Italia markets open in 6 hours 34 minutes
  • Dow Jones

    29.225,61
    -458,13 (-1,54%)
     
  • Nasdaq

    10.737,51
    -314,13 (-2,84%)
     
  • Nikkei 225

    26.168,37
    -253,68 (-0,96%)
     
  • EUR/USD

    0,9823
    +0,0004 (+0,04%)
     
  • BTC-EUR

    19.875,80
    -87,09 (-0,44%)
     
  • CMC Crypto 200

    445,60
    -0,38 (-0,09%)
     
  • HANG SENG

    17.165,87
    -85,01 (-0,49%)
     
  • S&P 500

    3.640,47
    -78,57 (-2,11%)
     

IPG Photonics Announces Second Quarter 2022 Financial Results

·13 minuto per la lettura
IPG Photonics Corporation
IPG Photonics Corporation

Strong Performance in Electric Vehicle and Medical Applications Drives Sales

Company Announces New $300 million Stock Repurchase Program After Completing $312 million of Repurchases in the First Half of 2022

OXFORD, Mass., Aug. 02, 2022 (GLOBE NEWSWIRE) -- IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the second quarter ended June 30, 2022.

 

 

Three Months Ended June 30,

 

 

 

Six Months Ended June 30,

 

 

(In millions, except per share data and percentages)

 

 

2022

 

 

 

2021

 

 

Change

 

 

2022

 

 

 

2021

 

 

Change

Revenue

 

$

377.0

 

 

$

371.7

 

 

1

%

 

$

747.0

 

 

$

717.2

 

 

4

%

Gross margin

 

 

45.7

%

 

 

48.6

%

 

 

 

 

46.1

%

 

 

48.0

%

 

 

Operating income

 

$

71.7

 

 

$

92.3

 

 

(22) %

 

$

164.8

 

 

$

181.1

 

 

(9)  %

Operating margin

 

 

19.0

%

 

 

24.8

%

 

 

 

 

22.1

%

 

 

25.2

%

 

 

Net income attributable to IPG Photonics Corporation

 

$

57.0

 

 

$

69.8

 

 

(18) %

 

$

126.5

 

 

$

137.9

 

 

(8)  %

Earnings per diluted share

 

$

1.10

 

 

$

1.29

 

 

(15) %

 

$

2.41

 

 

$

2.55

 

 

(5)  %

Management Comments

"Strong sales in North America and Japan drove our revenue growth as we focus on opportunities that diversify our revenue across key geographies and applications, including e-mobility and medical," said Dr. Eugene Scherbakov, IPG Photonics' Chief Executive Officer. "IPG's innovative solutions are generating increased laser adoption in welding applications, primarily in electric vehicle manufacturing, but also in general automotive and industrial applications with continued adoption of the LightWELD in handheld applications. We reached a significant milestone as revenue from welding applications surpassed high power cutting revenue in a number of key geographies. We are also seeing higher demand across many emerging growth products that help diversify our exposure across different applications, such as medical, battery welding and foil cutting applications."

Financial Highlights

Second quarter revenue of $377 million increased 1% year over year. Exchange rates were a meaningful headwind to revenue, reducing it by approximately $18 million on a constant currency basis. Materials processing sales accounted for 91% of total revenue and decreased 1% year over year with higher sales in welding and cleaning applications offset by lower revenue in cutting and solar cell manufacturing applications. Sales into Other applications increased 29% year over year, driven by the strength in medical. Emerging growth products sales accounted for 40% of total revenue.

Revenue in high power continuous wave (CW) lasers declined 14% year over year due to lower demand in high power cutting applications in China, which was partially offset by strong growth in welding and cutting applications in North America and Japan. Sales of pulsed lasers grew significantly compared with the prior year primarily driven by foil cutting, partially offset by lower sales into solar cell manufacturing. By region, sales increased 33% in North America, 43% in Japan, and 2% in Europe, and decreased 14% in China on a year-over-year basis.

Earnings per diluted share (EPS) of $1.10 decreased by 15% year over year. Foreign exchange transaction losses reduced operating income by $18 million or 4.7 percentage points and also reduced EPS by $0.28. The effective tax rate in the quarter was 22%, benefiting from certain discrete items. During the second quarter, IPG generated $79 million in cash from operations. Capital expenditures were $35 million and stock repurchases were $233 million in the quarter.

Business Outlook and Financial Guidance

“Second quarter book-to-bill was slightly below one and bookings declined from the record level last quarter on more moderate demand in Europe as well as currency headwinds. While the operating environment is uncertain, we believe that fiber laser adoption will continue to drive demand across many applications and geographies and will benefit from global trends including increasing automation, e-mobility, renewable energy and energy efficiency as energy costs rise globally," concluded Dr. Scherbakov.

For the third quarter of 2022, IPG expects revenue of $350 to $380 million. The Company expects the third quarter tax rate to be approximately 25%. IPG anticipates delivering earnings per diluted share in the range of $1.00 to $1.30. We estimate that the third quarter guidance range is reduced by approximately $15 million due to foreign currency translation headwinds that are primarily related to the strength of the U.S. dollar as compared to the Euro and Chinese Yuan.

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 with Russia, 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 0.96, Russian Ruble 51, Japanese Yen 136 and Chinese Yuan 6.71, respectively.

Authorization of New Stock Buyback Program

After completing previously authorized share repurchase programs during the quarter, the Board of Directors has authorized a new program to purchase up to $300 million of IPG common stock. In the first half of 2022, the Company repurchased $312 million of its common stock. Share repurchases may be made periodically in open-market or other transactions, and are subject to market conditions, legal requirements and other factors. The share repurchase program authorization does not obligate the Company to repurchase any dollar amount or number of its shares, and repurchases may be commenced or suspended from time to time without prior notice.

Supplemental Financial Information

Additional supplemental financial information is provided in the unaudited Second Quarter 2022 Financial Data Workbook and 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 2, 2022 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 Fedotoff
Director of Investor Relations
IPG Photonics Corporation
508-597-4713
efedotoff@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 make its fiber laser technology the tool of choice in mass production. 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 Oxford, 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 fiber laser adoption will continue to drive demand across many applications and geographies and global trends increasing automation, e-mobility, renewable energy and energy efficiency as energy costs rise globally, as well as revenue, tax rate and earnings guidance, and the impact of U.S. Dollar on our guidance for third quarter of 2022. 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 22, 2022) 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,

 

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

 

 

(In thousands, except per share data)

Net sales

 

$

377,023

 

$

371,658

 

 

$

747,002

 

$

717,243

 

Cost of sales

 

 

204,679

 

 

191,130

 

 

 

402,837

 

 

372,724

 

Gross profit

 

 

172,344

 

 

180,528

 

 

 

344,165

 

 

344,519

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

 

19,010

 

 

19,193

 

 

 

39,384

 

 

38,076

 

Research and development

 

 

30,608

 

 

35,191

 

 

 

64,058

 

 

68,530

 

General and administrative

 

 

33,411

 

 

31,066

 

 

 

64,075

 

 

61,158

 

Loss (gain) on foreign exchange

 

 

17,640

 

 

2,826

 

 

 

11,830

 

 

(4,339

)

Total operating expenses

 

 

100,669

 

 

88,276

 

 

 

179,347

 

 

163,425

 

Operating income

 

 

71,675

 

 

92,252

 

 

 

164,818

 

 

181,094

 

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

1,177

 

 

(407

)

 

 

1,107

 

 

(902

)

Other income, net

 

 

618

 

 

28

 

 

 

382

 

 

281

 

Total other income (expense)

 

 

1,795

 

 

(379

)

 

 

1,489

 

 

(621

)

Income before provision of income taxes

 

 

73,470

 

 

91,873

 

 

 

166,307

 

 

180,473

 

Provision for income taxes

 

 

16,139

 

 

22,196

 

 

 

39,348

 

 

42,574

 

Net income

 

 

57,331

 

 

69,677

 

 

 

126,959

 

 

137,899

 

Less: net income (loss) attributable to non-controlling interests

 

 

363

 

 

(123

)

 

 

419

 

 

(28

)

Net income attributable to IPG Photonics Corporation

 

$

56,968

 

$

69,800

 

 

$

126,540

 

$

137,927

 

Net income attributable to IPG Photonics Corporation per share:

 

 

 

 

 

 

 

 

Basic

 

$

1.10

 

$

1.31

 

 

$

2.42

 

$

2.58

 

Diluted

 

$

1.10

 

$

1.29

 

 

$

2.41

 

$

2.55

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

51,687

 

 

53,472

 

 

 

52,111

 

 

53,548

 

Diluted

 

 

51,795

 

 

53,999

 

 

 

52,311

 

 

54,145

 

IPG PHOTONICS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

June 30,

 

December 31,

 

 

 

2022

 

 

 

2021

 

 

 

(In thousands, except share and 
per share data)

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

771,788

 

 

$

709,105

 

Short-term investments

 

 

462,865

 

 

 

805,400

 

Accounts receivable, net

 

 

246,877

 

 

 

262,121

 

Inventories

 

 

556,747

 

 

 

460,747

 

Prepaid income taxes

 

 

52,912

 

 

 

36,990

 

Prepaid expenses and other current assets

 

 

79,662

 

 

 

73,320

 

Total current assets

 

 

2,170,851

 

 

 

2,347,683

 

Deferred income taxes, net

 

 

60,563

 

 

 

47,761

 

Goodwill

 

 

39,285

 

 

 

38,609

 

Intangible assets, net

 

 

46,866

 

 

 

52,678

 

Property, plant and equipment, net

 

 

680,321

 

 

 

635,302

 

Other assets

 

 

50,883

 

 

 

48,507

 

Total assets

 

$

3,048,769

 

 

$

3,170,540

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$

32,225

 

 

$

18,126

 

Accounts payable

 

 

57,276

 

 

 

55,839

 

Accrued expenses and other current liabilities

 

 

210,813

 

 

 

230,826

 

Income taxes payable

 

 

15,588

 

 

 

8,642

 

Total current liabilities

 

 

315,902

 

 

 

313,433

 

Other long-term liabilities and deferred income taxes

 

 

92,516

 

 

 

93,855

 

Long-term debt, net of current portion

 

 

 

 

 

16,031

 

Total liabilities

 

 

408,418

 

 

 

423,319

 

Commitments and contingencies

 

 

 

 

IPG Photonics Corporation equity:

 

 

 

 

Common stock, $0.0001 par value, 175,000,000 shares authorized; 55,967,254 and 50,206,255 shares issued and outstanding, respectively, at June 30, 2022; 55,788,246 and 53,010,265 shares issued and outstanding, respectively, at December 31, 2021.

 

 

6

 

 

 

6

 

Treasury stock, at cost, 5,760,999 and 2,777,981 shares held at June 30, 2022 and December 31, 2021, respectively.

 

 

(750,109

)

 

 

(438,503

)

Additional paid-in capital

 

 

930,950

 

 

 

908,423

 

Retained earnings

 

 

2,593,147

 

 

 

2,466,607

 

Accumulated other comprehensive loss

 

 

(134,778

)

 

 

(189,951

)

Total IPG Photonics Corporation equity

 

 

2,639,216

 

 

 

2,746,582

 

Non-controlling interests

 

 

1,135

 

 

 

639

 

Total equity

 

 

2,640,351

 

 

 

2,747,221

 

Total liabilities and equity

 

$

3,048,769

 

 

$

3,170,540

 

IPG PHOTONICS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

 

2021

 

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

 

Net income

 

$

126,959

 

 

$

137,899

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

47,104

 

 

 

47,976

 

Provisions for inventory, warranty & bad debt

 

 

38,644

 

 

 

32,654

 

Other

 

 

25,579

 

 

 

18,665

 

Changes in assets and liabilities that used cash, net of acquisitions:

 

 

 

 

Accounts receivable and accounts payable

 

 

4,691

 

 

 

37,404

 

Inventories

 

 

(99,233

)

 

 

(61,220

)

Other

 

 

(48,583

)

 

 

(10,188

)

Net cash provided by operating activities

 

 

95,161

 

 

 

203,190

 

Cash flows from investing activities:

 

 

 

 

Purchases of and deposits on property, plant and equipment

 

 

(59,903

)

 

 

(54,344

)

Proceeds from sales of property, plant and equipment

 

 

645

 

 

 

258

 

Purchases of short-term investments

 

 

(583,828

)

 

 

(1,014,033

)

Proceeds from short-term investments

 

 

925,657

 

 

 

785,023

 

Acquisitions of businesses, net of cash acquired

 

 

(2,000

)

 

 

 

Other

 

 

(350

)

 

 

(547

)

Net cash provided by (used in) investing activities

 

 

280,221

 

 

 

(283,643

)

Cash flows from financing activities:

 

 

 

 

Principal payments on long-term borrowings

 

 

(1,932

)

 

 

(1,896

)

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

 

 

2,088

 

 

 

10,567

 

Purchase of treasury stock, at cost

 

 

(311,606

)

 

 

(41,731

)

Payment of purchase price holdback from business combination

 

 

 

 

 

(2,624

)

Net cash used in financing activities

 

 

(311,450

)

 

 

(35,684

)

Effect of changes in exchange rates on cash and cash equivalents and restricted cash

 

 

(1,249

)

 

 

(8,217

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

62,683

 

 

 

(124,354

)

Cash, cash equivalents and restricted cash — Beginning of period

 

 

709,105

 

 

 

878,553

 

Cash and cash equivalents — End of period

 

 

771,788

 

 

 

754,199

 

Supplemental disclosures of cash flow information:

 

 

 

 

Cash paid for interest

 

$

1,600

 

 

$

1,388

 

Cash paid for income taxes

 

$

61,715

 

 

$

41,809

 

IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF AMORTIZATION OF INTANGIBLE ASSETS (UNAUDITED)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(In thousands)

Amortization of intangible assets:

 

 

 

 

 

 

 

 

Cost of sales

 

$

1,055

 

$

1,200

 

$

2,228

 

$

2,441

Sales and marketing

 

 

1,854

 

 

1,879

 

 

3,702

 

 

3,895

Total amortization of intangible assets

 

$

2,909

 

$

3,079

 

$

5,930

 

$

6,336

IPG PHOTONICS CORPORATION
SUPPLEMENTAL SCHEDULE OF STOCK-BASED COMPENSATION (UNAUDITED)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

(In thousands)

Cost of sales

 

$

3,215

 

 

$

2,843

 

 

$

6,273

 

 

$

5,469

 

Sales and marketing

 

 

1,309

 

 

 

1,247

 

 

 

2,518

 

 

 

2,407

 

Research and development

 

 

2,374

 

 

 

2,472

 

 

 

4,903

 

 

 

4,590

 

General and administrative

 

 

3,568

 

 

 

3,349

 

 

 

6,730

 

 

 

6,298

 

Total stock-based compensation

 

 

10,466

 

 

 

9,911

 

 

 

20,424

 

 

 

18,764

 

Tax effect of stock-based compensation

 

 

(2,251

)

 

 

(2,114

)

 

 

(4,385

)

 

 

(3,992

)

Net stock-based compensation

 

$

8,215

 

 

$

7,797

 

 

$

16,039

 

 

$

14,772

 


 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2022

 

 

 

2021

 

 

2022

 

 

 

2021

 

 

(In thousands)

Tax (detriment) benefit on stock-based compensation

 

$

(427

)

 

$

501

 

$

(2,140

)

 

$

6,097