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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
IPG Photonics Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 8, 2012 05:36PM
IPG Photonics Corp. (IPGP) filed Quarterly Report for the period ended 2012-03-31. Highlight of Business Operations:Cost of sales and gross margin. Cost of sales increased by $8.2 million, or 17.8%, to $54.5 million for the three months ended March 31, 2012 from $46.3 million for the three months ended March 31, 2011. Our gross margin increased to 55.8% for the three months ended March 31, 2012 from 53.7% for the three months ended March 30, 2011. Gross margin increased due to an increase in advanced applications sales where units generally have higher margins and an improvement in manufacturing efficiency because the increase in manufacturing expenses was less than the increase in net sales. In addition, cost of sales benefited from a reduction in the cost of internally manufactured components and accessories. Expenses related to inventory reserves and other inventory valuation adjustments increased by $0.9 million to $1.9 million, or 1.5% of sales for the three months ended March 31, 2012, as compared to $1.0 million, or 1.0% of sales for the three months ended March 31, 2011.Sales and marketing expense. Sales and marketing expense increased by $0.2 million, or 3.7%, to $5.1 million for the three months ended March 31, 2012 from $4.9 million for the three months ended March 31, 2011, primarily as a result of an increase in amortization of units used for demonstration purposes. As a percentage of sales, sales and marketing expense decreased to 4.2% for the three months ended March 31, 2012 from 5.0% for the three months ended March 31, 2011. Research and development expense. Research and development expense increased $1.4 million, or 24.6%, to $7.1 million for the three months ended March 31, 2012, compared to $5.7 million for the three months ended March 31, 2011, primarily as a result of an increase in material expenses and personnel costs. Research and development activity continues to focus on enhancing the performance of our internally manufactured components, refining production processes to improve manufacturing yields, the development of new products operating at different wavelengths and higher output powers and new complementary accessories to be used with our products. As a percentage of sales, research and development expense increased to 5.8% for the three months ended March 31, 2012 from 5.7% for the three months ended March 31, 2011. General and administrative expense. General and administrative expense increased by $1.8 million, or 21.8%, to $9.9 million for the three months ended March 31, 2012 from $8.2 million for the three months ended March 31, 2011, primarily due to legal and consulting expenses related to tax and transfer pricing analysis, higher bad debt expense, increased salaries and benefits as a result of increased headcount and increased travel expenses. As a percentage of sales, general and administrative expense decreased to 8.1% for the three months ended March 31, 2012 from 8.2% for the three months ended March 31, 2011. Net income attributable to IPG Photonics Corporation. Net income attributable to IPG Photonics Corporation increased by $6.8 million to $29.9 million for the three months ended March 31, 2012 compared to $23.1 million for the three months ended March 31, 2011. Net income attributable to IPG Photonics Corporation as a percentage of our net sales increased by 1.3 percentage points to 24.3% for the three months ended March 31, 2012 from 23.1% for the three months ended March 31, 2011 due to the factors described above.
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