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IPG Photonics Reports 67% Year-Over-Year Revenue Growth and Improved Profitability in Second Quarter 2010

Date Announced: 03 Aug 2010

Fiber laser company benefits from booming materials processing sector.

OXFORD, Mass.--(BUSINESS WIRE)--IPG Photonics Corporation (NASDAQ: IPGP - News) today reported financial results for the second quarter of fiscal 2010 ended June 30, 2010.

“IPG reported stronger second-quarter financial results, continuing the momentum that has been building in 2010,” said Dr. Valentin Gapontsev, IPG Photonics’ Chief Executive Officer. “IPG’s revenue and earnings per share for the second quarter both exceeded the high end of our financial guidance.”

“As a result of the operating leverage in our business model, coupled with 67% year-over-year sales growth and 31% sequential growth, gross and operating margins expanded to 45.3% and 23.4%, respectively. Our operating results for the second quarter included a benefit of $2.3 million, or approximately $0.03 per diluted share, relating to foreign exchange gains.”

“Despite some underlying uncertainties in the global macro-economic environment during the second quarter many of our end markets are benefitting from a secular recovery,” said Gapontsev.

“Materials processing had an outstanding quarter with sales increasing 91% year-over-year and 34% on a sequential basis. Demand for high-power cutting lasers and pulsed lasers for engraving and marking drove this strong performance as did sales to China, which more than tripled from the same period last year.”

Medical application sales continued to be strong, increasing 32% year-over-year and 29% sequentially, following solid first-quarter 2010 results. Advanced applications sales were 5% lower year-over-year and up 15% sequentially, and telecommunications sales decreased 24% year-over-year and improved 15% sequentially as customers began re-ordering.”

“IPG generated $15.6 million in cash from operations and ended the quarter with $90.7 million in cash, an increase of $6.2 million sequentially,” said Gapontsev. “Capital expenditures for the first half of 2010 totaled $12.8 million.”

Business Outlook and Financial Guidance
“Our book-to-bill ratio continues to be greater than one, and we have excellent sales momentum,” stated Dr. Gapontsev. “In addition, with sales demand returning, we expect to continue to capitalize on the operating leverage in our business model. Going forward in 2010, we will continue to meet the increasing global demand for fiber lasers and related products, introduce new and innovative sources and laser-based tools, penetrate complementary markets, and capitalize on new opportunities to expand our customer base and displace existing laser and non-laser technologies in a wide range of applications.”

IPG Photonics expects revenues in the range of $69 million to $75 million for the third quarter of 2010. The Company anticipates earnings per diluted share in the range of $0.19 to $0.25 based on 47,333,000 common shares, which includes 46,220,000 basic common shares outstanding and 1,113,000 potentially dilutive options at June 30, 2010. The EPS guidance includes higher planned legal expenditures related to the IMRA America patent trial scheduled to begin in August 2010.

The Company also announced today that all claims related to the CardioFocus patent litigation have been settled by mutual agreement. The settlement will have no effect upon the financial results of the Company.

For full details, visit http://www.ipgphotonics.com

Source: IPG Photonics

Contact

IPG Photonics Corporation
Tim Mammen, 508-373-1100
Chief Financial Officer

E-mail: fleibreich@ipgphotonics.com

Web Site: www.ipgphotonics.com/

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