OXFORD, Mass., May 04, 2021 (GLOBE NEWSWIRE) — IPG Photonics Corporation (NASDAQ: IPGP) today reported financial results for the first quarter ended March 31, 2021. In a separate press release, the Company announced CEO transition, which is effective immediately.
| Three Months Ended March 31, | |||||||||||
| (In millions, except per share data and percentages) | 2021 | 2020 | Change | ||||||||
| Revenue | $ | 345.6 | $ | 249.2 | 39 | % | |||||
| Gross margin | 47.5 | % | 41.3 | % | |||||||
| Operating income | $ | 88.8 | $ | 44.8 | 98 | % | |||||
| Operating margin | 25.7 | % | 18.0 | % | |||||||
| Net income attributable to IPG Photonics Corporation | $ | 68.1 | $ | 36.4 | 87 | % | |||||
| Earnings per diluted share | $ | 1.26 | $ | 0.68 | 85 | % | |||||
Management Comments
“We were pleased to see continued strong demand in China and North America as well as a further improvement in Europe. These drove both year-over-year and sequential increases in sales, despite typical seasonality, helping us achieve our best first quarter results since 2018, which was a record year, and a solid start to 2021,” said Dr. Valentin Gapontsev, IPG Photonics’ Executive Chairman of the Board. “We saw firm demand in welding applications, growth in electric vehicle battery production and solar cell manufacturing that helped our results. Initial orders for our handheld welder were strong and we are increasing production of this innovative device to meet growing customer demand,” said Dr. Eugene Scherbakov, IPG Photonics’ Chief Executive Officer.
Financial Highlights
First quarter revenue of $346 million increased 39% year over year. Materials processing sales increased 45% year over year due to higher sales in welding, cutting, solar cell manufacturing, sintering and ablation applications. Materials processing sales accounted for 92% of total revenue in the quarter. Sales into other applications decreased 9% year over year as strength in advanced applications and telecom was offset by lower revenue in medical.
Sales of high power continuous wave (“CW”) lasers, representing 49% of total revenue, increased 43% year over year. These sales benefited from growth of ultra-high power fiber lasers (6 kilowatts of power or greater), which represented 55% of all high power CW laser sales, as well as strong demand for pulsed and adjustable mode beam (AMB) lasers. By region, sales increased 104% in China, 14% in Europe, and 9% in North America on a year-over-year basis. Sales decreased 21% in Japan.
Earnings per diluted share (“EPS”) of $1.26 increased 85% year over year. Foreign exchange gains benefited EPS by $0.09. The effective tax rate in the quarter was 23%. During the first quarter, IPG generated $88 million in cash from operations. Capital expenditures were $27 million and stock repurchases totaled $3 million.
Business Outlook and Financial Guidance
“The broad-based economic recovery across most of our end markets supported strong bookings in the first quarter and resulted in a book-to-bill that was meaningfully above 1. I am encouraged to see strong bookings for our core high power fiber lasers used in cutting and welding applications as well as for newer emerging products in medical applications, electric vehicle battery production and solar cell manufacturing. We believe that global trends such as increasing energy efficiency and sustainability, displacement of legacy non-laser processes and growth in electric vehicle battery capacity, together with a recovery in global capital spending and improving economic conditions will continue to drive demand for our fiber lasers,” concluded Dr. Gapontsev.
For the second quarter of 2021, IPG expects revenue of $360 to $390 million. The Company expects the second quarter tax rate to be approximately 25%. IPG anticipates delivering earnings per diluted share in the range of $1.20 to $1.50, with 53.5 million basic common shares outstanding and 54.2 million diluted common shares outstanding. Financial guidance provided this quarter is subject to greater risk and uncertainty given the COVID-19 pandemic and its associated impacts to the global business environment, public health requirements and government mandates.
As discussed in more detail in the “Safe Harbor” passage of this news release, actual results may differ from this guidance due to various factors including, but not limited to, government and Company measures implemented to address the COVID-19 pandemic, product demand, order cancellations and delays, competition, tariffs, trade policy changes and general economic conditions. This guidance is based upon current market conditions and expectations, and is subject to the risks outlined in the Company’s reports with the SEC, and assumes exchange rates relative to the U.S. Dollar of Euro 0.85, Russian Ruble 76, Japanese Yen 111 and Chinese Yuan 6.57, respectively.
Supplemental Financial Information
Additional supplemental financial information is provided in the unaudited First Quarter 2021 Financial Data Workbook available on the investor relations section of the Company’s website at investor.ipgphotonics.com.
About IPG Photonics Corporation
IPG Photonics Corporation is the leader in high-power fiber lasers and amplifiers used primarily in materials processing and other diverse applications. The Company’s mission is to make its fiber laser technology the tool of choice in mass production. IPG accomplishes this mission by delivering superior performance, reliability and usability at a lower total cost of ownership compared with other types of lasers and non-laser tools, allowing end users to increase productivity and decrease costs. A member of the S&P 500® Index, IPG is headquartered in Oxford, Massachusetts and has more than 30 facilities worldwide. For more information, visit www.ipgphotonics.com.
