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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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04-3444218
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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50 Old Webster Road, Oxford, Massachusetts
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01540
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(Address of principal executive offices)
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(Zip Code)
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Title of Class
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Name of Exchange on Which Registered
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Common Stock, Par Value $0.0001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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PART I
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ITEM 1.
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BUSINESS
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ITEM 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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PART II
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ITEM 5.
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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ITEM 6.
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SELECTED FINANCIAL DATA
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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ITEM 7A.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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ITEM 9A.
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CONTROLS AND PROCEDURES
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ITEM 9B.
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OTHER INFORMATION
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PART III
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 11.
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EXECUTIVE COMPENSATION
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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ITEM 14.
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PRINCIPAL ACCOUNTING FEES AND SERVICES
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PART IV
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||
ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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ITEM 16.
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FORM 10-K SUMMARY
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SIGNATURES
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||
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|
|
INDEX TO FINANCIAL STATEMENTS
|
F-
1
|
•
|
Superior Performance.
Fiber lasers provide uniform beam quality over the entire power range. In most conventional laser solutions, the beam quality is sensitive to output power, while in fiber lasers, the output beam is virtually non-divergent over a wide power range. A non-divergent beam enables higher levels of precision, increased power densities and the ability to deliver the beam over greater distances to where processing can be completed. The superior beam quality and greater intensity of a fiber laser's beam allow tasks to be accomplished more rapidly, with lower-power units and with greater flexibility than comparable conventional lasers.
|
•
|
Lower Cost.
The purchase price for fiber lasers is generally lower than that of YAG lasers and of many CO
2
lasers. In addition, fiber lasers are less expensive to operate due to their better energy efficiency, lower required maintenance costs and faster processing speeds. Fiber lasers convert electrical energy to optical energy approximately 2 to 3 times more efficiently than diode-pumped YAG lasers or disc lasers, approximately 3 to 4 times more efficiently than conventional CO
2
lasers and approximately 15 to 30 times more efficiently than lamp-pumped YAG lasers. Because fiber lasers are much more energy-efficient and place lower levels of thermal stress on their internal components, they have substantially lower cooling requirements compared to those of conventional lasers, which also improves overall energy efficiency. Fiber lasers have lower maintenance costs due to the high performance and long life of our single-emitter diodes, fiber optics and other optical components. The higher power density of the fiber laser beam also allows for higher processing speeds in many applications, which increases the operating efficiencies on a per-part basis.
|
•
|
Ease of Use.
Numerous features of fiber lasers make them easier to operate, maintain and integrate into laser-based systems as compared to conventional lasers, many of which require mirrors to direct the beam. There are no moving parts in fiber lasers and the beam is contained in a flexible fiber optic cable so they do not require adjustments of internal components or mirrors to direct the beam.
|
•
|
Compact Size.
Fiber lasers are typically smaller and lighter in weight than conventional lasers, saving valuable floor space. While conventional lasers are delicate due to the precise alignment of mirrors, fiber lasers are more durable and able to perform in variable environments.
|
•
|
Choice of Wavelengths and Precise Control of Beam.
The design of fiber lasers generally provides a broad range of wavelength choices, allowing users to select the precise wavelength that best matches their application and materials. As the beam is delivered through a flexible fiber optic cable, it can be directed to the work area over longer distances without loss of beam quality.
|
|
|
Heavy industry
|
|
• Hardening and welding pipes in nuclear and pipeline industries
• Welding and cutting thick plates for ships and rail cars
• Cladding of turbine blades for power generators and drill bits for energy extraction
|
|
|
|
|
|
|
|
Aerospace
|
|
• Welding titanium air frames
• Cladding parts
• Percussion drilling of parts
|
|
|
|
|
|
|
|
Consumer
|
|
• Cutting and marking parts for electronics and appliances
• Electronics and credit card marking
• Stent, pacemaker and medical device manufacturing
|
|
|
|
|
|
|
|
Semiconductor and electronics
|
|
• Computer disk manufacturing and texturing
• Photovoltaic manufacturing
• Memory repair and trim
|
|
|
|
|
|
Advanced Applications
|
|
• Obstacle warning and light detecting and ranging
• Special projects and research
• Directed energy demonstrations
• Laser cinema projection
|
||
|
|
|
|
|
Communications
|
|
• Short to ultra long reach, 1G to 100G+ DWDM for all network segments
• Broadband — fiber to premises, cable video signal transport
• Metro and long-haul wire-line DWDM transport
|
||
|
|
|
|
|
Medical
|
|
• Skin rejuvenation and wrinkle removal
• General surgery and urology
• Dental
|
Product Line
|
|
Principal Markets
|
|
Principal Applications
|
|
|
|
||
High-Power Ytterbium CW
(1,000 — 100,000 Watts)
|
|
Automotive
Heavy Industry
General Manufacturing
Natural Resources
Aerospace
|
|
• Cutting
• Welding
• Annealing
• Drilling
• Cladding
• Brazing
• 3D Printing
|
|
|
|
||
Mid-Power Ytterbium CW
(100 — 999 Watts)
|
|
General Manufacturing
Consumer
Medical Devices
Printing
Electronics
|
|
• Cutting
• Welding
• Scribing
• Engraving
• 3D printing
|
|
|
|
|
|
Pulsed Ytterbium
(0.1 to 200 Watts)
|
|
General Manufacturing
Semiconductor
Medical Devices
Consumer
Electronics
Panel Displays
|
|
• Marking
• Engraving
• Scribing
• Drilling
• Coating removal
• Cutting
|
|
|
|
||
Pulsed and CW
Green Lasers
|
|
Microprocessing and Semiconductor
Solar
General Manufacturing
|
|
• Annealing silicon wafers
• Thin film ablation
• Marking plastics
|
|
|
|
|
|
Quasi-CW Ytterbium
(100 — 4500 Watts)
|
|
Medical Device
Computer Components
Fine-Processing
|
|
• Welding and micro-welding
• Drilling
• Cutting metals and crystals
|
|
|
|
||
Erbium Amplifiers
|
|
Broadband Access
Cable TV
DWDM
Instrumentation
Scientific Research
|
|
• Telephony
• Video on demand
• High-speed internet
• Ultra-long-haul transmission
• Beam combining
|
|
|
|
|
|
Transceivers
|
|
Telecommunications
Cable TV
Data Center Networking
|
|
• SONET/SDH optical transport
• Ethernet switching
• IP routing
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|
|
|
|
|||||||||
Materials Processing
|
|
$
|
942,119
|
|
|
93.6
|
%
|
|
$
|
849,335
|
|
|
94.2
|
%
|
|
$
|
731,274
|
|
|
95.0
|
%
|
Other applications:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Advanced Applications
|
|
28,166
|
|
|
2.8
|
|
|
28,866
|
|
|
3.2
|
|
|
25,704
|
|
|
3.3
|
|
|||
Communications
|
|
28,823
|
|
|
2.9
|
|
|
14,399
|
|
|
1.6
|
|
|
8,523
|
|
|
1.1
|
|
|||
Medical
|
|
7,065
|
|
|
0.7
|
|
|
8,665
|
|
|
1.0
|
|
|
4,331
|
|
|
0.6
|
|
|||
Total other applications:
|
|
64,054
|
|
|
6.4
|
|
|
51,930
|
|
|
5.8
|
|
|
38,558
|
|
|
5.0
|
|
|||
Total
|
|
$
|
1,006,173
|
|
|
100.0
|
%
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
769,832
|
|
|
100.0
|
%
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|||||||||
United States and other North America (1)
|
|
$
|
141,184
|
|
|
14.0
|
%
|
|
$
|
131,525
|
|
|
14.6
|
%
|
|
$
|
113,233
|
|
|
14.7
|
%
|
Europe:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Germany
|
|
90,893
|
|
|
9.1
|
|
|
93,802
|
|
|
10.4
|
|
|
77,404
|
|
|
10.1
|
|
|||
Other including Eastern Europe/CIS
|
|
224,836
|
|
|
22.3
|
|
|
189,123
|
|
|
21.0
|
|
|
173,018
|
|
|
22.5
|
|
|||
Asia and Australia:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
China
|
|
358,476
|
|
|
35.7
|
|
|
311,946
|
|
|
34.7
|
|
|
245,102
|
|
|
31.9
|
|
|||
Japan
|
|
88,592
|
|
|
8.8
|
|
|
76,033
|
|
|
8.4
|
|
|
72,573
|
|
|
9.4
|
|
|||
Other
|
|
100,052
|
|
|
9.9
|
|
|
95,494
|
|
|
10.6
|
|
|
85,426
|
|
|
11.1
|
|
|||
Rest of World
|
|
2,140
|
|
|
0.2
|
|
|
3,342
|
|
|
0.3
|
|
|
3,076
|
|
|
0.3
|
|
|||
Total
|
|
$
|
1,006,173
|
|
|
100.0
|
%
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
769,832
|
|
|
100.0
|
%
|
•
|
maintaining a technological lead over competitors;
|
•
|
reducing component and final product costs compared to market prices available to competitors;
|
•
|
ensuring access to critical components, enabling us to better meet customer demands;
|
•
|
controlling performance, quality and consistency;
|
•
|
enabling rapid development and deployment of new products and technologies;
|
•
|
short lead times for customer deliveries; and
|
•
|
limiting the spread our trade secrets.
|
•
|
product performance and reliability;
|
•
|
quality and service support;
|
•
|
price and value to the customer;
|
•
|
ability to manufacture and deliver products on a timely basis;
|
•
|
ability to achieve qualification for and integration into OEM systems;
|
•
|
ability to meet customer specifications; and
|
•
|
ability to respond quickly to market demand and technological developments.
|
•
|
demonstrate the effectiveness of fiber lasers in new applications for materials processing, medical, communications or other applications such as cinema and projection;
|
•
|
successfully develop new product lines, such as UV, visible and ultra-fast fiber lasers, that extend our product line to address different applications than our current products;
|
•
|
increase our direct and indirect sales efforts;
|
•
|
effectively service and support our installed product base on a global basis;
|
•
|
effectively meet growing competition and pricing pressures; and
|
•
|
continue to reduce our manufacturing costs and enhance our competitive position.
|
•
|
fluctuations in the values of foreign currencies;
|
•
|
longer accounts receivable collection periods and less developed credit assessment and collection procedures;
|
•
|
changes in a specific country's or region's economic conditions, such as recession;
|
•
|
compliance with a wide variety of domestic and foreign laws and regulations and unexpected changes in those laws and regulatory requirements, including uncertainties regarding taxes, tariffs, quotas, export controls, export licenses and other trade barriers;
|
•
|
certification requirements;
|
•
|
environmental regulations;
|
•
|
less effective protection of intellectual property rights in some countries;
|
•
|
potentially adverse tax consequences;
|
•
|
different capital expenditure and budget cycles for our customers, which affect the timing of their spending;
|
•
|
political, legal and economic instability, foreign conflicts, labor unrest and the impact of regional and global infectious illnesses in the countries in which we and our customers, suppliers, manufacturers and subcontractors are located;
|
•
|
preference for locally produced products;
|
•
|
difficulties and costs of staffing and managing international operations across different geographic areas and cultures;
|
•
|
seasonal reductions in business activities;
|
•
|
fluctuations in freight rates and transportation disruptions;
|
•
|
investment restrictions or requirements;
|
•
|
repatriation restrictions or requirements;
|
•
|
export and import restrictions; and
|
•
|
limitations on the ability of our employees to travel without restriction to certain countries in which we operate.
|
•
|
the increase, decrease, cancellation or rescheduling of significant customer orders;
|
•
|
the timing of revenue recognition based on the installation or acceptance of certain products shipped to our customers;
|
•
|
seasonality attributable to different purchasing patterns and levels of activity throughout the year in the areas where we operate;
|
•
|
the timing of customer qualification of our products and commencement of volume sales of systems that include our products;
|
•
|
our ability to obtain export licenses for our products on a timely basis or at all;
|
•
|
the rate at which our present and future customers and end users adopt our technologies;
|
•
|
the gain or loss of a key customer;
|
•
|
product or customer mix;
|
•
|
competitive pricing pressures and new market entrants;
|
•
|
our ability to design, manufacture and introduce new products on a cost-effective and timely basis;
|
•
|
our ability to manage our inventory levels and any provisions for excess or obsolete inventory;
|
•
|
our ability to collect outstanding accounts receivable balances;
|
•
|
the incurrence of expenses to develop and improve application and support capabilities, the benefits of which may not be realized until future periods, if at all;
|
•
|
the incurrence of expenses related to impairment of values for goodwill, intangibles and other long-lived assets;
|
•
|
different capital expenditure and budget cycles for our customers, which affect the timing of their spending;
|
•
|
foreign currency fluctuations;
|
•
|
economic and market conditions in a particular geography or country; and
|
•
|
our ability to control expenses.
|
•
|
stop selling our products or using the technology that contains the allegedly infringing intellectual property;
|
•
|
pay actual monetary damages, royalties, lost profits or increased damages and the plaintiff's attorneys' fees, which individually or in the aggregate may be substantial; and
|
•
|
attempt to obtain a license to use the relevant intellectual property, which may not be available on reasonable terms or at all.
|
•
|
election of our directors;
|
•
|
amendment of our certificate of incorporation or by-laws; and
|
•
|
approval of mergers, consolidations or the sale of all or substantially all of our assets.
|
•
|
authorizing the issuance of "blank check" preferred stock;
|
•
|
establishing a classified board;
|
•
|
providing that directors may only be removed for cause;
|
•
|
prohibiting stockholder action by written consent;
|
•
|
limiting the persons who may call a special meeting of stockholders;
|
•
|
establishing advance notice requirements for nominations for election to the board of directors and for proposing matters to be submitted to a stockholder vote; and
|
•
|
supermajority stockholder approval to change these provisions.
|
Location
|
|
Owned or
Leased
|
|
Lease Expiration
|
|
Approximate
Size (sq. ft.)
|
|
Primary Activity
|
||
Oxford, Massachusetts
|
|
Owned
|
|
—
|
|
|
423,600
|
|
|
Diodes, components, complete device manufacturing, administration
|
Marlborough, Massachusetts
|
|
Owned
|
|
—
|
|
|
112,000
|
|
|
Manufacturing, administration
|
|
|
Owned
|
|
—
|
|
|
97,500
|
|
|
Components, administration
|
Burbach, Germany
|
|
Owned
|
|
—
|
|
|
303,300
|
|
|
Optical fiber, components, final assembly, complete device manufacturing, administration
|
Moscow Russia
|
|
Owned
|
|
—
|
|
|
51,500
|
|
|
Components, complete device manufacturing
|
Fryazino, Russia
|
|
Leased
|
|
September 2019
|
|
|
73,500
|
|
|
Components, complete device manufacturing
|
|
|
Owned
|
|
—
|
|
|
411,000
|
|
|
Optical fiber, components, complete device manufacturing, administration
|
Manchester, New Hampshire
|
|
Leased
|
|
March 2017
|
|
|
63,000
|
|
|
Components, complete device manufacturing, administration
|
Beijing, China
|
|
Owned
|
|
—
|
|
|
34,500
|
|
|
Administration, service
|
|
|
Leased
|
|
May 2019
|
|
|
20,100
|
|
|
Service
|
Shanghai, China
|
|
Leased
|
|
April 2019
|
|
|
20,000
|
|
|
Administration, service
|
Cerro Maggiore, Italy
|
|
Owned
|
|
—
|
|
|
33,000
|
|
|
Complete device manufacturing, administration
|
Daejeon, South Korea
|
|
Owned
|
|
—
|
|
|
24,000
|
|
|
Administration, service
|
Novi, Michigan
|
|
Owned
|
|
—
|
|
|
16,000
|
|
|
Administration, service
|
Santa Clara , California
|
|
Leased
|
|
December 2017
|
|
|
15,400
|
|
|
Components, complete device manufacturing, administration
|
Mountain View, California
|
|
Leased
|
|
August 2017
|
|
|
12,400
|
|
|
Components, administration
|
Yokohama, Japan
|
|
Owned
|
|
—
|
|
|
11,000
|
|
|
Administration, service
|
Sao Paolo, Brazil
|
|
Leased
|
|
November 2021
|
|
|
10,700
|
|
|
Administration, service
|
Chubu, Japan
|
|
Owned
|
|
—
|
|
|
10,300
|
|
|
Administration, service
|
Total sq.ft. occupied:
|
|
|
|
|
|
1,742,800
|
|
|
|
|
|
Common Stock
Price Range
|
||||||
|
|
High
|
|
Low
|
||||
First Quarter ended March 31, 2015
|
|
$
|
101.69
|
|
|
$
|
69.86
|
|
Second Quarter ended June 30, 2015
|
|
$
|
102.49
|
|
|
$
|
81.88
|
|
Third Quarter ended September 30, 2015
|
|
$
|
96.50
|
|
|
$
|
71.63
|
|
Fourth Quarter ended December 31, 2015
|
|
$
|
95.12
|
|
|
$
|
70.21
|
|
First Quarter ended March 31, 2016
|
|
$
|
98.26
|
|
|
$
|
73.55
|
|
Second Quarter ended June 30, 2016
|
|
$
|
102.90
|
|
|
$
|
76.22
|
|
Third Quarter ended September 30, 2016
|
|
$
|
88.76
|
|
|
$
|
76.64
|
|
Fourth Quarter ended December 31, 2016
|
|
$
|
102.46
|
|
|
$
|
81.00
|
|
|
|
5-Year Cumulative Total Return
|
||||||||||||||||||||||
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
||||||||||||
IPG Photonics Corporation (IPGP)
|
|
$
|
100.00
|
|
|
$
|
196.78
|
|
|
$
|
229.14
|
|
|
$
|
221.20
|
|
|
$
|
263.24
|
|
|
$
|
291.44
|
|
Nasdaq Composite (U.S. & Foreign)
|
|
$
|
100.00
|
|
|
$
|
115.91
|
|
|
$
|
160.32
|
|
|
$
|
181.80
|
|
|
$
|
192.21
|
|
|
$
|
206.63
|
|
Russell 3000 Index
|
|
$
|
100.00
|
|
|
$
|
113.98
|
|
|
$
|
149.25
|
|
|
$
|
164.85
|
|
|
$
|
162.42
|
|
|
$
|
179.34
|
|
Date
|
|
Total Number of
Shares (or Units)
Purchased
|
|
|
|
Average Price
Paid per Share
(or Unit)
|
|
Total Number of
Shares (or Units)
Purchased as Part
of Publicly
Announced Plans
or Programs
|
|
Maximum Number
(or Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs
|
|||||||
October 1, 2016 — October 31, 2016
|
|
36,069
|
|
|
(1),(2)
|
|
$
|
83.38
|
|
|
$
|
—
|
|
|
$
|
93,515
|
|
November 1, 2016 — November 30, 2016
|
|
3,979
|
|
|
(2)
|
|
96.73
|
|
|
—
|
|
|
93,130
|
|
|||
December 1, 2016 — December 31, 2016
|
|
22,451
|
|
|
(1),(2)
|
|
98.83
|
|
|
—
|
|
|
91,054
|
|
|||
Total
|
|
62,499
|
|
|
|
|
$
|
89.78
|
|
|
$
|
—
|
|
|
$
|
91,054
|
|
(1)
|
In 2012, our Board of Directors approved "withhold to cover" as a tax payment method for vesting of restricted stock awards for certain employees. Pursuant to the "withhold to cover" method, we withheld from such employees the shares noted in the table above to cover tax withholding related to the vesting of their awards. For the fourth quarter of
2016
, the Company withheld
1,525
shares at an average price of
$98.63
.
|
(2)
|
In July 2016, the Board of Directors authorized a share repurchase program (the "Program"). Under the Program, the Company's management is authorized to repurchase shares of common stock in an amount not to exceed the number of shares issued to employees and directors under its various employee and director equity compensation and employee stock purchase plans from January 1, 2016 through December 31, 2017. The Program limits aggregate share repurchases to no more than $100 million over a period ending June 30, 2018. For the fourth quarter of
2016
, the Company repurchased
60,974
shares of its common stock with an average price of
$89.56
per share in the open market. Since the beginning of the Program, the Company has purchased $8,946 in shares pursuant to the Program.
|
Plan Category
|
|
Number of Securities
to be Issued upon
Exercise of
Outstanding
Options, RSUs and PSUs
(a)
|
|
Weighted-Average
Exercise Price of
Outstanding
Options, RSUs and PSUs
(b)
|
|
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans
(Excluding Securities
Reflected in Column (a))
(c)
|
||||
Equity Compensation Plans Approved by Security Holders
|
|
2,485,528
|
|
|
$
|
64.51
|
|
|
4,707,611
|
|
Equity Compensation Plans Not Approved by Security Holders
|
|
—
|
|
|
|
|
—
|
|
||
Total
|
|
2,485,528
|
|
|
|
|
4,707,611
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Consolidated Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
1,006,173
|
|
|
$
|
901,265
|
|
|
$
|
769,832
|
|
|
$
|
648,034
|
|
|
$
|
562,528
|
|
Cost of sales
|
|
453,933
|
|
|
409,388
|
|
|
353,314
|
|
|
308,136
|
|
|
257,801
|
|
|||||
Gross profit
|
|
552,240
|
|
|
491,877
|
|
|
416,518
|
|
|
339,898
|
|
|
304,727
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
|
38,393
|
|
|
31,868
|
|
|
30,637
|
|
|
26,692
|
|
|
23,845
|
|
|||||
Research and development
|
|
78,552
|
|
|
63,334
|
|
|
53,403
|
|
|
41,660
|
|
|
31,401
|
|
|||||
General and administrative
|
|
66,486
|
|
|
57,192
|
|
|
55,338
|
|
|
50,863
|
|
|
39,231
|
|
|||||
Loss (gain) on foreign exchange
|
|
4,496
|
|
|
(2,560
|
)
|
|
(6,618
|
)
|
|
2,536
|
|
|
1,362
|
|
|||||
Total operating expenses
|
|
187,927
|
|
|
149,834
|
|
|
132,760
|
|
|
121,751
|
|
|
95,839
|
|
|||||
Operating income
|
|
364,313
|
|
|
342,043
|
|
|
283,758
|
|
|
218,147
|
|
|
208,888
|
|
|||||
Interest income (expense), net
|
|
1,304
|
|
|
(301
|
)
|
|
(77
|
)
|
|
(1
|
)
|
|
319
|
|
|||||
Other income (expense), net
|
|
948
|
|
|
(125
|
)
|
|
793
|
|
|
155
|
|
|
8
|
|
|||||
Income before provision for income taxes
|
|
366,565
|
|
|
341,617
|
|
|
284,474
|
|
|
218,301
|
|
|
209,215
|
|
|||||
Provision for income taxes
|
|
(105,849
|
)
|
|
(99,590
|
)
|
|
(84,029
|
)
|
|
(62,521
|
)
|
|
(61,471
|
)
|
|||||
Net income
|
|
260,716
|
|
|
242,027
|
|
|
200,445
|
|
|
155,780
|
|
|
147,744
|
|
|||||
Less: Net (loss) income attributable to noncontrolling interests
|
|
(36
|
)
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
2,740
|
|
|||||
Net income attributable to IPG Photonics Corporation
|
|
260,752
|
|
|
242,154
|
|
|
200,445
|
|
|
155,780
|
|
|
145,004
|
|
|||||
Net income attributable to common shareholders
|
|
$
|
260,752
|
|
|
$
|
242,154
|
|
|
$
|
200,445
|
|
|
$
|
155,780
|
|
|
$
|
145,004
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
4.91
|
|
|
$
|
4.60
|
|
|
$
|
3.85
|
|
|
$
|
3.02
|
|
|
$
|
2.87
|
|
Diluted
|
|
$
|
4.85
|
|
|
$
|
4.53
|
|
|
$
|
3.79
|
|
|
$
|
2.97
|
|
|
$
|
2.81
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
53,068
|
|
|
52,676
|
|
|
52,104
|
|
|
51,548
|
|
|
50,477
|
|
|||||
Diluted
|
|
53,797
|
|
|
53,427
|
|
|
52,824
|
|
|
52,375
|
|
|
51,536
|
|
|||||
Dividends per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.65
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
623,855
|
|
|
$
|
582,532
|
|
|
$
|
522,150
|
|
|
$
|
448,776
|
|
|
$
|
384,053
|
|
Short-term investments
|
|
206,779
|
|
|
106,584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Working capital, excluding cash and cash equivalents and short-term investments (1)
|
|
312,053
|
|
|
271,683
|
|
|
237,546
|
|
|
225,365
|
|
|
152,334
|
|
|||||
Total assets
|
|
1,789,999
|
|
|
1,453,429
|
|
|
1,210,887
|
|
|
1,061,216
|
|
|
895,498
|
|
|||||
Revolving line-of-credit facilities
|
|
—
|
|
|
—
|
|
|
2,631
|
|
|
3,296
|
|
|
2,442
|
|
|||||
Long-term debt, including current portion
|
|
40,823
|
|
|
19,667
|
|
|
33,000
|
|
|
12,666
|
|
|
15,519
|
|
|||||
Noncontrolling interests and redeemable noncontrolling interests
|
|
166
|
|
|
1,137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
IPG Photonics Corporation equity
|
|
1,557,558
|
|
|
1,259,528
|
|
|
1,046,561
|
|
|
927,969
|
|
|
742,927
|
|
(1)
|
While applying the provisions of Accounting Standards Update ("ASU") No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" (ASU 2015-17), retrospectively, the adoption of this standard resulted in the reclassification of short-term deferred tax assets and short-term deferred tax liabilities to be long-term. The effect reduced the working capital for the years ended December 31, 2015, 2014, 2013 and 2012 by
$17.2 million
,
$12.1 million
,
$12.1 million
, and
$3.1 million
, respectively from the originally reported amounts.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of sales
|
|
$
|
6,018
|
|
|
$
|
5,316
|
|
|
$
|
4,153
|
|
Sales and marketing
|
|
1,820
|
|
|
1,998
|
|
|
1,567
|
|
|||
Research and development
|
|
4,905
|
|
|
4,049
|
|
|
3,033
|
|
|||
General and administrative
|
|
8,991
|
|
|
7,626
|
|
|
6,419
|
|
|||
Total stock-based compensation
|
|
21,734
|
|
|
18,989
|
|
|
15,172
|
|
|||
Tax benefit recognized
|
|
(6,971
|
)
|
|
(6,141
|
)
|
|
(4,865
|
)
|
|||
Net stock-based compensation
|
|
$
|
14,763
|
|
|
$
|
12,848
|
|
|
$
|
10,307
|
|
|
|
Year Ended December 31,
|
||||
|
|
2016
|
|
2015
|
|
2014
|
Expected term
|
|
4.4-6.1 years
|
|
4.4-6.3 years
|
|
4.7-6.1 years
|
Volatility
|
|
37%-45%
|
|
45%-48%
|
|
48%-51%
|
Risk-free rate of return
|
|
1.06%-1.41%
|
|
1.38%-1.74%
|
|
1.46%-1.84%
|
Dividend yield
|
|
0.25%
|
|
0.25%
|
|
0.25%
|
Forfeiture rate
|
|
2.65%-5.26%
|
|
3.47%-5.88%
|
|
3.04%-5.86%
|
|
|
Year Ended December 31,
|
||
|
|
2016
|
|
2015
|
Expected term
|
|
3.0 years
|
|
3.2 years
|
Volatility
|
|
13%-32%
|
|
12%-36%
|
Risk-free rate of return
|
|
0.88%
|
|
0.98%
|
Dividend yield
|
|
—%
|
|
—%
|
Weighted-average fair value per share
|
|
88.51
|
|
128.42
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
|
(In thousands, except percentages and per share data)
|
|||||||||||||||||||
Net sales
|
|
$
|
1,006,173
|
|
|
100.0
|
%
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
769,832
|
|
|
100.0
|
%
|
Cost of sales
|
|
453,933
|
|
|
45.1
|
|
|
409,388
|
|
|
45.4
|
|
|
353,314
|
|
|
45.9
|
|
|||
Gross profit
|
|
552,240
|
|
|
54.9
|
|
|
491,877
|
|
|
54.6
|
|
|
416,518
|
|
|
54.1
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
38,393
|
|
|
3.8
|
|
|
31,868
|
|
|
3.5
|
|
|
30,637
|
|
|
4.0
|
|
|||
Research and development
|
|
78,552
|
|
|
7.8
|
|
|
63,334
|
|
|
7.0
|
|
|
53,403
|
|
|
6.9
|
|
|||
General and administrative
|
|
66,486
|
|
|
6.6
|
|
|
57,192
|
|
|
6.3
|
|
|
55,338
|
|
|
7.2
|
|
|||
Loss (gain) on foreign exchange
|
|
4,496
|
|
|
0.4
|
|
|
(2,560
|
)
|
|
(0.3
|
)
|
|
(6,618
|
)
|
|
(0.9
|
)
|
|||
Total operating expenses
|
|
187,927
|
|
|
18.7
|
|
|
149,834
|
|
|
16.6
|
|
|
132,760
|
|
|
17.2
|
|
|||
Operating income
|
|
364,313
|
|
|
36.2
|
|
|
342,043
|
|
|
38.0
|
|
|
283,758
|
|
|
36.9
|
|
|||
Interest income (expense), net
|
|
1,304
|
|
|
0.1
|
|
|
(301
|
)
|
|
—
|
|
|
(77
|
)
|
|
—
|
|
|||
Other income (expense), net
|
|
948
|
|
|
0.1
|
|
|
(125
|
)
|
|
—
|
|
|
793
|
|
|
0.1
|
|
|||
Income before provision for income taxes
|
|
366,565
|
|
|
36.4
|
|
|
341,617
|
|
|
37.9
|
|
|
284,474
|
|
|
37.0
|
|
|||
Provision for income taxes
|
|
(105,849
|
)
|
|
(10.5
|
)
|
|
(99,590
|
)
|
|
(11.1
|
)
|
|
(84,029
|
)
|
|
(10.9
|
)
|
|||
Net income
|
|
260,716
|
|
|
25.9
|
|
|
242,027
|
|
|
26.9
|
|
|
200,445
|
|
|
26.0
|
|
|||
Less: Net loss attributable to noncontrolling interest
|
|
(36
|
)
|
|
—
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to IPG Photonics Corporation
|
|
$
|
260,752
|
|
|
25.9
|
%
|
|
$
|
242,154
|
|
|
26.9
|
%
|
|
$
|
200,445
|
|
|
26.0
|
%
|
Net income attributable to IPG Photonics Corporation per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
$
|
4.91
|
|
|
|
|
$
|
4.60
|
|
|
|
|
$
|
3.85
|
|
|
|
|||
Diluted
|
|
$
|
4.85
|
|
|
|
|
$
|
4.53
|
|
|
|
|
$
|
3.79
|
|
|
|
|||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
53,068
|
|
|
|
|
52,676
|
|
|
|
|
52,104
|
|
|
|
||||||
Diluted
|
|
53,797
|
|
|
|
|
53,427
|
|
|
|
|
52,824
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|||||||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|
|
|
|
|||||||||
Materials Processing
|
|
$
|
942,119
|
|
|
93.6
|
%
|
|
$
|
849,335
|
|
|
94.2
|
%
|
|
$
|
92,784
|
|
|
10.9
|
%
|
Other Applications
|
|
64,054
|
|
|
6.4
|
%
|
|
51,930
|
|
|
5.8
|
%
|
|
12,124
|
|
|
23.3
|
%
|
|||
Total
|
|
$
|
1,006,173
|
|
|
100.0
|
%
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
104,908
|
|
|
11.6
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|||||||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|
|
|
|
|||||||||
High-Power CW Lasers
|
|
$
|
578,668
|
|
|
57.5
|
%
|
|
$
|
499,643
|
|
|
55.4
|
%
|
|
$
|
79,025
|
|
|
15.8
|
%
|
Medium-Power CW Lasers
|
|
98,855
|
|
|
9.8
|
%
|
|
99,452
|
|
|
11.0
|
%
|
|
(597
|
)
|
|
(0.6
|
)%
|
|||
Low-Power CW Lasers
|
|
12,788
|
|
|
1.3
|
%
|
|
13,761
|
|
|
1.5
|
%
|
|
(973
|
)
|
|
(7.1
|
)%
|
|||
Pulsed Lasers
|
|
128,971
|
|
|
12.8
|
%
|
|
124,824
|
|
|
13.8
|
%
|
|
4,147
|
|
|
3.3
|
%
|
|||
QCW Lasers
|
|
48,612
|
|
|
4.8
|
%
|
|
56,506
|
|
|
6.3
|
%
|
|
(7,894
|
)
|
|
(14.0
|
)%
|
|||
Other Revenue including Amplifiers, Laser Systems, Service, Parts, Accessories and Change in Deferred Revenue
|
|
138,279
|
|
|
13.7
|
%
|
|
107,079
|
|
|
11.9
|
%
|
|
31,200
|
|
|
29.1
|
%
|
|||
Total
|
|
$
|
1,006,173
|
|
|
100.0
|
%
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
104,908
|
|
|
11.6
|
%
|
•
|
The increase in high-power laser sales related to growth in cutting, cladding, laser sintering, heat treatment and annealing applications partially offset by a decline in surface patterning and automotive related welding applications and decreases in average selling prices. High-power lasers are continuing to displace CO2 lasers in cutting systems sold by our OEM customers. We are also seeing increased use of high-power lasers for deposition applications like cladding and laser sintering which is used in additive manufacturing. Our cutting and additive manufacturing OEM customers are producing systems using lasers with higher output powers in order to improve the speed with which parts are cut and grown.
|
•
|
The decrease in medium-power sales related to fine cutting applications partially offset by a higher demand for medium-power lasers used for fine welding, sintering and ablation applications. In part the increase in sintering applications transitioned to high-power lasers because our additive manufacturing OEM customers are increasingly using high-power lasers instead of medium-power lasers in their systems. While the number of units shipped of medium-power lasers increased, this increase was offset by declines in average selling prices.
|
•
|
Low-power laser sales decreased due to lower sales for medical applications.
|
•
|
Pulsed laser sales increased due to higher demand for ablation and cleaning and stripping applications. Marking and engraving applications, which is the largest application for pulsed lasers, was relatively flat. Within the pulsed laser category, increased sales of high-power pulsed lasers and green pulsed lasers were partially offset by decreased sales of pulsed lasers with lower average power.
|
•
|
QCW laser sales decreased due to lower demand for fine cutting from consumer electronics applications partially offset by increased sales for welding and drilling applications.
|
•
|
Materials processing sales also increased as a result of higher sales and service related sales which are included in above.
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|
|
|
|
|||||||||
Materials Processing
|
|
$
|
849,335
|
|
|
94.2
|
%
|
|
$
|
731,274
|
|
|
95.0
|
%
|
|
$
|
118,061
|
|
|
16.1
|
%
|
Other Applications
|
|
51,930
|
|
|
5.8
|
%
|
|
38,558
|
|
|
5.0
|
%
|
|
13,372
|
|
|
34.7
|
%
|
|||
Total
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
769,832
|
|
|
100.0
|
%
|
|
$
|
131,433
|
|
|
17.1
|
%
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
|
|
|
|
|||||||||
High-Power CW Lasers
|
|
$
|
499,643
|
|
|
55.4
|
%
|
|
$
|
426,074
|
|
|
55.3
|
%
|
|
$
|
73,569
|
|
|
17.3
|
%
|
Medium-Power CW Lasers
|
|
99,452
|
|
|
11.0
|
%
|
|
80,971
|
|
|
10.5
|
%
|
|
18,481
|
|
|
22.8
|
%
|
|||
Low-Power CW Lasers
|
|
13,761
|
|
|
1.5
|
%
|
|
13,174
|
|
|
1.7
|
%
|
|
587
|
|
|
4.5
|
%
|
|||
Pulsed Lasers
|
|
124,824
|
|
|
13.8
|
%
|
|
131,593
|
|
|
17.1
|
%
|
|
(6,769
|
)
|
|
(5.1
|
)%
|
|||
QCW Lasers
|
|
56,506
|
|
|
6.3
|
%
|
|
34,881
|
|
|
4.5
|
%
|
|
21,625
|
|
|
62.0
|
%
|
|||
Other Revenue including Amplifiers, Laser Systems, Service, Parts, Accessories and Change in Deferred Revenue
|
|
107,079
|
|
|
11.9
|
%
|
|
83,139
|
|
|
10.8
|
%
|
|
23,940
|
|
|
28.8
|
%
|
|||
Total
|
|
$
|
901,265
|
|
|
100.0
|
%
|
|
$
|
769,832
|
|
|
100.0
|
%
|
|
$
|
131,433
|
|
|
17.1
|
%
|
•
|
High-power laser sales increased due to increased demand for cutting, welding and surface structuring applications.
|
•
|
Medium-power laser sales increased due to increased demand for laser sintering/3D manufacturing and thin material cutting and welding applications.
|
|
|
|
|
|
|
|
|
|
Description
|
|
Available Principal
|
|
Interest Rate
|
|
Maturity
|
|
Security
|
U.S. Revolving Line of Credit (1)
|
|
Up to $50.0 million
|
|
LIBOR plus 0.80% to 1.20%, depending on our performance
|
|
April 2020
|
|
Unsecured
|
Euro Credit Facilities (Germany) (2)
|
|
Euro 30.0 million ($31.5 million)
|
|
Euribor + 1.00% or EONIA 1.25%
|
|
July 2017
|
|
Unsecured, guaranteed by parent company and Germany subsidiary
|
Euro Overdraft Facilities (3)
|
|
Euro 2.0 million
($2.1 million) |
|
1.0%-6.5%
|
|
October 2017
|
|
Common pool of assets of Italian subsidiary
|
(1)
|
This facility is available to certain foreign subsidiaries in their respective local currencies. At
December 31, 2016
, there were no amounts drawn on this line, however, there were
$0.2 million
of guarantees issued against the line which reduces total availability.
|
(2)
|
This facility is available to certain foreign subsidiaries in their respective local currencies. At
December 31, 2016
, there were no drawings, however, there were
$12.0 million
of guarantees issued against the line which reduces total availability.
|
(3)
|
At
December 31, 2016
, there were no drawings.
|
•
|
An increase in cash provided by net income after adding back non-cash charges of
$372.5 million
in
2016
as compared to
$331.3 million
in
2015
;
|
•
|
A smaller increase in cash used by accounts receivable of
$11.4 million
in
2016
as compared to
$19.0 million
in
2015
due to a decrease in days sales outstanding;
|
•
|
A smaller increase in cash used by inventory of
$53.6 million
in
2016
as compared to
$70.6 million
in
2015
due to a decrease in days inventory on hand; partially offset by
|
•
|
An increase in cash paid for income taxes. Cash used for income and other taxes payable was
$10.7 million
in 2016 while cash provided by income and other taxes payable was
$9.5 million
in 2015.
|
|
|
Payments Due in
|
||||||||||||||||||
|
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Operating lease obligations
|
|
$
|
11,228
|
|
|
$
|
4,188
|
|
|
$
|
4,807
|
|
|
$
|
1,552
|
|
|
$
|
681
|
|
Purchase obligations
|
|
33,072
|
|
|
20,664
|
|
|
12,408
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt obligations (including interest)(1)
|
|
43,182
|
|
|
3,732
|
|
|
20,519
|
|
|
18,931
|
|
|
—
|
|
|||||
Total(2)
|
|
$
|
87,482
|
|
|
$
|
28,584
|
|
|
$
|
37,734
|
|
|
$
|
20,483
|
|
|
$
|
681
|
|
(1)
|
Interest for long-term debt obligations was calculated including the effect of our fixed rate amounts. The weighted average fixed rate amount was
2.83%
|
(2)
|
Excludes obligations related to ASC 740, reserves for uncertain tax positions, because we are unable to provide a reasonable estimate of the timing of future payments relating to the remainder of these obligations. See Note 14 to the Consolidated Financial Statements.
|
This information is incorporated by reference from pages
|
F-
1
|
through
|
F-25
|
of this report.
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
(1)
|
Financial Statements.
|
(2)
|
Financial Statement Schedules.
|
(3)
|
The exhibits listed in the "Index to Exhibits" preceding the Exhibits attached hereto are filed with this Form 10-K or incorporated by reference as set forth therein.
|
(b)
|
Exhibits.
|
(c)
|
Additional Financial Statement Schedules.
|
|
|
IPG P
HOTONICS
C
ORPORATION
|
|
|
|
By:
|
/s/ Valentin P. Gapontsev
|
|
Valentin P. Gapontsev
Chief Executive Officer and
Chairman of the Board
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
|
||
/s/ Valentin P. Gapontsev
Valentin P. Gapontsev
|
|
Chief Executive Officer, Chairman of the Board and Director (Principal Executive Officer)
|
|
February 27, 2017
|
|
|
|
||
/s/ Timothy P.V. Mammen
Timothy P.V. Mammen
|
|
Senior Vice President, Chief Financial Officer (Principal Financial Officer)
|
|
February 27, 2017
|
|
|
|
||
/s/ Thomas J. Burgomaster
Thomas J. Burgomaster
|
|
Vice President, Corporate Controller (Principal Accounting Officer)
|
|
February 27, 2017
|
|
|
|
|
|
/s/ Michael C. Child
Michael C. Child
|
|
Director
|
|
February 27, 2017
|
|
|
|
||
/s/ Henry E. Gauthier
Henry E. Gauthier
|
|
Director
|
|
February 27, 2017
|
|
|
|
||
/s/ William S. Hurley
William S. Hurley
|
|
Director
|
|
February 27, 2017
|
|
|
|
|
|
/s/ Catherine P. Lego
Catherine P. Lego
|
|
Director
|
|
February 27, 2017
|
|
|
|
||
/s/ Eric Meurice
Eric Meurice
|
|
Director
|
|
February 27, 2017
|
|
|
|
||
/s/ John Peeler
John Peeler
|
|
Director
|
|
February 27, 2017
|
|
|
|
||
/s/ Igor Samartsev
Igor Samartsev
|
|
Director
|
|
February 27, 2017
|
|
|
|
||
/s/ Eugene Scherbakov
Eugene Scherbakov
|
|
Director
|
|
February 27, 2017
|
|
|
|
|
|
/s/ Thomas J. Seifert
Thomas J. Seifert
|
|
Director
|
|
February 27, 2017
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
F-
2
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
|
F-
3
|
|
Consolidated Statements of Income for the Years Ended December 31, 2016, 2015 and 2014
|
|
|
F-
4
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2016, 2015 and 2014
|
|
|
F-
5
|
|
Consolidated Statements of Equity for the Years Ended December 31, 2016, 2015 and 2014
|
|
|
F-
6
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014
|
|
|
F-
7
|
|
Notes to Consolidated Financial Statements
|
|
|
F-
8
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per share data)
|
||||||||||
NET SALES
|
$
|
1,006,173
|
|
|
$
|
901,265
|
|
|
$
|
769,832
|
|
COST OF SALES
|
453,933
|
|
|
409,388
|
|
|
353,314
|
|
|||
GROSS PROFIT
|
552,240
|
|
|
491,877
|
|
|
416,518
|
|
|||
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Sales and marketing
|
38,393
|
|
|
31,868
|
|
|
30,637
|
|
|||
Research and development
|
78,552
|
|
|
63,334
|
|
|
53,403
|
|
|||
General and administrative
|
66,486
|
|
|
57,192
|
|
|
55,338
|
|
|||
Loss (gain) on foreign exchange
|
4,496
|
|
|
(2,560
|
)
|
|
(6,618
|
)
|
|||
Total operating expenses
|
187,927
|
|
|
149,834
|
|
|
132,760
|
|
|||
OPERATING INCOME
|
364,313
|
|
|
342,043
|
|
|
283,758
|
|
|||
OTHER INCOME (EXPENSE), Net:
|
|
|
|
|
|
||||||
Interest income (expense), net
|
1,304
|
|
|
(301
|
)
|
|
(77
|
)
|
|||
Other income (expense), net
|
948
|
|
|
(125
|
)
|
|
793
|
|
|||
Total other income (expense)
|
2,252
|
|
|
(426
|
)
|
|
716
|
|
|||
INCOME BEFORE PROVISION FOR INCOME TAXES
|
366,565
|
|
|
341,617
|
|
|
284,474
|
|
|||
PROVISION FOR INCOME TAXES
|
(105,849
|
)
|
|
(99,590
|
)
|
|
(84,029
|
)
|
|||
NET INCOME
|
260,716
|
|
|
242,027
|
|
|
200,445
|
|
|||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
(36
|
)
|
|
(127
|
)
|
|
—
|
|
|||
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION
|
$
|
260,752
|
|
|
$
|
242,154
|
|
|
$
|
200,445
|
|
NET INCOME ATTRIBUTABLE TO IPG PHOTONICS CORPORATION PER SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.91
|
|
|
$
|
4.60
|
|
|
$
|
3.85
|
|
Diluted
|
$
|
4.85
|
|
|
$
|
4.53
|
|
|
$
|
3.79
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
|
|
|
|
|
||||||
Basic
|
53,068
|
|
|
52,676
|
|
|
52,104
|
|
|||
Diluted
|
53,797
|
|
|
53,427
|
|
|
52,824
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Net income
|
$
|
260,716
|
|
|
$
|
242,027
|
|
|
$
|
200,445
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Translation adjustments
|
3,163
|
|
|
(69,314
|
)
|
|
(110,734
|
)
|
|||
Unrealized gain on derivatives
|
49
|
|
|
95
|
|
|
172
|
|
|||
Unrealized loss on available-for-sale investments
|
(298
|
)
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive income (loss)
|
2,914
|
|
|
(69,219
|
)
|
|
(110,562
|
)
|
|||
Comprehensive income
|
263,630
|
|
|
172,808
|
|
|
89,883
|
|
|||
Comprehensive (loss) income attributable to noncontrolling interest
|
(21
|
)
|
|
(442
|
)
|
|
—
|
|
|||
Comprehensive income attributable to IPG Photonics Corporation
|
$
|
263,651
|
|
|
$
|
173,250
|
|
|
$
|
89,883
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|||||||||
COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
52,883,902
|
|
|
$
|
5
|
|
|
52,369,688
|
|
|
$
|
5
|
|
|
51,930,978
|
|
|
$
|
5
|
|
Exercise of stock options
|
430,930
|
|
|
—
|
|
|
477,785
|
|
|
—
|
|
|
402,647
|
|
|
—
|
|
|||
Common stock issued under employee stock purchase plan
|
39,747
|
|
|
—
|
|
|
36,429
|
|
|
—
|
|
|
36,063
|
|
|
—
|
|
|||
Purchased common stock
|
(102,774
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of period
|
53,251,805
|
|
|
5
|
|
|
52,883,902
|
|
|
5
|
|
|
52,369,688
|
|
|
5
|
|
|||
TREASURY STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchased treasury stock
|
(102,774
|
)
|
|
(8,946
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of period
|
(102,774
|
)
|
|
(8,946
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
|
607,649
|
|
|
|
|
567,617
|
|
|
|
|
538,908
|
|
||||||
Stock-based compensation
|
|
|
21,734
|
|
|
|
|
18,989
|
|
|
|
|
15,172
|
|
||||||
Exercise of stock options and related tax benefit from exercise
|
|
|
18,889
|
|
|
|
|
18,582
|
|
|
|
|
11,428
|
|
||||||
Common stock issued under employee stock purchase plan
|
|
|
2,702
|
|
|
|
|
2,461
|
|
|
|
|
2,109
|
|
||||||
Balance, end of period
|
|
|
650,974
|
|
|
|
|
607,649
|
|
|
|
|
567,617
|
|
||||||
RETAINED EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
|
833,356
|
|
|
|
|
591,202
|
|
|
|
|
390,757
|
|
||||||
Net income attributable to IPG Photonics Corporation
|
|
|
260,752
|
|
|
|
|
242,154
|
|
|
|
|
200,445
|
|
||||||
Balance, end of period
|
|
|
1,094,108
|
|
|
|
|
833,356
|
|
|
|
|
591,202
|
|
||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
|
(181,482
|
)
|
|
|
|
(112,263
|
)
|
|
|
|
(1,701
|
)
|
||||||
Translation adjustments
|
|
|
3,148
|
|
|
|
|
(69,314
|
)
|
|
|
|
(110,734
|
)
|
||||||
Unrealized gain on derivatives, net of tax
|
|
|
49
|
|
|
|
|
95
|
|
|
|
|
172
|
|
||||||
Unrealized loss on available-for-sale investments, net of tax
|
|
|
(298
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Balance, end of period
|
|
|
(178,583
|
)
|
|
|
|
(181,482
|
)
|
|
|
|
(112,263
|
)
|
||||||
TOTAL IPG PHOTONICS CORPORATION EQUITY
|
|
1,557,558
|
|
|
|
|
1,259,528
|
|
|
|
|
1,046,561
|
|
|||||||
NONCONTROLLING INTERESTS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, beginning of year
|
|
|
1,137
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Purchase of NCI
|
|
|
(950
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Attribution to NCI
|
|
|
—
|
|
|
|
|
1,579
|
|
|
|
|
—
|
|
||||||
Net loss attributable to NCI
|
|
|
(36
|
)
|
|
|
|
(127
|
)
|
|
|
|
—
|
|
||||||
Other comprehensive income (loss) attributable to NCI
|
|
|
15
|
|
|
|
|
(315
|
)
|
|
|
|
—
|
|
||||||
Balance, end of period
|
|
|
166
|
|
|
|
|
1,137
|
|
|
|
|
—
|
|
||||||
TOTAL EQUITY
|
|
|
$
|
1,557,724
|
|
|
|
|
$
|
1,260,665
|
|
|
|
|
$
|
1,046,561
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
|
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
260,716
|
|
|
$
|
242,027
|
|
|
$
|
200,445
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
51,475
|
|
|
42,415
|
|
|
35,612
|
|
|||
Deferred income taxes
|
(12,908
|
)
|
|
(7,153
|
)
|
|
(1,486
|
)
|
|||
Stock-based compensation
|
21,734
|
|
|
18,989
|
|
|
15,172
|
|
|||
Unrealized losses (gains) on foreign currency transactions
|
2,298
|
|
|
(5,491
|
)
|
|
(3,497
|
)
|
|||
Other
|
2,724
|
|
|
510
|
|
|
459
|
|
|||
Provisions for inventory, warranty and bad debt
|
46,469
|
|
|
39,985
|
|
|
28,036
|
|
|||
Changes in assets and liabilities that (used) provided cash, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(11,444
|
)
|
|
(19,036
|
)
|
|
(48,518
|
)
|
|||
Inventories
|
(53,626
|
)
|
|
(70,565
|
)
|
|
(42,246
|
)
|
|||
Prepaid expenses and other current assets
|
(4,069
|
)
|
|
1,853
|
|
|
(5,351
|
)
|
|||
Accounts payable
|
(407
|
)
|
|
9,806
|
|
|
3,262
|
|
|||
Accrued expenses and other liabilities
|
5,480
|
|
|
613
|
|
|
(1,567
|
)
|
|||
Income and other taxes payable
|
(10,746
|
)
|
|
9,529
|
|
|
5,763
|
|
|||
Tax benefit from exercise of employee stock options
|
(5,408
|
)
|
|
(6,911
|
)
|
|
(5,979
|
)
|
|||
Net cash provided by operating activities
|
292,288
|
|
|
256,571
|
|
|
180,105
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(127,042
|
)
|
|
(70,119
|
)
|
|
(88,601
|
)
|
|||
Purchase of intangible assets
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
658
|
|
|
164
|
|
|
434
|
|
|||
Proceeds from short-term investments
|
198,808
|
|
|
—
|
|
|
—
|
|
|||
Purchases of short-term investments
|
(299,508
|
)
|
|
(106,747
|
)
|
|
—
|
|
|||
Acquisition of businesses
|
(47,792
|
)
|
|
(4,958
|
)
|
|
—
|
|
|||
Other
|
468
|
|
|
93
|
|
|
87
|
|
|||
Net cash used in investing activities
|
(274,408
|
)
|
|
(181,567
|
)
|
|
(90,080
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from line-of-credit facilities
|
7,992
|
|
|
12,887
|
|
|
33,282
|
|
|||
Payments on line-of-credit facilities
|
(7,992
|
)
|
|
(15,227
|
)
|
|
(33,623
|
)
|
|||
Purchase of noncontrolling interests
|
(950
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds on long-term borrowings
|
23,750
|
|
|
—
|
|
|
—
|
|
|||
Principal payments on long-term borrowings
|
(2,594
|
)
|
|
(13,333
|
)
|
|
(1,667
|
)
|
|||
Exercise of employee stock options and issuances under employee stock purchase plan
|
16,183
|
|
|
14,132
|
|
|
7,558
|
|
|||
Tax benefit from exercise of employee stock options
|
5,408
|
|
|
6,911
|
|
|
5,979
|
|
|||
Purchase of Treasury Stock, at cost
|
(8,946
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
32,851
|
|
|
5,370
|
|
|
11,529
|
|
|||
EFFECT OF CHANGES IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
|
(9,408
|
)
|
|
(19,992
|
)
|
|
(28,180
|
)
|
|||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
41,323
|
|
|
60,382
|
|
|
73,374
|
|
|||
CASH AND CASH EQUIVALENTS — Beginning of period
|
582,532
|
|
|
522,150
|
|
|
448,776
|
|
|||
CASH AND CASH EQUIVALENTS — End of period
|
$
|
623,855
|
|
|
$
|
582,532
|
|
|
$
|
522,150
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
942
|
|
|
$
|
873
|
|
|
$
|
253
|
|
Cash paid for income taxes
|
$
|
126,964
|
|
|
$
|
91,329
|
|
|
$
|
73,544
|
|
Non-cash transactions:
|
|
|
|
|
|
||||||
Demonstration units transferred from inventory to other assets
|
$
|
6,293
|
|
|
$
|
3,181
|
|
|
$
|
3,528
|
|
Property, plant and equipment transferred from inventory
|
$
|
4,529
|
|
|
$
|
2,951
|
|
|
$
|
1,551
|
|
Additions to property, plant and equipment included in accounts payable
|
$
|
973
|
|
|
$
|
350
|
|
|
$
|
1,084
|
|
Property purchase financed with debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,000
|
|
Category
|
|
Economic
Useful Life
|
|
|
Buildings
|
|
30 years
|
|
|
Machinery and equipment
|
|
5-12 years
|
|
|
Office furniture and fixtures
|
|
3-5 years
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1
|
|
$
|
1,811
|
|
|
$
|
1,890
|
|
|
$
|
2,473
|
|
Provision for bad debts, net of recoveries
|
|
111
|
|
|
427
|
|
|
579
|
|
|||
Uncollectable accounts written off
|
|
(76
|
)
|
|
(114
|
)
|
|
(617
|
)
|
|||
Foreign currency translation
|
|
170
|
|
|
(392
|
)
|
|
(545
|
)
|
|||
Balance at December 31
|
|
$
|
2,016
|
|
|
$
|
1,811
|
|
|
$
|
1,890
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1
|
|
$
|
28,210
|
|
|
$
|
19,272
|
|
|
$
|
14,997
|
|
Provision for warranty accrual
|
|
22,483
|
|
|
22,808
|
|
|
15,449
|
|
|||
Warranty claims
|
|
(16,220
|
)
|
|
(12,208
|
)
|
|
(9,165
|
)
|
|||
Foreign currency translation and other
|
|
(495
|
)
|
|
(1,662
|
)
|
|
(2,009
|
)
|
|||
Balance at December 31
|
|
$
|
33,978
|
|
|
$
|
28,210
|
|
|
$
|
19,272
|
|
|
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
179,699
|
|
|
$
|
179,699
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
206,616
|
|
|
206,616
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap
|
77
|
|
|
—
|
|
|
77
|
|
|
—
|
|
||||
Auction rate securities
|
1,144
|
|
|
—
|
|
|
—
|
|
|
1,144
|
|
||||
Total assets
|
$
|
387,536
|
|
|
$
|
386,315
|
|
|
$
|
77
|
|
|
$
|
1,144
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Long-term notes
|
$
|
41,351
|
|
|
$
|
—
|
|
|
$
|
41,351
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
41,351
|
|
|
$
|
—
|
|
|
$
|
41,351
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||
|
|
|
|||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
214,232
|
|
|
$
|
214,232
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments
|
106,375
|
|
|
106,375
|
|
|
—
|
|
|
—
|
|
||||
Auction rate securities
|
1,136
|
|
|
—
|
|
|
—
|
|
|
1,136
|
|
||||
Total assets
|
$
|
321,743
|
|
|
$
|
320,607
|
|
|
$
|
—
|
|
|
$
|
1,136
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Long-term notes
|
$
|
19,667
|
|
|
$
|
19,667
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contingent purchase consideration
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Total liabilities
|
$
|
19,687
|
|
|
$
|
19,667
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Auction Rate Securities
|
|
|
|
|
|
|
||||||
Balance, January 1
|
|
$
|
1,136
|
|
|
$
|
1,128
|
|
|
$
|
1,120
|
|
Period transactions
|
|
8
|
|
|
8
|
|
|
8
|
|
|||
Balance, December 31
|
|
$
|
1,144
|
|
|
$
|
1,136
|
|
|
$
|
1,128
|
|
Contingent Purchase Consideration
|
|
|
|
|
|
|
||||||
Balance, January 1
|
|
$
|
20
|
|
|
$
|
98
|
|
|
$
|
375
|
|
Period transactions
|
|
(21
|
)
|
|
(50
|
)
|
|
—
|
|
|||
Change in fair value and currency fluctuations
|
|
1
|
|
|
(28
|
)
|
|
(277
|
)
|
|||
Balance, December 31
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
98
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Foreign currency translation adjustments
|
|
$
|
(178,577
|
)
|
|
$
|
(181,725
|
)
|
Change in carrying value of auction rate securities
|
|
232
|
|
|
232
|
|
||
Unrealized gain on derivatives, net of tax of $28 and $45
|
|
60
|
|
|
11
|
|
||
Unrealized loss on available-for-sale investments, net of tax of $134 and $0
|
|
(298
|
)
|
|
—
|
|
||
Accumulated other comprehensive loss
|
|
$
|
(178,583
|
)
|
|
$
|
(181,482
|
)
|
Notional Amounts
1
|
|
Other Assets
|
|
Other Current Liabilities
|
|
Deferred
Income Taxes
And Other
Long-Term
Liabilities
|
||||||||||||||||||||||||
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
$
|
23,156
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Effective portion recognized in other comprehensive income (loss), pretax:
|
|
|
|
|
|
|
||||||
Interest rate swap
|
|
$
|
85
|
|
|
$
|
304
|
|
|
$
|
567
|
|
Effective portion reclassified from other comprehensive income (loss) to interest expense, pretax:
|
|
|
|
|
|
|
||||||
Interest rate swap
|
|
$
|
(8
|
)
|
|
$
|
(153
|
)
|
|
$
|
(295
|
)
|
Ineffective portion recognized in income:
|
|
|
|
|
|
|
||||||
Interest rate swap
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of sales
|
|
$
|
6,018
|
|
|
$
|
5,316
|
|
|
$
|
4,153
|
|
Sales and marketing
|
|
1,820
|
|
|
1,998
|
|
|
1,567
|
|
|||
Research and development
|
|
4,905
|
|
|
4,049
|
|
|
3,033
|
|
|||
General and administrative
|
|
8,991
|
|
|
7,626
|
|
|
6,419
|
|
|||
Total stock-based compensation
|
|
21,734
|
|
|
18,989
|
|
|
15,172
|
|
|||
Tax benefit recognized
|
|
(6,971
|
)
|
|
(6,141
|
)
|
|
(4,865
|
)
|
|||
Net stock-based compensation
|
|
$
|
14,763
|
|
|
$
|
12,848
|
|
|
$
|
10,307
|
|
|
|
2016
|
|
2015
|
|
2014
|
Expected term
|
|
4.4-6.1 years
|
|
4.4-6.3 years
|
|
4.7-6.1 years
|
Volatility
|
|
37%-45%
|
|
45%-48%
|
|
48%-51%
|
Risk-free rate of return
|
|
1.06%-1.41%
|
|
1.38%-1.74%
|
|
1.46%-1.84%
|
Dividend yield
|
|
0.25%
|
|
0.25%
|
|
0.25%
|
Forfeiture rate
|
|
2.65%-5.26%
|
|
3.47%-5.88%
|
|
3.04%-5.86%
|
|
|
Number of
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
|
(In years)
|
|
(In thousands)
|
|||||
Outstanding — January 1, 2016
|
|
2,224,169
|
|
|
$
|
53.82
|
|
|
|
|
|
||
Granted
|
|
260,930
|
|
|
82.84
|
|
|
|
|
|
|||
Exercised
|
|
(392,887
|
)
|
|
35.81
|
|
|
|
|
|
|||
Forfeited
|
|
(27,959
|
)
|
|
72.87
|
|
|
|
|
|
|||
Outstanding — December 31, 2016
|
|
2,064,253
|
|
|
$
|
60.65
|
|
|
6.04
|
|
$
|
78,556
|
|
Vested or expected to vest — December 31, 2016
|
|
1,996,705
|
|
|
$
|
59.89
|
|
|
5.96
|
|
$
|
77,508
|
|
Exercisable — December 31, 2016
|
|
1,067,916
|
|
|
$
|
45.95
|
|
|
4.54
|
|
$
|
56,345
|
|
|
|
Number of
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
|
(In years)
|
|
(In thousands)
|
|||||
Outstanding — January 1, 2016
|
|
277,719
|
|
|
$
|
77.22
|
|
|
|
|
|
||
Granted
|
|
140,452
|
|
|
81.86
|
|
|
|
|
|
|||
Converted
|
|
(44,656
|
)
|
|
70.64
|
|
|
|
|
|
|||
Canceled
|
|
(6,745
|
)
|
|
81.89
|
|
|
|
|
|
|||
Outstanding — December 31, 2016
|
|
366,770
|
|
|
$
|
79.72
|
|
|
7.99
|
|
$
|
36,204
|
|
Vested or expected to vest — December 31, 2016
|
|
336,240
|
|
|
$
|
79.31
|
|
|
7.94
|
|
$
|
33,190
|
|
|
|
2016
|
|
2015
|
Expected term
|
|
3.0 years
|
|
3.2 years
|
Volatility
|
|
13%-32%
|
|
12%-36%
|
Risk-free rate of return
|
|
0.88%
|
|
0.98%
|
Dividend yield
|
|
—%
|
|
—%
|
Weighted-average fair value per share
|
|
88.51
|
|
128.42
|
|
|
Number of
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
|
(In years)
|
|
(In thousands)
|
|||||
Outstanding — January 1, 2016
|
|
27,233
|
|
|
$
|
128.54
|
|
|
|
|
|
||
Granted
|
|
27,272
|
|
|
88.51
|
|
|
|
|
|
|||
Converted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding — December 31, 2016
|
|
54,505
|
|
|
$
|
108.51
|
|
|
8.64
|
|
$
|
5,380
|
|
Vested or expected to vest — December 31, 2016
|
|
50,313
|
|
|
$
|
108.59
|
|
|
8.64
|
|
$
|
4,966
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Components and raw materials
|
$
|
93,284
|
|
|
$
|
70,394
|
|
Work-in-process
|
44,723
|
|
|
43,259
|
|
||
Finished goods
|
101,003
|
|
|
90,085
|
|
||
Total
|
$
|
239,010
|
|
|
$
|
203,738
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Land
|
|
$
|
21,811
|
|
|
$
|
18,962
|
|
Buildings
|
|
214,830
|
|
|
166,784
|
|
||
Machinery and equipment
|
|
279,372
|
|
|
226,724
|
|
||
Office furniture and fixtures
|
|
31,210
|
|
|
26,981
|
|
||
Construction-in-progress
|
|
59,391
|
|
|
35,946
|
|
||
Total property, plant and equipment
|
|
606,614
|
|
|
475,397
|
|
||
Accumulated depreciation
|
|
(227,239
|
)
|
|
(186,793
|
)
|
||
Total property, plant and equipment — net
|
|
$
|
379,375
|
|
|
$
|
288,604
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accrued compensation
|
$
|
43,761
|
|
|
$
|
33,617
|
|
Customer deposits and deferred revenue
|
34,571
|
|
|
21,525
|
|
||
Current portion of accrued warranty
|
15,711
|
|
|
14,871
|
|
||
Other
|
8,442
|
|
|
5,654
|
|
||
Total
|
$
|
102,485
|
|
|
$
|
75,667
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Term debt:
|
|
|
|
||||
Long-term notes
|
$
|
40,823
|
|
|
$
|
19,667
|
|
Less: current portion
|
(3,188
|
)
|
|
(2,000
|
)
|
||
Total long-term debt
|
$
|
37,635
|
|
|
$
|
17,667
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income attributable to IPG Photonics Corporation
|
$
|
260,752
|
|
|
$
|
242,154
|
|
|
$
|
200,445
|
|
Net income attributable to common stockholders
|
260,752
|
|
|
242,154
|
|
|
200,445
|
|
|||
Weighted average shares
|
53,068
|
|
|
52,676
|
|
|
52,104
|
|
|||
Dilutive effect of common stock equivalents
|
729
|
|
|
751
|
|
|
720
|
|
|||
Diluted weighted average common shares
|
53,797
|
|
|
53,427
|
|
|
52,824
|
|
|||
Basic net income attributable to IPG Photonics Corporation per share
|
$
|
4.91
|
|
|
$
|
4.60
|
|
|
$
|
3.85
|
|
Basic net income attributable to common stockholders
|
$
|
4.91
|
|
|
$
|
4.60
|
|
|
$
|
3.85
|
|
Diluted net income attributable to IPG Photonics Corporation per share
|
$
|
4.85
|
|
|
$
|
4.53
|
|
|
$
|
3.79
|
|
Diluted net income attributable to common stockholders
|
$
|
4.85
|
|
|
$
|
4.53
|
|
|
$
|
3.79
|
|
Years Ending December 31
|
|
Facilities
|
|
Equipment
|
|
Total
|
||||||
2017
|
|
$
|
3,245
|
|
|
$
|
943
|
|
|
$
|
4,188
|
|
2018
|
|
2,275
|
|
|
598
|
|
|
2,873
|
|
|||
2019
|
|
1,613
|
|
|
321
|
|
|
1,934
|
|
|||
2020
|
|
895
|
|
|
101
|
|
|
996
|
|
|||
2021
|
|
545
|
|
|
11
|
|
|
556
|
|
|||
Thereafter
|
|
681
|
|
|
—
|
|
|
681
|
|
|||
Total
|
|
$
|
9,254
|
|
|
$
|
1,974
|
|
|
$
|
11,228
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Balance at January 1
|
$
|
505
|
|
|
$
|
455
|
|
Foreign exchange adjustment
|
(2
|
)
|
|
(14
|
)
|
||
Total goodwill arising from purchase
|
19,325
|
|
|
64
|
|
||
Balance at December 31
|
$
|
19,828
|
|
|
$
|
505
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||||
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
Weighted-
Average Lives
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
Weighted-
Average Lives
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Patents
|
$
|
8,114
|
|
$
|
(4,926
|
)
|
$
|
3,188
|
|
7 Years
|
$
|
6,641
|
|
$
|
(4,573
|
)
|
$
|
2,068
|
|
6 Years
|
Customer relationships
|
12,727
|
|
(3,621
|
)
|
9,106
|
|
9 Years
|
3,325
|
|
(3,092
|
)
|
233
|
|
5 Years
|
||||||
Production know-how
|
6,618
|
|
(4,093
|
)
|
2,525
|
|
8 Years
|
6,672
|
|
(3,339
|
)
|
3,333
|
|
8 Years
|
||||||
Technology, trademark and tradename
|
17,910
|
|
(3,940
|
)
|
13,970
|
|
8 Years
|
8,247
|
|
(1,977
|
)
|
6,270
|
|
8 Years
|
||||||
|
$
|
45,369
|
|
$
|
(16,580
|
)
|
$
|
28,789
|
|
|
$
|
24,885
|
|
$
|
(12,981
|
)
|
$
|
11,904
|
|
|
•
|
$1,473
of patents from the 2016 acquisition of BSI;
|
•
|
$9,900
of technology and tradename and
$9,500
of customer relationships from the 2016 acquisition of Menara; and
|
•
|
$6,298
of technology from the 2015 acquisition of RuchTech.
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
$4,706
|
|
$4,641
|
|
$3,964
|
|
$3,590
|
|
$3,504
|
|
$8,384
|
|
$28,789
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
U.S.
|
|
$
|
103,798
|
|
|
$
|
94,242
|
|
|
$
|
72,800
|
|
Foreign
|
|
262,767
|
|
|
247,375
|
|
|
211,674
|
|
|||
Total
|
|
$
|
366,565
|
|
|
$
|
341,617
|
|
|
$
|
284,474
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(41,407
|
)
|
|
$
|
(30,334
|
)
|
|
$
|
(22,549
|
)
|
State
|
|
(4,750
|
)
|
|
(6,616
|
)
|
|
(2,823
|
)
|
|||
Foreign
|
|
(72,600
|
)
|
|
(69,793
|
)
|
|
(60,143
|
)
|
|||
Total current
|
|
$
|
(118,757
|
)
|
|
$
|
(106,743
|
)
|
|
$
|
(85,515
|
)
|
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
8,709
|
|
|
$
|
6,303
|
|
|
$
|
454
|
|
State
|
|
383
|
|
|
312
|
|
|
27
|
|
|||
Foreign
|
|
3,816
|
|
|
538
|
|
|
1,005
|
|
|||
Total deferred
|
|
$
|
12,908
|
|
|
$
|
7,153
|
|
|
$
|
1,486
|
|
Provision for income taxes
|
|
$
|
(105,849
|
)
|
|
$
|
(99,590
|
)
|
|
$
|
(84,029
|
)
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Tax at statutory rate
|
|
$
|
(128,298
|
)
|
|
$
|
(119,566
|
)
|
|
$
|
(99,867
|
)
|
Non-U.S. rate differential — net
|
|
16,718
|
|
|
15,931
|
|
|
14,590
|
|
|||
State income taxes — net
|
|
(2,640
|
)
|
|
(2,094
|
)
|
|
(1,787
|
)
|
|||
Effect of changes in enacted tax rates on deferred tax assets and liabilities
|
|
(111
|
)
|
|
(153
|
)
|
|
(44
|
)
|
|||
Nondeductible stock compensation expense
|
|
(296
|
)
|
|
(338
|
)
|
|
(483
|
)
|
|||
Other nondeductible expenses
|
|
(2,307
|
)
|
|
(1,039
|
)
|
|
(2,063
|
)
|
|||
Federal and state tax credits
|
|
9,840
|
|
|
8,837
|
|
|
5,865
|
|
|||
Change in reserves, including interest and penalties
|
|
1,105
|
|
|
(1,522
|
)
|
|
(7
|
)
|
|||
Change in valuation allowance
|
|
26
|
|
|
(620
|
)
|
|
—
|
|
|||
Other — net
|
|
114
|
|
|
974
|
|
|
(233
|
)
|
|||
|
|
$
|
(105,849
|
)
|
|
$
|
(99,590
|
)
|
|
$
|
(84,029
|
)
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Property, plant and equipment
|
|
$
|
(14,122
|
)
|
|
$
|
(8,031
|
)
|
|
$
|
(5,310
|
)
|
Inventory provisions
|
|
19,710
|
|
|
14,566
|
|
|
10,497
|
|
|||
Allowances and accrued liabilities
|
|
5,434
|
|
|
2,590
|
|
|
1,570
|
|
|||
Other tax credits
|
|
5,027
|
|
|
3,763
|
|
|
726
|
|
|||
Deferred compensation
|
|
9,215
|
|
|
5,891
|
|
|
4,218
|
|
|||
Net operating loss carryforwards
|
|
7,885
|
|
|
923
|
|
|
—
|
|
|||
Valuation allowance
|
|
(662
|
)
|
|
(678
|
)
|
|
—
|
|
|||
Net deferred tax assets
|
|
$
|
32,487
|
|
|
$
|
19,024
|
|
|
$
|
11,701
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at January 1
|
|
$
|
7,579
|
|
|
$
|
6,494
|
|
|
$
|
6,501
|
|
Change in prior period positions
|
|
(1,876
|
)
|
|
33
|
|
|
(795
|
)
|
|||
Additions for tax positions in current period
|
|
700
|
|
|
1,052
|
|
|
788
|
|
|||
Balance at December 31
|
|
$
|
6,403
|
|
|
$
|
7,579
|
|
|
$
|
6,494
|
|
|
|
|
• United States
|
|
2013 — 2016
|
• Germany
|
|
2013 — 2016
|
• Russia
|
|
2015 — 2016
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States and other North America
|
|
$
|
141,184
|
|
|
$
|
131,525
|
|
|
$
|
113,233
|
|
Europe:
|
|
|
|
|
|
|
||||||
Germany
|
|
90,893
|
|
|
93,802
|
|
|
77,404
|
|
|||
Other including Eastern Europe/CIS
|
|
224,836
|
|
|
189,123
|
|
|
173,018
|
|
|||
Asia and Australia:
|
|
|
|
|
|
|
||||||
China
|
|
358,476
|
|
|
311,946
|
|
|
245,102
|
|
|||
Japan
|
|
88,592
|
|
|
76,033
|
|
|
72,573
|
|
|||
Other
|
|
100,052
|
|
|
95,494
|
|
|
85,426
|
|
|||
Rest of World
|
|
2,140
|
|
|
3,342
|
|
|
3,076
|
|
|||
Total
|
|
$
|
1,006,173
|
|
|
$
|
901,265
|
|
|
$
|
769,832
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Materials Processing
|
|
$
|
942,119
|
|
|
$
|
849,335
|
|
|
$
|
731,274
|
|
Other Applications
|
|
64,054
|
|
|
51,930
|
|
|
38,558
|
|
|||
Total
|
|
$
|
1,006,173
|
|
|
$
|
901,265
|
|
|
$
|
769,832
|
|
|
|
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
|
$
|
230,116
|
|
|
$
|
170,981
|
|
|
$
|
155,428
|
|
Russia
|
|
76,966
|
|
|
55,150
|
|
|
59,612
|
|
|||
Germany
|
|
61,792
|
|
|
53,678
|
|
|
51,528
|
|
|||
China
|
|
8,096
|
|
|
6,237
|
|
|
6,582
|
|
|||
Other
|
|
14,116
|
|
|
12,045
|
|
|
12,507
|
|
|||
|
|
$
|
391,086
|
|
|
$
|
298,091
|
|
|
$
|
285,657
|
|
2016
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
207,248
|
|
|
$
|
252,787
|
|
|
$
|
266,017
|
|
|
$
|
280,121
|
|
Gross profit
|
|
114,410
|
|
|
137,703
|
|
|
144,791
|
|
|
155,336
|
|
||||
Net income attributable to IPG Photonics Corporation
|
|
49,326
|
|
|
67,058
|
|
|
69,235
|
|
|
75,133
|
|
||||
Basic earnings per share
|
|
0.93
|
|
|
1.26
|
|
|
1.30
|
|
|
1.42
|
|
||||
Diluted earnings per share
|
|
0.92
|
|
|
1.25
|
|
|
1.29
|
|
|
1.39
|
|
2015
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
198,960
|
|
|
$
|
235,138
|
|
|
$
|
243,541
|
|
|
$
|
223,626
|
|
Gross profit
|
|
107,827
|
|
|
128,703
|
|
|
133,304
|
|
|
122,043
|
|
||||
Net income attributable to IPG Photonics Corporation
|
|
57,359
|
|
|
61,299
|
|
|
62,792
|
|
|
60,704
|
|
||||
Basic earnings per share
|
|
1.09
|
|
|
1.16
|
|
|
1.19
|
|
|
1.15
|
|
||||
Diluted earnings per share
|
|
1.08
|
|
|
1.15
|
|
|
1.18
|
|
|
1.14
|
|
|
|
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Form of Second Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to Registration Statement No. 333-136521 filed with the Securities and Exchange Commission (the "Commission") on August 11, 2006)
|
|
|
|
3.3
|
|
Form of Amended and Restated By-laws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's current Report on Form 8-K filed with the Commission on August 22, 2014)
|
|
|
|
4.1
|
|
Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to Registration Statement No. 333-136521 filed with the Commission on November 14, 2006)
|
|
|
|
10.1
|
|
2000 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2007)
|
|
|
|
10.2
|
|
Amendment to Section 4.2 of 2000 Incentive Compensation Plan (incorporated by reference to Exhibit 10.5 to the Registrant's Current Report on Form 8-K filed with the Commission on May 13, 2008)
|
|
|
|
10.3
|
|
Amendment to the 2000 Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on August 22, 2014)
|
|
|
|
10.4
|
|
2006 Incentive Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K/A filed with the Commission on February 22, 2017)
|
|
|
|
10.5
|
|
Non-Employee Directors Stock Plan, as amended April 2, 2010 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on June 8, 2010)
|
|
|
|
10.6
|
|
Amendment to the Non-Employee Directors Stock Plan, as amended (incorporated by reference to Exhibit to 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on August 22, 2014)
|
|
|
|
10.7
|
|
IPG Photonics Non-Employee Director Compensation Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on March 5, 2013)
|
|
|
|
10.8
|
|
Amendment to the IPG Photonics Corporation Non-Employee Directors Stock Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on September 14, 2015)
|
|
|
|
10.9
|
|
IPG Photonics Corporation Non-Employee Director Compensation Plan, as amended (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K/A filed with the Commission on February 22, 2017)
|
|
|
|
10.10
|
|
Senior Executive Annual Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K/A filed with the Commission on February 22, 2017)
|
|
|
|
10.11
|
|
2008 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.8 to the Registrant's Current Report on Form 8-K filed with the Commission on May 13, 2008)
|
|
|
|
10.12
|
|
Amendment to 2008 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on June 15, 2009)
|
|
|
|
10.13
|
|
Employment Agreement dated October 7, 2013 between the Registrant and Dr. Valentin P. Gapontsev, (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on October 15, 2013)
|
|
|
|
10.14
|
|
Service Agreement dated October 7, 2013 between IPG Laser GmbH and Dr. Eugene Scherbakov, (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on October 15, 2013)
|
|
|
|
10.15
|
|
Form of Employment Agreement dated October 7, 2013 between the Registrant and each of Timothy P.V. Mammen, Angelo P. Lopresti and Alexander Ovtchinnikov, (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on October 15, 2013)
|
Exhibit
Number
|
|
Description
|
10.16
|
|
Form of Letter amending Employment Agreements and Confidentiality, Non-Competition and Confirmatory Assignment Agreements between the Registrant and each of the named executive officers and certain other executive officers (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K/A filed with the Commission on February 22, 2017)
|
|
|
|
10.17
|
|
Form of Indemnification Agreement between the Registrant and each of its Directors and Executive Officers (incorporated by reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K/A filed with the Commission on February 22, 2017)
|
|
|
|
10.18
|
|
Loan Agreement between the Registrant and Bank of America, N.A. dated as of June 4, 2008 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on June 9, 2008)
|
|
|
|
10.19
|
|
Revolving Credit Note by the Registrant dated June 4, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on June 9, 2008)
|
|
|
|
10.20
|
|
Term Note by the Registrant dated June 4, 2008 (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on June 9, 2008)
|
|
|
|
10.21
|
|
Second Amendment to Loan Agreement, between the Registrant and Bank of America, N.A., dated as of September 30, 2010 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on November 9, 2010)
|
|
|
|
10.22
|
|
Revolving Credit Note Modification Agreement No. 1, between the Registrant and Bank of America, N.A., dated as of September 30, 2010 (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on November 9, 2010)
|
|
|
|
10.23
|
|
Term Note Modification Agreement No. 1, between the Registrant and Bank of America, N.A., dated as of September 30, 2010 (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on November 9, 2010)
|
|
|
|
10.24
|
|
Amended and Restated Loan Agreement between the Registrant and Bank of America, N.A., dated as of April 30, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on May 6, 2015)
|
|
|
|
10.25
|
|
Revolving Credit Note by the Registrant dated as of April 30, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on May 6, 2015)
|
|
|
|
10.26
|
|
Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG dated June 18, 2012 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on June 29, 2012)
|
|
|
|
10.27
|
|
Guarantee of the Registrant to Deutsche Bank AG dated June 26, 2012 (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on June 29, 2012)
|
|
|
|
10.28
|
|
Enclosure 1 to Guarantee to Deutsche Bank AG dated June 26, 2012 (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed with the Commission on June 29, 2012)
|
|
|
|
10.29
|
|
Amendment to Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG dated January 17, 2014 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on March 4, 2014)
|
|
|
|
10.30
|
|
Amendment to Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG dated June 25, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on July 1, 2014)
|
|
|
|
10.31
|
|
Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG dated August 7, 2014 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on August 14, 2014)
|
|
|
|
10.32
|
|
Guarantee of the Registrant to Deutsche Bank AG dated August 7, 2014 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on August 14, 2014)
|
|
|
|
Exhibit
Number
|
|
Description
|
10.33
|
|
Guarantee of IPG Laser GmbH to Deutsche Bank AG dated August 7, 2014 (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on August 14, 2014)
|
|
|
|
10.34
|
|
Annex 1 to Guarantee of IPG Laser GmbH to Deutsche Bank AG dated August 11, 2014 (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed with the Commission on August 14, 2014)
|
|
|
|
10.35
|
|
First Amendment to Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG dated October 1, 2015 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on October 6, 2015)
|
|
|
|
10.36
|
|
Annex 1 (1st Amendment) to Guarantee of IPG Laser GmbH to Deutsche Bank AG, dated October 1, 2015 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on October 6, 2015)
|
|
|
|
10.37
|
|
Second Amendment of the Credit Facility Agreement between IPG Laser GmbH and Deutsche
Bank AG, dated April 18, 2016 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Commission on May 19, 2016)
|
|
|
|
10.38
|
|
Annex 1 to (2nd Amendment) Guarantee of IPG Laser GmbH to Deutsche Bank AG, dated April
18, 2016 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Commission on May 19, 2016)
|
|
|
|
10.39
|
|
First Amendment to the Amended and Restated Loan Agreement, between the Registrant and
Bank of America, N.A. dated as of May 19, 2016 (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the Commission on May 19, 2016)
|
|
|
|
10.40
|
|
Term Note, between the Registrant and Bank of America, N.A., dated May 19, 2016 (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed with the Commission on May 19, 2016)
|
|
|
|
10.41
|
|
Third Amendment to Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG, dated November 1, 2016 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 2, 2016)
|
|
|
|
10.42
|
|
Annex I (Third Amendment) to Guarantee of IPG Laser GmbH to Deutsche Bank AG dated November 1, 2016 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 2, 2016)
|
|
|
|
10.43
|
|
Fourth Amendment to Credit Facility Agreement between IPG Laser GmbH and Deutsche Bank AG, dated December 16, 2016
|
|
|
|
10.44
|
|
Annex I (Fourth Amendment) to Guarantee of IPG Laser GmbH to Deutsche Bank AG dated December 16, 2016
|
|
|
|
21.1
|
|
List of Subsidiaries
|
|
|
|
23.1
|
|
Consent of Deloitte & Touche LLP
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 1350
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
Name
|
|
State or Jurisdiction
of Incorporation
|
|
Ownership by Registrant as of
December 31, 2014
|
IPG Laser GmbH
|
|
Germany
|
|
100%
|
NTO IRE-Polus
|
|
Russia
|
|
100%
|
IPG (Beijing) Fiber Laser Technology Co., Ltd.
|
|
China
|
|
100%
|
1.
|
I have reviewed this Annual Report on Form 10-K of IPG Photonics Corporation for the year ended December 31, 2016;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Valentin P. Gapontsev
|
Valentin P. Gapontsev
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of IPG Photonics Corporation for the year ended December 31, 2016;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Timothy P.V. Mammen
|
Timothy P.V. Mammen
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
1
|
the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
|
2
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ VALENTIN P. GAPONTSEV
|
Valentin P. Gapontsev
Chairman and Chief Executive Officer
|
|
/s/ TIMOTHY P.V. MAMMEN
|
Timothy P.V. Mammen
Senior Vice President and Chief Financial Officer
|
(1)
|
Aggregate Facility Amount
|
(a)
|
Facility 1: revolving cash credit facility in the amount of up to
Euro 14,000,000.00
(in words:
Euro Fourteen Million
)
(“Facility 1”)
.
|
(b)
|
Facility 2: revolving guarantee facility in the amount of up to
Euro 9,000,000.00
(in words:
Euro Nine Million
)
(“Facility 2”)
.
|
(c)
|
Facility 3: revolving margin line in the amount of up to
Euro 7,000,000.00
(in words:
Euro Seven Million
)
(“Facility 3”)
.
|
(3)
|
Purpose
|
(a)
|
The proceeds of Facility 1 shall be applied towards purposes of financing short-term working capital requirements, especially financing of the outstanding accounts receivables and inventories of the Borrower as well as - pursuant to § 4 - of companies of which a Borrower directly or indirectly owns a majority interest according to § 16 of the German Stock Companies Act (
Aktiengesetz
)
(“Subsidiaries”)
. For purposes of this Credit Facility Agreement only the IPG (Beijing) Fiber Laser Technology Company Limited, Beijing, China is deemed to be a Subsidiary (irrespective of § 16 of the German Stock Companies Act).
|
(b)
|
The proceeds of Facility 2 shall be applied towards the issuance of Guarantees upon instruction of the Borrower as well as - pursuant to § 4 - of its respective Subsidiaries.
|
(c)
|
Facility 3 may only be utilized by entering into financial derivatives transactions with the Subsidiaries of the Borrower - subject to the provisions of § 4.
|
(4)
|
Definitions
|