Rofin-Sinar Technologies Inc. (NASDAQ:RSTI) Q1 2015 Earnings Conference Call - Final Transcript
Feb 05, 2015 • 11:00 am ET
Welcome to Rofin-Sinar's First Quarter 2015 Financial Results Conference Call. Today's call is hosted by Mr. Gunther Braun, Chief Executive Officer; and Ms. Ingrid Mittelstadt, Chief Financial Officer. Following management's comments, you will have the opportunity to ask questions.Please go ahead.
Thank you. Good morning or good afternoon to everyone. I am here in Plymouth, Michigan, together with Ingrid Mittelstadt, our CFO. I hope you all received the press release containing our first quarter 2015 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 statement. (Forward-looking cautionary statements) As you can see from our press release, our business is performing well.
Sales were solid and earnings per share rose significantly over the same period of the previous year. However, an unfavorable exchange rate materially lowered our financial results and let me first hit some of the main points before we review our business segment results.So quarterly earnings per share increased 175% year-over-year to $0.22, and this is mainly driven by operations, through cost reductions, and higher sales volumes.
Our gross margin increased to 35% year-over-year mainly as a result of the product mix. Also it decreased sequentially two percentage points due to volume related under-absorbed fixed costs and less favorable product mix.This ongoing cost reduction measures in fiber lasers in higher business levels for our ultrashort-pulse lasers.
We still continue to expect to achieve the projected gross margin of 40% by the fourth quarter of fiscal year 2015.We continue to gain traction with our high-power fiber laser portfolio and sales of high-power fiber laser products increased sequentially by approximately 9% and 44% year-over-year, and this is before.
Exchange rate impact, we continue to see increased interest from worldwide OEM customers for our third generation of high-power fiber lasers and will launch a number of this next generation products over the next two quarters, which should support further growth in revenue and profitability.
And we started to manufacture the third generation of high-power fiber laser, you remember the 2 kilowatt fiber laser setup out of one box, in generally there is a projected shipment mix for the second quarter of approximately 50% previous generation and 50% now the new generation of high-power fiber lasers.
Net sales of $122.4 million were up slightly from the $121.2 million in the comparable quarter of fiscal 2014. But we are below our guidance of $127 million to $130 million, mainly due to fluctuations in currency but also negatively affected by timing of deliveries and revenue recognition. Using the average exchange rates from Q1 fiscal year 2014, net sales in the first quarter of 2015 would have been higher by approximately $7.1 million, within our guided range.
This was one of our strongest quarters over the last decade for sales to the automotive industries, where sales to the machine tool, consumer