SANTA CLARA, Calif., Sept. 27 /PRNewswire-FirstCall/ -- Coherent, Inc. , a leading supplier of lasers and electro-optics for commercial and scientific applications, announced an adjusted EBITDA target of 19-23% of sales exiting fiscal year 2010.
The Company intends to achieve the target through a variety of activities including material cost reductions, expanded use of contract manufacturers, SG&A leverage, the introduction of more flexible and cost-effective platform designs and continued yield and reliability improvements. Implementation of these changes is staged in such a way as to minimize any impact on customers' supply chains.
"For the past several years, we have focused our energies on expanding gross margins. While we believe there are further opportunities to increase gross margins, we are broadening our efforts to incorporate SG&A leverage into the next round of financial performance improvements," said John Ambroseo, Coherent's President and Chief Executive Officer. "The completion of this program will enable us to deliver higher returns to our shareholders. Just as importantly, many of the changes will enhance the value we deliver to our customers including faster time to market, industry-leading product reliability and performance and platforms that can evolve with the customers' applications," Ambroseo added.
The Company also announced that it is reviewing several options to deploy its cash to continue to grow sustainable shareholder value. Among the choices under consideration are accretive acquisitions and a share repurchase program, the timing of the latter being dependent in part upon the Company being current in its Securities and Exchange Commission reporting obligations. There can be no assurance that the Company will engage in such accretive acquisitions or a share repurchase program.
The Company's statement regarding its adjusted EBITDA percentage target is a non-GAAP financial measure. The most comparable GAAP measurement is net income, which is not currently accessible on a forward-looking basis. Adjusted EBITDA reflects earnings before interest, taxes, depreciation, amortization, stock compensation expenses and other non-operating income and expense items. These items, which are required to determine GAAP net income, are subject to significant change by the end of fiscal 2010, given the impact of potential acquisitions, tax rate changes and other operational factors which will heavily impact these items and are also impacted by the Company's historical stock option investigation and the effect of any compensation charges arising from future equity grants.
Founded in 1966, Coherent, Inc. is a Standard & Poor's SmallCap 600 company and a world leader in providing photonics based solutions to the commercial and scientific research markets. For more information about Coherent, visit the Company's Web site at http://www.coherent.com/ for product and financial updates.
This press release contains forward-looking statements, as defined under the Federal securities laws. These forward-looking statements include the statements in this press release that relate to adjusted EBITDA percentage targets and the actions to be taken to achieve such adjusted EBITDA percentage targets, the delivery of higher returns to shareholders, opportunities to improve gross margins, engaging in accretive acquisitions, the enactment of a share repurchase program and the enhancement of the value delivered to customers. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Factors that could cause actual results to differ materially include risks and uncertainties, including but not limited to risks associated with quarterly and annual fluctuations in our net sales and operating results, our exposure to risks associated with worldwide economic slowdowns, our ability to increase our sales volumes and decrease our costs, the impact that our operations and potential acquisitions will have on interest, taxes, depreciation and amortization measurements, changes to the Company's tax rate as a result of government action and other risks identified in the Company's SEC filings. Readers are encouraged to refer to the risk disclosures described in the Company's Registration Statement on Form S-3 (as amended and filed with the SEC on October 4, 2006) and the reports on Forms 10-K, 10-Q and 8-K, as applicable and as filed from time-to-time by the Company. Actual results, events and performance may differ materially from those presented herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update these forward-looking statements as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.