IPG Photonics' 4Q13 revenue increased 14% over 4Q12

Oxford, MA - IPG Photonics Corp. has reported financial results for the 4Q ended December 31, 2013. Revenue for the 4Q was $165.9M, compared to the reported $172.2M in the 3Q of this year, and the 4Q revenue was a 14% increase over the $145M reported in the same period last year. Net income for 4Q13 was $36.6M, a 5% increase over the $34.9M reported in the same period last year.

Year over year, IPG Photonics had a 15% increase in revenues in 2013 vs 2012 ($648M vs $562.5M) and a 7% increase in net income ($145M vs $155.8M).
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Related: IPG Photonics reports record revenue of $172.2M in 3Q13

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Management comments
"IPG ended a year of financial and operational performance with a strong fourth quarter as we continued to extend our lead and capitalize on growing demand for fiber laser technology," said Valentin Gapontsev, IPG Photonics’ CEO. "Revenues for the quarter increased 14% over the prior year driven by high-power laser sales for materials processing applications. While net income for the quarter increased by 5%, our profitability and margins were affected by a $5.9 million inventory provision and $1.6 million from foreign exchange transaction losses. The inventory provision and foreign exchange transaction losses reduced diluted earnings per share, net of tax, by $0.07 and $0.02, respectively, while the lower effective tax rate during the quarter benefited earnings per share by $0.03."

“Materials processing sales, which make up the majority of our business, grew 22% for the fourth quarter,” said Gapontsev. “High-power laser sales increased 24% 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 Asian, North American and European markets.”

"For the full year, revenue grew 15% primarily from high-power fiber laser sales," said Gapontsev. "Asia was the strongest performing region for us geographically. Fiscal 2013 earnings per share rose to $2.97, a 6% increase over 2012. In 2013, we invested in the business, substantially expanding IPG's R&D spending, as well as adding facilities and headcount in other areas. While this reduced growth of net income in 2013, it has strengthened and enhanced IPG's product portfolio, management and technological advantages, positioning IPG for further growth in 2014 and beyond."

“During the fourth quarter, IPG generated $58.4 million in cash from operations and used $22.6 million to finance capital expenditures,” said Gapontsev. “We ended the quarter with $448.8 million in cash and cash equivalents.”

Business outlook and financial guidance
“Order flow in the fourth quarter was strong and the book-to-bill ratio was greater than one," said Gapontsev. "At the end of 2013, our backlog, which included $132.6 million of orders with firm shipment dates and $132.4 million of frame agreements that we expect to ship within one year, grew to $265.0 million, a 31% increase from year-end 2012.”

“Looking ahead, we are excited by IPG’s prospects for growth in 2014. Fiber laser technology continues to gain adoption over traditional laser technologies and non-laser technologies. The continued market penetration and acceptance of our existing products and new product introductions give us confidence in our opportunities to grow revenues, improve margins, and enter into new applications,” concluded Gapontsev.

IPG Photonics expects revenue in the range of $160 million to $175 million for the 1Q14. The company anticipates earnings per diluted share in the range of $0.69 to $0.83 based on 52,487,000 diluted common shares, which includes 51,660,000 basic common shares outstanding and 827,000 potentially dilutive options at December 31, 2013.

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.



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