FlashResults II-VI Incorporated IIVI (Numbers in Thousands, Except Per Share Data)
PITTSBURGH, Jan. 22 /PRNewswire-FirstCall/ -- II-VI Incorporated (NASDAQ:IIVI) today reported results for its second quarter ended December 31, 2007. Revenues for the quarter increased 17% to a record $74,256,000 from $63,342,000 in the second quarter of last fiscal year. Revenues for the six months ended December 31, 2007 increased 18% to $146,927,000 from $124,139,000 for the same period last fiscal year. Net earnings for the quarter were a record $26,760,000 or $0.88 per share-diluted and included a $0.52 after-tax gain on sale of equity investment as described below. These results compare with net earnings of $9,110,000 or $0.30 per share-diluted in the second quarter of last fiscal year. For the six months ended December 31, 2007, net earnings were $36,383,000 or $1.19 per share-diluted and included a $0.52 after-tax gain on sale of equity investment as described below. This compares with net earnings of $16,608,000 or $0.55 per share-diluted for the same period last fiscal year.
During the quarter ended December 31, 2007, the Company sold its equity interest in a Canadian company, 5NPlus, Inc., for approximately $30 million in cash on which it recorded an after-tax gain of $15,913,000 or $0.52 per share diluted.
Bookings for the quarter increased 11% to $79,735,000 compared to $72,151,000 in the second quarter of last fiscal year. Bookings for the six months ended December 31, 2007 increased 18% to $161,573,000 from $136,448,000 for the same period last fiscal year. Bookings are defined as customer orders received that are expected to be converted into revenues during the next 12 months.
Francis J. Kramer, president and chief executive officer said, "Second quarter operating results exceeded our expectations due to improved operating performances in the Military & Materials and Near-Infrared Optics segments. Pacific Rare Specialty Metals & Chemicals executed well. This is the fourth consecutive quarter of record Company revenues, and bookings were the second highest in Company history led by a record-setting quarter for Infrared Optics. Our backlog has increased 14% since June 30, 2007 and is up 27% from the year ago quarter." Kramer continued, "The sale of our investment in 5NPlus strengthened the Company's financial fundamentals which enabled us to pay down our debt significantly. We completed our acquisition of a 74.9% equity interest in HIGHYAG Lasertechnologie GmbH on January 2, 2008. We are pleased to welcome HIGHYAG to the II-VI Incorporated family of companies and have adjusted our outlook for the remainder of this fiscal year to include their expected revenue and earnings contribution." Segment Information The following segment information includes segment earnings (defined as earnings before income taxes, interest expense and other income or expense, net). Management believes segment earnings are a useful performance measure because they reflect the results of segment performance over which management has direct control.
Three Months Ended Six Months Ended
December 31, December 31,
% %
2007 2006 Increase 2007 2006 Increase
(Decrease) (Decrease) Bookings: Infrared Optics $ 39,018 $ 31,328 25% $ 74,517 $ 64,127 16%
Near-Infrared Optics 10,103 25,134 (60%) 34,241 32,595 5%
Military & Materials 18,949 7,560 151% 30,515 14,579 109%
Compound Semiconductor
Group 11,665 8,129 43% 22,300 25,147 (11%)
Total Bookings $ 79,735 $ 72,151 11% $ 161,573 $ 136,448 18% Revenues: Infrared Optics $ 33,918 $ 31,494 8% $ 67,535 $ 63,652 6%
Near-Infrared Optics 14,419 11,727 23% 28,651 22,239 29%
Military & Materials 12,239 6,462 89% 24,216 12,649 91%
Compound Semiconductor
Group 13,680 13,659 0% 26,525 25,599 4%
Total Revenues $ 74,256 $ 63,342 17% $ 146,927 $ 124,139 18% Segment Earnings: Infrared Optics $ 7,823 $ 8,794 (11%) $ 15,190 $ 17,597 (14%)
Near-Infrared Optics 2,842 1,635 74% 5,744 2,834 103%
Military & Materials 2,251 603 273% 3,770 844 347%
Compound Semiconductor
Group 1,147 1,160 (1%) 1,528 1,013 51%
Total Segment
Earnings $ 14,063 $ 12,192 15% $ 26,232 $ 22,288 18%
Outlook For the third fiscal quarter ending March 31, 2008, the Company currently forecasts revenues to range from $81 million to $84 million and earnings per share to range from $0.37 to $0.42. Results for the quarter ended March 31, 2007 were revenues of $67.1 million and earnings per share of $0.33. For the fiscal year ending June 30, 2008, the Company expects revenues to range from $315 million to $321 million and earnings per share to range from $1.93 to $2.05. The results for the fiscal year ending June 30, 2008 include the after-tax gain on sale of equity investment of $0.52 per share. Results for the year ended June 30, 2007 were revenues of $263 million and earnings per share of $1.25.
Webcast Information The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday, January 22, 2008 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 web site at http://www.ii-vi.com/ as well as at http://www.videonewswire.com/event.asp?id=44827. Please allow extra time prior to the call to visit the site and, if needed, download the media software required to listen to the internet broadcast. A replay of the webcast will be available for two weeks following the call.
About II-VI Incorporated II-VI Incorporated, the worldwide leader in crystal growth technology, is a vertically-integrated manufacturing company that creates and markets products for a diversified customer base including industrial manufacturing, military and aerospace, medical radiology, high-power electronics and telecommunications, and thermoelectronics applications. Headquartered in Saxonburg, Pennsylvania, with manufacturing, sales, and distribution facilities worldwide, the Company produces numerous crystalline compounds including zinc selenide for infrared laser optics, cadmium zinc telluride for gamma radiation detectors, silicon carbide for high-power electronic and microwave applications, and bismuth telluride for thermoelectric coolers.
In the Company's infrared optics business, II-VI Infrared manufactures optical and opto-electronic components for industrial laser and thermal imaging systems, and HIGHYAG Lasertechnologie GmbH ("HIGHYAG") manufactures fiber-delivered beam delivery systems and processing tools for industrial lasers. In the Company's near-infrared optics business, VLOC, manufactures near-infrared and visible light products for industrial, scientific, military and medical instruments and laser gain materials and products for solid-state YAG and YLF lasers. In the Company's military & materials business, Exotic Electro-Optics (EEO) manufactures infrared products for military applications, and Pacific Rare Specialty Metals & Chemicals produces and refines selenium and tellurium materials. In the Company's Compound Semiconductor Group, the eV PRODUCTS division manufactures and markets solid-state x-ray and gamma-ray sensor products and materials for use in medical, industrial, environmental, scientific and homeland security applications; the Wide Bandgap Materials (WBG) group manufactures and markets single crystal silicon carbide substrates for use in the solid-state lighting, wireless infrastructure, RF electronics and power switching industries; the Marlow Industries, Inc. subsidiary designs and manufactures thermoelectric cooling and power generation solutions for use in defense, space, photonics, telecommunications, medical, consumer and industrial markets; and, the Advanced Materials Development Center (AMDC) provides expertise in materials development, process development, and manufacturing scale up.
This press release contains forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties. 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 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 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, 2007; (iii) purchasing patterns from customers and end-users; (iv) 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; and/or (vi) the Company's ability to devise and execute strategies to respond to market conditions.
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data) Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
Revenues Net sales $ 70,232 $ 60,870 $ 139,163 $ 119,049
Contract research
and development 4,024 2,472 7,764 5,090
Total Revenues 74,256 63,342 146,927 124,139
Costs, Expenses, Other (Income) Expense Cost of goods sold $ 40,132 $ 33,803 $ 81,394 $ 67,854
Contract research
and development 3,125 1,915 5,948 3,902
Internal research
and development 2,020 1,561 4,124 2,862
Selling, general and
administrative 14,916 13,871 29,229 27,233
Interest expense 70 295 195 669
Other (income) expense,
net (1,054) (937) (2,188) (1,445)
Gain on sale of equity
investment, pre-tax (26,455) - (26,455) -
Total Costs, Expenses,
Other (Income) Expense 32,754 50,508 92,247 101,075 Earnings Before Income
Taxes 41,502 12,834 54,680 23,064 Income Taxes 14,742 3,724 18,297 6,456 Net Earnings $ 26,760 $ 9,110 $ 36,383 $ 16,608 Diluted Earnings
Per Share $ 0.88 $ 0.30 $ 1.19 $ 0.55 Average Shares
Outstanding - Diluted 30,538 30,119 30,470 30,017 Average Shares
Outstanding - Basic 29,696 29,312 29,645 29,254
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(000) December 31, June 30,
2007 2007 Assets Current Assets
Cash and cash equivalents $ 68,038 $ 32,618
Accounts receivable, net 42,593 47,724
Inventories 64,314 59,857
Deferred income taxes 9,175 9,279
Prepaid and other current assets 3,676 2,434
Total Current Assets 187,796 151,912 Property, Plant & Equipment, net 87,176 85,639
Goodwill 24,656 24,489
Other Intangible Assets, net 14,146 13,920
Investments 3,665 6,982
Other Assets 5,269 4,982
Total Assets $ 322,708 $ 287,924 Liabilities and Shareholders' Equity Current Liabilities
Accounts payable $ 11,607 $ 14,099
Accruals and other current liabilities 30,719 29,595
Current portion of long-term debt - 55
Total Current Liabilities 42,326 43,749 Long-Term Debt-less current portion 3,581 14,940 Deferred Income Taxes 4,229 6,087 Other Liabilities 13,014 3,708
Total Liabilities 63,150 68,484 Shareholders' Equity 259,558 219,440
Total Liabilities and Shareholders'
Equity $ 322,708 $ 287,924
II-VI Incorporated and Subsidiaries
Other Selected Financial Information (Unaudited)
($000 except per share data) The following other selected financial information includes earnings before interest, income taxes, depreciation and amortization (EBITDA). Management believes EBITDA is a useful performance measure because it reflects operating profitability before certain non-operating expenses and non-cash charges.
Other Selected Financial Information Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006 EBITDA $ 45,743 $ 17,229 $ 63,380 $ 31,910
EBITDA excluding pre-tax
gain on sale of
equity investment $ 19,288 $ 17,229 $ 36,925 $ 31,910
Cash paid for capital
expenditures $ 4,264 $ 5,375 $ 9,239 $ 8,439
Net payments on
indebtedness $ 10,735 $ 8,388 $ 11,749 $ 12,276
Incentive stock option
and performance share
compensation expense,
pre-tax $ 1,033 $ 793 $ 2,102 $ 1,536
Cash paid for shares
repurchased through
the Company's stock
repurchase program $ - $ - $ 594 $ 502 Shares repurchased through
the Company's stock
repurchase program - - 20,000 19,500
Reconciliation of Segment Earnings and
EBITDA to Earnings Before Income Taxes Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006 Total Segment Earnings $ 14,063 $ 12,192 $ 26,232 $ 22,288
Interest expense 70 295 195 669
Other (income), net (27,509) (937) (28,643) (1,445)
Earnings before income
taxes $ 41,502 $ 12,834 $ 54,680 $ 23,064 EBITDA $ 45,743 $ 17,229 $ 63,380 $ 31,910
Interest expense 70 295 195 669
Depreciation and amortization 4,171 4,100 8,505 8,177
Earnings before income
taxes $ 41,502 $ 12,834 $ 54,680 $ 23,064
DATASOURCE: II-VI Inc.
CONTACT: Craig A. Creaturo, Chief Financial Officer and Treasurer of II- VI Incorporated, +1-724-352-4455, Web site: http://www.ii-vi.com/
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