- Record Revenues of $282M Increased 21% Compared to Q2 FY17
- Record Backlog of over $400M and strengthening Book to Bill Ratio
- The adoption of the Tax Cuts and Jobs Act reduced EPS by $0.24
PITTSBURGH, Feb. 01, 2018 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) ("II-VI" or the "Company") today
reported results for its second fiscal quarter ended December 31, 2017. The Company’s results include $15.8 million or $0.24 per
diluted share of largely one time additional income tax expense due to the provisions under the Tax Cuts and Jobs Act and
associated withholding taxes for anticipated cash repatriation. The Securities and Exchange Commission has issued rules that allow
for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax
impacts. The Company currently anticipates finalizing and recording any resulting adjustments by the end of the quarter ending
December 31, 2018.
“Revenues and adjusted EPS this quarter were at the top end of our guidance driven by solid performance from all
three segments,” said Dr. Vincent D. Mattera, Jr. President and CEO, II-VI Incorporated. “Each of our segments saw growth in their
end markets, and our newer products accounted for more than half the growth this quarter. Our growth markets as well as our core
markets of industrial and communications are positioned to benefit as the end markets continue to mature. With regard to the new
Tax Cuts and Jobs Act of 2017, the tax we have recorded is to account for the various provisions and our plans for cash
repatriation in due course. We expect this legislation to be a net positive for II-VI.”
| Table 1 |
|
| $ Millions, except per share amounts, % and Book to
Bill |
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
281.5 |
|
|
|
$ |
261.5 |
|
|
|
$ |
231.8 |
|
|
|
$ |
543.0 |
|
|
|
$ |
453.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
32.5 |
|
|
|
$ |
29.8 |
|
|
|
$ |
27.1 |
|
|
|
$ |
62.3 |
|
|
|
$ |
50.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings |
|
$ |
9.6 |
|
|
|
$ |
21.1 |
|
|
|
$ |
23.9 |
|
|
|
$ |
30.7 |
|
|
|
$ |
40.2 |
|
| Adjusted net earnings (1) |
|
$ |
25.4 |
|
|
|
$ |
21.1 |
|
|
|
$ |
23.9 |
|
|
|
$ |
46.5 |
|
|
|
$ |
40.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share |
|
$ |
0.15 |
|
|
|
$ |
0.32 |
|
|
|
$ |
0.37 |
|
|
|
$ |
0.47 |
|
|
|
$ |
0.63 |
|
| Adjusted diluted earnings per share (1) |
|
$ |
0.39 |
|
|
|
$ |
0.32 |
|
|
|
$ |
0.37 |
|
|
|
$ |
0.71 |
|
|
|
$ |
0.63 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Selected Financial Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Book to Bill (2) |
|
|
1.05 |
|
|
|
|
0.96 |
|
|
|
|
1.18 |
|
|
|
|
1.01 |
|
|
|
|
1.14 |
|
| Gross margin |
|
|
38.9 |
% |
|
|
|
40.5 |
% |
|
|
|
40.7 |
% |
|
|
|
39.7 |
% |
|
|
|
40.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating margin |
|
|
11.5 |
% |
|
|
|
11.4 |
% |
|
|
|
11.7 |
% |
|
|
|
11.5 |
% |
|
|
|
11.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on sales |
|
|
3.4 |
% |
|
|
|
8.1 |
% |
|
|
|
10.3 |
% |
|
|
|
5.7 |
% |
|
|
|
8.9 |
% |
| Adjusted return on sales (1) |
|
|
9.0 |
% |
|
|
|
8.1 |
% |
|
|
|
10.3 |
% |
|
|
|
8.6 |
% |
|
|
|
8.9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes the impact of the Tax Cuts and Jobs Act in fiscal year 2018. See Tables 7 and 8 for Reconciliation of
Reported Earnings to Adjusted Net Earnings.
(2) Book to Bill is calculated by dividing orders the company expects to convert to revenue within the next twelve months by
revenues recognized during the period.
Outlook
The outlook for the third fiscal quarter ending March 31, 2018 is revenues of $270 million to $285 million and
earnings per share of $0.33 to $0.40. This is all at prevailing exchange rates and all earnings per share comments refer to diluted
shares. Comparable results for the quarter ended March 31, 2017 were revenues of $245 million and diluted earnings per share of
$0.35. 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 Book to Bill, Revenues, Operating Income and
Margins |
|
|
|
| $ Millions, except % and Book to Bill |
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
| Book to Bill: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Laser Solutions |
|
|
1.11 |
|
|
|
|
1.08 |
|
|
|
|
1.04 |
|
|
|
|
1.10 |
|
|
|
|
1.03 |
|
| II-VI Photonics |
|
|
0.96 |
|
|
|
|
0.78 |
|
|
|
|
1.35 |
|
|
|
|
0.87 |
|
|
|
|
1.22 |
|
| II-VI Performance Products |
|
|
1.09 |
|
|
|
|
1.13 |
|
|
|
|
1.08 |
|
|
|
|
1.11 |
|
|
|
|
1.17 |
|
| Total Book to Bill |
|
|
1.05 |
|
|
|
|
0.96 |
|
|
|
|
1.18 |
|
|
|
|
1.01 |
|
|
|
|
1.14 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Laser Solutions |
|
$ |
109.8 |
|
|
|
$ |
93.3 |
|
|
|
$ |
81.5 |
|
|
|
$ |
203.1 |
|
|
|
$ |
160.8 |
|
| II-VI Photonics |
|
|
110.5 |
|
|
|
|
110.6 |
|
|
|
|
100.9 |
|
|
|
|
221.1 |
|
|
|
|
196.7 |
|
| II-VI Performance Products |
|
|
61.2 |
|
|
|
|
57.6 |
|
|
|
|
49.4 |
|
|
|
|
118.8 |
|
|
|
|
95.8 |
|
| Total Revenues |
|
$ |
281.5 |
|
|
|
$ |
261.5 |
|
|
|
$ |
231.8 |
|
|
|
$ |
543.0 |
|
|
|
$ |
453.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Laser Solutions |
|
$ |
9.5 |
|
|
|
$ |
3.3 |
|
|
|
$ |
7.6 |
|
|
|
$ |
12.8 |
|
|
|
$ |
14.3 |
|
| II-VI Photonics |
|
|
16.9 |
|
|
|
|
19.5 |
|
|
|
|
15.9 |
|
|
|
|
36.4 |
|
|
|
|
29.8 |
|
| II-VI Performance Products |
|
|
6.1 |
|
|
|
|
7.0 |
|
|
|
|
3.6 |
|
|
|
|
13.1 |
|
|
|
|
6.7 |
|
| Total Operating Income |
|
$ |
32.5 |
|
|
|
$ |
29.8 |
|
|
|
$ |
27.1 |
|
|
|
$ |
62.3 |
|
|
|
$ |
50.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Laser Solutions |
|
|
8.7 |
% |
|
|
|
3.5 |
% |
|
|
|
9.3 |
% |
|
|
|
6.3 |
% |
|
|
|
8.9 |
% |
| II-VI Photonics |
|
|
15.3 |
% |
|
|
|
17.6 |
% |
|
|
|
15.8 |
% |
|
|
|
16.5 |
% |
|
|
|
15.1 |
% |
| II-VI Performance Products |
|
|
10.0 |
% |
|
|
|
12.2 |
% |
|
|
|
7.3 |
% |
|
|
|
11.0 |
% |
|
|
|
7.0 |
% |
| Total Operating Margin |
|
|
11.5 |
% |
|
|
|
11.4 |
% |
|
|
|
11.7 |
% |
|
|
|
11.5 |
% |
|
|
|
11.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3 is a reconciliation of Operating Income reported in this press release to reported Net Earnings.
| Table 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of Operating Income to Net
Earnings |
|
|
|
|
|
|
|
|
| $ Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
32.5 |
|
|
|
$ |
29.8 |
|
|
|
$ |
27.1 |
|
|
|
$ |
62.3 |
|
|
|
$ |
50.8 |
|
| Interest expense |
|
|
4.7 |
|
|
|
|
3.6 |
|
|
|
|
1.4 |
|
|
|
|
8.3 |
|
|
|
|
2.6 |
|
| Other expense (income), net |
|
|
(2.0 |
) |
|
|
|
(0.7 |
) |
|
|
|
(6.1 |
) |
|
|
|
(2.7 |
) |
|
|
|
(7.5 |
) |
| Income taxes |
|
|
20.2 |
|
|
|
|
5.8 |
|
|
|
|
7.9 |
|
|
|
|
26.0 |
|
|
|
|
15.5 |
|
| Net Earnings |
|
$ |
9.6 |
|
|
|
$ |
21.1 |
|
|
|
$ |
23.9 |
|
|
|
$ |
30.7 |
|
|
|
$ |
40.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4 is a reconciliation of Operating Income reported in this press release to EBITDA.
| Table 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of Operating Income to EBITDA |
|
|
|
|
| $ Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
32.5 |
|
|
$ |
29.8 |
|
|
$ |
27.1 |
|
|
$ |
62.3 |
|
|
$ |
50.8 |
| Depreciation and amortization |
|
|
19.4 |
|
|
|
18.9 |
|
|
|
14.9 |
|
|
|
38.3 |
|
|
|
29.8 |
| Other income (expense) |
|
|
2.0 |
|
|
|
0.7 |
|
|
|
6.1 |
|
|
|
2.7 |
|
|
|
7.5 |
| EBITDA (3) |
|
$ |
53.9 |
|
|
$ |
49.4 |
|
|
$ |
48.1 |
|
|
$ |
103.3 |
|
|
$ |
88.1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5 is a reconciliation of EBITDA reported in this press release to reported Net Earnings.
| Table 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of EBITDA to Net Earnings |
|
|
|
|
| $ Millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
Three Months
Ended |
|
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
|
|
Dec 31, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
$ |
53.9 |
|
|
|
$ |
49.4 |
|
|
|
$ |
48.1 |
|
|
|
$ |
103.3 |
|
|
|
$ |
88.1 |
|
| EBITDA margin (4) |
|
|
19.1 |
% |
|
|
|
18.9 |
% |
|
|
|
20.8 |
% |
|
|
|
19.0 |
% |
|
|
|
19.4 |
% |
| Interest expense |
|
$ |
4.7 |
|
|
|
$ |
3.6 |
|
|
|
$ |
1.4 |
|
|
|
$ |
8.3 |
|
|
|
$ |
2.6 |
|
| Depreciation and amortization |
|
|
19.4 |
|
|
|
|
18.9 |
|
|
|
|
14.9 |
|
|
|
|
38.3 |
|
|
|
|
29.8 |
|
| Income taxes |
|
|
20.2 |
|
|
|
|
5.8 |
|
|
|
|
7.9 |
|
|
|
|
26.0 |
|
|
|
|
15.5 |
|
| Net Earnings |
|
$ |
9.6 |
|
|
|
$ |
21.1 |
|
|
|
$ |
23.9 |
|
|
|
$ |
30.7 |
|
|
|
$ |
40.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
(4) EBITDA margin is defined as earnings before interest, incomes taxes, depreciation and amortization divided by
revenues.
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, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation expense, pre-tax |
|
$ |
5.4 |
|
|
$ |
6.3 |
|
|
$ |
3.9 |
|
|
$ |
11.7 |
|
|
$ |
8.0 |
| Cash paid for shares repurchased through the Company’s share repurchase
program |
|
$ |
- |
|
|
$ |
49.9 |
|
|
$ |
- |
|
|
$ |
49.9 |
|
|
$ |
- |
| Shares repurchased through the Company’s share repurchase program |
|
|
- |
|
|
|
1,414,900 |
|
|
|
- |
|
|
|
1,414,900 |
|
|
|
- |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Webcast Information
The Company will host a conference call at 4:30 p.m. Eastern Time on Thursday, February 1, 2018 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/ya4drs4h. A replay of the webcast will be available for two weeks following
the call.
Use of Non-GAAP Financial Measures
The Company has disclosed 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 the adjusted non-GAAP earnings per share measure the earnings of the Company, excluding non-recurring or unusual items
that are considered by the management to be outside the Company’s standard operation. 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, 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,
the Company has 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. For more information, please visit us at www.ii-vi.com.
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, 2017;
(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; (vii) our
ability to achieve the anticipated benefits of capital investments that we make; (viii) the Company's ability to devise and execute
strategies to respond to market conditions; and/or (ix) risks related to the recent U.S. tax legislation and the Company’s
continuing analysis of its impact on the Company. 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, |
|
| |
|
2017 |
|
|
2017 |
|
|
2016 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
281,470 |
|
|
$ |
261,503 |
|
|
$ |
231,822 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Costs, Expenses & Other Expense (Income) |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
|
172,037 |
|
|
|
155,528 |
|
|
|
137,559 |
|
| Internal research and development |
|
|
27,764 |
|
|
|
25,574 |
|
|
|
23,632 |
|
| Selling, general and administrative |
|
|
49,122 |
|
|
|
50,624 |
|
|
|
43,495 |
|
| Interest expense |
|
|
4,644 |
|
|
|
3,645 |
|
|
|
1,365 |
|
| Other expense (income), net |
|
|
(1,965 |
) |
|
|
(767 |
) |
|
|
(6,045 |
) |
| Total Costs, Expenses, & Other Expense (Income) |
|
|
251,602 |
|
|
|
234,604 |
|
|
|
200,006 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings Before Income Taxes |
|
|
29,868 |
|
|
|
26,899 |
|
|
|
31,816 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income Taxes |
|
|
20,272 |
|
|
|
5,758 |
|
|
|
7,913 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Earnings |
|
$ |
9,596 |
|
|
$ |
21,141 |
|
|
$ |
23,903 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted Earnings Per Share |
|
$ |
0.15 |
|
|
$ |
0.32 |
|
|
$ |
0.37 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic Earnings Per Share |
|
$ |
0.15 |
|
|
$ |
0.34 |
|
|
$ |
0.38 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Average Shares Outstanding - Diluted |
|
|
65,038 |
|
|
|
65,283 |
|
|
|
64,407 |
|
| Average Shares Outstanding - Basic |
|
|
62,302 |
|
|
|
62,744 |
|
|
|
62,390 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| II-VI Incorporated and Subsidiaries |
| Condensed Consolidated Statements of Earnings
(Unaudited) |
| ($000 except per share data) |
| |
|
|
|
|
|
|
| |
|
Six Months
Ended |
| |
|
December 31, |
|
December
31, |
| |
|
2017 |
|
2016 |
| |
|
|
|
|
|
|
| Revenues |
|
$ |
542,973 |
|
|
$ |
453,342 |
|
| |
|
|
|
|
|
|
| Costs, Expenses & Other Expense (Income) |
|
|
|
|
|
|
| Cost of goods sold |
|
|
327,565 |
|
|
|
271,477 |
|
| Internal research and development |
|
|
53,338 |
|
|
|
45,464 |
|
| Selling, general and administrative |
|
|
99,746 |
|
|
|
85,574 |
|
| Interest expense |
|
|
8,289 |
|
|
|
2,611 |
|
| Other expense (income), net |
|
|
(2,732 |
) |
|
|
(7,447 |
) |
| Total Costs, Expenses, & Other Expense (Income) |
|
|
486,206 |
|
|
|
397,679 |
|
| |
|
|
|
|
|
|
| Earnings Before Income Taxes |
|
|
56,767 |
|
|
|
55,663 |
|
| |
|
|
|
|
|
|
| Income Taxes |
|
|
26,030 |
|
|
|
15,466 |
|
| |
|
|
|
|
|
|
| Net Earnings |
|
$ |
30,737 |
|
|
$ |
40,197 |
|
| |
|
|
|
|
|
|
| Diluted Earnings Per Share |
|
$ |
0.47 |
|
|
$ |
0.63 |
|
| |
|
|
|
|
|
|
| Basic Earnings Per Share |
|
$ |
0.49 |
|
|
$ |
0.65 |
|
| |
|
|
|
|
|
|
| Average Shares Outstanding - Diluted |
|
|
65,161 |
|
|
|
63,999 |
|
| Average Shares Outstanding - Basic |
|
|
62,523 |
|
|
|
62,205 |
|
| |
|
|
|
|
|
|
|
|
| II-VI Incorporated and Subsidiaries |
| Condensed Consolidated Balance Sheets (Unaudited) |
($000)
|
| |
|
|
|
|
|
|
| |
|
December 31, |
|
June 30, |
| |
|
2017 |
|
2017 |
| Assets |
|
|
|
|
|
|
| Current Assets |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
254,456 |
|
$ |
271,888 |
| Accounts receivable |
|
|
196,045 |
|
|
193,379 |
| Inventories |
|
|
235,468 |
|
|
203,695 |
| Prepaid and refundable income taxes |
|
|
7,055 |
|
|
6,732 |
| Prepaid and other current assets |
|
|
30,391 |
|
|
26,602 |
| Total Current Assets |
|
|
723,415 |
|
|
702,296 |
| Property, plant & equipment, net |
|
|
481,014 |
|
|
367,728 |
| Goodwill |
|
|
272,209 |
|
|
250,342 |
| Other intangible assets, net |
|
|
132,328 |
|
|
133,957 |
| Investments |
|
|
67,068 |
|
|
11,727 |
| Deferred income taxes |
|
|
3,427 |
|
|
3,023 |
| Other assets |
|
|
8,413 |
|
|
8,224 |
| Total Assets |
|
$ |
1,687,874 |
|
$ |
1,477,297 |
| |
|
|
|
|
|
|
| Liabilities and Shareholders’
Equity |
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
| Current portion of long-term debt |
|
$ |
20,000 |
|
$ |
20,000 |
| Accounts payable |
|
|
71,236 |
|
|
65,540 |
| Accruals and other current liabilities |
|
|
88,947 |
|
|
99,412 |
| Total Current Liabilities |
|
|
180,183 |
|
|
184,952 |
| Long-term debt |
|
|
442,768 |
|
|
322,022 |
| Capital lease obligation |
|
|
22,861 |
|
|
23,415 |
| Deferred income taxes |
|
|
37,158 |
|
|
15,345 |
| Other liabilities |
|
|
41,003 |
|
|
31,000 |
| Total Liabilities |
|
|
723,973 |
|
|
576,734 |
| Total Shareholders' Equity |
|
|
963,901 |
|
|
900,563 |
| Total Liabilities and
Shareholders’ Equity |
|
$ |
1,687,874 |
|
$ |
1,477,297 |
| |
|
|
|
|
|
|
| II-VI Incorporated and Subsidiaries |
|
| Condensed Consolidated Statements of Cash Flows
(Unaudited) |
|
($000)
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Six Months Ended |
|
| |
|
December
31, |
|
| |
|
2017 |
|
|
2016 |
|
| Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
| Net cash provided by operating activities |
|
$ |
59,669 |
|
|
$ |
58,692 |
|
| |
|
|
|
|
|
|
|
|
| Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
| Additions to property, plant & equipment |
|
|
(77,623 |
) |
|
|
(57,822 |
) |
| Purchases of businesses |
|
|
(80,965 |
) |
|
|
(580 |
) |
| Purchase of equity investment |
|
|
(51,491 |
) |
|
|
- |
|
| Other investing activities |
|
|
145 |
|
|
|
186 |
|
| Net cash used in investing
activities |
|
|
(209,934 |
) |
|
|
(58,216 |
) |
| |
|
|
|
|
|
|
|
|
| Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
| Proceeds from issuance |
|
|
|
|
|
|
|
|
| Proceeds from issuance of 0.25% convertible senior notes
due 2022 |
|
|
345,000 |
|
|
|
- |
|
| Proceeds from borrowings under Credit Facility |
|
|
100,000 |
|
|
|
44,000 |
|
| Payments on borrowings under Credit Facility |
|
|
(262,000 |
) |
|
|
(15,000 |
) |
| Purchases of treasury stock |
|
|
(49,875 |
) |
|
|
- |
|
| Proceeds from exercises of stock options |
|
|
6,784 |
|
|
|
7,740 |
|
| Payments in satisfaction of employees' minimum tax
obligations |
|
|
(3,608 |
) |
|
|
(2,271 |
) |
| Debt issuance costs |
|
|
(10,061 |
) |
|
|
(1,384 |
) |
| Other financing activities |
|
|
- |
|
|
|
503 |
|
| Net cash provided by financing
activities |
|
|
126,240 |
|
|
|
33,588 |
|
| |
|
|
|
|
|
|
|
|
| Effect of exchange rate changes on cash and cash
equivalents |
|
|
6,593 |
|
|
|
(6,314 |
) |
| |
|
|
|
|
|
|
|
|
| Net (decrease) increase in cash and cash equivalents |
|
|
(17,432 |
) |
|
|
27,750 |
|
| |
|
|
|
|
|
|
|
|
| Cash and Cash Equivalents at Beginning of Period |
|
|
271,888 |
|
|
|
218,445 |
|
| Cash and Cash Equivalents at End of
Period |
|
$ |
254,456 |
|
|
$ |
246,195 |
|
| |
|
|
|
|
|
|
|
|
| Table 7 |
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of Selected Non-GAAP Financial
Measurements |
|
|
|
|
| ($ Millions, except per share amounts) |
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months
Ended |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Sept 30, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Reported Net Earnings |
|
$ |
9.6 |
|
|
$ |
21.1 |
|
|
$ |
23.9 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Add back one-time items: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Impact of the "Tax Cuts and Jobs Act" |
|
|
15.8 |
|
|
|
- |
|
|
|
- |
| |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Net Earnings |
|
$ |
25.4 |
|
|
$ |
21.1 |
|
|
$ |
23.9 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Per share data: |
|
|
|
|
|
|
|
|
|
|
|
| Reported Earnings: |
|
|
|
|
|
|
|
|
|
|
|
| Earnings - Diluted Earnings Per Share |
|
$ |
0.15 |
|
|
$ |
0.32 |
|
|
$ |
0.37 |
| Earnings - Basic Earnings Per Share |
|
$ |
0.15 |
|
|
$ |
0.34 |
|
|
$ |
0.38 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Per share, After-Tax Impact of Special Items on: |
|
|
|
|
|
|
|
|
|
|
|
| Adjustments - Diluted Earnings Per Share |
|
$ |
0.24 |
|
|
$ |
0.32 |
|
|
$ |
0.37 |
| Adjustments - Basic Earnings Per Share |
|
$ |
0.25 |
|
|
$ |
0.34 |
|
|
$ |
0.38 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Earnings: |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Earnings - Diluted Earnings Per Share |
|
$ |
0.39 |
|
|
$ |
0.32 |
|
|
$ |
0.37 |
| Adjusted Earnings - Basic Earnings Per Share |
|
$ |
0.41 |
|
|
$ |
0.34 |
|
|
$ |
0.38 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Table 8 |
|
|
|
|
|
|
|
| Reconciliation of Selected Non-GAAP Financial
Measurements |
| ($ Millions, except per share amounts) |
| (Unaudited) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
Six Months
Ended |
| |
|
|
|
|
|
|
|
| |
|
Dec 31, |
|
|
Dec 31, |
| |
|
2017 |
|
|
2016 |
| |
|
|
|
|
|
|
|
| Reported Earnings |
|
$ |
30.7 |
|
|
$ |
40.2 |
| |
|
|
|
|
|
|
|
| Add back one-time items: |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Impact of the "Tax Cuts and Jobs Act" |
|
|
15.8 |
|
|
|
- |
| |
|
|
|
|
|
|
|
| Adjusted Net Earnings |
|
$ |
46.5 |
|
|
$ |
40.2 |
| |
|
|
|
|
|
|
|
| Per share data: |
|
|
|
|
|
|
|
| Reported Earnings: |
|
|
|
|
|
|
|
| Earnings - Diluted Earnings Per Share |
|
$ |
0.47 |
|
|
$ |
0.63 |
| Earnings - Basic Earnings Per Share |
|
$ |
0.49 |
|
|
$ |
0.65 |
| |
|
|
|
|
|
|
|
| Per share, After-Tax Impact of Special Items on: |
|
|
|
|
|
|
|
| Adjustments - Diluted Earnings Per Share |
|
$ |
0.24 |
|
|
$ |
- |
| Adjustments - Basic Earnings Per Share |
|
$ |
0.25 |
|
|
$ |
- |
| |
|
|
|
|
|
|
|
| Adjusted Earnings: |
|
|
|
|
|
|
|
| Adjusted Earnings - Diluted Earnings Per Share |
|
$ |
0.71 |
|
|
$ |
0.63 |
| Adjusted Earnings - Basic Earnings Per Share |
|
$ |
0.74 |
|
|
$ |
0.65 |
| |
|
|
|
|
|
|
|
CONTACT:
Mark Lourie
Director, Corporate Communications
Mark.lourie@ii-vi.com
www.ii-vi.com
