IPG Photonics Corp. today reported that revenues for the 1Q08 increased by 27% to $52.9 million and net income increased by 23% to $8.1 million from the 1Q07. Revenue growth for the quarter was driven by sales of the company's fiber lasers used for materials processing applications, which increased by 34% over the 1Q07 to $44.2 million, as well as strong sales to European and Asian markets.
Operating income increased 13% to $12.5 million for the 1Q08, up from $11.1 million for the same period in 2007. Earnings per diluted share increased 20% to $0.18 from $0.15 a year ago. Operating expenses for the 1Q08 were $11.9 million, or 22% of revenue, compared with $8.3 million, or 20% of revenue, in the 1Q07.
Cash and cash equivalents were $38.7 million on March 31, 2008, compared with $38.0 million on December 31, 2007, primarily as a result of $5.4 million of cash provided by operating activities, proceeds from the sale of marketable securities of $4.5 million and net proceeds from the Company's credit lines of $3.3 million, offset by capital expenditures and investments in intangible assets of $13.0 million. In addition to cash and cash equivalents, short-term and long-term investments in auction rate securities were $2.5 million at March 31, 2008.
Comments on the 1Q08
"The growing acceptance of fiber lasers across a variety of applications, combined with our presence in the major markets for industrial lasers across the globe, resulted in another quarter of strong top- and bottom-line growth," said Dr. Valentin Gapontsev, IPG Photonics' CEO. "Strong shipments in the European Union and continued expansion into the high-growth markets of Russia, India, China and South Korea more than offset the softness we experienced in the US, which accounts for only 18% of our sales."
"In the first quarter of this year, pulsed laser sales increased 73% over the prior year, driven by strong demand for marking and photovoltaic (solar) applications. Pulsed lasers are IPG's largest revenue generator. Gross margins in Q1 grew to 46% from 43% in the fourth quarter, due to higher absorption of fixed costs as a result of improved yields and increased production, part of which resulted in an increase in inventories. We have overcome the production issues which impacted diode yields in the fourth quarter of 2007," added Dr. Gapontsev.
"In international markets, we continue to see robust growth from existing OEMs, new customers and our presence in key high-growth Asian markets. In the US and elsewhere, we are seeing substantially increased order flow in materials processing and telecommunications from the beginning of the year. Some of these orders will ship in the second quarter and the remainder is expected to ship during the following six to nine months," stated Dr. Gapontsev.
For the 2Q08, IPG Photonics expects revenues in the range of $52 million to $56 million. The company anticipates earnings per diluted share in the range of $0.15 to $0.19 based on 46,041,000 common shares, which include 44,095,000 basic common shares outstanding and 1,946,000 potentially dilutive options at March 31, 2008.
For more information, please visit www.ipgphotonics.com.