UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ______ to _______
Commission file number: 000-21377
Rofin-Sinar Technologies Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 38-3306461
-------------------------------- --------------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45701 Mast Street, Plymouth, MI 48170
---------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
(313) 455-5400
-----------------------------------------------------------
(Registrant's telephone number, including area code)
-----------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] / No [ ]
11,510,500 shares of the registrant's common stock, par value $0.01 per
share, were outstanding as of August 13, 1997.
<PAGE>
ROFIN-SINAR TECHNOLOGIES INC.
INDEX
PART I. FINANCIAL INFORMATION Page No.
[S] [C]
Item 1
------
Condensed Consolidated Balance Sheets
June 30, 1997 and September 30, 1996 3
Condensed Consolidated Statements of Income
Nine months and three months ended
June 30, 1997 and June 30, 1996 4
Condensed Consolidated Statements of Cash Flows
Nine months ended June 30, 1997 and June 30, 1996 5
Notes to Condensed Consolidated Financial Statements 6
Item 2
------
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION 14
SIGNATURES 15
<PAGE>
PART I. FINANCIAL INFORMATION
Rofin-Sinar Technologies Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(dollars in thousands)
June 30, September 30,
1997 1996
---------- ----------
[S] [C] [C]
ASSETS
Current Assets:
Cash and cash equivalents $ 7,213 $ 34,869
Short-term investments 33,217 0
Trade accounts receivable, net 31,569 31,235
Inventories, net (Note 2) 29,999 34,353
Deferred income tax assets - current 3,113 2,779
Other current assets and prepaid expenses 1,900 1,695
--------- ---------
Total current assets 107,011 104,931
Property and equipment, net 21,502 24,735
Deferred income tax assets - noncurrent 2,295 3,244
Other noncurrent assets 297 142
--------- ---------
Total assets $ 131,105 $ 133,052
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Line of credit (Note 3) $ 0 $ 18,426
Bank loans (Note 3) 18,907 6,354
Accounts payable, trade 6,668 5,508
Accrued liabilities (Note 2) 21,897 20,722
Deferred income tax liability - current 563 498
--------- ---------
Total current liabilities 48,035 51,508
Pension obligations 2,888 3,518
Minority interests 28 26
--------- ---------
Total liabilities 50,951 55,052
Stockholders' equity
Preferred stock, 5,000,000 shares authorized,
none issued or outstanding 0 0
Common stock, $0.01 par value, 50,000,000 shares
authorized, 11,510,500 issued and outstanding 115 115
Additional paid-in-capital 75,722 75,700
Cumulative foreign currency translation adjustment ( 2,360) 2,185
Retained earnings 6,677 0
--------- ---------
Total stockholders' equity $ 80,154 $ 78,000
Total liabilities and stockholders' equity $ 131,105 $ 133,052
========= =========
See accompanying notes to condensed consolidated financial statements
- 3 -
<PAGE>
Rofin-Sinar Technologies Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
Periods Ended June 30, 1997 and 1996
(dollars in thousands, except per share amounts)
Nine Months Three Months
1997 1996 1997 1996
---------- ---------- ---------- ----------
[S] [C] [C] [C] [C]
Net sales $ 98,677 $ 83,372 $ 31,209 $ 29,649
Cost of goods sold 62,395 51,466 19,163 18,016
---------- ---------- ---------- ----------
Gross profit 36,282 31,906 12,046 11,633
Selling, general, and
administrative expenses 17,636 15,221 6,103 5,382
Special charge 1,350 0 1,350 0
Research and development expenses 6,958 5,850 2,083 1,923
---------- ---------- ---------- ----------
Income from operations 10,338 10,835 2,510 4,328
Other expense (income):
Interest expense (income), net ( 662) 790 ( 211) 253
Other expenses (income) ( 590) ( 47) ( 198) ( 23)
---------- ---------- ---------- ----------
Income before income taxes 11,590 10,092 2,919 4,098
Income tax expense 4,913 4,354 1,408 1,799
---------- ---------- ---------- ----------
Net income $ 6,677 $ 5,738 $ 1,511 $ 2,299
========== ========== ========== ==========
Pro forma net income
per common share $ 0.57 $ 0.66 $ 0.13 $ 0.27
Weighted average shares used
in computing pro forma
net income per share 11,603,100 8,631,578 11,627,965 8,631,578
========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements
- 4 -
<PAGE>
Rofin-Sinar Technologies Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended June 30, 1997 and 1996
(dollars in thousands)
June 30, June 30,
1997 1996
---------- ----------
[S] [C] [C]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 6,677 $ 5,738
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Changes in operating assets and liabilities 2,510 ( 9,821)
Other adjustments 2,243 3,030
---------- ----------
Net cash provided (used) by
operating activities 11,430 ( 1,053)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of equipment 55 -
Additions to furniture and equipment ( 1,265) ( 1,393)
Purchases of short term investments ( 33,216) -
---------- ----------
Net cash used by investing activities ( 34,426) ( 1,393)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in former parent capital - ( 941)
Repayment of former parent loans ( 16,735) -
Borrowings from former parent - 6,921
Borrowings from bank 12,655 -
Repayments to bank - ( 2,905)
---------- ----------
Net cash provided (used) by
financing activities ( 4,080) 3,075
---------- ----------
Effect of foreign currency translation on cash ( 580) ( 60)
---------- ----------
Net decrease in cash and cash equivalents ( 27,656) 569
Cash and cash equivalents at beginning of period 34,869 691
---------- ----------
Cash and cash equivalents at end of period $ 7,213 $ 1,260
========== ==========
See accompanying notes to condensed consolidated financial statements
- 5 -
<PAGE>
Rofin-Sinar Technologies Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(dollars in thousands)
1. The accompanying consolidated condensed financial statements have been
prepared in conformity with generally accepted accounting principles,
consistent with those reflected in the Company's annual report to stock-
holders for the year ended September 30, 1996. All adjustments necessary
for a fair presentation have been made which comprise only normal recurring
adjustments; however, interim results of operations are not necessarily
indicative of results to be expected for the year.
2. Balance Sheet detail:
Inventories are stated at the lower of cost (first-in, first-out or
weighted average) or market, and are summarized as follows:
June 30, September 30,
1997 1996
---------- ----------
[S] [C] [C]
Finished Goods $ 3,221 $ 6,586
Work in progress 7,333 8,027
Raw materials and supplies 8,927 8,087
Demo inventory 4,193 5,015
Service parts 6,325 6,638
---------- ----------
Total inventories, net $ 29,999 $ 34,353
========== ==========
Accrued liabilities are comprised of the following:
June 30, September 30,
1997 1996
---------- ----------
[S] [C] [C]
Employee compensation $ 5,057 $ 5,274
Warranty reserves 4,662 4,427
Deferred revenue 675 2,548
Income taxes payable 5,803 3,636
Customer deposits 1,272 402
Other 4,428 4,435
---------- ----------
Total accrued liabilities $ 21,897 $ 20,722
========== ==========
3. The line of credit represents intercompany borrowings outstanding from the
former parent of $0 and $18,426 at June 30, 1997 and September 30, 1996,
respectively. In October 1996 the Company paid off its outstanding line of
credit balance. In addition, the Company obtained a one year $25,000
revolving loan facility with Deutsche Bank AG to support its working
capital needs. As of June 30, 1997, $ 11,468 was borrowed against this
loan facility by the Company's German subsidiary at a fixed interest rate
of 3.9 percent. The Company's Italian subsidiary borrowed $852 under such
facility at a fixed interest rate of 8.0 percent. The Company's Japanese
subsidiary had loans with the Bank of Yokohama, Sumitomo Bank, and
Deutsche Bank AG totaling $6,587. Interest on the loans is at floating
market rates and was 1.3 percent, 1.2 percent, and 1.3 percent,
respectively, at June 30, 1997.
- 6 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q constitute forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties, and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include the following:
Industry Concentration and Cyclicality; Dependence on Sales by Third Parties
The Company's business is significantly dependent on capital expenditures by
manufacturers in the Machine Tool, Automotive and Semiconductor & Electronics
industries. These industries are cyclical and have historically experienced
periods of oversupply, resulting in significantly reduced demand for capital
equipment, including the products manufactured and marketed by the Company.
For the foreseeable future, the Company's operations will continue to be
dependent on capital expenditures in these industries which, in turn, are
largely dependent on the market demand for their products. The company's net
sales and results of operations may be materially adversely affected if
downturns or slowdowns in the Machine Tool, Automotive and Semiconductor &
Electronics industries occur in the future.
The Company's net sales are dependent in part upon the ability of its OEM
customers to develop and sell systems that incorporate the Company's laser
products. Adverse economic conditions, large inventory positions, limited
marketing resources and other factors affecting these OEM customers could have
a substantial impact upon the Company's financial results. No assurances can
be given that the company's OEM customers will not experience financial or
other difficulties that could adversely affect their operations and, in turn,
the financial condition or results of operations of the Company.
Variability and Uncertainty of Quarterly Operating Results;
Potential Volatility of Stock Price
The Company has experienced and expects to continue to experience some
fluctuations in its quarterly results. The Company believes that fluctuations
in quarterly results may cause the market price of its Common Stock to
fluctuate, perhaps substantially. Factors which may have an influence on the
Company's operating results in a particular quarter include the timing of the
receipt of orders from major customers, product mix, competitive pricing
pressures, the relative proportions of domestic and international sales, the
Company's ability to design, manufacture and introduce new products on a cost
effective and timely basis, the delay between incurrence of expenses to
further develop marketing and service capabilities and realization of benefits
from such improved capabilities, and the introduction of new products by the
Company and its competitors. In addition, the Company's backlog at any given
time is not necessarily indicative of actual sales for any succeeding period.
The Company's sales will often reflect orders shipped in the same quarter that
they are received. Moreover, customers may cancel or reschedule shipments,
and production difficulties could delay shipments. Accordingly, the Company's
results of operations are subject to significant variability from quarter to
quarter.
- 7 -
<PAGE>
Other factors which the Company believes may cause the market price of Common
Stock to fluctuate, perhaps substantially, include announcements of new
products, technologies or customers by the Company or its competitors and
developments with respect to intellectual property and shortfalls in the
Company's operations relative to analysts' expectations. In addition, in
recent years, the stock market in general, and the shares of technology
companies in particular, have experienced wide price fluctuations. These
broad market and industry fluctuations, particularly in the Semiconductor &
Electronics industry, may adversely affect the market price of the Company's
Common Stock.
Currency Risk
Although the Company reports its results in U.S. dollars, approximately two
thirds of its sales are denominated in other currencies, including primarily
German marks, as well as French francs, Italian lire and Japanese yen.
Although a predominant portion of the Company's cost of goods sold, selling,
general and administrative expenses and research and development expenses are
incurred in German marks, net sales and cost and related assets and
liabilities are generally denominated in the functional currencies of the
operations, thereby serving to reduce the Company's exposure to exchange gains
and losses. Exchange differences upon translation from each operation's
functional currency to U.S. dollars are accumulated as a separate component of
equity. The currency translation adjustment component of shareholders' equity
changed from a $2.2 million credit at September 30, 1996 to a $2.4 million
debit at June 30, 1997. This change arose primarily from the strengthening
of the U.S. dollar against the German mark, and reflects the fact that a high
proportion of the Company's capital is invested in its German operations,
whose functional currency is the German mark. The fluctuation of the German
mark and the other functional currencies against the U.S. dollar has had the
effect of increasing and decreasing (as applicable) reported net sales as well
as cost of goods sold and gross margin and selling, general and administrative
expenses denominated in such foreign currencies when translated into U.S.
dollars as compared to prior periods. Although historically the Company's
subsidiaries have not paid dividends, a further area of currency exposure may
in the future be represented by the payment of dividends, if any, by the
Company's operating subsidiaries in their respective functional currencies.
The Company has implemented a policy to hedge up to 50% of its net foreign
currency exposure utilizing forward exchange contracts, forward exchange
options and currency swap contracts. The Company has also implemented a
policy to continue to borrow in each operating subsidiary's functional
currency to reduce exposure to exchange gains and losses. There can be no
assurance that changes in currency exchange rates will not have a material
adverse effect on the Company's business, financial condition and results of
operations.
Competition
The laser industry is characterized by significant price competition. The
Company's current and proposed laser products and laser marking products
compete with those of several well-established companies, some of which are
larger and have substantially greater financial, managerial and technical
resources, more extensive distribution and service networks and larger
installed customer bases than the Company. The Company believes that this
competition will be particularly intense in the Nd:YAG solid state laser
markets, as many companies have committed significant research and development
- 8 -
<PAGE>
resources to pursue opportunities in these markets. There can be no assurance
that the Company will successfully differentiate its current and proposed
products from the products of its competitors or that the marketplace will
consider the Company's products to be superior to competing products. With
respect to the Company's laser marking products, because many of the
components required to develop and produce a laser-based marking system are
commercially available, barriers to entry into this market are relatively low,
and the Company expects new competitive product entry in this market. To
maintain its competitive position in this market, the Company believes that it
will be required to continue a high level of investment in engineering,
research and development, marketing and customer service and support. There
can be no assurance that the Company will have sufficient resources to
continue to make such investments, that the Company will be able to make the
technological advances necessary to maintain its competitive position, or that
its products will receive market acceptance.
Risks Relating to Sales Growth in CO2 and Nd:YAG Lasers
In recent years, the Company has experienced a period of rapid growth,
attributable in large part to the demand for its laser marking products. If
the Company is to maintain or increase the rate of growth of its laser sales
in the near term, such sales will have to come through increases in market
share for the Company's existing products, through the development of new
products or through the Company's acquisition of its competitors or their
products. To date, a substantial portion of the Company' revenue has been
derived from sales of high-powered CO2 laser sources and, more recently, solid
state flash lamp-pumped laser sources. The Company intends to devote
substantial resources to increasing the output power of its diffusion-cooled
CO2 Slab laser sources and to developing diode-pumped Nd:YAG solid state laser
products in accordance with market demand. The Company is currently focused
on reducing the manufacturing costs of its diffusion-cooled CO2 Slab lasers
to achieve more attractive pricing. The Company's diode-pumped lasers,
however, are in an early stage of development and are not expected to result
in marketable products prior to 1998. A large part of the Company's growth
strategy depends upon being able to increase substantially its market share
for laser marking products, particularly in the United States. If the Company
is unable to implement its strategy of increasing its market share for laser
marking products and of expanding its product range to include higher output
power diffusion-cooled CO2 Slab lasers and diode-pumped Nd:YAG solid state
lasers at attractive prices, it may not be able to achieve its anticipated
rate of growth, as a result of which its business, operating results and
financial condition could be adversely affected.
No assurance can be given that the Company will successfully expand its
marking products' market share, increase the output power of its diffusion-
cooled CO2 Slab laser sources or develop diode-pumped Nd:YAG solid state laser
products, or that any such products will achieve market acceptance or not be
rendered obsolete or uncompetitive by products of other companies.
While there are currently no commitments with respect to any future
acquisitions, the Company's business strategy includes the expansion of its
products and services, which may be effected through acquisitions. The
Company from time to time reviews various opportunities to acquire businesses,
technologies or products complementary to the Company's present business.
Although management expects to analyze any such opportunity carefully before
committing the Company's resources, there can be no assurance that the Company
will be able to integrate any acquired business effectively or that any
acquisition will result in long-term benefits to the Company.
- 9 -
<PAGE>
Conflicting Patents and Other Intellectual Property Rights of Third Parties;
Limited Protection of Intellectual Property.
The Company from time to time receives notices from third parties alleging
infringement of such parties' patent of other intellectual property rights by
the Company's products. While such notices are common in the Company's
industry and the Company has in the past been able to develop non-infringing
technology or license necessary patents or technology on commercially
reasonable terms, there can be no assurance that the Company would in the
future prevail in any litigation seeking damages or expenses from the Company
or to enjoin the Company from selling its products on the basis of such
alleged infringement, or that the Company would be able to develop any non-
infringing technology or license any valid and infringed patents on
commercially reasonable terms. In the event any third party made a valid
claim against the Company or its customers and a license were not made
available to the Company on commercially reasonable terms, the Company would
be adversely affected.
The Company's future success depends in part upon its intellectual property,
including trade secrets, know-how and continuing technological innovation.
There can be no assurance that the steps taken by the Company to protect its
intellectual property will be adequate to prevent misappropriation or that
others will not develop competitive technologies or products. The Company
currently holds 32 United States and foreign patents on its laser sources
which expire from 1997 to 2014. There can be no assurance that other
companies are not investigating or developing other technologies that are
similar to the Company's, that any patents will issue from any application
filed by the Company or that, if patents do issue, the claims allowed will be
sufficiently broad to deter or prohibit others from marketing similar
products. In addition, there can be no assurance that any patents issued to
the Company will not be challenged, invalidated or circumvented, or that the
rights thereunder will provide a competitive advantage to the Company.
Risks Associated with International Operations
The Company's products are currently marketed in approximately 25 countries,
with Germany, the rest of Europe, the United States and the Asia/Pacific
region being the Company's principal markets. Sales in the Company's
principal markets are subject to risks inherent in international business
activities, including, in particular, general economic conditions in each such
country, overlap of differing tax structures, management of an organization
spread over various jurisdictions, unexpected changes in regulatory
requirements and compliance with a variety of foreign laws and regulations.
Other general risks associated with international operations include import
and export licensing requirements, trade restrictions and changes in tariff
and freight rates. The business and operations of the Company's principal
subsidiary, ROFIN-SINAR Laser GmbH, are primarily subject to the changing
economic and political conditions prevailing from time to time in Germany.
Although productivity in Germany is generally high, labor costs, corporate
taxes and employee benefit expenses are high and weekly working hours are
shorter in Germany compared to the rest of the European Union, the United
States and Japan.
- 10 -
<PAGE>
Overview
Rofin-Sinar is a leader in the design, development, engineering, manufacture
and marketing of laser-based products used for cutting, welding and marking a
wide range of industrial materials. During the third quarter of fiscal year
1996 and fiscal year 1997, respectively, approximately 71% and 70% of the
Company's revenues were from sales and servicing of laser products for cutting
and welding applications and approximately 29% and 30% were from sales and
servicing of laser products for marking applications.
Through its global manufacturing, distribution and service network, the
Company provides a comprehensive range of laser solutions to three principal
target markets for material processing lasers: the Machine Tool, Automotive
and Semiconductor & Electronics industries. The Company sells directly to
industrial end-users, to OEMs who integrate Rofin-Sinar's laser sources with
other system components and to distributors. Many of Rofin-Sinar's customers
are among the largest global participants in their respective industries.
Results of Operations
For the periods indicated, the following table sets forth the percentage of
net sales represented by the respective line items in the Company's
consolidated statements of operations.
Nine Months Three Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
[S] [C] [C] [C] [C]
Net sales 100% 100% 100% 100%
Cost of goods sold 63% 62% 61% 61%
Gross profit 37% 38% 39% 39%
Selling, general and
administrative expenses 18% 18% 20% 18%
Research and development expenses 7% 7% 7% 6%
Special charge 1% 0% 4% 0%
Income from operations 11% 13% 8% 15%
Income before income taxes 12% 12% 9% 14%
Net income 7% 7% 5% 8%
Net Sales - Net sales of $31.2 million and $98.7 million represent
increases of $1.6 million (5%) and $15.3 million (18%) for the three months
and nine months ended June 30, 1997, respectively, compared to the
corresponding periods of fiscal 1996. The improvement resulted from net
sales increases of $8.4 million, or 31%, in the United States, and $7.0
million, or 13% in Europe/Asia for the corresponding nine month period as
compared to the prior year. The strengthening of the U.S. dollar against
foreign currencies resulted in lower net sales of $6.4 million for the nine
month period. Net sales of laser products for cutting and welding
applications for the three and nine month periods increased by 4% to $21.9
million and by 23% to $72.8 million as compared to the same periods for
fiscal 1996. Net sales of lasers for marking applications for the three and
nine month periods increased by 9% to $9.3 million and increased by 8% to
$25.8 million as compared to fiscal 1996. The strong increase in cutting and
welding products is caused mainly by major orders for laser welding systems
in the automotive industry and by the success the Company's diffusion-cooled
CO2-Slab laser is experiencing in the marketplace.
- 11 -
<PAGE>
Cost of Goods Sold - Cost of goods sold increased $1.2 million (6%) and
$11.0 million (21%) for the three months and nine months ended June 30,
1997, respectively, compared to the corresponding periods of fiscal 1996,
and reflect the increase in net sales and lower margin multiple-unit laser
welding system shipments.
Gross Profit - The Company's gross profit of $12.0 million and $36.3
million for the three months and nine months ended June 30, 1997,
respectively, represents a $0.4 million and $4.4 million increase in gross
profit over the same periods of the prior year. This is due to the
significant growth in sales between these two periods. As a percentage of
sales, gross profit remained unchanged at 39% and decreased from 38% to 37%
over the corresponding period from the prior year, as described under cost
of goods sold.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses increased $0.7 million (13%) and $2.4 million (16%)
for the three months and nine months ended June 30, 1997, respectively,
compared to the corresponding periods of fiscal 1996. This is due in part
to the cost for the Munich laser trade fair in June and a specific provision
for a customer bad debt, as well as the increased costs of doing business as a
public company and the overhead required to support the higher sales levels.
As a percentage of sales over the three month period ended June 30, SG&A
expenses increased from 18% to 20%, while for the nine month period they
remained unchanged at 18%.
Research and Development - The Company spent net $2.1 million and $7.0
million on research and development during the three and nine month periods.
This represents a 8% and 19% increase in research and development over the
same periods of the prior year. The increase in spending was primarily due
to the additional expenses for the diode pumped solid state laser program,
started in the fourth quarter fiscal 1996, which, subject to the completion
of milestones, will continue into fiscal 1998. Gross research and
development expenses for the nine months were $7.8 million and were reduced
by $0.8 million of government grants.
Special Charge - In the third quarter of fiscal 1997, the Company's results
reflect a special charge for a settlement of $1.4 million, or 4.3% of net
sales, related to a customer dispute arising out of the use of one of the
Company's existing products in a newly developed customer application.
Income from Operations - The Company's income from operations of $2.5
million for the three months ended June 30, 1997 represents a decrease of
$1.8 million (42%) from the prior year period, while income from operations
of $10.3 million for nine months represented a decrease of $0.5 million, or
5% from the corresponding prior year period. Income from operations was
unfavorably affected by the special charge of $1.4 million, discussed above,
and by $0.9 million for the nine month period fiscal 1997 due to the
strengthening of the U.S. dollar. These two unfavorable factors for the
nine month period were largely offset by the favorable impact of gross
profit created by higher net sales versus the comparable period in the prior
year.
- 12 -
<PAGE>
Income Before Income Taxes - The Company's income before income taxes of
$2.9 million and $11.6 million for the three and nine months ended June 30,
1997, represents a decrease of $1.2 million (29%) and an increase of $1.5
million (15%) over the corresponding prior year periods. Interest expense
declined due to lower interest rates and reduced borrowing in the current
period versus the comparable period in the prior year. In addition, the
Company benefited from the interest income generated out of the cash-flow
during the first nine months and on the invested net proceeds from the
initial public offering after the purchase of its assets from the Company's
former parent.
Income Tax Expense - Income tax expense of $1.4 million and $4.9 million for
the three and nine month periods ended June 30, 1997 represent effective tax
rates of 48% and 42%, respectively, compared to prior year corresponding
effective tax rates of 44% and 43%, respectively. The increase in the
effective rate for the three months ended June 30, 1997 is due to the fact
that the Company's U.S. operations represented a lesser portion of the
consolidated income before income taxes than did the Europe/Asian operations
in fiscal 1997, compared to 1996. This was partially offset by the favorable
impact of certain foreign income which was not taxed due to the use of tax
loss carryforwards.
Net Income - In light of the foregoing factors, the Company realized a
consolidated net income of $1.5 million and $6.7 million for the three and
nine month periods ended June 30, 1997, which represent a decrease of $0.8
million (34%) and an increase of $0.9 million (16%) over the comparable
prior periods. For the three months ended June 30, 1997 earnings per share
equaled $0.13 based upon 11.6 million common shares outstanding as compared
to pro-forma earnings per share of $0.27 for the same period of 1996, based
on 8.6 million shares outstanding.
Liquidity and Capital Resources
The Company's primary sources of liquidity are cash, cash equivalents and
short-term investments of $34.9 million and $40.4 million at September 30,
1996 and June 30, 1997. In addition, the Company has a $25.0 million
revolving loan facility for working capital purposes of which $7.2 was
unused and available as of June 30, 1997. Net cash provided (used) by
operating activities amounted to $11.4 million for the nine months ended
June 30, 1997 as compared to ($1.1 million) for the corresponding period of
fiscal 1996. This $12.5 million improvement was primarily due to improved net
income and favorable fluctuations in accounts receivable and inventory levels.
- 13 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Material developments in connection with legal proceedings.
None.
ITEM 2. Material modification of rights of registrant's securities.
None.
ITEM 3. Defaults on senior securities.
None.
ITEM 4. Submission of matters to a vote of security holders.
None.
ITEM 5. Other.
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of earnings per share.
27.1 Financial data schedule for three month period
ended June 30, 1997.
(b) Reports on Form 8-K
The Registrant filed the following Current Reports on Form
8-K during the quarter ended June 30, 1997:
Current Report on Form 8-K, dated July 17, 1997, included
information relating to Rofin-Sinar Technology Inc's third-
quarter announcement of the signing of a purchase agreement
to acquire 80% of the stock of DILAS Diodenlaser, subject to
the completion of due diligence.
- 14 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Rofin-Sinar Technologies Inc.
---------------------------------
(Registrant)
Date: August 14, 1997 /S/ Gunther Braun
---------------------------------
Gunther Braun
Executive Vice President,
Finance and Administration, and
Chief Financial Officer
Earnings Per Share
Nine Months Three Months
Ended June 30, Ended June 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
[S] [C] [C] [C] [C]
Net income 6,677 5,738 1,511 2,299
Weighted average
shares outstanding 11,603,100 8,631,578 11,627,965 8,631,578
---------- ---------- ---------- ----------
Earnings per share $ 0.57 $ 0.66 $ 0.13 $ 0.27
---------- ---------- ---------- ----------
(1) Includes common-stock outstanding and common-stock
equivalent-stock options.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
consolidated financial statements of Rofin-Sinar Technologies Inc. and
Subsidiaries for the nine months ended June 30, 1997 and is qualified in its
entirety by reference to such consolidated financial statements.
</LEGEND>
<CIK> 0001019361
<NAME> ROFIN-SINAR TECHNOLOGIES INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 40,430
<SECURITIES> 0
<RECEIVABLES> 33,089
<ALLOWANCES> (1,520)
<INVENTORY> 29,999
<CURRENT-ASSETS> 107,011
<PP&E> 21,502
<DEPRECIATION> 0
<TOTAL-ASSETS> 131,105
<CURRENT-LIABILITIES> 48,035
<BONDS> 0
0
0
<COMMON> 115
<OTHER-SE> 80,039
<TOTAL-LIABILITY-AND-EQUITY> 131,105
<SALES> 98,677
<TOTAL-REVENUES> 98,677
<CGS> 62,395
<TOTAL-COSTS> 62,395
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (662)
<INCOME-PRETAX> 11,590
<INCOME-TAX> 4,913
<INCOME-CONTINUING> 6,677
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,677
<EPS-PRIMARY> $0.57
<EPS-DILUTED> $0.57
</TABLE>
