IPG Photonics Reports Revenue Growth of 17% for Fourth Quarter and 19% for Full Year 2012

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IPG Photonics Reports Revenue Growth of 17% for Fourth Quarter and 19% for Full Year 2012

High-Power Lasers for Materials Processing Applications Drive Growth; Provides Positive Outlook for First Quarter of 2013

OXFORD, Mass.--(BUSINESS WIRE)-- IPG Photonics Corporation (NAS: IPGP) today reported financial results for the fourth quarter and fiscal year ended December 31, 2012.

  Three Months Ended   Twelve Months Ended

December 31,

  

December 31,

  
(In millions, except per share data)

2012

  

2011

% Change

2012

  

2011

% Change

Revenue$145.0$123.5

17%

 

$562.5$474.5

19%

 

Gross margin51.8%53.8%54.2%54.2%
Operating income$47.3$46.1

3%

 

$208.9$175.5

19%

 

Operating margin32.6%37.3%37.1%37.0%
Net income attributable to IPG Photonics Corporation$34.9$31.1

12%

 

$145.0$117.8

23%

 

Earnings per diluted share$0.67$0.64

5%

 

$

2.81

$2.41

17%

 

 

Management Comments

"IPG ended a solid year of financial and operational performance with strong results for the fourth quarter," said Dr. Valentin Gapontsev, IPG Photonics' Chief Executive Officer. "Revenues for the quarter increased 17% over the prior year and net income increased by 12%, driven by high-power laser sales for materials processing applications. Looking at the full year, our 19% revenue growth and 23% net income growth demonstrates the wide and growing acceptance of IPG's technology across a variety of applications."

"Materials Processing sales, which make up the majority of our business, grew 14% for the fourth quarter," said Dr. Gapontsev. "High-power laser sales increased 10% from the prior year, driven by cutting and welding applications, primarily used by automotive, heavy industry and general manufacturing. On a geographic basis, we performed well across most regions, particularly in North America and Asia."

"In 2012, IPG spent approximately $68 million on capital expenditures to support manufacturing and new technology infrastructure, as well as expand capacity for the assembly of finished product," Dr. Gapontsev said.

Business Outlook and Financial Guidance

"We are excited by IPG's prospects for growth in 2013," said Dr. Gapontsev. "We are pleased with the start of the year as order flow was very strong in January despite a book-to-bill that was less than one in Q4. We are making progress on increasing sales to current major OEMs and new applications. We believe that fiber laser technology continues to make market share gains over legacy laser technologies and non-laser technologies."

"While revenues in the first quarter have historically been lighter on a sequential basis due to seasonality, we expect to report sequential growth over Q4 2012, as well as year-over-year. The continued market penetration of our products give us confidence that IPG will grow in 2013 as we strengthen our technology and competitive lead in the laser market, expand our product portfolio and enter into new applications," concluded Dr. Gapontsev.

IPG Photonics expects revenue in the range of $145 million to $155 million for the first quarter of 2013. The Company anticipates earnings per diluted share in the range of $0.65 to $0.75 based on 52,116,000 diluted common shares, which includes 51,110,000 basic common shares outstanding and 1,006,000 potentially dilutive options at December 31, 2012.

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 Company's 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, February 15, 2013 at 10:00 a.m. ET. The conference call will be webcast live 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) 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 IPG's 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, increasing sales to current major OEMs and new applications, making market share gains, sequential growth over Q4 2012, continued market penetration of IPG's products, continued growth in 2013, strengthening of IPG's technology and competitive lead, expanding the Company's product lead and entering into new applications, and guidance for the first 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 economic downturns; reduction in customer capital expenditures; potential order cancellations and push-outs and financial and credit market issues; 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, including from transportation disruptions from natural and man-made events; manufacturing risks; inventory write-downs; foreign currency fluctuations; 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 February 27, 2012) 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 December 31,Twelve Months Ended December 31,
2012 2011 2012 2011 
(in thousands, except per share data)
NET SALES$145,030$123,524$562,528$474,482
COST OF SALES 69,856  57,100  257,801  217,227 
GROSS PROFIT 75,174  66,424  304,727  257,255 
OPERATING EXPENSES:
Sales and marketing7,0745,28023,84521,731
Research and development9,2706,58031,40125,422
General and administrative9,9379,94339,23137,442
Loss (gain) on foreign exchange 1,634  (1,449) 1,362  (2,862)
Total operating expenses 27,915  20,354  95,839  81,733 
OPERATING INCOME 47,259  46,070  208,888  175,522 
OTHER INCOME (EXPENSE), Net:
Interest (expense) income, net(222)(96)319(681)
Other income (expense), net 989  208  8  (257)
Total other income (expense) 767  112  327  (938)
INCOME BEFORE PROVISION FOR INCOME TAXES48,02646,182209,215174,584
PROVISION FOR INCOME TAXES (13,114) (14,327) (61,471) (53,575)
NET INCOME34,91231,855147,744121,009
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS -  769  2,740  3,250 
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS
CORPORATION$34,912 $31,086 $145,004 $117,759 
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS
CORPORATION PER SHARE:
Basic$0.68$0.65$

2.87

$2.48
Diluted$0.67$0.64$

2.81

$2.41
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic51,11047,56450,47747,365
Diluted52,11648,68551,53648,685
        
 
IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF STOCK-BASED COMPENSATION
 
Three Months EndedTwelve Months Ended

December 31,

December 31,

(In thousands)

2012

2011

2012

2011

 
Cost of sales$594$428$2,184$1,731
Sales and marketing2252971,0521,503
Research and development3512471,3271,036
General and administrative 1,037  896  4,002  3,778 
 
Total stock-based compensation2,2071,8688,5658,048
Tax benefit recognized (691) (569) (2,629) (2,551)
 
Net stock-based compensation$1,516$1,299$5,936$5,497
        
 
IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF ACQUISITION RELATED COSTS IN COST OF SALES
 
Three Months EndedTwelve Months Ended

December 31,

December 31,

(In thousands)

2012

2011

2012

2011

 
Cost of sales
Step-up of inventory (1)

$

460$-$ Read Full Story

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