IPG Photonics Corporation (IPGP)
Q2 2009 Earnings Call
August 4, 2009 10:00 am ET
Angelo P. Lopresti – Vice President, General Counsel & Secretary
Valentin P. Gapontsev Ph.D. – Chairman & Chief Executive Officer
Timothy P.V. Mammen – Vice President & Chief Financial Officer
Avinash Kant – D.A. Davidson & Company
C.J. Muse – Barclays Capital
James Ricchiuti – Needham & Company
Joseph Maxa – Dougherty & Company
Jiwon Lee – Sidoti & Company
Sven Eenmaa – Thomas Weisel Partners
Previous Statements by IPGP
» IPG Photonics Corp. Q1 2009 Earnings Call Transcript
» IPG Photonics Corporation Q4 2008 Earnings Call Transcript
» IPG Photonics Corporation Q3 2008 Earnings Call Transcript
Angelo P. Lopresti
Thank you and good morning everyone. With us today is IPG Photonics' Chairman and Chief Executive Officer, Dr. Valentin Gapontsev; and Vice President and Chief Financial Officer, Tim Mammen. Statements made during the course of this conference call that discuss management's or the company's intentions, expectations, or predictions of the future are forward-looking statements.
These forward-looking statements are subject to known and unknown risks and uncertainties that could cause the company's actual results to differ materially from those projected in such forward-looking statements. These risks and uncertainties included – include those details in IPG Photonics' Form 10-K for the year ended December 31, 2008 and other reports on file with the Securities and Exchange Commission. Copies of these filings may be obtained by visiting the Investors section of IPG's website at www.ipgphotonics.com or by contacting the company directly. You may also find copies on the SEC's website at www.sec.gov.
Any forward-looking statements made on this call are the company's expectations or predictions only as of today, August 4, 2009. The company assumes no obligation to publicly release any update or revision to any such statement. We will post these prepared remarks on our website after the completion of the call. Please go to www.ipgphotonics.com and select Investors to review these remarks. I will now turn the call over to Dr. Gapontsev.
Valentin P. Gapontsev
Good morning. And thank you for joining us today. As you know already our, second quarter revenues of $40.4 million came in at the low end of our guidance range, down 28% year-over-year. We also reported a loss of $1.2 million for the quarter, or $0.03 per share. And while we fell short of our bottom-line guidance, we continued to cut expenses and capital expenditures, and we also continued to generate cash.
Overall, our financial performance continues to reflect the global economic downturn. The good news from this quarter is that high power lasers, which are now our most significant contributor to sales, continued to grow on a year-over-year basis. We are seeing growing market acceptance of fiber lasers in high power applications as users continue to move away from traditional lasers and turn to IPG’s superior high power sources for cutting, welding, brazing, cladding, and other applications. We also continue to see new applications for our high power lasers.
Please note that high power lasers for cutting and welding is the largest available market for industrial lasers, much larger – larger than the market opportunity for marking lasers. Let me discuss some operational highlights for the quarter. First, we sold our first pulsed green lasers and we are now accepting customer orders. We have strong customer interest and several units are in customer tests now, including solar. We have also started to ship two other new exciting product families. One of them provides high energy per pulse, up to 50 million joules in nanosecond pulses. This unique laser family opens exciting new opportunities in LCD display processing, automotive, and other applications.
The second new product family is our long pulse fiber lasers targeted at replace – at replacing lamp pumped YAG lasers. These lasers have pulse durations from hundreds of microseconds to multiple milliseconds, and energy per pulse up to 50 joules. That market is approximately $300 million now. More recently, we announced the successful development of 10-kilowatt single mode laser, which is a great milestone for IPG and the laser industry in general. We have accepted an order for this unique laser, which has tactical directed energy applications and many others.
Also we are now offering a first 100-watt fiber-coupled laser diode, the most powerful high brightness single-emitter based laser diode. At the lowest cost per watt, the new diode is well ahead in performance of any existing fiber-coupled laser diodes available in the market. We are hopeful that these new products can compensate for some of the impact from the global economic downturn. Second, I want to highlight that we hired additional experienced sales staff that will solely focus on the merchant market for our best-of-class laser diodes. Also, we now have an additional sales representative in Brazil focusing on high power and the automotive market there. We have added skilled sales personnel in China, as well as other locations internationally. Third, we completed the purchase of the remaining 20% minority interest in our Japanese subsidiary, further simplifying our structure.
In total, IPG’s value proposition remains strong. Customers continue to choose IPG’s fiber lasers for their superior performance, reliability, usability, and lower total cost of ownership, compared with conventional lasers. We are taking the right actions to ensure that we are an even stronger company when our markets rebound. Our continued investment in sales infrastructure and our aggressive product development strategy will allow us to maintain our technological edge and leadership position. We expect to be well positioned for renewed growth when the global economy recovers. I will now turn the call our – to our CFO, Tim Mammen for details.