				100,346
Total Current Assets					3,394,630				4,305,192
Property, plant & equipment, net					1,803,646				1,363,195
Goodwill					5,284,591				1,285,759
Other intangible assets, net					2,984,979				635,404
Deferred income taxes					28,451				31,714
Other assets					334,262				223,582
Total Assets				$	13,830,559			$	7,844,846
Liabilities, Mezzanine Equity and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt				$	129,011			$	403,212
Accounts payable					479,385				434,917
Operating lease current liabilities					38,855				27,574
Accruals and other current liabilities					535,833				401,256
Total Current Liabilities					1,183,084				1,266,959
Long-term debt					4,494,282				1,897,214
Deferred income taxes					618,565				77,259
Operating lease liabilities					141,542				110,214
Other liabilities					230,568				109,922
Total Liabilities					6,668,041				3,461,568
Total Mezzanine Equity					2,153,480				766,803
Total Shareholders' Equity					5,009,038				3,616,475
Total Liabilities, Mezzanine Equity and Shareholders’ Equity				$	13,830,559			$	7,844,846

Coherent Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)				Three Months Ended
				September 30,
					2022				2021
Cash Flows from Operating Activities
Net cash provided by operating activities				$	79,577			$	52,336
Cash Flows from Investing Activities
Additions to property, plant & equipment					(138,990	)			(47,565	)
Purchases of businesses, net of cash acquired					(5,488,556	)			—
Other investing activities					(711	)			—
Net cash used in investing activities					(5,628,257	)			(47,565	)
Cash Flows from Financing Activities
Proceeds from borrowings of Term A Facility					850,000				—
Proceeds from borrowings of Term B Facility					2,800,000				—
Proceeds from borrowings of Revolving Credit Facility					65,000				—
Proceeds from issuance of Series B preferred shares					1,400,000				—
Payments on existing debt					(996,429	)			(15,513	)
Debt issuance costs					(126,516	)			—
Equity Issuance Costs					(42,000	)			—
Proceeds from exercises of stock options					7,425				7,481
Payment on convertible notes					(3,561	)			—
Payments in satisfaction of employees' minimum tax obligations					(40,885	)			(13,017	)
Payment of dividends					—				(13,808	)
Other financing activities					(292	)			(1,109	)
Net cash provided by (used in) financing activities					3,912,742				(35,966	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash					(42,273	)			(522	)
Net decrease in cash, cash equivalents, and restricted cash					(1,678,211	)			(31,717	)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period					2,582,371				1,591,892
Cash, Cash Equivalents, and Restricted Cash at End of Period(1)				$	904,160			$	1,560,175

(1) Restricted cash, non-current is included in the condensed consolidated balance sheets under 'Other Assets'.

Table 2
Segment Revenues, GAAP Operating Income (Loss) & Margins, and
Non-GAAP Operating Income (Loss) & Margins*
$ Millions, except %
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Revenues:(1)
Networking		$	596.6			$	590.1			$	531.0
Materials			355.6				296.9				264.1
Lasers			392.4				—				—
Consolidated		$	1,344.6			$	887.0			$	795.1
GAAP Operating Income (Loss):(1)
Networking		$	91.0			$	67.1			$	59.4
Materials			75.3				53.5				46.8
Lasers			(123.8	)			—				—
Unallocated and Other			—				(6.4	)			(11.2	)
Consolidated		$	42.5			$	114.2			$	95.1
Non-GAAP Operating Income:(1)
Networking		$	117.7			$	89.2			$	86.8
Materials			96.8				79.5				63.5
Lasers			71.9				—				—
Unallocated and Other			—				—				—
Consolidated		$	286.4			$	168.6			$	150.2
GAAP Operating Margin (Loss):(1)
Networking			15.3%				11.4%				11.2%
Materials			21.2%				18.0%				17.7%
Lasers			(31.5)%			NA				NA
Consolidated			3.2%				12.9%				12.0%
Non-GAAP Operating Margin:(1)
Networking			19.7%				15.1%				16.3%
Materials			27.2%				26.8%				24.0%
Lasers			18.3%			NA				NA
Consolidated			21.3%				19.0%				18.9%

*Amounts may not recalculate due to rounding.

(1) Segment results for prior periods have been updated to include the movement of two businesses between Materials and Networking.

Table 3
Reconciliation of Segment Non-GAAP Operating Income (Loss) to
GAAP Segment Operating Income (Loss)*
$ Millions
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Non-GAAP Networking Operating Income		$	117.7			$	89.2			$	86.8
Share-based compensation			(10.2	)			(3.1	)			(9.6	)
Amortization of acquired intangibles			(16.5	)			(16.2	)			(16.9	)
Restructuring and related expenses			—				(2.8	)			(0.9	)
Networking GAAP Operating Income		$	91.0			$	67.1			$	59.4
Non-GAAP Materials Operating Income		$	96.8			$	79.5			$	63.5
Share-based compensation			(17.2	)			(10.5	)			(13.2	)
Amortization of acquired intangibles			(3.2	)			(3.7	)			(3.5	)
Integration and other(1)			(1.1	)			(5.4	)			—
Start-up costs(3)			—				(6.4	)			—
Materials GAAP Operating Income		$	75.3			$	53.5			$	46.8
Non-GAAP Lasers Operating Income		$	71.9			$	—			$	—
Share-based compensation			(25.8	)			—				—
Amortization of acquired intangibles			(62.8	)			—				—
Integration and other(1)			(23.0	)			—				—
Transaction fees and financing(2)			(38.7	)			—				—
Preliminary fair value adjustment on acquired inventory			(45.5	)			—				—
Lasers GAAP Operating Income (Loss)		$	(123.8	)		$	—			$	—
Non-GAAP Unallocated and Other Operating Income (Loss)		$	—			$	—			$	—
Restructuring, integration, and transaction expenses			—				(6.4	)			(11.2	)
Unallocated and Other GAAP Operating Income (Loss)		$	—			$	(6.4	)		$	(11.2	)
Total GAAP Operating Income		$	42.5			$	114.2			$	95.1
Non-GAAP Operating Income		$	286.4			$	168.6			$	150.2

*Amounts may not recalculate due to rounding.
(1)	During fiscal year 2023, Integration and Other includes one-time retention and severance payments, as well as other integration costs related to the Coherent transaction. During fiscal year 2022, Integration and other includes integration and restructuring charges from the Finisar acquisition.
(2)	Transaction fees and financing in fiscal year 2023 includes debt extinguishment costs and various fees related to closing the Coherent transaction. Transaction fees and financing in fiscal year 2022 includes incremental interest expense related to the financing for the Coherent transaction which were be included as an adjustment in arriving at non-GAAP earnings through the closing of the Coherent transaction, as the associated funding was contingent on transaction close.
(3)	Start-up costs in operating expenses were related to the start-up of new devices for new customer applications.

Table 4
Reconciliation of GAAP Measures to non-GAAP Measures*
$ Millions
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Gross profit on GAAP basis (4)		$	443.6			$	326.0			$	306.6
Share-based compensation			5.3				0.9				1.5
Amortization of acquired intangibles			47.4				9.6				9.6
Preliminary fair value adjustment on acquired inventory			45.5				—				—
Integration and other(1)			0.4				6.9
Gross profit on non-GAAP basis		$	542.2			$	343.4			$	317.7
Internal research and development on GAAP basis		$	121.1			$	95.9			$	89.0
Share-based compensation			(5.4	)			(1.3	)			(2.3	)
Start-up costs(3)			—				(6.4	)			—
Integration and other(1)			—				(0.6	)			—
Internal research and development on non-GAAP basis		$	115.7			$	87.6			$	86.7
Selling, general and administrative on GAAP basis		$	280.0			$	115.9			$	122.6
Share-based compensation			(42.5	)			(11.3	)			(18.9	)
Amortization of acquired intangibles			(35.1	)			(10.3	)			(10.8	)
Integration and other(1)			(23.7	)			—				—
Transaction fees and financing(2)			(38.7	)			(7.1	)			(12.0	)
Selling, general and administrative on non-GAAP basis		$	140.0			$	87.2			$	80.9
Operating income on GAAP basis		$	42.5			$	114.2			$	95.1
Share-based compensation			53.2				13.5				22.7
Amortization of acquired intangibles			82.5				19.9				20.4
Start-up costs(3)			—				6.4				—
Preliminary fair value adjustment on acquired inventory			45.5				—				—
Integration and other(1)			24.1				—				—
Transaction fees and financing(2)			38.7				14.6				12.0
Operating income on non-GAAP basis		$	286.4			$	168.6			$	150.2

Table 4
Reconciliation of GAAP Measures to non-GAAP Measures (Continued)*
$ Millions
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Interest and other (income) expense, net on GAAP basis		$	93.5			$	65.3			$	4.6
Foreign currency exchange gains (losses), net			3.0				(19.8	)			4.9
Transaction fees and financing(2)			(34.8	)			(38.3	)			—
Interest and other (income) expense, net on non-GAAP basis		$	61.7			$	7.2			$	9.5
Income taxes on GAAP basis		$	(12.3	)		$	5.3			$	16.0
Tax impact of non-GAAP measures			53.5				22.6				7.1
Income taxes on non-GAAP basis		$	41.2			$	27.9			$	23.1
Net earnings (loss) on GAAP basis		$	(38.7	)		$	43.6			$	74.5
Share-based compensation			53.2				13.5				22.7
Amortization of acquired intangibles			82.5				19.9				20.4
Preliminary fair value adjustment on acquired inventory			45.5				—				—
Start-up costs(3)			—				6.4				—
Foreign currency exchange (gains) losses			(3.0	)			19.8				(4.9	)
Integration and other(1)			24.1				14.7				12.0
Transaction fees and financing(2)			73.5				38.3				—
Tax impact of non-GAAP measures			(53.5	)			(22.6	)			(7.1	)
Net earnings on non-GAAP basis		$	183.6			$	133.7			$	117.7
Per share data:
Net earnings (loss) on GAAP basis
Basic Earnings (Loss) Per Share		$	(0.56	)		$	0.25			$	0.54
Diluted Earnings (Loss) Per Share		$	(0.56	)		$	0.23			$	0.50
Net earnings on non-GAAP basis
Basic Earnings Per Share		$	1.11			$	1.09			$	0.95
Diluted Earnings Per Share		$	1.04			$	0.98			$	0.87

*Amounts may not recalculate due to rounding.
(1)	During fiscal year 2023, Integration and other includes one-time retention and severance payments and other integration costs related to the Coherent transaction. During fiscal year 2022, Integration and other includes integration and restructuring charges from the Finisar acquisition.
(2)	Transaction fees and financing in fiscal year 2023 includes debt extinguishment costs, various fees related to closing the Coherent transaction. Transaction fees and financing in fiscal year 2022 includes incremental interest expense related to the financing for the Coherent transaction which were included as an adjustment in arriving at non-GAAP earnings through the closing of the Coherent transaction, as the associated funding was contingent on transaction close.
(3)	Start-up costs in operating expenses were related to the start-up of new devices for new customer applications.
(4)	GAAP gross profit for the three months ended September 30, 2021 has been updated to include amortization of developed technology intangible assets.

   

Table 5
Reconciliation of GAAP Net Income (Loss), EBITDA and Adjusted EBITDA*
$ Millions
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Net earnings (loss) on GAAP basis		$	(38.7	)		$	43.6			$	74.5
Income taxes			(12.3	)			5.3				16.0
Depreciation and amortization			147.3				73.3				69.7
Interest expense			61.9				48.5				12.2
EBITDA (1)		$	158.2			$	170.7			$	172.4
EBITDA margin			11.8	%			19.2	%			21.7	%
Preliminary fair value adjustment on acquired inventory			45.5				—				—
Share-based compensation			53.2				13.5				22.7
Foreign currency exchange (gains) losses			(3.0	)			19.8				(4.9	)
Start-up costs			—				6.4				—
Integration and other(3)			24.1				—				—
Transaction fees and financing(4)			73.5				14.6				12.0
Adjusted EBITDA (2)		$	351.5			$	225.0			$	202.2
Adjusted EBITDA margin			26.1	%			25.4	%			25.4	%

*Amounts may not recalculate due to rounding.
(1)	EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization.
(2)	Adjusted EBITDA excludes non-GAAP adjustments for share-based compensation, certain one-time restructuring, integration, and transaction expenses, debt extinguishment charges, start-up costs, and the impact of foreign currency exchange gains and losses.
(3)	During fiscal year 2023, Integration and other includes one-time retention and severance payments, and other integration costs related to the Coherent transaction. During fiscal year 2022, Integration and other includes integration and restructuring charges from the Finisar acquisition.
(4)	Transaction fees and financing includes debt extinguishment costs and various fees related to closing the Coherent transaction.

   

Table 6
GAAP Earnings Per Share Calculation*
$ Millions
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Numerator
Net earnings (loss)		$	(38.7	)		$	43.6			$	74.5
Deduct Series A preferred stock dividends			(6.9	)			(6.9	)			(6.9	)
Deduct Series B redeemable preferred dividends			(28.7	)			(10.4	)			(10.2	)
Basic earnings (loss) available to common shareholders		$	(74.3	)		$	26.3			$	57.4
Effect of dilutive securities:
Add back interest on convertible notes		$	—			$	0.6			$	0.5
Diluted earnings (loss) available to common shareholders		$	(74.3	)			26.9			$	57.9
Denominator
Weighted average shares			133.3				106.5				105.8
Effect of dilutive securities:
Common stock equivalents			—				3.0				2.8
Convertible notes			—				7.3				7.3
Diluted weighted average common shares			133.3				116.8				115.8
Basic earnings (loss) per common share		$	(0.56	)		$	0.25			$	0.54
Diluted earnings (loss) per common share		$	(0.56	)		$	0.23			$	0.50

*Amounts may not recalculate due to rounding.

Table 7
Non-GAAP Earnings Per Share Calculation*
$ Millions
(Unaudited)		Three Months Ended
		Sept 30,				Jun 30,				Sept 30,
			2022				2022				2021
Numerator
Net earnings on non-GAAP basis		$	183.6			$	133.7			$	117.7
Deduct Series A preferred stock dividends			(6.9	)			(6.9	)			(6.9	)
Deduct Series B redeemable preferred dividends			(28.7	)			(10.4	)			(10.2	)
Basic earnings available to common shareholders		$	148.1			$	116.4			$	100.6
Effect of dilutive securities:
Add back interest on convertible notes		$	0.4			$	0.6			$	0.5
Add back Series A preferred stock dividends			6.9				6.9				6.9
Diluted earnings available to common shareholders		$	155.3			$	123.8			$	108.0
Denominator
Weighted average shares			133.3				106.5				105.8
Effect of dilutive securities:
Common stock equivalents			1.5				3.0				2.8
Convertible notes			4.5				7.3				7.3
Series A Mandatory Convertible Preferred Stock			9.6				8.9				8.9
Diluted weighted average common shares			148.8				125.7				124.8
Basic earnings per common share on non-GAAP basis		$	1.11			$	1.09			$	0.95
Diluted earnings per common share on non-GAAP basis		$	1.04			$	0.98			$	0.87

*Amounts may not recalculate due to rounding.

Table 8
Example EPS Calculations (1)
$ Millions
		Hypothetical Earnings Level for Q2 FY23
Non-GAAP net earnings		$	162.0			$	171.0			$	180.0			$	200.0
Deduct Series B redeemable preferred dividends			(29.4	)			(29.4	)			(29.4	)			—
Non-GAAP net earnings available to common shareholders		$	132.6			$	141.6			$	150.6			$	200.0
Diluted weighted average common shares			151.0				151.0				151.0				177.0
Diluted earnings per common share on non-GAAP basis		$	0.88			$	0.94			$	1.00			$	1.13

(1)

The Company does not provide reconciliations of the hypothetical non-GAAP net earnings and hypothetical diluted non-GAAP EPS presented in this table. This table contains purely hypothetical figures, which are provided solely to illustrate how the Company would calculate diluted non-GAAP EPS under different factual scenarios.

 

CONTACT:        

Mary Jane Raymond
Treasurer and Chief Financial Officer

investor.relations@coherent.com
https://www.coherent.com/company/investor-relations

FAQ

What were Coherent Corp.'s fiscal Q1 2023 earnings results?

Coherent reported record revenue of $1.34 billion and a non-GAAP EPS of $1.04 for Q1 FY23.

What is Coherent Corp.'s revenue outlook for Q2 FY23?

The company expects Q2 revenue to be between $1,340 million and $1,400 million.

What was the year-over-year revenue growth for Coherent Corp. in Q1 FY23?

The company achieved a 69% year-over-year revenue growth.

How did Coherent's backlog change year-over-year?

Coherent reported a backlog of $3.05 billion, which is a 119% increase year-over-year.