- Bookings of $274M increased 32% from Q2FY16
- Revenues of $232M increased 21% compared to Q2FY16
- EPS of $0.37 increased 42% sequentially and 23% compared to Q2FY16; includes $0.04 of net
foreign currency gains and other one-time items
PITTSBURGH, Jan. 24, 2017 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) ("II-VI" or the "Company") today
reported results for its second fiscal quarter ended December 31, 2016.
Vincent D. Mattera, Jr., President and Chief Executive Officer, said “Our second fiscal quarter results reflect
our strategy and the results of our efforts to address the growing market opportunities we are seeing, including those in the
communications markets. Company margin expansion is being driven by volume and manufacturing efficiencies. With a book to bill
ratio of 1.18, we anticipate the momentum we are currently experiencing to continue through the second half of fiscal year
2017.”
| Table 1 |
|
|
|
|
| $ Millions, except per share amounts and % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Increase |
| |
|
|
|
2016 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
(Decrease) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bookings (1) |
|
|
$ |
274.3 |
|
|
|
$ |
244.3 |
|
|
|
$ |
207.7 |
|
|
|
$ |
518.6 |
|
|
|
$ |
394.9 |
|
|
|
31 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
|
$ |
231.8 |
|
|
|
$ |
221.5 |
|
|
|
$ |
191.5 |
|
|
|
$ |
453.3 |
|
|
|
$ |
380.7 |
|
|
|
19 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings |
|
|
$ |
23.9 |
|
|
|
$ |
16.3 |
|
|
|
$ |
19.0 |
|
|
|
$ |
40.2 |
|
|
|
$ |
36.2 |
|
|
|
11 |
% |
| Adjusted net earnings (2) |
|
|
$ |
31.5 |
|
|
|
$ |
22.5 |
|
|
|
$ |
19.0 |
|
|
|
$ |
54.0 |
|
|
|
$ |
36.2 |
|
|
|
49 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share |
|
|
$ |
0.37 |
|
|
|
$ |
0.26 |
|
|
|
$ |
0.30 |
|
|
|
$ |
0.63 |
|
|
|
$ |
0.58 |
|
|
|
9 |
% |
| Adjusted diluted earnings per share (2) |
|
|
$ |
0.49 |
|
|
|
$ |
0.35 |
|
|
|
$ |
0.30 |
|
|
|
$ |
0.84 |
|
|
|
$ |
0.58 |
|
|
|
45 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Selected Financial Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross margin |
|
|
|
40.7 |
% |
|
|
|
39.5 |
% |
|
|
|
37.3 |
% |
|
|
|
40.1 |
% |
|
|
|
37.4 |
% |
|
|
270 bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on sales |
|
|
|
10.3 |
% |
|
|
|
7.4 |
% |
|
|
|
9.9 |
% |
|
|
|
8.9 |
% |
|
|
|
9.5 |
% |
|
|
(60 bps) |
| Adjusted return on sales (2) |
|
|
|
13.6 |
% |
|
|
|
10.2 |
% |
|
|
|
9.9 |
% |
|
|
|
12.0 |
% |
|
|
|
9.5 |
% |
|
|
250 bps |
(1) Bookings are orders the Company expects to convert to revenues within the next twelve months.
(2) Fiscal year 2017 excludes the expenses associated with the Company’s acceleration of its investment in the new technology
platform to increase its capability to produce new optoelectronic devices. See Tables 7 and 8 for Reconciliations of Reported
Earnings to Adjusted Earnings.
As discussed below under “Use of Non-GAAP Financial Measures,” the Company is presenting certain non-GAAP
financial measures in this release. Investors should consider non-GAAP adjusted measures in addition to, and not as a substitute
for, or superior to, financial performance measures prepared in accordance with generally accepted accounting principles ("GAAP").
Please refer to the attached schedules for the applicable GAAP to non-GAAP reconciliations.
Outlook
The outlook for the third fiscal quarter ending March 31, 2017 is revenue of $234 million to $244 million and
diluted earnings per share of $0.31 to $0.36. The additional expenses associated with the acceleration of the Company’s investment
in the new technology platform in the third fiscal quarter are expected to be around $0.11 per share. These amounts are calculated
using prevailing exchange rates. The results for the quarter ended March 31, 2016 were revenues of $205.1 million and diluted
earnings per share of $0.24 which included acquisition transaction expenses and other one-time transactions. As discussed in more
detail below, actual results may differ from these forecasts due to various factors including, but not limited to, changes in
product demand, competition and general economic conditions.
Segment Information
Operating income is defined as earnings before income taxes, interest expense and other expense or income,
net.
| Table 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment Bookings, Revenues, Operating Income and
Margins |
|
|
| $ Millions, except % |
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
|
2016 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
| Bookings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Laser Solutions |
|
|
85.0 |
|
|
|
|
80.6 |
|
|
|
|
66.4 |
|
|
|
|
165.6 |
|
|
|
|
135.5 |
|
| II-VI Photonics |
|
|
136.1 |
|
|
|
|
104.6 |
|
|
|
|
97.5 |
|
|
|
|
240.7 |
|
|
|
|
162.7 |
|
| II-VI Performance Products |
|
|
53.2 |
|
|
|
|
59.1 |
|
|
|
|
43.8 |
|
|
|
|
112.3 |
|
|
|
|
96.7 |
|
| Total bookings |
|
$ |
274.3 |
|
|
|
$ |
244.3 |
|
|
|
$ |
207.7 |
|
|
|
$ |
518.6 |
|
|
|
$ |
394.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Laser Solutions |
|
$ |
81.5 |
|
|
|
$ |
79.3 |
|
|
|
$ |
70.2 |
|
|
|
$ |
160.8 |
|
|
|
$ |
141.8 |
|
| II-VI Photonics |
|
|
100.9 |
|
|
|
|
95.8 |
|
|
|
|
74.3 |
|
|
|
|
196.7 |
|
|
|
|
146.2 |
|
| II-VI Performance Products |
|
|
49.4 |
|
|
|
|
46.4 |
|
|
|
|
47.0 |
|
|
|
|
95.8 |
|
|
|
|
92.7 |
|
| Total revenues |
|
$ |
231.8 |
|
|
|
$ |
221.5 |
|
|
|
$ |
191.5 |
|
|
|
$ |
453.3 |
|
|
|
$ |
380.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted II-VI Laser Solutions (1) |
|
$ |
17.2 |
|
|
|
$ |
14.3 |
|
|
|
$ |
11.2 |
|
|
|
$ |
31.5 |
|
|
|
$ |
23.4 |
|
| New IR&D technology platform investment |
|
|
(9.6 |
) |
|
|
|
(7.6 |
) |
|
|
|
- |
|
|
|
|
(17.2 |
) |
|
|
|
- |
|
| Consolidated II-VI Laser Solutions |
|
$ |
7.6 |
|
|
|
$ |
6.7 |
|
|
|
$ |
11.2 |
|
|
|
$ |
14.3 |
|
|
|
$ |
23.4 |
|
| II-VI Photonics |
|
|
15.9 |
|
|
|
|
13.9 |
|
|
|
|
7.4 |
|
|
|
|
29.8 |
|
|
|
|
13.7 |
|
| II-VI Performance Products |
|
|
3.6 |
|
|
|
|
3.1 |
|
|
|
|
3.1 |
|
|
|
|
6.7 |
|
|
|
|
6.4 |
|
| Total operating income |
|
$ |
27.1 |
|
|
|
$ |
23.7 |
|
|
|
$ |
21.7 |
|
|
|
$ |
50.8 |
|
|
|
$ |
43.5 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Operating Income (1) |
|
$ |
36.7 |
|
|
|
$ |
31.3 |
|
|
|
$ |
21.7 |
|
|
|
$ |
68.0 |
|
|
|
$ |
43.5 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted II-VI Laser Solutions (1) |
|
|
21.1 |
% |
|
|
|
18.0 |
% |
|
|
|
16.0 |
% |
|
|
|
19.6 |
% |
|
|
|
16.5 |
% |
| II-VI Laser Solutions |
|
|
9.3 |
% |
|
|
|
8.4 |
% |
|
|
|
16.0 |
% |
|
|
|
8.9 |
% |
|
|
|
16.5 |
% |
| II-VI Photonics |
|
|
15.8 |
% |
|
|
|
14.5 |
% |
|
|
|
10.0 |
% |
|
|
|
15.1 |
% |
|
|
|
9.4 |
% |
| II-VI Performance Products |
|
|
7.3 |
% |
|
|
|
6.7 |
% |
|
|
|
6.6 |
% |
|
|
|
7.0 |
% |
|
|
|
6.9 |
% |
| Total operating margin |
|
|
11.7 |
% |
|
|
|
10.7 |
% |
|
|
|
11.3 |
% |
|
|
|
11.2 |
% |
|
|
|
11.4 |
% |
| Adjusted total operating margin |
|
|
15.8 |
% |
|
|
|
14.1 |
% |
|
|
|
11.3 |
% |
|
|
|
15.1 |
% |
|
|
|
11.4 |
% |
(1) Fiscal year 2017 excludes the expenses associated with the Company’s acceleration of its investment in the new technology
platform to increase its capability to produce new optoelectronic devices. See Tables 7 and 8 for Reconciliations of Reported
Earnings to Adjusted Earnings.
GAAP net earnings and GAAP diluted earnings per share are included in Table 1 on page 1. Tables 3 through 5
reconcile adjusted numbers to the GAAP reported numbers.
Table 3 is a reconciliation of Operating Income reported in this press release to reported Net Earnings.
| Table 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2016 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted operating income (2) |
|
$ |
36.7 |
|
|
|
$ |
31.3 |
|
|
|
$ |
21.7 |
|
|
|
$ |
68.0 |
|
|
|
$ |
43.5 |
|
| New IR&D technology platform investment (2) |
|
|
(9.6 |
) |
|
|
|
(7.6 |
) |
|
|
|
- |
|
|
|
|
(17.2 |
) |
|
|
|
- |
|
| Operating income |
|
$ |
27.1 |
|
|
|
$ |
23.7 |
|
|
|
$ |
21.7 |
|
|
|
$ |
50.8 |
|
|
|
$ |
43.5 |
|
| Interest expense |
|
|
1.4 |
|
|
|
|
1.2 |
|
|
|
|
0.6 |
|
|
|
|
2.6 |
|
|
|
|
1.2 |
|
| Other expense (income), net |
|
|
(6.1 |
) |
|
|
|
(1.4 |
) |
|
|
|
(1.1 |
) |
|
|
|
(7.5 |
) |
|
|
|
(2.1 |
) |
| Income taxes |
|
|
7.9 |
|
|
|
|
7.6 |
|
|
|
|
3.2 |
|
|
|
|
15.5 |
|
|
|
|
8.2 |
|
| Net Earnings |
|
$ |
23.9 |
|
|
|
$ |
16.3 |
|
|
|
$ |
19.0 |
|
|
|
$ |
40.2 |
|
|
|
$ |
36.2 |
|
Table 4 is a reconciliation of Operating Income reported in this press release to adjusted EBITDA.
| Table 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2016 |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
27.1 |
|
|
$ |
23.7 |
|
|
$ |
21.7 |
|
|
$ |
50.8 |
|
|
$ |
43.5 |
| Depreciation and amortization |
|
|
14.9 |
|
|
|
14.9 |
|
|
|
13.8 |
|
|
|
29.8 |
|
|
|
27.1 |
| Other income (expense), net |
|
|
6.1 |
|
|
|
1.4 |
|
|
|
1.1 |
|
|
|
7.5 |
|
|
|
2.1 |
| New IR&D technology platform investment (2) |
|
|
9.6 |
|
|
|
7.6 |
|
|
|
- |
|
|
|
17.2 |
|
|
|
- |
| Adjusted EBITDA (1)(2) |
|
$ |
57.7 |
|
|
$ |
47.6 |
|
|
$ |
36.6 |
|
|
$ |
105.3 |
|
|
$ |
72.7 |
Table 5 is a reconciliation of EBITDA reported in this press release to reported Net Earnings.
| Table 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
|
2016 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
$ |
57.7 |
|
|
|
$ |
47.6 |
|
|
|
$ |
36.6 |
|
|
|
$ |
105.3 |
|
|
|
$ |
72.7 |
|
| Adjusted EBITDA margin (1)(2) |
|
|
24.9 |
% |
|
|
|
21.5 |
% |
|
|
|
19.1 |
% |
|
|
|
23.2 |
% |
|
|
|
19.1 |
% |
| New IR&D technology platform investment (2) |
|
|
(9.6 |
) |
|
|
|
(7.6 |
) |
|
|
|
- |
|
|
|
|
(17.2 |
) |
|
|
|
- |
|
| EBITDA |
|
|
48.1 |
|
|
|
|
40.0 |
|
|
|
|
36.6 |
|
|
|
|
88.1 |
|
|
|
|
72.7 |
|
| EBITDA margin (1) |
|
|
20.8 |
% |
|
|
|
18.1 |
% |
|
|
|
19.1 |
% |
|
|
|
19.4 |
% |
|
|
|
19.1 |
% |
| Interest expense |
|
|
1.4 |
|
|
|
|
1.2 |
|
|
|
|
0.6 |
|
|
|
|
2.6 |
|
|
|
|
1.2 |
|
| Depreciation and amortization |
|
|
14.9 |
|
|
|
|
14.9 |
|
|
|
|
13.8 |
|
|
|
|
29.8 |
|
|
|
|
27.1 |
|
| Income taxes |
|
|
7.9 |
|
|
|
|
7.6 |
|
|
|
|
3.2 |
|
|
|
|
15.5 |
|
|
|
|
8.2 |
|
| Net Earnings |
|
$ |
23.9 |
|
|
|
$ |
16.3 |
|
|
|
$ |
19.0 |
|
|
|
$ |
40.2 |
|
|
|
$ |
36.2 |
|
(1) EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
(2) Fiscal year 2017 excludes the expenses associated with the Company’s acceleration of its investment in the new technology
platform to increase its capability to produce new optoelectronic devices. See Tables 7 and 8 for Reconciliations of Reported
Earnings to Adjusted Earnings.
Table 6 is a table of other selected financial information.
| Table 6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ Millions, except share information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2016 |
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation expense |
|
$ |
3.9 |
|
|
$ |
4.1 |
|
|
$ |
3.7 |
|
|
$ |
8.0 |
|
|
$ |
7.6 |
| Cash paid for shares repurchased through the Company’s share repurchase
program |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.4 |
|
|
$ |
- |
|
|
$ |
6.3 |
| Shares repurchased through the Company’s share repurchase program |
|
|
- |
|
|
|
- |
|
|
|
25,200 |
|
|
|
- |
|
|
|
380,538 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Webcast Information
The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday, January 24, 2017 to discuss these
results. The conference call will be broadcast live over the internet and can be accessed by all interested parties from the
Company's website at www.ii-vi.com as well as at http://tinyurl.com/jlzbgg2. A replay of the webcast will be available for two weeks following
the call.
Use of Non-GAAP Financial
Measures
The Company has disclosed adjusted financial measurements in this press release that present financial
information considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although
the Company's management uses these measurements as an aid in monitoring the Company's on-going financial performance. The adjusted
non-GAAP net earnings and adjusted non-GAAP earnings per share measure the earnings of the Company, excluding non-recurring or
unusual items that are considered by management to be outside of the Company’s standard operations. EBITDA is an adjusted non-GAAP
financial measurement that is considered by management to be useful in measuring the profitability between companies within the
industry by reflecting operating results of the Company excluding non-operating factors. There are limitations associated with the
use of non-GAAP financial measures, including that such measures may not be entirely comparable to similarly titled measures used
by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance that items
excluded from the non-GAAP financial measures will not occur in the future, or that there could be cash costs associated with items
excluded from the non-GAAP financial measures. The Company compensates for these limitations by using these non-GAAP financial
measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their
most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for,
or superior to, financial performance measures prepared in accordance with GAAP.
About II-VI
Incorporated
II-VI Incorporated, a global leader in engineered materials and optoelectronic components and devices, is a
vertically integrated manufacturing company that develops innovative products for diversified applications in the industrial,
optical communications, military, life sciences, semiconductor equipment, and consumer markets. Headquartered in Saxonburg,
Pennsylvania, with research and development, manufacturing, sales, service, and distribution facilities worldwide, the Company
produces a wide variety of application-specific photonic and electronic materials and components, and deploys them in various forms
including integrated with advanced software to enable our customers.
Forward-looking
Statements
This press release contains forward-looking statements relating to future events and expectations that are based
on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and relate to the Company's performance on a going-forward basis. The
forward-looking statements in this press release involve risks and uncertainties, which could cause actual results, performance or
trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. The Company
believes that all forward-looking statements made by it in this release have a reasonable basis, but there can be no assurance that
management's expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be
correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ
materially from those discussed in the forward-looking statements in this press release include, but are not limited to: (i) the
failure of any one or more of the assumptions stated above to prove to be correct; (ii) the risks relating to forward-looking
statements and other "Risk Factors" discussed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2016;
(iii) the purchasing patterns of customers and end-users; (iv) the timely release of new products, and acceptance of such new
products by the market; (v) the introduction of new products by competitors and other competitive responses; (vi) the Company's
ability to assimilate recently acquired businesses, and risks, costs and uncertainties associated with such acquisitions; and/or
(vii) the Company's ability to devise and execute strategies to respond to market conditions. The Company disclaims any obligation
to update information contained in these forward-looking statements whether as a result of new information, future events or
developments, or otherwise.
| II-VI Incorporated and Subsidiaries |
| Condensed Consolidated Statements of Earnings
(Unaudited) |
| ($000 except per share data) |
| |
|
|
|
|
|
|
| |
|
Three Months
Ended |
| |
|
December 31, |
|
September
30, |
|
December
31, |
| |
|
|
2016 |
|
|
|
2016 |
|
|
|
2015 |
|
| Revenues |
|
|
|
|
|
|
| Net sales: |
|
|
|
|
|
|
| Domestic |
|
$ |
74,216 |
|
|
$ |
69,318 |
|
|
$ |
74,177 |
|
| International |
|
|
157,606 |
|
|
|
152,202 |
|
|
|
117,257 |
|
| Total Revenues |
|
|
231,822 |
|
|
|
221,520 |
|
|
|
191,434 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Costs, Expenses & Other Expense (Income) |
|
|
|
|
|
|
| Cost of goods sold |
|
|
137,559 |
|
|
|
133,918 |
|
|
|
120,090 |
|
| Internal research and development |
|
|
23,632 |
|
|
|
21,832 |
|
|
|
12,155 |
|
| Selling, general and administrative |
|
|
43,495 |
|
|
|
42,079 |
|
|
|
37,408 |
|
| Interest expense |
|
|
1,365 |
|
|
|
1,246 |
|
|
|
597 |
|
| Other expense (income), net |
|
|
(6,045 |
) |
|
|
(1,402 |
) |
|
|
(994 |
) |
| Total Costs, Expenses, & Other Expense (Income) |
|
|
200,006 |
|
|
|
197,673 |
|
|
|
169,256 |
|
| |
|
|
|
|
|
|
| Earnings Before Income Taxes |
|
|
31,816 |
|
|
|
23,847 |
|
|
|
22,178 |
|
| |
|
|
|
|
|
|
| Income Taxes |
|
|
7,913 |
|
|
|
7,553 |
|
|
|
3,187 |
|
| |
|
|
|
|
|
|
| Net Earnings |
|
$ |
23,903 |
|
|
$ |
16,294 |
|
|
$ |
18,991 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Diluted Earnings Per Share |
|
$ |
0.37 |
|
|
$ |
0.26 |
|
|
$ |
0.30 |
|
| |
|
|
|
|
|
|
| Basic Earnings Per Share |
|
$ |
0.38 |
|
|
$ |
0.26 |
|
|
$ |
0.31 |
|
| |
|
|
|
|
|
|
| Average Shares Outstanding - Diluted |
|
|
64,407 |
|
|
|
63,590 |
|
|
|
62,673 |
|
| Average Shares Outstanding - Basic |
|
|
62,390 |
|
|
|
62,020 |
|
|
|
61,165 |
|
| II-VI Incorporated and Subsidiaries |
| Condensed Consolidated Statements of Earnings
(Unaudited) |
| ($000 except per share data) |
| |
|
|
|
|
| |
|
Six Months
Ended |
| |
|
December 31, |
|
December
31, |
| |
|
|
2016 |
|
|
|
2015 |
|
| Revenues |
|
|
|
|
| Net sales: |
|
|
|
|
| Domestic |
|
$ |
143,534 |
|
|
$ |
144,928 |
|
| International |
|
|
309,808 |
|
|
|
235,713 |
|
| Total Revenues |
|
|
453,342 |
|
|
|
380,641 |
|
| |
|
|
|
|
| |
|
|
|
|
| Costs, Expenses & Other Expense (Income) |
|
|
|
|
| Cost of goods sold |
|
|
271,477 |
|
|
|
238,108 |
|
| Internal research and development |
|
|
45,464 |
|
|
|
25,306 |
|
| Selling, general and administrative |
|
|
85,574 |
|
|
|
73,718 |
|
| Interest expense |
|
|
2,611 |
|
|
|
1,246 |
|
| Other expense (income), net |
|
|
(7,447 |
) |
|
|
(2,051 |
) |
| Total Costs, Expenses, & Other Expense (Income) |
|
|
397,679 |
|
|
|
336,327 |
|
| |
|
|
|
|
| Earnings Before Income Taxes |
|
|
55,663 |
|
|
|
44,314 |
|
| |
|
|
|
|
| Income Taxes |
|
|
15,466 |
|
|
|
8,109 |
|
| |
|
|
|
|
| Net Earnings |
|
$ |
40,197 |
|
|
$ |
36,205 |
|
| |
|
|
|
|
| |
|
|
|
|
| Diluted Earnings Per Share |
|
$ |
0.63 |
|
|
$ |
0.58 |
|
| |
|
|
|
|
| Basic Earnings Per Share |
|
$ |
0.65 |
|
|
$ |
0.59 |
|
| |
|
|
|
|
| Average Shares Outstanding - Diluted |
|
|
63,999 |
|
|
|
62,701 |
|
| Average Shares Outstanding - Basic |
|
|
62,205 |
|
|
|
61,194 |
|
| II-VI Incorporated and Subsidiaries |
Condensed Consolidated Balance Sheets (Unaudited)
($000) |
| |
|
|
|
|
| |
|
December 31, |
|
June 30, |
| |
|
|
2016 |
|
|
2016 |
|
| Assets |
|
|
|
|
| Current Assets |
|
|
|
|
| Cash and cash equivalents |
|
$ |
246,195 |
|
$ |
218,445 |
|
| Accounts receivable |
|
|
153,411 |
|
|
164,817 |
|
| Inventories |
|
|
183,062 |
|
|
175,133 |
|
| Prepaid and refundable income taxes |
|
|
5,685 |
|
|
6,535 |
|
| Prepaid and other current assets |
|
|
21,794 |
|
|
18,033 |
|
| Total Current Assets |
|
|
610,147 |
|
|
582,963 |
|
| Property, plant & equipment, net |
|
|
305,174 |
|
|
242,857 |
|
| Goodwill |
|
|
232,316 |
|
|
233,755 |
|
| Other intangible assets, net |
|
|
117,979 |
|
|
124,590 |
|
| Investment |
|
|
11,844 |
|
|
11,354 |
|
| Deferred income taxes |
|
|
5,161 |
|
|
7,848 |
|
| Other assets |
|
|
10,380 |
|
|
8,614 |
|
| Total Assets |
|
$ |
1,293,001 |
|
$ |
1,211,981 |
|
| |
|
|
|
|
| Liabilities and Shareholders’
Equity |
|
|
|
|
| Current Liabilities |
|
|
|
|
| Current portion of long-term debt |
|
$ |
20,000 |
|
$ |
20,000 |
|
| Accounts payable |
|
|
60,616 |
|
|
53,796 |
|
| Accruals and other current liabilities |
|
|
80,082 |
|
|
97,446 |
|
| Total Current Liabilities |
|
|
160,698 |
|
|
171,242 |
|
| Long-term debt |
|
|
242,892 |
|
|
215,307 |
|
| Capital lease obligation |
|
|
23,964 |
|
|
- |
|
| Deferred income taxes |
|
|
12,793 |
|
|
11,103 |
|
| Other liabilities |
|
|
33,608 |
|
|
31,991 |
|
| Total Liabilities |
|
|
473,955 |
|
|
429,643 |
|
| Total Shareholders’ Equity |
|
|
819,046 |
|
|
782,338 |
|
| Total Liabilities and
Shareholders’ Equity |
|
$ |
1,293,001 |
|
$ |
1,211,981 |
|
| II-VI Incorporated and Subsidiaries |
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000) |
| |
|
|
|
|
| |
|
Six Months Ended |
| |
|
December
31, |
| |
|
|
2016 |
|
|
|
2015 |
|
| Cash Flows from Operating Activities |
|
|
|
|
| Net cash provided by operating activities |
|
$ |
58,692 |
|
|
$ |
62,300 |
|
| |
|
|
|
|
| Cash Flows from Investing Activities |
|
|
|
|
| Additions to property, plant & equipment |
|
|
(57,822 |
) |
|
|
(19,156 |
) |
| Purchase of business |
|
|
(580 |
) |
|
|
- |
|
| Other investing activities |
|
|
186 |
|
|
|
39 |
|
| Net cash used in investing
activities |
|
|
(58,216 |
) |
|
|
(19,117 |
) |
| |
|
|
|
|
| Cash Flows from Financing Activities |
|
|
|
|
| Proceeds from borrowings |
|
|
44,000 |
|
|
|
4,000 |
|
| Payments on borrowings |
|
|
(15,000 |
) |
|
|
(33,500 |
) |
| Purchases of treasury stock |
|
|
- |
|
|
|
(6,284 |
) |
| Proceeds from exercises of stock options |
|
|
7,740 |
|
|
|
1,794 |
|
| Payments in satisfaction of employees' minimum tax
obligations |
|
|
(2,271 |
) |
|
|
(1,981 |
) |
| Debt issuance costs |
|
|
(1,384 |
) |
|
|
- |
|
| Other financing activities |
|
|
503 |
|
|
|
120 |
|
| Net cash provided by (used in) financing
activities |
|
|
33,588 |
|
|
|
(35,851 |
) |
| |
|
|
|
|
| Effect of exchange rate changes on cash and cash
equivalents |
|
|
(6,314 |
) |
|
|
(3,882 |
) |
| |
|
|
|
|
| Net increase in cash and cash equivalents |
|
|
27,750 |
|
|
|
3,450 |
|
| |
|
|
|
|
| Cash and Cash Equivalents at Beginning of Period |
|
|
218,445 |
|
|
|
173,634 |
|
| Cash and Cash Equivalents at End of
Period |
|
$ |
246,195 |
|
|
$ |
177,084 |
|
| Table 7 |
|
|
|
|
|
|
|
|
| II-VI Incorporated and Subsidiaries |
| Reconciliation of Selected Non-GAAP Financial
Measurements |
| ($ Millions, except per share amounts) |
| |
|
|
|
|
|
|
|
|
| Reconciliation of Reported Earnings to Non-GAAP
Earnings |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months
Ended |
| |
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
| |
|
|
2016 |
|
|
|
|
2016 |
|
|
|
|
2015 |
| |
|
|
|
|
|
|
|
|
| Reported Earnings |
|
$ |
23.9 |
|
|
|
$ |
16.3 |
|
|
|
$ |
19.0 |
| |
|
|
|
|
|
|
|
|
| Add back one-time items: |
|
|
|
|
|
|
|
|
| New IR&D technology platform investment |
|
|
9.6 |
|
|
|
|
7.6 |
|
|
|
|
- |
| |
|
|
|
|
|
|
|
|
| Income tax impact on one-time items |
|
|
(2.0 |
) |
|
|
|
(1.4 |
) |
|
|
|
- |
| |
|
|
|
|
|
|
|
|
| Adjusted Earnings |
|
$ |
31.5 |
|
|
|
$ |
22.5 |
|
|
|
$ |
19.0 |
| |
|
|
|
|
|
|
|
|
| Per share data: |
|
|
|
|
|
|
|
|
| Reported Earnings: |
|
|
|
|
|
|
|
|
| Earnings - Diluted Earnings Per Share |
|
$ |
0.37 |
|
|
|
$ |
0.26 |
|
|
|
$ |
0.30 |
| Earnings - Basic Earnings Per Share |
|
$ |
0.38 |
|
|
|
$ |
0.26 |
|
|
|
$ |
0.31 |
| |
|
|
|
|
|
|
|
|
| Per share, After-Tax Impact of Special Items on: |
|
|
|
|
|
|
|
|
| Adjustments - Diluted Earnings Per Share |
|
$ |
0.12 |
|
|
|
$ |
0.10 |
|
|
|
$ |
- |
| Adjustments - Basic Earnings Per Share |
|
$ |
0.12 |
|
|
|
$ |
0.10 |
|
|
|
$ |
- |
| |
|
|
|
|
|
|
|
|
| Adjusted Earnings: |
|
|
|
|
|
|
|
|
| Adjusted Earnings - Diluted Earnings Per Share |
|
$ |
0.49 |
|
|
|
$ |
0.35 |
|
|
|
$ |
0.30 |
| Adjusted Earnings - Basic Earnings Per Share |
|
$ |
0.50 |
|
|
|
$ |
0.36 |
|
|
|
$ |
0.31 |
| Table 8 |
|
|
|
|
|
| II-VI Incorporated and Subsidiaries |
| Reconciliation of Selected Non-GAAP Financial
Measurements |
| ($ Millions, except per share amounts) |
| |
|
|
|
|
|
| Reconciliation of Reported Earnings to Non-GAAP
Earnings |
| (Unaudited) |
| |
|
|
|
|
|
| |
|
Six Months
Ended |
| |
|
|
|
|
|
| |
|
Dec 31, |
|
|
Dec 31, |
| |
|
|
2016 |
|
|
|
|
2015 |
| |
|
|
|
|
|
| Reported Earnings |
|
$ |
40.2 |
|
|
|
$ |
36.2 |
| |
|
|
|
|
|
| Add back one-time items: |
|
|
|
|
|
| New IR&D technology platform investment |
|
|
17.2 |
|
|
|
|
- |
| |
|
|
|
|
|
| Income tax impact on one-time items |
|
|
(3.4 |
) |
|
|
|
- |
| |
|
|
|
|
|
| Adjusted Earnings |
|
$ |
54.0 |
|
|
|
$ |
36.2 |
| |
|
|
|
|
|
| Per share data: |
|
|
|
|
|
| Reported Earnings: |
|
|
|
|
|
| Earnings - Diluted Earnings Per Share |
|
$ |
0.63 |
|
|
|
$ |
0.58 |
| Earnings - Basic Earnings Per Share |
|
$ |
0.65 |
|
|
|
$ |
0.59 |
| |
|
|
|
|
|
| Per share, After-Tax Impact of Special Items on: |
|
|
|
|
|
| Adjustments - Diluted Earnings Per Share |
|
$ |
0.22 |
|
|
|
$ |
- |
| Adjustments - Basic Earnings Per Share |
|
$ |
0.22 |
|
|
|
$ |
- |
| |
|
|
|
|
|
| Adjusted Earnings: |
|
|
|
|
|
| Adjusted Earnings - Diluted Earnings Per Share |
|
$ |
0.84 |
|
|
|
$ |
0.58 |
| Adjusted Earnings - Basic Earnings Per Share |
|
$ |
0.87 |
|
|
|
$ |
0.59 |
CONTACT: II-VI Incorporated Mary Jane Raymond, Chief Financial Officer (724) 352-4455
