Superior Reliability & Performance
The Leader in Photonics
August 2015
P. 2 Superior Reliability & Performance
Forward-Looking Statements & Non-GAAP Measurement
Forward-Looking Statements
The statements in this presentation that relate to guidance, projections, future plans, business opportunities, estimates, events or performance
are forward-looking statements that involve risks and uncertainties, including risks associated with business and economic conditions, customer
and/or supplier contract cancellations, manufacturing risks, competitive factors, successful introductions of new products, uncertainties pertaining
to customer orders, demand for products and services, growth and development of markets for the Company's products and services, and other
risks identified in our filings made with the Securities and Exchange Commission, including, most recently, our Form 10-Q for the quarter ended
April 4, 2015. Actual results, events and performance may differ materially. 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 release publicly the results of any
revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Readers are encouraged to refer to the risk disclosures described in the Company’s Form 10-K for the fiscal
year ended September 27, 2014, our most recent Form10-Q and subsequent reports and 8-K’s, as applicable.
Non-GAAP Measurement
The Company’s statements regarding its historical pro forma net income, pro forma EBITDA% and pro forma EPS results are non-GAAP financial
measures. Historical pro forma net income, pro forma EBITDA% and pro forma EPS exclude those items set forth on the applicable slide and you
should refer to those slides and the reconciliation for further information.
The Company neither updates nor confirms any guidance regarding the future operating results of the Company which may have been given
prior to this presentation.
All images copyrighted by Coherent, Inc. © 2013
P. 3 Superior Reliability & Performance
The Photonics Company
• Provider of Photonics Solutions - Primarily Lasers for Commercial
and Scientific Research Applications
• Founded in 1966
• TTM Sales $798.2 Million
• TTM Orders $742.4 Million
• 2,524 Employees
• Sales 26% U.S. and 74% International
• Approximately 427 Patents, 147 Pending
____________________ Note: Photonics is the Merger of Lasers, Optics and Electronics
Source: Company management as of 07/04/15
Materials
Processing
Microelectronics
OEM Components
& Instrumentation
Scientific Research
& Gov. Programs
Revenue Mix
TTM
Europe
R.O.W.
Asia Pacific
Geographic Sales Distribution
TTM
15%
21%
15%
49%
17%
26%
6%
51%
US
P. 4 Superior Reliability & Performance
Diversified Markets and Applications
Technology Portfolio
FPD, API, Semi
Marking, Engraving,
Cutting and Welding
Diagnostic &
Therapeutic Medical,
Defense and Display
Ultrafast
1 4 + 1 1
NEWP, JDSU, Trumpf IPGP, Trumpf, RSTI JDSU, NEWP, Private
Companies
NEWP, GSIG, Private
Companies
OLED, Smartphones,
Tablets, Strengthened
Glass Cutting
High Power
Materials Processing
Laser Eye Care
Dental
Attosecond Physics
Primary
Application Focus
Growth vs Market
Competitors
Growth
Opportunities
Scientific Research &
Government Programs
OEM Components &
Instrumentation Materials Processing Microelectronics
SAM Position
P. 5 Superior Reliability & Performance
Acquisition of Tinsley Optics
• Tinsley Optics was a division of L-3 Communications specializing
in large format optics for excimer laser annealing (ELA), defense
and aerospace applications
• Coherent acquired the Tinsley assets in a cash transaction on
July 27, 2015
• The acquisition provides supply chain protection for Coherent and
its customers for Gen 5 and larger ELA systems (>1000mm)
• Coherent will continue to support non-ELA customers
predominantly for ground and space-based telescopes
• We expect the business to generate $7.5-10 million in FY16 sales
and become accretive by Q4FY16
• Tinsley will operate as part of Coherent Integrated Optical
Systems (IOS) located in Richmond, CA
P. 6 Superior Reliability & Performance
Acquisition of Raydiance Inc.
• Raydiance was a venture backed start-up specializing in short
pulse processing for the automotive fuel injector and medical
device manufacturing
• Coherent acquired the Raydiance assets in a cash transaction on
July 24, 2015
• The acquisition expands Coherent’s know-how and IP position in
the developing micromachining market
• Coherent will provide ongoing support for the installed user base
including new systems, parts and service
• We expect the business to generate $7.5-10 million in FY16 sales
and become accretive by Q4FY16
• It will operate as part of Coherent Integrated Optical Systems
(IOS) located in Richmond, CA
P. 7 Superior Reliability & Performance
HighLight FL High Power Fiber Laser Platform
• Target Applications
• Cutting, welding, brazing and additive manufacturing
• Key Attributes
• Power 1kw to 4kW, scalable to higher power
• Modular architecture with high flexibility for OEM modules or
complete systems
• High-quality, high-throughput metal processing especially with
highly reflective materials
• Robust design for harsh industrial environments
• Vertical integration enables reliability and cost
P. 8 Superior Reliability & Performance
5 Micron Laser
• Key Attributes
• Industry’s first commercial high power 5 micron laser
• Unique wavelength enables more efficient processing of certain
materials
• Ability to achieve up to 50% smaller spot size than CO2
• Leverages Coherent’s industry leading CO2 platform and with similar
Cost-of-ownership
• 230W average power. Future models scalable to higher powers
• Target Applications
• PCB via drilling – extended CO2 capability to drill <40 micron vias
• Polymer Film Cutting – ability to process difficult materials
• Ultra-thin Glass Processing – ability to cut free-form
• Medical Therapy – high water absorption advantage
P. 9 Superior Reliability & Performance
Monaco – Industrial Femtosecond Laser
• Key Attributes
• Ideal for highest edge / surface quality in insulators, metals and semiconductors
• Pulse width tunable (400 – 10,000 fs) to match optimum material removal rates
• Up to 1MHz rep rate / 40W power for highest throughput / lowest costs per part
• Compact all fiber architecture enables low cost and future performance scaling
• Target Applications
• Glass cutting for microelectronics
• Thin film processing for microelectronics
• Lasik flap cutting and cataract procedures
• Automotive engine parts including fuel injectors
• Medical device manufacturing including stents
P. 10 Superior Reliability & Performance
Performa Income Statement Metrics
$ Millions except
earnings per share 594
419
696
895
773 767
891
163 221 177
599
436
605
803 769 810 795
201 204 189
$-
$200
$400
$600
$800
$1,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1'15 Q2'15 Q3'15
Bookings Revenue
13.5%
7.1%
17.0% 19.5% 18.4% 17.8% 17.2% 18.7% 17.6% 18.4%
0%
5%
10%
15%
20%
25%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1'15 Q2'15 Q3'15
Pro Forma EBITDA%
1.74
0.46
2.13
3.70 3.28
3.56 3.19
0.87 0.94 0.82
$-
$1.00
$2.00
$3.00
$4.00
$5.00
FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1'15 Q2'15 Q3'15
Pro Forma EPS
Note:. Pro Forma EBITDA% and EPS exclude stock related compensation charges, intangibles amortization, inventory step up per purchase price accounting and exceptional
items such as impairment charges, major restructuring costs, historical financial restatement and litigation costs, and non-recurring tax expenses or benefits.
____________________
P. 11 Superior Reliability & Performance
Balance Sheet
July 4, 2015 Sept 27, 2014
Cash, equivalents & investments
Accounts receivable
Inventories
Other current assets
PP&E, net
Long term assets
$ 336.8
144.7
157.8
71.7
99.0
187.1
$ 318.3
137.3
170.5
55.0
107.4
210.9
Total Assets $ 997.1 $ 999.4
Current liabilities
Long term liabilities
Equity
$ 129.8
53.3
814.0
$ 117.3
62.4
819.7
Total Liabilities & Stockholders’ Equity $ 997.1 $ 999.4
$ Millions
FY08 $ 227.2 M
FY10 $ 43.3 M
FY11 $ 100.0 M
FY12 $ 25.0 M
Q1FY15 $ 17.3 M
Q2FY15 $ 7.7 M
Q3FY15 $ 0.0 M
Historical stock repurchases 362
218 244 263 220 225 250
318 323 344 337
SepFY07
SepFY08
SepFY09
SepFY10
SepFY11
SepFY12
SepFY13
SepFY14
DecFY15
MarFY15
JunFY15
Cash Balance
P. 12 Superior Reliability & Performance
Reconciliation to GAAP and Non-GAAP Financials
Quarter to Date
Q3 15 Q2 15 Q1 15
Net Income % of revenue 7.0% 9.0% 8.7%
Income tax expense 2.6% 2.8% 3.1%
Interest and other (income) expense, net 0.4% (0.6%) 0.6%
Depreciation and amortization 4.2% 4.1% 4.1%
Customs audit 0.7% 0.0% 0.0%
Impairment of investment 1.1% 0.0% 0.0%
Stock based compensation 2.4% 2.3% 2.2%
Pro Forma EBITDA % of revenue 18.4% 17.6% 18.7%
Quarter to Date
Q3 15 Q2 15 Q1 15
GAAP net income $13,264 $18,413 $17,430
GAAP net income per diluted share $ 0.53 $ 0.74 $ 0.69
Stock based compensation 3,293 3,479 3,960
Intangibles amortization 1,432 1,540 1,607
Customs audit 1,289 0 0
Impairment of investment 1,274 0 0
Non-recurring tax benefit 0 0 (1,118)
Non-GAAP net income $20,552 $23,432 $21,879
Non-GAAP net income per diluted share $ 0.82 $ 0.94 $ 0.87