NEW YORK, NY-Needham & Company, LLC (www.needhamco.com), a privately held investment bank primarily focused on emerging growth companies and their investors, held its Ninth Annual Growth Conference at the New York Palace Hotel on January 9-12, 2007. The annual conference-which attracted former New York City mayor Rudy Giuliani as a lunchtime guest speaker-is one of the largest growth stock investment conferences in the U.S., with nearly 400 companies making presentations on technology, health care, consumer, and industrial growth markets.
This year’s conference addressed the laser and photonics industry with presentations from more than 30 companies in such market segments as laser components and systems, optical communications, biophotonics and medical lasers, and photonics test and measurement. “The tone of the photonics companies was cautiously optimistic, with the optimism arising from the new opportunities that arise every day,” said Needham senior analyst John Harmon. “But the caution derives from the challenges of consolidation and the potential threat of new technologies,” he added.
Among the photonics presenters were three key U.S. laser manufacturers: Coherent (Santa Clara, CA), Newport Corporation (Irvine, CA), and Rofin-Sinar Technologies (Plymouth, MI and Hamburg, Germany). Harmon said that Coherent’s presentation was upbeat within the limits imposed by the company’s ongoing voluntary stock-option investigation. Newport sketched out its view of the important laser technologies in 2010, and the company is currently developing new laser technologies within areas adjacent to its historical focus on the visible and ultraviolet wavelengths. And Rofin-Sinar offered its standard presentation but mentioned that its annual guidance, which had disappointed investors by being just in line with current Street estimates, was on the conservative side. In a preview of the Growth Conference itself that focused on the laser market, Harmon noted strong 18% year-over-year revenue growth in the fourth quarter (ended September 30) for Coherent, solid 11% revenue growth and strong 18% order growth for Newport in a normally seasonally weak Q3, and a buy rating and $75 per share price target for Rofin-Sinar.
“Overall, the presentations indicated that the laser industry remains solid-with microelectronics and materials processing remaining the most attractive market segments-as lasers continue to find new applications and replace traditional machine tools,” said Harmon. An additional trend Harmon noted is the belief from some manufacturers that vertical integration (including the ability of a company to have their own diode and system manufacture) is a key to remaining competitive.
Summarizing the optical telecommunications sector-represented by such presenters as Santur, Avanex, Bookham, and MRV Communications-Harmon said that the march continues towards the use of tunable rather than fixed lasers.
Needham & Co. is headquartered in New York City with offices in Boston, MA, and Menlo Park and San Francisco, CA. In addition to investment banking, Needham’s principal activities include institutional sales and trading, asset management, venture capital, and the production of comprehensive equity research for more than 350 companies.
-Gail Overton