Rofin-Sinar Technologies, Inc. (RSTI)

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Rofin-Sinar Technologies, Inc. (RSTI)

F2Q09 (Qtr End 03\31\09) Earnings Call

May 07, 2009, 11:00 am ET


Günther Braun - President and CEO

Ingrid Mittelstädt - CFO and EVP Finance, Administration and Treasurer


Chuck Murphy – Sidoti & Company

Mark Douglas - Longbow Research

Antonio Antezano - Macquarie Research Equities

Eggert Kuls - M.M. Warburg & Company.

Ajit Pai - Thomas Weisel Partners

Karsten Oblinger - DZ Bank

Tobias Loskamp - Kepler Capital Markets



Welcome to Rofin-Sinar's 2009 Second Quarter Results Conference Call. Today's call is hosted by Mr. Günther Braun, Chief Executive Officer and Ingrid Mittelstädt, Chief Financial Officer. Following management's comments, you will have the opportunity to ask questions. Please go ahead.

Günther Braun

Thank you and good morning or good afternoon to everyone. I'm here in Plymouth, in Michigan; together with Ingrid, our CFO. I hope you all got the press release containing our second quarter results. We will give you some comments about our business and performance and then we will open it up for questions.

Now before we start, I would like to make the usual statement about the information you are getting in this conference call.

Safe Harbor Statements our discussion may include predictions, estimates or other information that may be considered forward-looking. While these forward-looking statements represent our best current judgments on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. Throughout our discussions, we will attempt to discuss important factors relating to our business that may affect our predictions. You may also want to review our last 10-Q and 10-K filings for a more complete disclosure of financial risks.

Okay, before I comment on the business environment, we would like to do the standard review of our performance in the period ending March 31, 2009.

First a quick overview of our second quarter. As you have seen from our press release, we reached sales in the second quarter of $75.6 million, which is $61 million or 45% lower than in the comparable quarter in fiscal year '08.

The strengthening of the US dollar exchange rates decreased sales by approximately 14% or $10.7 million. Net income was $1.2 million or approximately 2% of net sales 89% lower compared to last year second quarter.

We know that the numbers are not outstanding but I think quite satisfying, given the low sales volume. Again we face the substantial number of delivery delays especially during the second half of March and Ingrid will give you a number to that. Given the strong decline in sales of approximately $78 million over the last six months, think about in our fourth quarter last year which was $154 million now $76 million in the second quarter and not losing money I think was quite a success.

The macroeconomic environment, which we currently face is still very challenging and the financial crisis has leads to significant reduction in financing of capital equipment. Many of the industries we serve are affected and there are only few industries, which are relatively stable and later on I will comment on this one.

I will continue this, some other statistics here, sales in our micro, marking business decreased 44% over the comparable quarter to $35 million and it’s now 46% of total sales.

The sales of our macro business was also significantly below the previous quarters, business decreased by 49% to $30.3 million or 40% of total sales. Our component business, and you know, it’s laser diodes, it’s the active passive fibers, power supplies, fiber optics and so on decreased 29% and reached $10.3 million, representing 14% of quarterly sales.

Now the geographical spilt; sales to Asian countries decreased by 40% to 23% of quarterly sales and reached $17.1 million. Basically, all of the industries we serve were down. The strongest countries were China and Japan for us but there is also positive message which is that the Chinese business already increased sequentially by approximately 40% from Q1 to Q2 and that’s nice.

North America, as expected contributed only $17.2 million or 23% of quarterly sales. No surprise I think hopefully business conditions improve. Europe was responsible for the remaining 54% of the quarterly sales. Sales decreased 45% to $41.3 million comparing to last year's second quarter. Missing the strong PV business by the way. And of course do not forget the negative currency impact on the numbers in Europe and Asia.

Our spare parts and service business decreased 38% and accounted for approximately 31% of net sales for the quarter. Some other statistics now coming through the breakdown of our quarterly laser sales by industry. Automotive, last quarter was 5% versus 9% in '08. The machine tool reached 33% versus 38% in '08. Semiconductor, electronics, PV and so on 21% same percentage in '08, and others were 41% versus 32% in '08. But don’t forget low sales volume.

During the second quarter, we shipped to total of 500 lasers versus 899 lasers last year. That’s approximately 44% less compared to last year second quarter, 181 units were for macro applications and 319 units were for marking and micro application.

Now, let me start to comment on the six months results, we realized sales of $182.6 million in the last six months versus $271.3 million last year. The result is a decrease of 33% or $88.7 million from the comparable period of fiscal '08. And difference in the US dollar exchange rate decreased sales by approximately 10% or $18.4 million.

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