Acquisition and Background of Coherent, Inc.

Critical Accounting Policies and Estimates

Fiscal Year 2022 Compared to Fiscal Year 2021

Operating income for the year ended June 30, 2022 for Photonic Solutions increased 11% to $230 million, compared to an operating income of $208 million last fiscal year. The drivers of the increased operating income were higher sales volume, and improved operating performance.

Fiscal Year 2021 Compared to Fiscal Year 2020

indium phosphide semiconductor lasers, gallium arsenide semiconductor lasers, silicon carbide semiconductor technology, and other emerging market trends.

There were foreign currency losses of $6 million for the year ended June 30, 2021 due to the volatility in the foreign exchange market, compared to $8 million of losses for the year ended June 30, 2020.

The above operating results for the year ended June 30, 2021 include the Company's acquisition of Finisar in September 2019.

The above operating results for the year ended June 30, 2021 include the Company's acquisition of Finisar in September 2019.

Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan

Payments in satisfaction of employees' minimum tax obligations

Net cash provided by operating activities:

Net cash used in investing activities:

Net cash provided by financing activities:

Senior Credit Facilities as of June 30, 2022

The Company had Senior Credit Facilities with Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders party thereto.

The credit agreement governing the Senior Credit Facilities (the "Credit Agreement") provides for senior secured financing of $2.4 billion in the aggregate, consisting of

(i)Aggregate principal amount of $1,255 million for a five-year senior secured first-lien term A loan facility (the "Term A Facility"),

(ii)Aggregate principal amount of $720 million for a seven-year senior secured term B loan facility (the "Term B Facility" and together with the Term A Facility, the "Term Loan Facilities"), which was repaid in full during the quarter ended September 30, 2020, and

(iii)Aggregate principal amount of $450 million for a five-year senior secured first-lien revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan Facilities, the "Senior Credit Facilities").

On July 1, 2022, the Credit Agreement was terminated, and amounts borrowed under the Term A Facility were repaid in full using proceeds from the New Term Facilities (defined below).

Funding of Coherent Acquisition on July 1, 2022

As of August 1, 2022, the Company had no amount outstanding under the New Revolving Credit Facility.

The Indenture contains customary covenants and events of default, including default relating to among other things, payment default, failure to comply with covenants or agreements contained in the Indenture or the Senior Notes and certain provisions related to bankruptcy events. As of June 30, 2022, the Company was in compliance with all covenants under the Indenture.

The Company had aggregate availability of $450 million under its Revolving Credit Facility as of June 30, 2022.

The weighted average interest rate of total borrowings was 2% and 1% for the years ended June 30, 2022 and 2021, respectively

Our cash position, borrowing capacity and debt obligations are as follows (in millions):

We have no off-balance sheet arrangements as defined by Regulation S-K of the Securities Act of 1933.

© Edgar Online, source Glimpses