IPG Photonics Announces Second Quarter 2023 Financial Results
01 Août 2023 - 2:00PM
IPG Photonics Corporation (NASDAQ: IPGP) today reported
financial results for the second quarter ended June 30, 2023.
|
|
Three Months Ended June 30, |
|
|
|
Six Months Ended June 30, |
|
|
(In millions, except
per share data and percentages) |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
Revenue |
|
$ |
340.0 |
|
|
$ |
377.0 |
|
|
(10 |
) |
% |
|
$ |
687.1 |
|
|
$ |
747.0 |
|
|
(8 |
) |
% |
Gross margin |
|
|
43.4 |
% |
|
|
45.7 |
% |
|
|
|
|
42.9 |
% |
|
|
46.1 |
% |
|
|
Operating income |
|
$ |
72.1 |
|
|
$ |
71.7 |
|
|
1 |
|
% |
|
$ |
147.5 |
|
|
$ |
164.8 |
|
|
(10 |
) |
% |
Operating margin |
|
|
21.2 |
% |
|
|
19.0 |
% |
|
|
|
|
21.5 |
% |
|
|
22.1 |
% |
|
|
Net income attributable to IPG
Photonics Corporation |
|
$ |
62.3 |
|
|
$ |
57.0 |
|
|
9 |
|
% |
|
$ |
122.5 |
|
|
$ |
126.5 |
|
|
(3 |
) |
% |
Earnings per diluted share |
|
$ |
1.31 |
|
|
$ |
1.10 |
|
|
19 |
|
% |
|
$ |
2.57 |
|
|
$ |
2.41 |
|
|
7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management Comments
"Our materials processing business, excluding
China, performed well in the second quarter with continued strong
demand in welding and cleaning applications, driven by e-mobility.
We also saw a sequential improvement in flat sheet cutting sales
across many regions despite macroeconomic uncertainties and
competition in China," said Dr. Eugene Scherbakov, IPG Photonics'
Chief Executive Officer. "Adoption of fiber laser technology
continues and we are proud that our solutions have become an
industry standard in many industrial applications. We are exploring
additional opportunities to replace laser and non-laser
technologies with IPG fiber laser solutions across many new and
existing markets and applications."
Financial Highlights
Second quarter revenue of $340 million decreased
10% year over year. Changes in foreign exchange rates reduced
revenue by approximately $9 million or 2% and divestitures
reduced revenue by approximately 1% compared to the same period
last year. Materials processing sales accounted for 92% of total
revenue and decreased 8% year over year with growth in welding,
cleaning, 3D printing and solar cell manufacturing applications
offset by lower revenue in cutting and marking applications. Sales
into other applications decreased 23% year over year due to lower
revenue in medical and advanced applications, as well as the
telecom divestiture. Emerging growth products sales accounted for
41% of total revenue.
Revenue in high power continuous wave (CW)
lasers declined 10% year over year due to lower demand in flat
sheet cutting applications. Sales of pulsed lasers declined 24%
compared with the prior year as growth in cleaning and solar cell
manufacturing applications was offset by lower demand in foil
cutting and marking applications. By region, sales decreased 28% in
China and 11% in North America, but increased 4% in Europe and 14%
in Japan on a year-over-year basis.
Earnings per diluted share (EPS) of $1.31
increased 19% year over year. Foreign exchange transaction loss
decreased operating income by $1 million, but had no material
impact on net income and earnings per share due to a tax benefit.
The effective tax rate in the quarter was 24%. During the second
quarter, IPG generated $67 million in cash from operations and
spent $26 million on capital expenditures.
Business Outlook and Financial Guidance
“Second quarter book-to-bill was below one as
increased economic uncertainty negatively impacted customer orders
in our key geographies. In particular, general industrial demand in
Europe and North America has weakened while industrial demand and
EV investment remain soft in China. However, we are pleased to see
continued strong orders in e-mobility applications, driven by
increased investments in EV battery capacity in Europe, North
America, Korea and Japan, which should drive sales for our welding,
foil cutting and cleaning solutions. We are also seeing increasing
orders for 3D printing applications and laser diode heating and
drying solutions and are excited about additional opportunities for
these applications in the second half of 2023. The EV investment
cycle in China is expected to rebound in 2024," concluded Dr.
Scherbakov.
For the third quarter of 2023, IPG expects
revenue of $300 million to $330 million. The Company expects the
third quarter tax rate to be approximately 25%. IPG anticipates
delivering earnings per diluted share in the range of $0.85 to
$1.15.
As discussed in more detail in the "Safe Harbor"
passage of this news release, actual results may differ from this
guidance due to various factors including, but not limited to,
trade policy changes and trade restrictions, the COVID-19 pandemic,
product demand, order cancellations and delays, competition,
tariffs, currency fluctuations and general economic conditions.
This guidance is based upon current market conditions and
expectations, and is subject to the risks outlined in the Company's
reports filed with the SEC, and assumes exchange rates relative to
the U.S. dollar of Euro 0.92, Russian ruble 87, Japanese yen 145
and Chinese yuan 7.23, respectively.
Supplemental Financial Information
Additional supplemental financial information is
provided in the unaudited Financial Data Workbook and Second
Quarter 2023 Earnings Call Presentation available on the investor
relations section of the Company's website at
investor.ipgphotonics.com.
Conference Call Reminder
The Company will hold a conference call today,
August 1, 2023 at 10:00 am ET. To access the call, please dial
877-407-6184 in the US or 201-389-0877 internationally. A live
webcast of the call will also be available and archived on the
investor relations section of the Company's website at
investor.ipgphotonics.com.
Contact
Eugene FedotoffSenior Director, Investor Relations IPG Photonics
Corporation 508-597-4713efedotoff@ipgphotonics.com
About IPG Photonics Corporation
IPG Photonics Corporation is the leader in
high-power fiber lasers and amplifiers used primarily in materials
processing and other diverse applications. The Company’s mission is
to develop innovative laser solutions making the world a better
place. IPG accomplishes this mission by delivering superior
performance, reliability and usability at a lower total cost of
ownership compared with other types of lasers and non-laser tools,
allowing end users to increase productivity and decrease costs. IPG
is headquartered in Marlborough, Massachusetts and has more than 30
facilities worldwide. For more information, visit
www.ipgphotonics.com.
Safe Harbor Statement
Information and statements provided by IPG 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 strong orders in e-mobility applications, which should
drive sales for our welding, foil cutting and cleaning solutions,
additional opportunities for 3D printing applications and laser
diode heating and drying solutions, expected rebound of the EV
investment cycle in China in 2024, revenue, tax rate and earnings
guidance, and the impact of the U.S. dollar on our guidance for
third quarter of 2023. 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 IPG serves, particularly
the effect of downturns in the markets IPG serves; uncertainties
and adverse changes in the general economic conditions of markets;
inability to manage risks associated with international customers
and operations; changes in trade controls and trade policies; IPG's
ability to penetrate new applications for fiber lasers and increase
market share; the rate of acceptance and penetration of IPG's
products; foreign currency fluctuations; high levels of fixed costs
from IPG's vertical integration; the appropriateness of IPG's
manufacturing capacity for the level of demand; competitive
factors, including declining average selling prices; the effect of
acquisitions and investments; inventory write-downs; asset
impairment charges; intellectual property infringement claims and
litigation; interruption in supply of key components; manufacturing
risks; government regulations and trade sanctions; and other risks
identified in IPG's SEC filings. Readers are encouraged to refer to
the risk factors described in IPG's Annual Report on Form 10-K
(filed with the SEC on February 27, 2023) and IPG's 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.
IPG 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 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(In thousands, except per share data) |
Net sales |
|
$ |
339,971 |
|
$ |
377,023 |
|
$ |
687,145 |
|
|
$ |
747,002 |
Cost of sales |
|
|
192,280 |
|
|
204,679 |
|
|
392,516 |
|
|
|
402,837 |
Gross profit |
|
|
147,691 |
|
|
172,344 |
|
|
294,629 |
|
|
|
344,165 |
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
20,187 |
|
|
19,010 |
|
|
41,275 |
|
|
|
39,384 |
Research and development |
|
|
23,512 |
|
|
30,608 |
|
|
46,282 |
|
|
|
64,058 |
General and administrative |
|
|
29,660 |
|
|
33,411 |
|
|
59,788 |
|
|
|
64,075 |
Other restructuring charges |
|
|
963 |
|
|
— |
|
|
1,144 |
|
|
|
— |
Loss (gain) on foreign exchange |
|
|
1,306 |
|
|
17,640 |
|
|
(1,349 |
) |
|
|
11,830 |
Total operating expenses |
|
|
75,628 |
|
|
100,669 |
|
|
147,140 |
|
|
|
179,347 |
Operating income |
|
|
72,063 |
|
|
71,675 |
|
|
147,489 |
|
|
|
164,818 |
Other income, net: |
|
|
|
|
|
|
|
|
Interest income, net |
|
|
9,264 |
|
|
1,177 |
|
|
16,797 |
|
|
|
1,107 |
Other income, net |
|
|
285 |
|
|
618 |
|
|
616 |
|
|
|
382 |
Total other income |
|
|
9,549 |
|
|
1,795 |
|
|
17,413 |
|
|
|
1,489 |
Income before provision of
income taxes |
|
|
81,612 |
|
|
73,470 |
|
|
164,902 |
|
|
|
166,307 |
Provision for income
taxes |
|
|
19,291 |
|
|
16,139 |
|
|
42,446 |
|
|
|
39,348 |
Net income |
|
|
62,321 |
|
|
57,331 |
|
|
122,456 |
|
|
|
126,959 |
Less: net income attributable
to non-controlling interests |
|
|
— |
|
|
363 |
|
|
— |
|
|
|
419 |
Net income attributable to IPG
Photonics Corporation |
|
$ |
62,321 |
|
$ |
56,968 |
|
$ |
122,456 |
|
|
$ |
126,540 |
Net income attributable to IPG
Photonics Corporation per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.32 |
|
$ |
1.10 |
|
$ |
2.58 |
|
|
$ |
2.42 |
Diluted |
|
$ |
1.31 |
|
$ |
1.10 |
|
$ |
2.57 |
|
|
$ |
2.41 |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
47,316 |
|
|
51,687 |
|
|
47,429 |
|
|
|
52,111 |
Diluted |
|
|
47,453 |
|
|
51,795 |
|
|
47,618 |
|
|
|
52,311 |
IPG PHOTONICS CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
|
|
|
June 30, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(In thousands, except share and per
share data) |
ASSETS |
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
573,071 |
|
|
$ |
698,209 |
|
Short-term investments |
|
|
523,341 |
|
|
|
479,374 |
|
Accounts receivable, net |
|
|
231,125 |
|
|
|
211,347 |
|
Inventories |
|
|
491,301 |
|
|
|
509,363 |
|
Prepaid income taxes |
|
|
50,748 |
|
|
|
40,934 |
|
Prepaid expenses and other current assets |
|
|
54,482 |
|
|
|
47,047 |
|
Total current assets |
|
|
1,924,068 |
|
|
|
1,986,274 |
|
Deferred income taxes,
net |
|
|
69,644 |
|
|
|
75,152 |
|
Goodwill |
|
|
38,494 |
|
|
|
38,325 |
|
Intangible assets, net |
|
|
30,086 |
|
|
|
34,120 |
|
Property, plant and equipment,
net |
|
|
609,344 |
|
|
|
580,561 |
|
Other assets |
|
|
24,781 |
|
|
|
28,848 |
|
Total assets |
|
$ |
2,696,417 |
|
|
$ |
2,743,280 |
|
LIABILITIES AND EQUITY |
Current liabilities: |
|
|
|
|
Current portion of long-term debt |
|
$ |
— |
|
|
$ |
16,031 |
|
Accounts payable |
|
|
37,418 |
|
|
|
46,233 |
|
Accrued expenses and other current liabilities |
|
|
184,156 |
|
|
|
202,764 |
|
Income taxes payable |
|
|
6,613 |
|
|
|
9,618 |
|
Total current liabilities |
|
|
228,187 |
|
|
|
274,646 |
|
Other long-term liabilities
and deferred income taxes |
|
|
69,680 |
|
|
|
83,274 |
|
Total liabilities |
|
|
297,867 |
|
|
|
357,920 |
|
Commitments and
contingencies |
|
|
|
|
IPG Photonics Corporation
equity: |
|
|
|
|
Common stock, $0.0001 par value, 175,000,000 shares authorized;
56,242,504 and 47,364,320 shares issued and outstanding,
respectively, at June 30, 2023; 56,017,672 and 48,138,257
shares issued and outstanding, respectively, at December 31,
2022. |
|
|
6 |
|
|
|
6 |
|
Treasury stock, at cost, 8,878,184 and 7,879,415 shares held at
June 30, 2023 and December 31, 2022, respectively. |
|
|
(1,051,040 |
) |
|
|
(938,009 |
) |
Additional paid-in capital |
|
|
969,889 |
|
|
|
951,371 |
|
Retained earnings |
|
|
2,698,972 |
|
|
|
2,576,516 |
|
Accumulated other comprehensive loss |
|
|
(219,277 |
) |
|
|
(204,524 |
) |
Total IPG Photonics Corporation equity |
|
|
2,398,550 |
|
|
|
2,385,360 |
|
Total liabilities and
equity |
|
$ |
2,696,417 |
|
|
$ |
2,743,280 |
|
IPG PHOTONICS CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
|
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(In thousands) |
Cash flows from
operating activities: |
|
|
|
|
Net income |
|
$ |
122,456 |
|
|
$ |
126,959 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
35,343 |
|
|
|
47,104 |
|
Provisions for inventory, warranty & bad debt |
|
|
31,846 |
|
|
|
38,644 |
|
Other |
|
|
13,615 |
|
|
|
25,579 |
|
Changes in assets and liabilities that used cash, net of
acquisitions: |
|
|
|
|
Accounts receivable and accounts payable |
|
|
(31,348 |
) |
|
|
4,691 |
|
Inventories |
|
|
(12,103 |
) |
|
|
(99,233 |
) |
Other |
|
|
(55,863 |
) |
|
|
(48,583 |
) |
Net cash provided by operating activities |
|
|
103,946 |
|
|
|
95,161 |
|
Cash flows from
investing activities: |
|
|
|
|
Purchases of and deposits on property, plant and equipment |
|
|
(59,139 |
) |
|
|
(59,903 |
) |
Proceeds from sales of property, plant and equipment |
|
|
1,740 |
|
|
|
645 |
|
Purchases of short-term investments |
|
|
(583,347 |
) |
|
|
(583,828 |
) |
Proceeds from short-term investments |
|
|
549,879 |
|
|
|
925,657 |
|
Acquisitions of businesses, net of cash acquired |
|
|
— |
|
|
|
(2,000 |
) |
Other |
|
|
326 |
|
|
|
(350 |
) |
Net cash (used in) provided by investing activities |
|
|
(90,541 |
) |
|
|
280,221 |
|
Cash flows from
financing activities: |
|
|
|
|
Principal payments on long-term borrowings |
|
|
(16,031 |
) |
|
|
(1,932 |
) |
Proceeds from issuance of common stock under employee stock option
and purchase plans less payments for taxes related to net share
settlement of equity awards |
|
|
(731 |
) |
|
|
2,088 |
|
Purchase of treasury stock, at cost |
|
|
(113,031 |
) |
|
|
(311,606 |
) |
Net cash used in financing activities |
|
|
(129,793 |
) |
|
|
(311,450 |
) |
Effect of changes in exchange
rates on cash and cash equivalents |
|
|
(8,750 |
) |
|
|
(1,249 |
) |
Net (decrease) increase in
cash and cash equivalents |
|
|
(125,138 |
) |
|
|
62,683 |
|
Cash and cash equivalents —
Beginning of period |
|
|
698,209 |
|
|
|
709,105 |
|
Cash and cash equivalents —
End of period |
|
|
573,071 |
|
|
|
771,788 |
|
Supplemental disclosures of
cash flow information: |
|
|
|
|
Cash paid for interest |
|
$ |
947 |
|
|
$ |
1,600 |
|
Cash paid for income taxes |
|
$ |
58,178 |
|
|
$ |
61,715 |
|
IPG PHOTONICS CORPORATION |
SUPPLEMENTAL SCHEDULE OF AMORTIZATION OF INTANGIBLE ASSETS
(UNAUDITED) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(In thousands) |
Amortization of intangible
assets: |
|
|
|
|
|
|
|
|
Cost of sales |
|
$ |
564 |
|
$ |
1,055 |
|
$ |
1,128 |
|
$ |
2,228 |
Sales and marketing |
|
|
1,457 |
|
|
1,854 |
|
|
2,914 |
|
|
3,702 |
Total amortization of
intangible assets |
|
$ |
2,021 |
|
$ |
2,909 |
|
$ |
4,042 |
|
$ |
5,930 |
IPG PHOTONICS CORPORATION |
SUPPLEMENTAL SCHEDULE OF STOCK-BASED COMPENSATION
(UNAUDITED) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(In thousands) |
Cost of sales |
|
$ |
2,515 |
|
|
$ |
3,215 |
|
|
$ |
5,161 |
|
|
$ |
6,273 |
|
Sales and marketing |
|
|
1,390 |
|
|
|
1,309 |
|
|
|
2,683 |
|
|
|
2,518 |
|
Research and development |
|
|
2,045 |
|
|
|
2,374 |
|
|
|
3,841 |
|
|
|
4,903 |
|
General and
administrative |
|
|
3,757 |
|
|
|
3,568 |
|
|
|
7,633 |
|
|
|
6,730 |
|
Total stock-based
compensation |
|
|
9,707 |
|
|
|
10,466 |
|
|
|
19,318 |
|
|
|
20,424 |
|
Tax effect of stock-based
compensation |
|
|
(2,148 |
) |
|
|
(2,251 |
) |
|
|
(4,244 |
) |
|
|
(4,385 |
) |
Net stock-based
compensation |
|
$ |
7,559 |
|
|
$ |
8,215 |
|
|
$ |
15,074 |
|
|
$ |
16,039 |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(In thousands) |
Excess tax benefit (detriment) on stock-based compensation |
|
$ |
22 |
|
$ |
(427 |
) |
|
$ |
(1,686 |
) |
|
$ |
(2,140 |
) |
IPG Photonics (NASDAQ:IPGP)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
IPG Photonics (NASDAQ:IPGP)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024