COHERENT CORP

The following is a summary of the material risks and uncertainties that could cause our business, financial condition or operating results to be adversely impacted. We encourage you to carefully review the full risk factors contained in Item 1A. “Risk Factors” herein in their entirety for additional information regarding these risks and uncertainties.

Risks Relating to Our Business and Our Industry

•Investments in future markets of potential significant growth may not result in the expected return.

•Our competitive position depends on our ability to develop new products and processes.

•Our products may contain defects that are not detected until deployed, which could increase our costs, reduce our revenues, cause us to lose key customers, or expose us to litigation related to our products.

•Our competitive position may require significant investments.

•We may be unable to successfully implement our acquisitions strategy or integrate acquired companies and personnel with existing operations.

•Although we expect that our acquisitions will result in cost savings, synergies, and other benefits, we may not realize those benefits, or be able to retain those benefits even if realized.

•Our future success depends on continued international sales, and our global operations are complex and present multiple challenges to manage.

•We are subject to complex and rapidly changing import and export regulations of the countries in which we operate and/or sell which could limit our sales and decrease our profitability, and we may be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations.

•We may fail to accurately estimate the size and growth rate of our markets and our customers’ demands.

•We may encounter increased competition, and we may fail to accurately estimate our competitors’ or our customers’ willingness and capability to backward integrate into our competencies and thereby displace us.

•A significant portion of our business may be subject to cyclical market factors.

•The long sales cycles for many of our products may cause us to incur significant expenses.

•We have entered into supply agreements that commit us to supply products on specified terms.

•We depend on highly complex manufacturing processes that require strategic materials, components, and products from limited sources of supply.

•We participate in the semiconductor capital equipment market, which requires significant research and development expenses to develop and maintain products, and a failure to achieve market acceptance for our products could have a significant negative impact on our business and results of operations.

•There are risks associated with our participation in the display capital equipment market, including there being a relatively limited number of end customer manufacturers.

•Increases in commodity prices and diminished availability of rare earth minerals and noble gases may adversely affect our results of operations and financial condition.

•Changes in trade policies, such as increased import duties, could increase the costs of goods imported into the United States or China.

•A widespread health crisis could materially and adversely affect our business, financial condition, and results of operations.

•Global economic downturns may adversely affect our business, operating results, and financial condition.

•Foreign currency risk may negatively affect our revenues, cost of sales, and operating margins, and could result in foreign exchange losses.

•Inflation and increased borrowing costs could impact our cash flows and profitability.

•Our current credit agreement and any other credit or similar agreements into which we may enter in the future may restrict our operations, particularly our ability to respond to changes or to take certain actions regarding our business.

•Any inability to access financial markets from time to time to raise required capital, finance our working capital requirements or our acquisition strategies, or otherwise support our liquidity needs could negatively impact our ability to finance our operations, meet certain obligations, or implement our growth strategy.

•There are limitations on the protection of our intellectual property, and we may from time to time be involved in costly intellectual property litigation or indemnification.

•Our global operations are subject to complex and rapidly changing legal and regulatory requirements.

•We may face particular data privacy and security and data protection risks due to laws and regulations regulating the protection or security of personal and other sensitive data.

•Cybersecurity attacks and incidents and other vulnerabilities could subject us to costly damages, claims and expenses, harm to our reputation or competitive position, or disrupt our operations and business.

•Data breaches and other events and incidents that impact the confidentiality, availability, and integration of information and assets could disrupt our operations, subject us to legal claims, and impact our financial results.

•We use and generate potentially hazardous substances that are subject to stringent environmental and safety regulations.

•We have a substantial amount of debt, which could adversely affect our business, financial condition, or results of operations and prevent us from fulfilling our debt-related obligations.

•The agreements that govern our senior credit facilities and our 5.000% senior notes due 2029 contain various covenants that impose restrictions on our business, which may affect our ability to operate our businesses.

•Unfavorable changes in tax rates, tax liabilities, or tax accounting rules could negatively affect future results.

•Natural disasters or other global or regional catastrophic events could disrupt our operations, give rise to substantial environmental hazards, and adversely affect our results.

•Delays in transportation of products and possible shortages of critical raw materials, parts, equipment and other resources may adversely affect our results of operations.

•Our success requires us to attract, retain, and develop key personnel and maintain good relations with our employees.

•We contract with a number of large end-user service providers and product companies that have considerable bargaining power, which may require us to agree to terms and conditions that could have an adverse effect on our business or ability to recognize revenues.

•The adoption of new climate change regulations may result in increased financial costs and/or losses.

•Some of our business units depend from time to time on large purchases from a few large customers, and any loss, cancellation, reduction, or delay in purchases by these large customers could harm the longevity of the business.

•Actions that we are taking to restructure our business in alignment with our strategic priorities may not be as effective as anticipated.

•We are subject to a number of risks associated with the equity investments contemplated by the respective investment agreements entered into with Denso Corporation and Mitsubishi Electric Corporation and certain related supply arrangements, and these risks could adversely impact our operations, financial condition and business.

•Our operations may be adversely affected if we are unable to manufacture certain products in our manufacturing facilities.

•Failure to accurately forecast our customer demands and our resulting revenues could result in additional charges for obsolete or excess inventories or noncancellable purchase commitments.

•Our markets are unpredictable and characterized by rapid technological changes and evolving standards demanding a significant investment in research and development, and, if we fail to address changing market conditions, our business and operating results will be harmed.

Risks Relating to Our Capital Stock

•The trading prices for our common stock have been volatile in the past and may be volatile in the future.

•Provisions in our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws and the Pennsylvania Associations Code (the “Code”) may delay or prevent our acquisition by a third party, which could also reduce the market price of our capital stock.

•We do not currently intend to pay dividends on our common stock; holders will benefit from an investment in our common stock only if it appreciates in value.

•Our ability to declare and pay dividends on our capital stock may be limited, including by the terms of our existing Credit Agreement.

•Our common stock is subordinate to our existing and future indebtedness, the Series B Preferred Stock, and any other preferred stock we may issue in the future. Our Series B Preferred Stock ranks junior to all of our and our subsidiaries’ consolidated liabilities.

•Our Board of Directors can issue, without approval of the holders of our common stock, preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of our common stock, the rights of holders of shares of our capital stock, or the market price of our capital stock.

•The redemption rights of the holders of Series B Preferred Stock may result in the use of our cash in such a way that could adversely affect our business, financial condition or results of operations.

•Holders of our Series B Preferred Stock can exercise significant control over us, which could limit the ability of holders of our other capital stock to influence the outcome of key transactions, including a change of control.

•Reports published by securities or industry analysts, freelance bloggers and credit rating agencies, including projections in those reports that exceed our actual results, could adversely affect our share price and trading volume.

•We depend on our subsidiaries for cash to fund our operations and expenses, including future dividend payments with respect to our outstanding preferred stock.

Part I