PITTSBURGH, Jan. 24, 2012 (GLOBE NEWSWIRE) --
II-VI Incorporated (Nasdaq:IIVI) today
reported results for its second fiscal
quarter ended December 31, 2011.
All per share data in this press release have
been adjusted to account for the two-for-one
split of the Company's common shares paid
as a stock dividend to shareholders on June
24, 2011.
On July 1, 2011, the Company acquired Aegis
Lightwave, Inc. (Aegis). On December 7, 2010,
the Company acquired Max Levy Autograph, Inc.
(MLA). Results for the quarter and six months
ended December 31, 2011 include the operating
results of both Aegis and MLA. Aegis is part
of the Company's Near-Infrared Optics
segment while MLA is part of the
Company's Military & Materials segment.
Bookings for the quarter decreased 13% to
$116,883,000 compared to $134,128,000 in the
second quarter of last fiscal year. Bookings
for the six months ended December 31, 2011
were $247,130,000 compared to $246,178,000
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.
Revenues for the quarter increased 5% to
$126,757,000 from $120,887,000 in the second
quarter of last fiscal year. Revenues for the
six months ended December 31, 2011 increased
10% to $265,130,000 from $241,021,000 for the
same period last fiscal year.
Net earnings attributed to II-VI Incorporated
for the quarter were $13,287,000 or $0.21 per
share-diluted compared with net earnings of
$19,157,000 or $0.30 per share-diluted in the
second quarter of last fiscal year. For the
six months ended December 31, 2011, net
earnings attributable to II-VI Incorporated
were $31,866,000 or $0.50 per share-diluted
compared to net earnings of $37,524,000 or
$0.59 for the same period last fiscal year.
The results for the quarter and six months
ended December 31, 2011 include a write-down
of tellurium inventory of $2.2 million or
$0.03 per share-diluted from our Pacific Rare
Specialty Metals & Chemicals, Inc. business
unit (PRM) in our Military & Materials
segment due to decreases in the global
tellurium index pricing during the quarter.
In addition, the results include an after-tax
impairment loss of $0.7 million or
approximately $0.01 per share-diluted for
damaged machinery, equipment and inventory
and recovery related expenses as a result of
the Thailand flooding at Fabrinet, a company
that manufactures certain products for our
Aegis subsidiary. Both expenses were included
in cost of goods sold in the attached
condensed consolidated statements of earnings
and both expenses were consistent with the
ranges given from our prior guidance issued
on December 19, 2011.
Francis J. Kramer, president and chief
executive officer said, "During the
quarter, bookings decreased across many of
our businesses as customers monitored the
global economy; orders were delayed, placed
for smaller quantities and had shorter lead
times. Concurrently, the flooding in Thailand
significantly impacted our Aegis business; we
experienced a revenue decline at Aegis
because we lost most of our contract
manufacturing capacity. Aegis is currently
transitioning its capacity to restore
production to pre-flood levels. At Photop,
revenues increased compared to the September
2011 quarter, but lower-margin products
replaced those delivered during the second
quarter one year ago. Our Military &
Materials segment was affected by the index
pricing of tellurium at PRM where we wrote
down inventory and realized compressed
margins on products sold."
Kramer concluded, "We expect conditions
to improve during the second half of fiscal
year 2012 as infrared optics and optical
communications markets appear to be
strengthening. We continue to make strategic
capital investments across our manufacturing
base so that, as economies and markets
recover, we will be well positioned to
capitalize on emerging opportunities. We are
generating significant cash from operations
and our balance sheet remains fundamentally
strong. While this quarter's results were
affected by a natural disaster and material
pricing declines beyond our control, we are
confident II-VI Incorporated is poised to
deliver long-term strategic growth."
Segment Information
The following segment information includes
segment earnings (defined as earnings before
income taxes, interest expense and other
expense or income, net). Management believes
segment earnings are a useful performance
measure because they reflect the results of
segment performance over which management has
direct control. Effective July 1, 2011, the
Company renamed its former Compound
Semiconductor Group operating segment the
Advanced Products Group.
|
Three Months Ended
|
Six Months Ended
| |
December 31,
|
December 31,
| | | |
%
| | |
%
| | | |
Increase
| | |
Increase
| |
2011
|
2010
|
(Decrease)
|
2011
|
2010
|
(Decrease)
| | | | | | | |
Bookings:
| | | | | | |
Infrared Optics
|
$ 43,773
|
$ 47,006
|
(7)%
|
$ 94,871
|
$ 88,308
|
7%
|
Near-Infrared Optics
|
34,939
|
35,906
|
(3)%
|
73,313
|
69,722
|
5%
|
Military & Materials
|
26,543
|
29,600
|
(10)%
|
46,344
|
44,871
|
3%
|
Advanced Products Group
|
11,628
|
21,616
|
(46)%
|
32,602
|
43,277
|
(25)%
|
Total Bookings
|
$ 116,883
|
$ 134,128
|
(13)%
|
$ 247,130
|
$ 246,178
|
--%
| | | | | | | |
Revenues:
| | | | | | |
Infrared Optics
|
$ 46,762
|
$ 40,642
|
15%
|
$ 97,558
|
$ 81,868
|
19%
|
Near-Infrared Optics
|
39,468
|
41,418
|
(5)%
|
77,578
|
78,363
|
(1)%
|
Military & Materials
|
23,703
|
19,467
|
22%
|
47,362
|
39,602
|
20%
|
Advanced Products Group
|
16,824
|
19,360
|
(13)%
|
42,632
|
41,188
|
4%
|
Total Revenues
|
$ 126,757
|
$ 120,887
|
5%
|
$ 265,130
|
$ 241,021
|
10%
| | | | | | | |
Segment Earnings (Loss):
| | | | | | |
Infrared Optics
|
$ 11,470
|
$ 9,420
|
22%
|
$ 23,827
|
$ 18,068
|
32%
|
Near-Infrared Optics
|
1,684
|
8,068
|
(79)%
|
3,392
|
14,949
|
(77)%
|
Military & Materials
|
(386)
|
3,425
|
(111)%
|
2,576
|
7,146
|
(64)%
|
Advanced Products Group
|
1,470
|
3,775
|
(61)%
|
7,478
|
7,186
|
4%
|
Total Segment Earnings
|
$ 14,238
|
$ 24,688
|
(42)%
|
$ 37,273
|
$ 47,349
|
(21)%
|
Outlook
For the third fiscal quarter ending March 31,
2012, the Company currently forecasts
revenues to range from $130 million to $135
million and earnings per share to range from
$0.23 to $0.25. Comparable results for
the quarter ended March 31, 2011 were
revenues of $130 million and earnings per
share of $0.36. For the fiscal year
ending June 30, 2012, the Company expects
revenues to range from $550 million to $560
million and earnings per share to range from
$1.05 to $1.10. Comparable results for
the year ended June 30, 2011 were revenues of
$502.8 million and earnings per share of
$1.30. 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.
Webcast Information
The Company will host a conference call at
9:00 a.m. Eastern Time on Tuesday, January
24, 2012 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 www.ii-vi.com as well as at
http://tinyurl.com/7e6te4q. A replay of
the webcast will be available for 2 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
diversified markets including industrial
manufacturing, military and aerospace,
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, 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, medical instruments and
laser gain materials and products for
solid-state YAG and YLF lasers. Photop
Technologies, Inc. (Photop) manufactures
crystal materials, optics, microchip lasers
and opto-electronic modules for use in
optical communication networks and other
diverse consumer and commercial
applications. Aegis Lightwave, Inc.
(Aegis) manufactures tunable optical devices
required for high speed optical networks that
provide the bandwidth expansion necessary for
increasing internet traffic. Through its
Australian subsidiary, AOFR, Aegis also
manufactures fused fiber components,
including those required for fiber lasers for
material processing applications, as well as
optical couplers used primarily in the
telecommunication industry.
In the Company's military & materials
business, Exotic Electro-Optics (EEO)
manufactures infrared products for military
applications, Pacific Rare Specialty Metals &
Chemicals (PRM) produces and refines selenium
and tellurium materials and Max Levy
Autograph, Inc. (MLA) manufactures micro-fine
conductive mesh patterns for optical,
mechanical and ceramic components for
applications such as circuitry, metrology
standards, targeting calibration and
suppression of electro-magnetic
interference.
In the Company's advanced products group
(formerly the compound semiconductor group),
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; Marlow Industries, Inc.
(Marlow) designs and manufactures
thermoelectric cooling and power generation
solutions for use in defense, space,
photonics, telecommunications, medical,
consumer and industrial markets; and the
Worldwide Materials Group (WMG) 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 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, 2011 and
Quarterly Report on Form 10-Q for the quarter
ended September 30, 2011; (iii) the
purchasing patterns from 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; and/or (vi) 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)
| | | | | | | | | | |
| | |
II-VI Incorporated and Subsidiaries
| | |
Condensed Consolidated Balance Sheets
(Unaudited)
| | |
($000)
| | | |
December 31,
|
June 30,
| |
2011
|
2011
|
Assets
| | |
Current Assets
| | |
Cash and cash equivalents
|
$ 123,833
|
$ 149,460
|
Short-term investment
|
594
|
--
|
Accounts receivable
|
87,608
|
90,606
|
Inventories
|
142,578
|
126,430
|
Deferred income taxes
|
9,596
|
8,215
|
Prepaid and refundable income taxes
|
4,822
|
8,606
|
Prepaid and other current assets
|
9,708
|
12,223
|
Total Current Assets
|
378,739
|
395,540
|
Property, plant & equipment, net
|
150,000
|
138,135
|
Goodwill
|
84,785
|
64,262
|
Other intangible assets, net
|
42,819
|
28,732
|
Investments
|
15,938
|
15,458
|
Deferred income taxes
|
71
|
3
|
Other assets
|
6,145
|
5,072
|
Total Assets
|
$ 678,497
|
$ 647,202
| | | |
Liabilities and Shareholders' Equity
| | |
Current Liabilities
| | |
Accounts payable
|
$ 26,581
|
$ 25,065
|
Accruals and other current liabilities
|
51,340
|
62,173
|
Current maturities of long-term debt
|
3,888
|
3,729
|
Total Current Liabilities
|
81,809
|
90,967
|
Long-term debt
|
17,000
|
15,000
|
Deferred income taxes
|
4,968
|
6,641
|
Other liabilities
|
11,239
|
11,493
|
Total Liabilities
|
115,016
|
124,101
| | | |
Total II-VI Incorporated
Shareholders' Equity
|
562,587
|
522,374
|
Noncontrolling Interests
|
894
|
727
|
Total Shareholders' Equity
|
563,481
|
523,101
|
Total Liabilities and Shareholders'
Equity
|
$ 678,497
|
$ 647,202
|
| | |
II-VI Incorporated and Subsidiaries
| | |
Condensed Consolidated Statements of Cash
Flows (Unaudited)
| | |
($000)
|
Six Months Ended
| |
December 31,
| |
2011
|
2010
|
Net cash provided by operating activities
|
$ 42,913
|
$ 33,012
| | | |
Cash Flows from Investing Activities
| | |
Additions to property, plant and
equipment
|
(23,068)
|
(14,668)
|
Purchase of businesses, net of cash
acquired
|
(46,141)
|
(12,813)
|
Investment in unconsolidated business
|
--
|
(1,180)
|
Proceeds from collection of note
receivable
|
--
|
2,000
|
Other investing activities
|
24
|
240
|
Net cash used in investing activities
|
(69,185)
|
(26,421)
| | | |
Cash Flows from Financing Activities
| | |
Proceeds from long-term borrowings
|
7,000
|
--
|
Payment on long-term borrowings
|
(6,295)
|
--
|
Proceeds from exercises of stock options
|
452
|
3,278
|
Excess tax benefits from share-based
compensation expense
|
122
|
1,813
|
Net cash provided by financing activities
|
1,279
|
5,091
| | | |
Effect of exchange rate changes on cash
and cash equivalents
|
(634)
|
(434)
| | | |
Net (decrease) increase in cash and cash
equivalents
|
(25,627)
|
11,248
| | | |
Cash and Cash Equivalents at Beginning of
Period
|
149,460
|
108,026
|
Cash and Cash Equivalents at End of
Period
|
$ 123,833
|
$ 119,274
|
| | | | |
II-VI Incorporated and Subsidiaries
| | | | |
Other Selected Financial Information
| | | | |
($000)
| | | | | | | | | |
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,
| |
2011
|
2010
|
2011
|
2010
| | | | | |
EBITDA
|
$ 24,266
|
$ 31,073
|
$ 57,241
|
$ 62,630
|
Cash paid for capital expenditures
|
$ 10,356
|
$ 9,387
|
$ 23,068
|
$ 14,668
|
Net (payments) borrowings on indebtedness
|
$ (5,000)
|
$ --
|
$ 705
|
$ --
|
Share-based compensation expense, pre-tax
|
$ 2,618
|
$ 2,242
|
$ 7,176
|
$ 5,983
| | | | | | | | | | |
Reconciliation of Segment
|
Three Months Ended
|
Six Months Ended
|
Earnings and EBITDA to Net Earnings
|
December 31,
|
December 31,
| |
2011
|
2010
|
2011
|
2010
| | | | | |
Total Segment Earnings
|
$ 14,238
|
$ 24,688
|
$ 37,273
|
$ 47,349
|
Interest expense
|
77
|
25
|
136
|
55
|
Other expense (income), net
|
(1,506)
|
460
|
(3,136)
|
(1,602)
|
Income taxes
|
2,147
|
4,948
|
8,039
|
11,240
|
Net earnings
|
$ 13,520
|
$ 19,255
|
$ 32,234
|
$ 37,656
| | | | | |
EBITDA
|
$ 24,266
|
$ 31,073
|
$ 57,241
|
$ 62,630
|
Interest expense
|
77
|
25
|
136
|
55
|
Depreciation and amortization
|
8,522
|
6,845
|
16,832
|
13,679
|
Income taxes
|
2,147
|
4,948
|
8,039
|
11,240
|
Net earnings
|
$ 13,520
|
$ 19,255
|
$ 32,234
|
$ 37,656
|
CONTACT: II-VI Incorporated
Craig A. Creaturo, Chief Financial Officer and Treasurer
(724) 352-4455
ccreaturo@ii-vi.com
Source: Globe Newswire (January 24, 2012 - 6:55
AM EST)
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