IPG Photonics has reported results for the fourth quarter and year ended December 31, 2006. The company completed its initial public offering of common stock in December. Revenue increased by 23 percent to $42.1 million for the fourth quarter of 2006 from $34.1 million for the fourth quarter of 2005. For the full year, revenue increased by 49 percent to $143.2 million for 2006 from $96.4 million for 2005.

Net income increased to $16.6 million for the fourth quarter of 2006 from $3.9 million for the fourth quarter of 2005. Fourth-quarter 2006 adjusted net income was $6.6 million compared to $4.2 million for the fourth quarter of 2005. Adjusted net income excludes charges related to the change in the fair value of the company's series B warrants of $3.1 million and $0.3 million in the fourth quarters of 2006 and 2005, respectively, as well as a $13.1 million benefit related to the release of a deferred tax valuation allowance in the fourth quarter of 2006.

For the full year, net income increased to $29.2 million for 2006 from $7.4 million for 2005. Full year 2006 adjusted net income was $23.6 million compared to $8.2 million for 2005.

The company used a portion of the proceeds from its initial public offering to purchase its series B warrants eliminating future charges related to the series B warrants after the fourth quarter of 2006. Also, no further deemed dividend charges associated with the conversion of the company's previously outstanding preferred stock will be required in future periods.

IPG generated $10.3 million in cash from operating activities in the fourth quarter of 2006. For the full year 2006, the company generated $20.2 million in cash from operating activities and reported cash and cash equivalents of $75.7 million at year end 2006 compared to $8.4 million at year end 2005.

"IPG performed exceedingly well in the fourth quarter of 2006," said Dr. Valentin Gapontsev, IPG Photonics' chief executive officer. "Our sales growth was driven by sales of fiber lasers for materials processing applications, including low- and mid-power OEM sales and high-power laser sales," continued Gapontsev. "IPG Photonics' lasers are used by materials processing customers primarily for marking, cutting, and welding a wide variety of materials. This is currently our largest market and the one where we are experiencing the greatest growth."

"In addition to our strong financial performance, we also achieved several significant milestones during the quarter, including completing a successful IPO in December," added Gapontsev. "We won several new OEM orders as well as end-user orders that demonstrated the continuing momentum of our products in the market. We also made progress in optimizing our manufacturing and selling capabilities by bringing online a new application center in Germany, and we received Chinese approvals to open an office there."

For the first quarter of 2007, the company expects revenues in the range of $38 million to $41 million. "First, we plan to target new applications for fiber lasers and to displace existing laser technologies," Gapontsev said. "We also plan to support our growing customer base with expanded worldwide service capabilities and applications labs. In addition, we plan to continue to optimize our manufacturing through new facilities and improved techniques."

Thu Mar 15 09:40:00 CDT 2007