Rofin's net sales fell by 10 per cent in its second quarter of fiscal year 2015, from $122,719 to $110,550, it was reported in the company’s latest financial results.
Rofin announced in March that it has entered into an agreement to become part of Coherent. According to the company, the proposed merger announcement led to delivery pushouts, which significantly affected its results. In addition, a shift in revenue timing, resulting from final acceptance for some projects being delayed from the second quarter to the third, also had a negative impact.
‘Net sales of $110.6 million were lower than expected because of post-merger announcement delivery pushouts by customers and a shift of certain revenue recognition into the third quarter as final acceptance for some projects occurred in the third quarter, rather than in the second quarter as anticipated,’ commented Thomas Merk, CEO and president of Rofin.
The poor sales figures largely resulted from lasers for marking and micro applications, it said in the financial statement, which saw sales fall by 18 per cent to $45.9 million.
As well as net sales, the company’s net income fell by 94 per cent in the second quarter, from $8,737 to $529. Rofin has put this down to $4.4 million of non-recurring costs related primarily to the proposed merger with Coherent.
The dramatic fall in net income was also affected by a recent proxy contest, which cost the company approximately $3.8 million. Up until the announcement of the merger with Coherent, Rofin had been involved in a public dispute with Silver Arrow Capital Advisors (SAC). The investment firm, which owned nine per cent of Rofin, had been campaigning for members to be elected to Rofin’s board of directors, after criticising Rofin’s management strategy as a reason for what Silver Arrow felt was underperformance in Rofin’s stock over the past five years. In the weeks leading up to the meeting, the Rofin and Silver Arrow had each issued several open letters urging stockholders to vote for their perspective candidates onto Rofin’s board.
On a brighter note, Rofin saw a 25 per cent year-on-year growth in its high power fibre laser products. The launch of its 2.5kW fibre laser module is on track for release this fiscal year, one quarter earlier than expected.