Laser Maker’s Net Income Rises Despite Sales Decline

PLYMOUTH — Rofin-Sinar Technologies Inc. (Nasdaq: RSTI), the industrial laser maker with dual headquarters in Plymouth and in Hamburg, Germany, reported net income of $8.7 million or 31 cents a share in the second quarter of its fiscal year, ended March 31, up from $4.5 million or 16 cents a share in the same quarter a year earlier.

The profit increase came despite a 5 percent decline in revenue, to $122.7 million, down from $128.6 million in the same quarter a year earlier.

For the six months, net income was $14.9 million or 53 cents a share, more than double $6.7 million or 24 cents a share a year earlier. Revenue for the six months was $245.1 million, down 2 percent from $249.8 million in the same period a year earlier.

“Our second quarter results confirm that our strategic and technological initiatives are growing our business and improving profitability, said president and CEO Gunther Braun. “Net income and earnings per share nearly doubled year-over-year and we see further improvements in the gross margin as well as positive effects from our operating expenses cost controls. These excellent results were supported by a favorable product mix including better fixed cost absorption and the introduction of our third generation of high-power fiber lasers. Quarterly net sales were within our guidance, even though the adverse currency impact was higher than previously estimated. Revenues in the quarter were driven by a high sales level to the automotive sector, strong business from the machine tool and medical device industries and an increased demand from the semiconductor sector.”

Selling, general and administrative expenses were $24.5 million or 20 percent of sales, down 12 percent from $27.7 million a year earlier. Net research and development spending in the quarter was $9.7 million or 8 percent of sales, down from $11.6 million or 9 percent of sales a year earlier.

Sales of laser products for macro applications increased 3 percent to $48.4 million, accounting for 39 percent of total sales. Sales of lasers for marking and micro applications decreased 15 percent to $55.9 million, representing 46 percent of total sales. Sales of components increased 16 percent to $18.4 million, representing 15 percent of total sales.

On a geographical basis, revenues in North America increased 22 percent, totaling $29.4 million, and decreased 1 percent in Asia, to $36.8 million. Revenues also fell 16 percent in Europe, to $56.5 million, largely due to exchange rate fluctuations.

Order entry for the quarter increased 11 percent to $141.2 million compared to the second quarter of fiscal year 2014, resulting in a backlog of $160.1 million as of March 31, 2015, mainly for laser products.

For the third quarter ending June 30, taking into account the anticipated impact of the average exchange rate, the company expects sales to be in the range of $130 million to $135 million and earnings per share to be in the range of 39 to 42 cents.

For the fiscal year ending September 30, 2015, the Company is maintaining its sales guidance based on the current negative impact of the average exchange rates of between $515 million to $535 million, and adjusts upward its net income profitability at the mid-point of the sales range to approximately 8 percent of net sales.

To listen to a replay of a conference call discussing these results, visit www.rofin.com.

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