superior reliability & performance the leader in photonics

Superior Reliability & Performance

The Leader in Photonics

Superior Reliability & Performance October 2007

P. 2

Forward-Looking Statements & Non-GAAP Measurement

Forward-Looking Statements

The statements in this presentation that relate to future plans, events or performance are forward-looking statements

that involve risks and uncertainties, including risks associated with business and economic conditions, customer and/or

supplier contract cancellations, manufacturing risks, competitive factors, successful introductions of new products,

uncertainties pertaining to customer orders, demand for products and services, growth and development of markets for

the Company's products and services, and other risks identified in our filings made with the Securities and Exchange

Commission, including, most recently, our Registration Statement on Form S-3. Actual results, events and performance

may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which

speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to

these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect

the occurrence of unanticipated events. Readers are encouraged to refer to the risk disclosures described in the the

Company’s registration statement on Form S-3 filed with the SEC on October 10, 2006 and reports on Forms 10-K, 10-Q

and 8-K, as applicable.

Non-GAAP Measurement

The Company’s statement regarding its adjusted EBITDA percentage target is a non-GAAP financial measure. The most

comparable GAAP measurement is net income, which is not currently accessible on a forward-looking basis. Adjusted

EBITDA reflects earnings before interest, taxes, depreciation, amortization, stock compensation expenses and other

non-operating income and expense items. These items, which are required to determine GAAP net income, are subject

to significant change by end of fiscal 2010, given the impact of potential acquisitions, tax rate changes and other

operational factors which will heavily impact these items and are also impacted by the Company’s historical stock

option investigation and the effect of any compensation charges arising from future equity grants.


P. 3

The Photonics Company


P. 4

The Photonics Company

Provider of Photonics* Solutions Primarily Lasers for Commercial and Scientific Research Applications

Founded in 1966

Sales $600.4 Million (ttm)

Orders $579.4 Million (ttm)

~2400 Employees

Sales 31% U.S.; 69% International (ttm)

As of 6/30/07

*Photonics is the Merger of Lasers, Optics and Electronics


P. 5

Comparison of Cumulative Ten-Year Sales Return Indexed

Sources: Coherent, LFW, Deere & Co., SEMI, IMF-World Economic Outlook Database

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Non-diode Lasers Global Semi Global GDP Coherent


P. 6

Our Strategy and Objectives

Leverage the depth & breadth of our technology portfolio to optimize growth and performance

Create new markets through internal and independent application development

Continue to lead the revolution in commercial lasers

Complement internal product/market development through acquisitions

Deliver superior financial performance through EBITDA expansion and continued strong cash flows


P. 7

Competitive Landscape: Lasers and Electro-optic Components (non-telecom and consumer electronics)

~200 additional companies

44% $1.3 billion

IPG 5%

~$150 million

SP 6%

~$160 million

Coherent 20%

~$600 million

Cymer 18% ~$544 million

Excel 4%

~$125 million

JDSU 3%

~$100 million

$3 Billion Global Market

Public data and Company estimates


P. 8

Communicating

Measuring, Sensing

Reading, Writing

Projecting

Engraving, Marking

Etching, Exposing

Micromat'l Processing

Cutting, Drilling

Welding, J oining

Scienc

eMedica

lMicr

oelec

Cons.

Elec.

Telec

omm

Light

Mfg.

Heavy

Mfg.Def/

HS

2006 Industry Map ($3B minus telecom, CE)


P. 9

34%

29%

31%

6%

Geographic Sales Distribution $600.4 Million (ttm as of 6/30/07)

EuropeEurope

United StatesUnited States

R.O.W.R.O.W.Asia PacificAsia Pacific


P. 10

20%

26%

16%

35%

3%

Order Mix

$579.4 Million (ttm as of 6/30/07)

OEM ComponentsOEM Components& Instrumentation& Instrumentation

Materials ProcessingMaterials Processing

MicroelectronicsMicroelectronics

Graphic Arts & DisplayGraphic Arts & DisplayScientific ResearchScientific Research& Gov. Programs& Gov. Programs


P. 11

October 2007

Microelectronics

Flat Panel Display Capital EquipmentTFT-LCD, PDP & Next Generation FabsEnabling Manufacture of High End Displays (Low Temperature Polycrystalline Si-TFTs)

Color Filter Processing

Driving Next Generation Technology for Thin Flexible Displays (OLEDs)

Printed Circuit Board & Packaging EquipmentTransitioning from Conventional Tools to Improve Yields

and Reduce Feature SizesLaser Microvia Drilling

Laser Direct Imaging

Solar Cell Manufacturing

Semiconductor Capital Equipment Primarily 193 nm and Below and 300 mm Fabs Metrology/Inspection Tools

Photomask Tools


P. 12

October 2007

OEM Components & Instrumentation

OEM Components

Enabling Laser Components to Industries such as Medical,Thermal Imaging, and Defense

Leading Supplier of Excimer Lasers to OEM System Integrators for Ophthalmic Surgery

Bioinstrumentation Market

Proteomics, Genomics and Drug Discovery

New Architectures with Ultimate Goal of Portable Diagnostic Tools


P. 13

October 2007

Materials Processing

Miniaturization and Yields are Major Drivers

Cutting and Welding

Processing of Plastics

Marking and Coding

Cladding and Hardening


P. 14

October 2007

Graphic Arts & Display

Conversion to Digital Work Flow Paradigm and

“Green” (i.e., Environmental) Motivation

Computer-to-Plate

Digital Offset Presses

Large Format Projection & Digital Media

Laser TV and Consumer Electronics– Non-exclusive license to Osram


P. 15

October 2007

Scientific Research & Government Programs

Scientific Laser Market

University, Industrial and Government Laboratories

Incubating Many Emerging Applications and Technologies

Establishing Customer Relationships and Brand Equity


P. 16

Technology


P. 17

Optically Pumped Semiconductor (OPS): The Power of Platforms

Electrical Input: 40W-400W (up to10X more efficient than other laser sources)

Output Power: 10 mW-10W

Output Wavelengths: 460 nm-1060 nm

Characteristics: Reliable, Efficient, Compact, Air-Cooled

Units Shipped to Date:>10,000

MTBF:>27,000 hours

A Versatile & Revolutionary TechnologyA Versatile & Revolutionary Technology


P. 18

The Power of Platforms: Future Developments

Microelectronics and materials processing represent the two largest core market growth opportunities for Coherent

Over the next 12-18 months, we plan to introduce at least two new platforms into these markets

The key attributes are:

Configurable packages to serve multiple customers/applications

Modular design for performance and cost evolution – estimate up to 10 years of runway

Higher contract manufacturing/low cost region compatibility


P. 19

Financial Priorities and Progress


P. 20

Sales, Bookings & Backlog ($M)

$0

$100

$200

$300

$400

$500

$600

$700

2002 2003 2004 2005 2006 TTM'07*

Sales Backlog Bookings

As of 6/30/07

*Trailing Twelve Months as of 6/30/07


P. 21

Cash Net of Debt ($M)

$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

2002 2003 2004 2005 2006 Q3'07

Cash & S-T Investments Debt Cash Net of Debt

As of 6/30/07

Convertible debt of $200M was repaid in August 2007 at par plus accumulated interest


P. 22


Special Committee concluded its voluntary review of historical

stock option practices

Announced restatement range of $22-28 million

Significant majority of charges stem from the period of 1995-2001

More than half the charge is from 2000


P. 23


EBITDA targets of 19-23% exiting fiscal year 2010

Material cost reductions, expanded use of contract manufacturers, SG&A

leverage, introduction of more flexible and cost-effective platform designs

and continued yield and reliability improvements

Continued emphasis on capital structure

Choices under consideration include accretive acquisitions and a share

repurchase program


P. 24

Why Coherent

Photonics is the enabling solution; Coherent is the enabling

provider

Coherent is the Photonics Leader with multiple growth

opportunities in existing and emerging markets

Coherent has a track record of innovation, execution and

financial strength

superior reliability & performance the leader in photonics

Documents

photonics slide

companys products

companys statement

forwardlooking basis

gaap net income

comparable gaap measurement

nongaap financial measure

nonoperating income