EXHIBIT 99.1
II-VI Incorporated Reports First Quarter Earnings, Initiates Fiscal Year 2010 Guidance
PITTSBURGH, Oct. 20, 2009 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) today reported results for its first quarter ended September 30, 2009.
Revenues from continuing operations for the quarter decreased 25% to $65,538,000 from $87,766,000 in the first quarter of last fiscal year.
Bookings from continuing operations for the quarter decreased 1% to $73,336,000 compared to $74,295,000 in the first quarter of last fiscal year. Bookings are defined as customer orders received that are expected to be converted into revenues during the next 12 months.
For the quarter ended September 30, 2009, net earnings attributable to II-VI Incorporated were $6,306,000 or $0.21 per share-diluted compared with net earnings of $17,495,000 or $0.57 per share-diluted in the first quarter of last fiscal year.
Francis J. Kramer, president and chief executive officer said, "Bookings for this quarter increased 28% from the June 30, 2009 quarter. Every business segment outpaced its fourth quarter order rate, and we are encouraged that product demand is strengthening. The cost reductions we initiated during the second quarter of fiscal year 2009 contributed to the earnings we are announcing today."
Kramer continued, "During the quarter we repaid $0.6 million on our outstanding debt, made capital expenditures of $2.5 million, and invested $2.9 million in our joint venture in China, Langfang Haobo Diamond Co. Ltd. Finally, cash from operations of over $15 million helped increase our total cash to over $105 million."
Effective July 1, 2009, the Company adopted Noncontrolling Interest in Consolidated Financial Statements - an amendment of ARB No.51 which was retroactively applied to all periods presented. As announced on June 12, 2009, the Company sold its x-ray and gamma-ray radiation sensor business, eV PRODUCTS, Inc., which operated as a business within the Compound Semiconductor Group. Results for the period ended September 30, 2008 reflect the presentation of eV PRODUCTS as a discontinued operation.
Segment Information from Continuing Operations ($000's)
The following segment information includes segment earnings from
continuing operations (defined as earnings from continuing operations
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.
Three Months Ended
September 30,
%
Increase
2009 2008 (Decrease)
-------- -------- ------
Bookings:
Infrared Optics $ 28,170 $ 40,178 (30)%
Near-Infrared Optics 12,728 9,765 30%
Military and Materials 19,003 11,632 63%
Compound Semiconductor Group 13,435 12,720 6%
------ ------
Total Bookings $ 73,336 $ 74,295 (1)%
====== ======
Revenues:
Infrared Optics $ 29,167 $ 43,230 (33)%
Near-Infrared Optics 8,901 13,680 (35)%
Military and Materials 15,642 15,459 1%
Compound Semiconductor Group 11,828 15,397 (23)%
------ ------
Total Revenues $ 65,538 $ 87,766 (25)%
====== ======
Segment Earnings:
Infrared Optics $ 4,876 $ 10,373 (53)%
Near-Infrared Optics 1,022 2,677 (62)%
Military and Materials 2,255 2,881 (22)%
Compound Semiconductor Group 343 1,691 (80)%
--- -----
Total Segment Earnings $ 8,496 $ 17,622 (52)%
===== ======
Outlook
For the second fiscal quarter ending December 31, 2009, the Company currently forecasts revenues to range from $64.0 million to $67.0 million and earnings per share attributable to II-VI Incorporated to range from $0.18 to $0.22. Comparable results for the quarter ended December 31, 2008 were revenues from continuing operations of $74.3 million and earnings per share from continuing operations of $0.28. For the fiscal year ending June 30, 2010, the Company expects revenues to range from $264 million to $274 million and earnings per share to range from $0.85 to $0.95. Results for the year ended June 30, 2009 were revenues from continuing operations of $292 million and earnings per share attributable to II-VI Incorporated from continuing operations of $1.29.
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, October 20, 2009 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/ydqfb8e. Please allow extra time prior to the call to visit the site and, if needed, to download the media software required to listen to the internet broadcast. 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 a diversified customer base 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 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 (PRM) produces and refines selenium and tellurium materials. In the Company's 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 economic conditions, including any worsening of the global economic downturn, factors that could cause actual results to dif fer 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, 2009; (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.
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
Three Months Ended
September 30,
2009 2008
-------- --------
Revenues
Net sales:
Domestic $ 33,871 $ 42,161
International 29,740 42,794
-------- --------
63,611 84,955
Contract research and development 1,927 2,811
-------- --------
Total Revenues 65,538 87,766
-------- --------
Costs, Expenses, Other Expense (Income)
Cost of goods sold $ 38,389 $ 48,173
Contract research and development 1,279 2,232
Internal research and development 2,435 3,191
Selling, general and administrative 14,939 16,548
Interest expense 24 25
Other expense (income), net 73 (235)
-------- --------
Total Costs, Expenses, Other Expense
Income 57,139 69,934
-------- --------
Earnings from Continuing Operations
Before Income Taxes 8,399 17,832
Income Taxes 2,100 281
-------- --------
Earnings from Continuing Operations 6,299 17,551
Loss from Discontinued Operation, Net
of Income Tax Benefit -- (23)
-------- --------
Net Earnings 6,299 17,528
Less: Net (Loss) Earnings Attributable
to Noncontrolling Interests (7) 33
-------- --------
Net Earnings Attributable to II-VI
Incorporated $ 6,306 $ 17,495
======== ========
Net Earnings Attributable to II-VI
Incorporated: Diluted Earnings
Per Share:
Continuing operations $ 0.21 $ 0.57
Discontinued operation $ -- $ (0.00)
Total $ 0.21 $ 0.57
Net Earnings Attributable to II-VI
Incorporated: Basic Earnings
Per Share:
Continuing operations $ 0.21 $ 0.59
Discontinued operation $ -- $ (0.00)
Total $ 0.21 $ 0.58
Average Shares Outstanding - Diluted 29,881 30,647
======== ========
Average Shares Outstanding - Basic 29,547 29,941
======== ========
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
September 30, June 30,
2009 2009
-------- --------
Assets
Current Assets
Cash and cash equivalents $105,462 $ 95,930
Accounts receivable 38,639 43,109
Inventories 75,216 76,620
Deferred income taxes 8,483 9,705
Prepaid and other current assets 4,259 4,943
-------- --------
Total Current Assets 232,059 230,307
Property, Plant & Equipment, net 85,267 86,413
Goodwill 26,266 26,141
Other Intangible Assets, net 11,963 12,271
Investments 15,651 9,548
Other Assets 4,993 3,602
-------- --------
Total Assets $376,199 $368,282
======== ========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 9,554 $ 9,242
Accruals and other current liabilities 18,368 22,821
-------- --------
Total Current Liabilities 27,922 32,063
Long-Term Debt 3,346 3,665
Deferred Income Taxes 3,483 1,910
Other Liabilities 8,288 7,773
-------- --------
Total Liabilities 43,039 45,411
Shareholders' Equity
Total II-VI Incorporated Shareholders' Equity 332,727 322,376
Noncontrolling Interests 433 495
-------- --------
Total Shareholders' Equity 333,160 322,871
-------- --------
Total Liabilities and Shareholders' Equity $376,199 $368,282
======== ========
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)
Three Months Ended
September 30,
--------------------
2009 2008
Cash Flows from Operating Activities
Net cash provided by (used in):
Continuing operations $ 15,655 $ 1,898
Discontinued operation -- (1,289)
-------- --------
Net cash provided by operating activities 15,655 609
-------- --------
Cash Flows from Investing Activities
Additions to property, plant and equipment (2,547) (4,707)
Investment in unconsolidated businesses (2,933) (4,834)
Payments on deferred purchase price of business (997) --
Proceeds from sale of property, plant and
equipment 4 126
Redemption of marketable securities -- 2,000
-------- --------
Net cash used in investing activities:
Continuing operations (6,473) (7,415)
Discontinued operation -- (84)
-------- --------
Net cash used in investing activities (6,473) (7,499)
-------- --------
Cash Flows from Financing Activities
Payments on long-term debt (558) --
Proceeds from exercise of stock options 363 1,483
Excess tax benefits from share-based
compensation expense 161 1,241
-------- --------
Net cash (used in) provided by financing
activities (34) 2,724
-------- --------
Effect of exchange rate changes on cash and
cash equivalents 384 749
-------- --------
Net increase (decrease) in cash and cash
equivalents 9,532 (3,417)
Cash and Cash Equivalents at Beginning
of Period 95,930 69,835
-------- --------
Cash and Cash Equivalents at End of Period $105,462 $ 66,418
======== ========
II-VI Incorporated and Subsidiaries
Other Selected Financial Information
($000 except per share data)
The following other selected financial information for continuing
operations includes earnings from continuing operations before interest,
income taxes, depreciation and amortization (EBITDA). Management believes
EBITDA from continuing operations is a useful performance measure because
it reflects operating profitability before certain non-operating expenses
and non-cash charges.
Other Selected Financial Information for Continuing Operations
Three Months Ended
September 30,
--------------------
2009 2008
-------- --------
EBITDA $ 12,453 $ 21,700
Cash paid for capital expenditures $ 2,547 $ 4,707
Net payments on indebtedness $ 558 $ --
Share-based compensation expense, pre-tax $ 2,433 $ 1,542
Reconciliation of Segment Three Months Ended
------------------------- September 30,
Earnings and EBITDA to Earnings --------------------
------------------------------- 2009 2008
Before Income Taxes -------- --------
-------------------
Total Segment Earnings $ 8,496 $ 17,622
Interest expense 24 25
Other expense (income), net 73 (235)
-------- --------
Earnings before income taxes $ 8,399 $ 17,832
======== ========
EBITDA $ 12,453 $ 21,700
Interest expense 24 25
Depreciation and amortization 4,030 3,843
-------- --------
Earnings before income taxes $ 8,399 $ 17,832
======== ========
CONTACT: II-VI Incorporated
Craig A. Creaturo, Chief Financial Officer and Treasurer
(724) 352-4455
ccreaturo@ii-vi.com
www.ii-vi.com
