RSTI

Rofin-Sinar Technologies, Inc. (RSTI)

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Rofin-Sinar Technologies, Inc. (RSTI)

F4Q12 Earnings Call

November 8, 2012 11:00 am ET

Executives

Günther Braun – President and Chief Executive Officer

Ingrid Mittelstädt – Executive Vice President, Chief Financial Officer and Treasurer

Analysts

Patrick Newton – Stifel Nicolaus & Company

Mark S. Miller – Noble Financial Capital Markets

Vasanth N. Mohan – Piper Jaffray Companies

Jiwon Lee – Sidoti & Co. LLC

Presentation

Operator

Greetings and welcome to the Rofin-Sinar’s Fourth Quarter and Full Year 2012 Results Conference Call. Today’s call is hosted by Mr. Günther Braun, Chief Executive Officer; and Ms. Ingrid Mittelstädt, Chief Financial Officer. Following management’s comments, you’ll have the opportunity to ask questions. Please go ahead.

Günther Braun

Thank you. Good morning or good afternoon to everyone from Michigan as you have heard, I’m together with Ingrid, our CFO. I hope you all got the press release containing our fourth 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, we would like to make usual statement about the information you are getting in this conference call. Safe Harbor statement; 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.

So let’s start. Of course, we are pleased with our financial performance in the fourth quarter, given the overall global economic environment. Net sales, net income and earnings per share turned out better than we expected, also gross profit was challenged and Ingrid will address this topic later.

Revenues this quarter were primarily driven by the machine tool, automotive, consumer electronics and medical device industries. And the trend towards high power fiber laser and sheet metal cutting was underlined at the exhibition in Germany, the Europe Hannover were out of 36 laser cutting systems, 26 systems were equipped with fiber lasers, and that’s based on the press release from the industrial laser solution and we’ll see, it’s a big amount than expected in our portion is already pretty reasonable I would say. but you can reach this and get the industrial laser solution.

Now let me start with our standard review of our performance in the period, September 30, 2012. As you have seen from our press release, we delivered sales in the fourth quarter of $147.5 million that’s well above our guidance, but $22.1 million or 13% lower than in the comparable quarter in fiscal 2011. Sales in our micro marking business mainly reflect excellent demand from the consumer electronics and medical device industry when comparing to last year fourth quarter.

Net sales decreased 13% over the comparable quarter to $75.4 million or 51% of total sales. The sales in our macro business decreased 18% to $55.2 million compared to the fourth quarter fiscal year 2011. This is mainly caused by the lower, but stable demand from the machine tool industry in China and the macro business contributed for the 7% to quarterly sales.

component business increased by 12% to $16.9 million representing 12% of quarterly sales against on quarter for the laser power products and fiber related components. The statistic for our geographical split, sales to Asian countries decreased by 22% to $53 million and resulted in 36% of quarterly sales, strongest countries this time were China, and then Taiwan and Japan. And the Chinese business contributed 19% to quarter sales, and by the way, the book-to-bill in Asia was $0.97.

North America increased 1% and contributed $30.9 million or 21% of quarterly sales supported again this time, mainly by the medical device industry as well as marking application and also nice component business, our book-to-bill rate was $0.91 for North America.

Europe was responsible for the remaining 43% of the quarterly sales, has decreased 10% to $63.6 million comparing to last year first quarter. Solar industry, of course, is one of the industries responsible for the original sales figure compared to last year, automotive and smart cards were stable and highlight again medical device industry and our book-to-bill was $0.91 in this quarter.

Our spare parts service business compared to Q4 last fiscal year decreased by 10% or $4.3 million, accounted for approximately 27% of net sales for the quarter, very stable business it still demonstrates a stable utilization of the equipment in the factories.

Some other statistics now coming to the breakdown of our quarterly laser sales by industry automotive this year, this quarter 8% compared to 7% last fiscal year. Machine tool 33% compared to 37% in 2011, so you’ll see already a decrease, semi-electronic 28% versus 29% last fiscal year and others 31% versus 27%.

During the fourth quarter, we shipped a total of 1,293 lasers versus 1,225 lasers last year’s fourth quarter. This is approximately 9% less compared to last year. For macro applications, it was 438 this year versus 600 units last year, and for marking and micro this year, 855 units versus 825 units last year. And as I commented to the 12-month figures, we realized sales of $540.1 million in the last 12 months versus the $597.8 million in the last year.

Read the rest of this transcript for free on seekingalpha.com