Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | IIVI | |
Entity Registrant Name | II-VI INC | |
Entity Central Index Key | 820,318 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,370,557 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 241,285 | $ 271,888 |
Accounts receivable - less allowance for doubtful accounts of $1,622 at September 30, 2017 and $1,314 at June 30, 2017 | 192,828 | 193,379 |
Inventories | 224,461 | 203,695 |
Prepaid and refundable income taxes | 6,410 | 6,732 |
Prepaid and other current assets | 28,704 | 26,602 |
Total Current Assets | 693,688 | 702,296 |
Property, plant & equipment, net | 460,859 | 367,728 |
Goodwill | 270,103 | 250,342 |
Other intangible assets, net | 135,905 | 133,957 |
Investment | 11,998 | 11,727 |
Deferred income taxes | 2,950 | 3,023 |
Other assets | 8,302 | 8,224 |
Total Assets | 1,583,805 | 1,477,297 |
Current Liabilities | ||
Current portion of long-term debt | 20,000 | 20,000 |
Accounts payable | 73,271 | 65,540 |
Accrued compensation and benefits | 42,199 | 58,178 |
Accrued income taxes payable | 12,216 | 12,178 |
Other accrued liabilities | 30,789 | 29,056 |
Total Current Liabilities | 178,475 | 184,952 |
Long-term debt | 384,742 | 322,022 |
Capital lease obligation | 23,144 | 23,415 |
Deferred income taxes | 23,751 | 15,345 |
Other liabilities | 29,931 | 31,000 |
Total Liabilities | 640,043 | 576,734 |
Shareholders' Equity | ||
Preferred stock, no par value; authorized - 5,000,000 shares; none issued | ||
Common stock, no par value; authorized - 300,000,000 shares; issued - 74,632,347 shares at September 30, 2017; 74,081,451 shares at June 30, 2017 | 334,126 | 269,638 |
Accumulated other comprehensive income (loss) | (2,599) | (13,778) |
Retained earnings | 769,203 | 748,062 |
Shareholders' equity excluding treasury stock | 1,100,730 | 1,003,922 |
Treasury stock, at cost - 12,453,513 shares at September 30, 2017 and 10,940,062 shares at June 30, 2017 | (156,968) | (103,359) |
Total Shareholders' Equity | 943,762 | 900,563 |
Total Liabilities and Shareholders' Equity | $ 1,583,805 | $ 1,477,297 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,622 | $ 1,314 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 74,632,347 | 74,081,451 |
Treasury stock, shares | 12,453,513 | 10,940,062 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 261,503 | $ 221,520 |
Costs, Expenses and Other Expense (Income) | ||
Cost of goods sold | 155,528 | 133,918 |
Internal research and development | 25,574 | 21,832 |
Selling, general and administrative | 50,624 | 42,079 |
Interest expense | 3,645 | 1,246 |
Other expense (income), net | (767) | (1,402) |
Total Costs, Expenses and Other Expense (Income) | 234,604 | 197,673 |
Earnings Before Income Taxes | 26,899 | 23,847 |
Income Taxes | 5,758 | 7,553 |
Net Earnings | $ 21,141 | $ 16,294 |
Basic Earnings Per Share | $ 0.34 | $ 0.26 |
Diluted Earnings Per Share | $ 0.32 | $ 0.26 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net earnings | $ 21,141 | $ 16,294 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 11,097 | (582) |
Pension adjustment, net of taxes of $23 and ($52) for the three months ended, respectively | 82 | (112) |
Comprehensive income | $ 32,320 | $ 15,600 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Pension adjustment tax | $ 23 | $ (52) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities | ||
Net earnings | $ 21,141 | $ 16,294 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation | 15,219 | 11,708 |
Amortization | 3,597 | 3,174 |
Share-based compensation expense | 4,250 | 3,073 |
(Gain) loss on foreign currency remeasurements and transactions | (496) | 582 |
Earnings from equity investment | (270) | (331) |
Deferred income taxes | (2,995) | 1,521 |
Increase (decrease) in cash from changes in (net of effect of acquisitions): | ||
Accounts receivable | 2,716 | 8,283 |
Inventories | (13,891) | (7,551) |
Accounts payable | 2,542 | 8,338 |
Income taxes | 235 | 166 |
Accrued compensation and benefits | (16,434) | (19,756) |
Other operating net assets | (3,231) | (5,988) |
Net cash provided by operating activities | 12,383 | 19,513 |
Cash Flows from Investing Activities | ||
Additions to property, plant & equipment | (37,426) | (29,994) |
Purchase of business, net of cash acquired | (79,465) | |
Other investing activities | 136 | 145 |
Net cash used in investing activities | (116,755) | (29,849) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of 0.25% convertible senior notes due 2022 | 345,000 | |
Proceeds from borrowings under Credit Facility | 40,000 | 24,000 |
Payments on borrowings under Credit Facility | (257,000) | (10,000) |
Purchases of treasury stock | (49,875) | |
Proceeds from exercises of stock options | 3,706 | 1,745 |
Payments in satisfaction of employees' minimum tax obligations | (3,608) | (2,230) |
Debt issuance costs | (10,061) | (1,384) |
Other financing activities | 139 | |
Net provided by financing activities | 68,162 | 12,270 |
Effect of exchange rate changes on cash and cash equivalents | 5,607 | (283) |
Net (decrease) increase in cash and cash equivalents | (30,603) | 1,651 |
Cash and Cash Equivalents at Beginning of Period | 271,888 | 218,445 |
Cash and Cash Equivalents at End of Period | 241,285 | 220,096 |
Cash paid for interest | 2,196 | 1,092 |
Cash paid for income taxes | 6,167 | $ 5,721 |
Non cash transactions: | ||
Additions to property, plant & equipment included in accounts payable | $ 3,925 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - 0.25% Convertible Senior Notes Due 2022 | 3 Months Ended |
Sep. 30, 2017 | |
Debt instrument, interest rate | 0.25% |
Debt instrument maturity date | Sep. 1, 2022 |
Condensed Consolidated Stateme9
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - 3 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Beginning Balance at Jun. 30, 2017 | $ 900,563 | $ 269,638 | $ (13,778) | $ 748,062 | $ (103,359) |
Beginning Balance, shares at Jun. 30, 2017 | 74,081 | (10,940) | |||
Shares issued under share-based compensation plan | 3,706 | $ 3,706 | |||
Shares issued under share-based compensation plan (in shares) | 551 | ||||
Shares acquired in satisfaction of minimum tax withholding obligations | (3,608) | $ (3,608) | |||
Shares acquired in satisfaction of minimum tax withholding obligations (in shares) | (99) | ||||
Net earnings | 21,141 | 21,141 | |||
Purchases of treasury stock | (49,875) | $ (49,875) | |||
Purchases of treasury stock, shares | (1,415) | ||||
Treasury stock under deferred compensation arrangements | $ 126 | $ (126) | |||
Foreign currency translation adjustments | 11,097 | 11,097 | |||
Equity portion of convertible debt, net of issuance costs of $1,694 | 56,406 | 56,406 | |||
Share-based compensation expense | 4,250 | 4,250 | |||
Pension adjustment, net of taxes of $23 | 82 | 82 | |||
Ending Balance at Sep. 30, 2017 | $ 943,762 | $ 334,126 | $ (2,599) | $ 769,203 | $ (156,968) |
Ending Balance, shares at Sep. 30, 2017 | 74,632 | (12,454) |
Condensed Consolidated Statem10
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Stockholders Equity [Abstract] | ||
Pension adjustment tax | $ 23 | $ (52) |
Debt issuance costs | $ 1,694 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1 . Basis of Presentation The condensed consolidated financial statements of II-VI Incorporated (“II-VI”, the “Company”, “we”, “us” or “our”) for the three months ended September 30, 2017 and 2016 are unaudited. In the opinion of management, all adjustments considered necessary for a fair presentation for the periods presented have been included. All adjustments are of a normal recurring nature unless disclosed otherwise. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017. The consolidated results of operations for the three months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full fiscal year. The June 30, 2017 Condensed Consolidated Balance Sheet information was derived from the Company’s audited financial statements. |
Recently Issued Financial Accou
Recently Issued Financial Accounting Standards | 3 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recently Issued Financial Accounting Standards | Note 2 . Recently Issued Financial Accounting Standards Adopted Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The new guidance will be applied prospectively to awards modified on or after the adoption date. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit were needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company has adopted this standard for any impairment test that is performed after July 1, 2017 as permitted under the standard. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, and classification in the statement of cash flows. Under this ASU, excess tax benefits or deficiencies are recognized in income tax expense in the Condensed Consolidated Statement of Earnings. Upon adoption of this ASU, the Company had a valuation allowance for its U.S. deferred tax assets and did not recognize any tax benefit. Had the Company not had a valuation allowance, the Company would have recognized a tax benefit of $2.4 million. The impact to the Company’s dilutive shares under this new standard was immaterial. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). This update requires that public entities measure equity investments with readily determinable fair values, at fair value, with changes in their fair value recorded through net income. This ASU also clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This update simplifies the measurement of inventory valuation at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. This update eliminates the requirement to retrospectively apply the equity method in previous periods when an investor obtains significant influence over an investee. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. Revenue Recognition Pronouncement Currently Under Evaluation In May 2014, the FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606) which supersedes virtually all existing revenue recognition guidance under U.S. GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update allows for the use of either the retrospective or modified retrospective approach of adoption. The update will be effective for the Company’s 2019 fiscal year (July 1, 2018). We continue our evaluation of the impact of the ASU in fiscal 2018 by evaluating its impact on selected contracts at each of our business segments. As the ASU will supersede all existing revenue guidance affecting U.S. GAAP, it could impact revenue and cost recognition on our contracts across all our business segments, as well as our business processes and our information technology. As a result, our evaluation of the effect of the ASU will continue through fiscal year 2018. The Company has completed its assessment of its military related contracts that comprise approximately 10% of consolidated revenues and concluded that the Company will accelerate the recognition of revenue under the ASU for these contracts as the customer obtains control of the goods or service promised in the contract. The Company is currently evaluating the commercial portion of its business; the assessment will be completed during fiscal year 2018. Based upon our evaluation to date, we cannot currently estimate the impacts of adopting the ASU at this time. The Company will adopt this ASU using the modified retrospective method whereby the cumulative effect of applying the ASU would be recognized at the beginning of the year of adoption. Other Pronouncements Currently Under Evaluation In August 2017 the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The standard will be effective for the Company’s 2019 fiscal year. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In March 2017, the FASB issued ASU 2017-07, Consolidation (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update affects employers’ presentation of defined benefit retirement plan costs. Early adoption is permitted. The standard will be effective for the Company’s 2019 fiscal year. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the definition of a business. This update changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. Early adoption is permitted. The standard will be effective for the Company’s 2019 fiscal year. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This update requires that when intra-entity asset transfers occur, the entity must recognize tax effects in the period in which the transfer occurs. The standard will be effective for The Company’s 2019 fiscal year. Early adoption is permitted. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flow. The update will be effective for the Company’s 2019 fiscal year. Early adoption is permitted. The Company is evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update is intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity. The standard replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update will be effective for the Company’s 2021 fiscal year. Early adoption is permitted. The Company is evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires that a lessee recognize leased assets with terms greater than 12 months on the balance sheet for the rights and obligations created by those leases. The standard will be effective for the Company’s 2020 fiscal year. Early adoption is permitted. The Company is evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. |
Acquisition
Acquisition | 3 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition | Note 3 . Acquisition Kaiam Laser Limited, Inc. In August 2017, the Company acquired Kaiam Laser Limited, Inc. (“Kaiam”) a privately held company based in Newton Aycliffe, United Kingdom. Under the terms of the merger agreement, the consideration consisted of cash paid at the acquisition date of $79.5 million, net of cash acquired. The acquisition of Kaiam provides the Company with 150mm wafer fabrication platform to significantly expand the Company’s capacity for the production of vertical cavity surface emitting lasers (“VCSELs”) for the 3D sensing market and broadens the capability to address new market opportunities in other compound semiconductor materials. Kaiam will operate under the name II-VI Compound Semiconductor Ltd. within the Company’s II-VI Laser Solutions operating segment. Due to the timing of the acquisition, the Company is still in the process of measuring the fair value of assets acquired, including tangible, intangible assets and related deferred income taxes. The following table presents the preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition, as the Company intends to finalize its accounting for the acquisition of Kaiam within one year from the date of acquisition ($000): Assets Accounts receivable $ 79 Inventories 4,559 Prepaid and other assets 1,246 Property, plant & equipment 64,482 Intangible assets 5,146 Goodwill 18,307 Total assets acquired $ 93,819 Liabilities Accounts payable $ 751 Other accrued liabilities 2,486 Deferred tax liabilities 11,117 Total liabilities assumed 14,354 Net assets acquired $ 79,465 The goodwill of $18.3 million is included in the II-VI Laser Solutions segment and is attributed to the expected synergies and the assembled workforce of Kaiam. None of the goodwill is deductible for income tax purposes. The Company expensed transaction costs of $1.0 million for the three months ended September 30, 2017. The amount of revenues and net loss of Kaiam included in the Company’s Consolidated Statement of Earnings for the three months ended September 30, 2017 was $0.6 million and $3.7 million, respectively. Integrated Photonics, Inc. In June 2017, the Company acquired Integrated Photonics, Inc. (“IPI”), a privately held company based in New Jersey. IPI is a leader in engineered magneto-optic materials that enable high-performance directional components such as optical isolators for the optical communications market. Under the terms of the merger agreement, the consideration consisted of initial cash paid at the acquisition date of $39.4 million, net of cash acquired and a working capital adjustment of $0.7 million. In addition, the agreement provides up to a maximum of $2.5 million of additional cash earnout opportunities based upon IPI achieving certain agreed upon financial and transitional objectives, which if earned would be payable in the amount of $2.5 million for the achievement of the annual target. The following table presents the preliminary purchase price at the date of acquisition ($000): Net cash paid at acquisition $ 39,436 Fair value of cash earnout arrangement 2,250 Purchase price $ 41,686 The following table presents the preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition, as the Company intends to finalize its accounting for the valuation of property, plant and equipment, identifiable intangibles and deferred income tax liabilities and anticipates completion of the valuation within one year from the date of the acquisition ($000): Assets Accounts receivable $ 2,083 Inventories 3,968 Prepaid and other assets 322 Property, plant & equipment 11,257 Intangible assets 22,213 Goodwill 17,107 Total assets acquired $ 56,950 Liabilities Accounts payable $ 846 Other accrued liabilities 1,032 Long-term debt assumed 3,834 Deferred tax liabilities 9,552 Total liabilities assumed 15,264 Net assets acquired $ 41,686 The goodwill of $17.1 million is included in the II-VI Photonics segment and is attributed to the expected synergies and the assembled workforce of IPI. None of the goodwill is deductible for income tax purposes. The fair value of accounts receivable acquired was $2.1 million with the gross contractual amount being $2.1 million. At the time of acquisition, the Company expected to collect all of the accounts receivable. The Company expensed transaction costs of $0.3 million all within the year ended June 30, 2017. The amount of revenues and net earnings of IPI included in the Company’s Consolidated Statement of Earnings for the three months ended September 30, 2017 was $5.4 million and $0.4 million, respectively. |
Inventories
Inventories | 3 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4 . Inventories The components of inventories were as follows ($000): September 30, June 30, 2017 2017 Raw materials $ 81,706 $ 78,979 Work in progress 74,116 61,679 Finished goods 68,639 63,037 $ 224,461 $ 203,695 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 5 . Property, Plant and Equipment Property, plant and equipment consists of the following ($000): September 30, June 30, 2017 2017 Land and land improvements $ 9,228 $ 5,667 Buildings and improvements 200,774 144,293 Machinery and equipment 529,412 492,042 Construction in progress 95,594 88,458 835,008 730,460 Less accumulated depreciation (374,149 ) (362,732 ) $ 460,859 $ 367,728 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 6 . Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill were as follows ($000): Three Months Ended September 30, 2017 II-VI Laser II-VI II- VI Performance Solutions Photonics Products Total Balance-beginning of period $ 84,180 $ 113,272 $ 52,890 $ 250,342 Goodwill acquired 18,307 - - 18,307 Foreign currency translation 830 624 - 1,454 Balance-end of period $ 103,317 $ 113,896 $ 52,890 $ 270,103 The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill as of September 30, 2017 and June 30, 2017 were as follows ($000): September 30, 2017 June 30, 2017 Gross Net Gross Net Carrying Accumulated Book Carrying Accumulated Book Amount Amortization Value Amount Amortization Value Technology and Patents $ 66,096 $ (28,865 ) $ 37,231 $ 65,438 $ (27,313 ) $ 38,125 Trademarks 15,872 (1,373 ) 14,499 15,806 (1,340 ) 14,466 Customer Lists 128,237 (44,101 ) 84,136 123,058 (41,740 ) 81,318 Other 1,575 (1,536 ) 39 1,571 (1,523 ) 48 Total $ 211,780 $ (75,875 ) $ 135,905 $ 205,873 $ (71,916 ) $ 133,957 Amortization expense recorded on the Company’s intangible assets was $3.6 million and $3.2 million for the three months ended September 30, 2017 and 2016, respectively. In conjunction with the acquisition of Kaiam, the Company recorded $0.4 million attributed to the value of technology and patents and $4.7 million of customer lists. The intangibles were recorded based on the Company’s preliminary purchase price allocation utilizing either a discounted cash flow or relief from royalty method to derive the fair value. The valuation is expected to be finalized within one year from the date of acquisition. Technology and patents are being amortized over a range of 60 to 240 months, with a weighted average remaining life of approximately 97 months. Customer lists are being amortized over a range of approximately 120 to 240 months with a weighted average remaining life of approximately 145 months. The gross carrying amount of trademarks includes $14.1 million of acquired trade names with indefinite lives that are not amortized but tested annually for impairment or more frequently if a triggering event occurs. Included in the gross carrying amount and accumulated amortization of the Company’s intangible assets is the effect of foreign currency translation on that portion of the intangible assets relating to the Company’s German, U.K. and Chinese subsidiaries. At September 30, 2017, the estimated amortization expense for the existing intangible assets for each of the five succeeding fiscal years is as follows ($000): Year Ending June 30, Remaining 2018 $ 10,678 2019 14,008 2020 13,052 2021 12,356 2022 10,903 |
Debt
Debt | 3 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 7 . Debt The components of debt for the periods indicated were as follows ($000): September 30, June 30, 2017 2017 0.25% Convertible senior notes $ 345,000 $ - Convertible senior notes unamortized discount attributable to cash conversion option and debt issuance costs including initial purchaser discount (65,359 ) - Term loan, interest at LIBOR, as defined, plus 1.75% and 1.50%, respectively 80,000 85,000 Line of credit, interest at LIBOR, as defined, plus 1.75% and 1.50%, respectively 40,000 252,000 Credit facility unamortized debt issuance costs (1,400 ) (1,491 ) Yen denominated line of credit, interest at LIBOR, as defined, plus 1.75% 2,667 2,679 Note payable assumed in IPI acquisition 3,834 3,834 Total debt 404,742 342,022 Current portion of long-term debt (20,000 ) (20,000 ) Long-term debt, less current portion $ 384,742 $ 322,022 0.25% Convertible Senior Notes On August 24, 2017, the Company entered into a purchase agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several initial purchasers named therein (collectively, the “Initial Purchasers”), to issue and sell $300 million aggregate principal amount of our 0.25% convertible senior notes due 2022 (the "Notes") in a private placement to qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended. In addition, we granted the Initial Purchasers a 30-day option to purchase up to an additional $45 million aggregate principal amount of the Notes (the “Over-Allotment Option”). On August 29, 2017, the Initial Purchasers exercised their Over-Allotment Option to purchase the entire $45 million in aggregate principal amount of additional Notes. The Notes mature on September 1, 2022, unless earlier repurchased by the Company or converted by holders in accordance with the terms of the Notes. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2018. The sale of the Notes to the Initial Purchasers settled on August 29, 2017, and resulted in approximately $336 million in net proceeds to the Company after deducting the initial purchasers’ discount and the estimated offering expenses. The net proceeds from the offering and sale of the Notes were used, in part, to repurchase approximately $49.9 million of our Common Stock. The Company used the remaining net proceeds to repay $257.0 million on its revolving credit facility and to pay debt issuance costs. The Notes are governed by an Indenture between the Company, as issuer, and U.S. Bank, National Association, as trustee. The Notes will be our senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of our indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. In the event of our bankruptcy, liquidation, reorganization or other winding up, our assets that secure secured debt will be available to pay obligations on the Notes only after all indebtedness under such secured debt has been repaid in full from such assets. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our Common Stock or a combination of cash and shares of our Common Stock, at the Company’s election. As a result of our cash conversion option, the Company separately accounted for the value of the embedded conversion option as a debt discount. The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature, which was determined using an expected present value technique (income approach) to estimate the fair value of similar nonconvertible debt; the debt discount is being amortized as additional non-cash interest expense over the term of the Notes using the effective interest method with an effective interest rate of 4.4% per annum. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The initial conversion rate is 21.25 shares of Common Stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of $47.06 per share of Common Stock. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than cancelled, extinguished or forfeited. Prior to the close of the business date immediately preceding June 1, 2022, the Notes will be convertible only upon satisfaction of at least one of the conditions as follows: a) During any fiscal quarter beginning after the fiscal quarter ending on December 31, 2017 (and only during such fiscal quarter), if the last reported sale price of our Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each applicable trading day; b) During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Common Stock and the conversion rate on each such trading day; c) Upon the occurrence of specified corporate events On or after June 1, 2022 until the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. As of September 30, 2017, the Notes are not yet convertible. In accounting for the transaction costs related to the Note issuance, the Company allocated the total amount of offering costs incurred to the debt and equity components based on their relative values. Offering costs attributable to the debt component, totaling $8.4 million, are being amortized as non-cash interest expense over the term of the Notes, and offering costs attributable to the equity component, totaling $1.7 million, were recorded within stockholders' equity. The following table sets forth total interest expense recognized related to the Notes for the three months ended September 30, 2017: 0.25% contractual coupon $ 78 Amortization of debt discount and debt issuance costs including initial purchaser discount 1,107 Interest expense $ 1,185 Amended Credit Facility On July 28, 2016, the Company amended and restated its existing credit agreement. The Third Amended and Restated Credit Agreement (the “Amended Credit Facility”) provides for a revolving credit facility of $325 million, as well as a $100 million term loan. The term loan is being repaid in consecutive quarterly principal payments on the first business day of each January, April, July and October, with the first payment having commenced on October 1, 2016, as follows: (i) twenty consecutive quarterly installments of $5 million and (ii) a final installment of all remaining principal due and payable on the maturity date of July 27, 2021. Amounts borrowed under the revolving credit facility are due and payable on the maturity date. The Amended Credit Facility is unsecured, but is guaranteed by each existing and subsequently acquired or organized wholly-owned domestic subsidiary of the Company. The Company has the option to request an increase to the size of the revolving credit facility in an aggregate additional amount not to exceed $100 million. The Amended Credit Facility has a five-year term through July 27, 2021 and has an interest rate of either a Base Rate Option or a Euro-Rate Option, plus an Applicable Margin, as defined in the agreement governing the Amended Credit Facility. If the Base Rate option is selected for a borrowing, the Applicable Margin is 0.00% to 1.25% and if the Euro-Rate Option is selected for a borrowing, the Applicable Margin is 1.00% to 2.25%. The Applicable Margin is based on the ratio of the Company’s consolidated indebtedness to consolidated EBITDA. Additionally, the Credit Facility is subject to certain covenants, including those relating to minimum interest coverage and maximum leverage ratios. As of September 30, 2017, the Company was in compliance with all financial covenants under its Amended Credit Facility. Yen Loan The Company’s Yen denominated line of credit is a 500 million Yen (approximately $4.4 million) facility. The Yen line of credit matures in August 2020. The interest rate is equal to LIBOR, as defined in the loan agreement, plus 0.625% to 1.75%. At September 30, 2017 and June 30, 2017, the Company had 300 million Yen borrowed. Additionally, the facility is subject to certain covenants, including those relating to minimum interest coverage and maximum leverage ratios. As of September 30, 2017, the Company was in compliance with all financial covenants under its Yen facility. Note Payable In conjunction with the acquisition of IPI, the Company assumed a non-interest bearing note payable owed to a major customer of IPI. The agreement if not terminated early by either party is payable in full in May 2019. Aggregate Availability The Company had aggregate availability of $285.6 million and $73.5 million under its lines of credit as of September 30, 2017 and June 30, 2017, respectively. The amounts available under the Company’s lines of credit are reduced by outstanding letters of credit. As of September 30, 2017 and June 30, 2017, total outstanding letters of credit supported by these credit facilities were $1.2 million for both periods. Weighted Average Interest Rate The weighted average interest rate of total borrowings was 1.8% and 2.0% for the three months ended September 30, 2017 and 2016, respectively. Remaining Annual Principal Payments Remaining annual principal payments under the Company’s existing credit obligations from September 30, 2017 were as follows: U.S. Dollar Term Yen Line Line of Note Convertible Period Loan of Credit Credit Payable Notes Total Year 1 $ 20,000 $ - $ - $ - $ - $ 20,000 Year 2 20,000 - - 3,834 - 23,834 Year 3 20,000 - - - - 20,000 Year 4 20,000 2,667 40,000 - - 62,667 Year 5 - - - - 345,000 345,000 Total $ 80,000 $ 2,667 $ 40,000 $ 3,834 $ 345,000 $ 471,501 |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 . Income Taxes The Company’s year-to-date effective income tax rate at September 30, 2017 and 2016 was 21.4% and 31.7%, respectively. The variations between the Company’s effective tax rate and the U.S. statutory rate of 35% were primarily due to the consolidation of the Company’s foreign operations, which are subject to income taxes at lower statutory rates. The prior year’s effective income tax rate was negatively impacted by the valuation allowance established for the benefit of losses from the Company’s U.S. entities. U.S. GAAP clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of September 30, 2017 and June 30, 2017, the Company’s gross unrecognized income tax benefit was $7.7 million and $7.6 million, respectively. The Company has classified the uncertain tax positions as noncurrent income tax liabilities, as the amounts are not expected to be paid within one year. If recognized, $1.3 million of the gross unrecognized tax benefits at September 30, 2017 would impact the effective tax rate. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision on the Condensed Consolidated Statements of Earnings. The amount of accrued interest and penalties included in the gross unrecognized income tax benefit was $0.3 million at September 30, 2017 and June 30, 2017. Fiscal years 2014 to 2017 remain open to examination by the United States Internal Revenue Service, fiscal years 2012 to 2017 remain open to examination by certain state jurisdictions, and fiscal years 2006 to 2017 remain open to examination by certain foreign taxing jurisdictions. The Company’s income tax returns are not currently under examination. The Company believes its income tax reserves for these tax matters are adequate. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 9 . Earnings Per Share The following table sets forth the computation of earnings per share for the periods indicated. Weighted average shares issuable upon the exercises of stock options and the release of performance and restricted shares are not included in the calculation because they were anti-dilutive and totaled approximately 87,000 and 368,000 for the three months ended September 30, 2017 and 2016, respectively. The earnings per share computation does not include the effects of the convertible note issuance as these notes are not convertible until January 1, 2018, ($000 except per share data): Three Months Ended September 30, 2017 2016 Net earnings $ 21,141 $ 16,294 Divided by: Weighted average shares 62,744 62,020 Basic earnings per common share $ 0.34 $ 0.26 Net earnings $ 21,141 $ 16,294 Divided by: Weighted average shares 62,744 62,020 Dilutive effect of common stock equivalents 2,539 1,570 Diluted weighted average common shares 65,283 63,590 Diluted earnings per common share $ 0.32 $ 0.26 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 10 . Segment Reporting The Company reports its business segments using the “management approach” model for segment reporting. This means that the Company determines its reportable business segments based on the way the chief operating decision maker organizes business segments within the Company for making operating decisions and assessing performance. The Company reports its financial results in the following three segments: (i) II-VI Laser Solutions, (ii) II-VI Photonics, and (iii) II-VI Performance Products, and the Company’s chief operating decision maker receives and reviews financial information based on these segments. The Company evaluates business segment performance based upon segment operating income, which is defined as earnings before income taxes, interest and other income or expense. The segments are managed separately due to the market, production requirements and facilities unique to each segment. In June 2017, the Company completed its acquisition of IPI. See Note 3. Acquisitions. The operating results of this acquisition have been reflected in the selected financial information of the Company’s II-VI Photonics segment. In August 2017, the Company completed its acquisition of II-VI Compound Semiconductor Ltd. See Note 3. Acquisitions. The operating results of this acquisition have been reflected in the selected financial information of the Company’s II-VI Laser Solutions segment. The accounting policies of the segments are the same as those of the Company. The Company’s corporate expenses and assets are allocated to the segments. The Company evaluates segment performance based upon reported segment operating income, which is defined as earnings before income taxes, interest and other income or expense. Inter-segment sales and transfers are eliminated. The following tables summarize selected financial information of the Company’s operations by segment ($000): Three Months Ended September 30, 2017 II-VI II-VI Laser II-VI Performance Solutions Photonics Products Eliminations Total Revenues $ 93,262 $ 110,614 $ 57,627 $ - $ 261,503 Inter-segment revenues 7,184 4,578 827 (12,589 ) - Operating income 3,265 19,499 7,014 - 29,777 Interest expense (3,645 ) Other income (expense), net 767 Income taxes (5,758 ) Net earnings 21,141 Depreciation and amortization 8,306 6,163 4,347 - 18,816 Segment assets 704,405 566,198 313,202 - 1,583,805 Expenditures for property, plant & equipment 13,256 10,578 13,592 - 37,426 Investment - - 11,998 - 11,998 Three Months Ended September 30, 2016 II-VI II-VI Laser II-VI Performance Solutions Photonics Products Eliminations Total Revenues $ 79,290 $ 95,819 $ 46,411 $ - $ 221,520 Inter-segment revenues 5,940 3,438 1,733 (11,111 ) - Operating income 6,698 13,890 3,103 - 23,691 Interest expense (1,246 ) Other income (expense), net 1,402 Income taxes (7,553 ) Net earnings 16,294 Depreciation and amortization 5,650 4,848 4,384 - 14,882 Expenditures for property, plant & equipment 20,125 6,597 3,272 - 29,994 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | Note 11. Share-Based Compensation The Company’s Board of Directors adopted the II-VI Incorporated Amended and Restated 2012 Omnibus Incentive Plan (the “Plan”), which was approved by the Company’s shareholders. The Plan provides for the grant of performance-based cash incentive awards, non-qualified stock options, stock appreciation rights, restricted share awards, restricted share units, deferred share awards, performance share awards and performance share units to employees, officers and directors of the Company. The maximum number of shares of the Company’s Common Stock authorized for issuance under the Plan is limited to 4,900,000 shares of Common Stock, not including any remaining shares forfeited under the predecessor plans that may be rolled into the Plan. The Company records share-based compensation expense for these awards in accordance with U.S. GAAP, which requires the recognition of grant-date fair value of share-based compensation in net earnings and over the requisite service period of the individual grantees, which generally equals the vesting period. The Company accounts for cash-based stock appreciation rights, cash-based restricted share unit awards and cash-based performance share unit awards as liability awards, in accordance with applicable accounting standards. Share-based compensation expense is allocated approximately 20% to cost of goods sold and 80% to selling, general and administrative expense, based on the employee classification of the grantees. Share-based compensation expense for the periods indicated was as follows ($000): Three Months Ended September 30, 2017 2016 Stock Options and Cash-Based Stock Appreciation Rights $ 2,463 $ 1,663 Restricted Share Awards and Cash-Based Restricted Share Unit Awards 2,563 1,878 Performance Share Awards and Cash-Based Performance Share Unit Awards 1,286 608 $ 6,312 $ 4,149 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Fair Value of Financial Instruments | Note 12 . Fair Value of Financial Instruments The FASB defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous markets for the asset and liability in an orderly transaction between market participants at the measurement date. The Company estimates fair value of its financial instruments utilizing an established three-level hierarchy in accordance with U.S. GAAP. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows: • Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets. • Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. • Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. At September 30, 2017, the Company had foreign currency forward contracts recorded at fair value. The fair values of these instruments were measured using valuations based upon quoted prices for similar assets and liabilities in active markets (Level 2) and are valued by reference to similar financial instruments, adjusted for credit risk, restrictions and other terms specific to the contracts. In February 2016, the Company entered into a contingent earnout arrangement which provides up to a maximum of $6.0 million of additional cash earnout opportunities based upon EpiWorks achieving certain agreed upon financial and operational targets for capacity, wafers output and gross margin, which if earned would be payable for the achievement of each specific annual target over the next three years. The Company paid the first year earnout amount of $2.0 million during the quarter ended June 30, 2017. In June 2017, the Company entered into a contingent earnout arrangement which provides up to a maximum of $2.5 million of additional cash earnout opportunities based upon IPI achieving certain agreed upon financial and transitional objectives relating to finance, information technology and human resources, which if earned would be payable for the achievement of each specific annual target over the next year. The fair values of the contingent earnout arrangements were measured using valuations based upon other unobservable inputs that are significant to the fair value measurement (Level 3). We estimated the fair value of the 0.25% convertible notes based on quoted market prices as of the last trading day for the three months ended September 30, 2017; however, the convertible notes have only a limited trading volume and as such this fair value estimate is not necessarily the value at which the convertible notes could be retired or transferred. The Company concluded that this fair value measurement should be categorized within Level 2. The carrying value of the Convertible notes is net of unamortized discount and issuance costs. See Note 7. Debt for details on the Company’s debt facilities. The fair value and carrying value of the convertible notes were as follows at September 30, 2017 ($000): Fair Value Carrying Value Convertible notes $ 384,000 $ 279,641 The following table provides a summary by level of the fair value of financial instruments that are measured on a recurring basis or for which fair value is disclosed for the periods presented ($000): Fair Value Measurements at September 30, 2017 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable September 30, Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Foreign currency forward contracts $ 218 $ - $ 218 $ - Liabilities: 0.25% convertible notes $ 384,000 $ - $ 384,000 $ - Contingent earnout arrangements 5,795 - - 5,795 Fair Value Measurements at June 30, 2017 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable June 30, Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Foreign currency forward contracts $ 191 $ - $ 191 $ - Liabilities: Contingent earnout arrangements $ 5,795 $ - $ - $ 5,795 The Company’s policy is to report transfers into and out of Levels 1 and 2 of the fair value hierarchy at fair values as of the beginning of the period in which the transfers occur. There were no transfers in and out of Levels 1 and 2 of the fair value hierarchy during the three months ended September 30, 2017. The following table presents a reconciliation of the beginning and ending fair value measurements of the Company’s Level 3 contingent earnout arrangements related to the acquisition of II-VI EpiWorks and IPI ($000): Significant Unobservable Inputs (Level 3) Balance at July 1, 2017 $ 5,795 Contingent earnout arrangements Payments - Changes in fair value recorded in other expense, (income) - Balance at September 30, 2017 $ 5,795 The fair values of cash and cash equivalents are considered Level 1 among the fair value hierarchy and approximate fair value because of the short-term maturity of those instruments. The Company’s borrowings including its capital lease obligation are considered Level 2 among the fair value hierarchy and are variable interest rates and accordingly their principal amount approximate fair value. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2017 | |
Guarantees [Abstract] | |
Commitments and Contingencies | Note 13 . Commitments and Contingencies The Company records a warranty reserve as a charge against earnings based on a percentage of sales utilizing actual warranty claims over the last twelve months. The following table summarizes the change in the carrying value of the Company’s warranty reserve, which is a component of Other accrued liabilities in the Company’s Condensed Consolidated Balance Sheets ($000): Three Months Ended September 30, 2017 ($000) Balance-Beginning of Year $ 4,546 Settlements during the period (1,610 ) Additional warranty liability recorded 1,032 Balance-End of Period $ 3,968 |
Post-Retirement Benefits
Post-Retirement Benefits | 3 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Post-Retirement Benefits | Note 14. Post-Retirement Benefits The Company has a pension plan (the “Swiss Plan”) covering employees of the Zurich, Switzerland subsidiary. Net periodic pension costs associated with the Swiss Plan included the following ($000): Three Months Ended September 30, 2017 2016 Service cost $ 952 $ 897 Interest cost 107 40 Expected return on plan assets (215 ) (181 ) Net amortization 105 (164 ) Net periodic pension costs $ 949 $ 592 The Company contributed $0.9 million to the Swiss Plan during the three months ended September 30, 2017 and 2016. The Company currently anticipates contributing an additional estimated amount of approximately $2.8 million to the Swiss Plan during the remainder of fiscal year 2018. |
Share Repurchase Programs
Share Repurchase Programs | 3 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Share Repurchase Programs | Note 15. Share Repurchase Programs In August 2017, in conjunction with the Company’s offering and sale of the Notes, the Company’s Board of Directors authorized the Company to purchase up to $50 million of its Common Stock with a portion of the net proceeds received from the offering and sales of the Notes. The shares that were purchased by the Company pursuant to this authorization were retained as treasury stock and are available for general corporate purposes. The Company purchased 1,414,900 shares of its Common Stock for approximately $49.9 million pursuant to this authorization. In August 2014, the Company’s Board of Directors authorized the Company to purchase up to $50 million of its Common Stock through a share repurchase program (the “Program”) that calls for shares to be purchased in the open market or in private transactions from time to time. The Program has no expiration and may be suspended or discontinued at any time. Shares purchased by the Company are retained as treasury stock and available for general corporate purposes. The Company did not repurchase shares pursuant to this Program during the quarter ended September 30, 2017. Through September 30, 2017, the Company has purchased 1,316,587 shares of its Common Stock pursuant to the Program for approximately $19.0 million. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 16. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (“AOCI") by component, net of tax, for the three months ended September 30, 2017 were as follows ($000): Foreign Total Currency Defined Accumulated Other Translation Benefit Comprehensive Adjustment Pension Plan Income (Loss) AOCI - June 30, 2017 $ (8,460 ) $ (5,318 ) $ (13,778 ) Other comprehensive income before reclassifications 11,097 - 11,097 Amounts reclassified from AOCI - 82 82 Net current-period other comprehensive income 11,097 82 11,179 AOCI - September 30, 2017 $ 2,637 $ (5,236 ) $ (2,599 ) |
Capital Lease
Capital Lease | 3 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Capital Lease | Note 17. Capital Lease The Company’s OptoElectronic Devices subsidiary entered into a capital lease related to a building in Warren, New Jersey. The following table shows the future minimum lease payments due under the non-cancelable capital lease ($000): Fiscal Year Ending June 30, Amount 2018 (remaining) $ 1,934 2019 2,579 2020 2,579 2021 2,579 2022 2,579 Thereafter 24,503 Total minimum lease payments 36,753 Less amount representing interest 12,525 Present value of capitalized payments $ 24,228 Less: current portion $ 1,084 Long-term portion $ 23,144 The current and long-term portion of the capital lease obligation was recorded in Other accrued liabilities and Capital lease obligation, respectively, in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2017. The present value of the minimum capital lease payments at inception was $25 million recorded in Property, Plant & Equipment, net, in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2017, with associated depreciation being recorded over the 15-year life of the lease. During the period ended September 30, 2017, the Company recorded $0.4 million of depreciation expense associated with the capital leased asset. |
Recently Issued Financial Acc28
Recently Issued Financial Accounting Standards (Policies) | 3 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recently Issued Financial Accounting Standards | Adopted Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The new guidance will be applied prospectively to awards modified on or after the adoption date. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit were needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company has adopted this standard for any impairment test that is performed after July 1, 2017 as permitted under the standard. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, and classification in the statement of cash flows. Under this ASU, excess tax benefits or deficiencies are recognized in income tax expense in the Condensed Consolidated Statement of Earnings. Upon adoption of this ASU, the Company had a valuation allowance for its U.S. deferred tax assets and did not recognize any tax benefit. Had the Company not had a valuation allowance, the Company would have recognized a tax benefit of $2.4 million. The impact to the Company’s dilutive shares under this new standard was immaterial. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). This update requires that public entities measure equity investments with readily determinable fair values, at fair value, with changes in their fair value recorded through net income. This ASU also clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This update simplifies the measurement of inventory valuation at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. This update eliminates the requirement to retrospectively apply the equity method in previous periods when an investor obtains significant influence over an investee. The adoption of this standard did not have a material effect on the Company’s Consolidated Financial Statements. Revenue Recognition Pronouncement Currently Under Evaluation In May 2014, the FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606) which supersedes virtually all existing revenue recognition guidance under U.S. GAAP. The update's core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update allows for the use of either the retrospective or modified retrospective approach of adoption. The update will be effective for the Company’s 2019 fiscal year (July 1, 2018). We continue our evaluation of the impact of the ASU in fiscal 2018 by evaluating its impact on selected contracts at each of our business segments. As the ASU will supersede all existing revenue guidance affecting U.S. GAAP, it could impact revenue and cost recognition on our contracts across all our business segments, as well as our business processes and our information technology. As a result, our evaluation of the effect of the ASU will continue through fiscal year 2018. The Company has completed its assessment of its military related contracts that comprise approximately 10% of consolidated revenues and concluded that the Company will accelerate the recognition of revenue under the ASU for these contracts as the customer obtains control of the goods or service promised in the contract. The Company is currently evaluating the commercial portion of its business; the assessment will be completed during fiscal year 2018. Based upon our evaluation to date, we cannot currently estimate the impacts of adopting the ASU at this time. The Company will adopt this ASU using the modified retrospective method whereby the cumulative effect of applying the ASU would be recognized at the beginning of the year of adoption. Other Pronouncements Currently Under Evaluation In August 2017 the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The standard will be effective for the Company’s 2019 fiscal year. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In March 2017, the FASB issued ASU 2017-07, Consolidation (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update affects employers’ presentation of defined benefit retirement plan costs. Early adoption is permitted. The standard will be effective for the Company’s 2019 fiscal year. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the definition of a business. This update changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. Early adoption is permitted. The standard will be effective for the Company’s 2019 fiscal year. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This update requires that when intra-entity asset transfers occur, the entity must recognize tax effects in the period in which the transfer occurs. The standard will be effective for The Company’s 2019 fiscal year. Early adoption is permitted. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flow. The update will be effective for the Company’s 2019 fiscal year. Early adoption is permitted. The Company is evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update is intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity. The standard replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update will be effective for the Company’s 2021 fiscal year. Early adoption is permitted. The Company is evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires that a lessee recognize leased assets with terms greater than 12 months on the balance sheet for the rights and obligations created by those leases. The standard will be effective for the Company’s 2020 fiscal year. Early adoption is permitted. The Company is evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Kaiam Laser Limited, Inc | |
Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table presents the preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition, as the Company intends to finalize its accounting for the acquisition of Kaiam within one year from the date of acquisition ($000): Assets Accounts receivable $ 79 Inventories 4,559 Prepaid and other assets 1,246 Property, plant & equipment 64,482 Intangible assets 5,146 Goodwill 18,307 Total assets acquired $ 93,819 Liabilities Accounts payable $ 751 Other accrued liabilities 2,486 Deferred tax liabilities 11,117 Total liabilities assumed 14,354 Net assets acquired $ 79,465 |
Integrated Photonics, Inc | |
Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table presents the preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition, as the Company intends to finalize its accounting for the valuation of property, plant and equipment, identifiable intangibles and deferred income tax liabilities and anticipates completion of the valuation within one year from the date of the acquisition ($000): Assets Accounts receivable $ 2,083 Inventories 3,968 Prepaid and other assets 322 Property, plant & equipment 11,257 Intangible assets 22,213 Goodwill 17,107 Total assets acquired $ 56,950 Liabilities Accounts payable $ 846 Other accrued liabilities 1,032 Long-term debt assumed 3,834 Deferred tax liabilities 9,552 Total liabilities assumed 15,264 Net assets acquired $ 41,686 |
Purchase Price at the Date of Acquisition | The following table presents the preliminary purchase price at the date of acquisition ($000): Net cash paid at acquisition $ 39,436 Fair value of cash earnout arrangement 2,250 Purchase price $ 41,686 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows ($000): September 30, June 30, 2017 2017 Raw materials $ 81,706 $ 78,979 Work in progress 74,116 61,679 Finished goods 68,639 63,037 $ 224,461 $ 203,695 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consists of the following ($000): September 30, June 30, 2017 2017 Land and land improvements $ 9,228 $ 5,667 Buildings and improvements 200,774 144,293 Machinery and equipment 529,412 492,042 Construction in progress 95,594 88,458 835,008 730,460 Less accumulated depreciation (374,149 ) (362,732 ) $ 460,859 $ 367,728 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows ($000): Three Months Ended September 30, 2017 II-VI Laser II-VI II- VI Performance Solutions Photonics Products Total Balance-beginning of period $ 84,180 $ 113,272 $ 52,890 $ 250,342 Goodwill acquired 18,307 - - 18,307 Foreign currency translation 830 624 - 1,454 Balance-end of period $ 103,317 $ 113,896 $ 52,890 $ 270,103 |
Gross Carrying Amount and Accumulated Amortization of Intangible Assets Other Than Goodwill | The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill as of September 30, 2017 and June 30, 2017 were as follows ($000): September 30, 2017 June 30, 2017 Gross Net Gross Net Carrying Accumulated Book Carrying Accumulated Book Amount Amortization Value Amount Amortization Value Technology and Patents $ 66,096 $ (28,865 ) $ 37,231 $ 65,438 $ (27,313 ) $ 38,125 Trademarks 15,872 (1,373 ) 14,499 15,806 (1,340 ) 14,466 Customer Lists 128,237 (44,101 ) 84,136 123,058 (41,740 ) 81,318 Other 1,575 (1,536 ) 39 1,571 (1,523 ) 48 Total $ 211,780 $ (75,875 ) $ 135,905 $ 205,873 $ (71,916 ) $ 133,957 |
Estimated Amortization Expense for Existing Intangible Assets for Each of Five Succeeding Fiscal Years | At September 30, 2017, the estimated amortization expense for the existing intangible assets for each of the five succeeding fiscal years is as follows ($000): Year Ending June 30, Remaining 2018 $ 10,678 2019 14,008 2020 13,052 2021 12,356 2022 10,903 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Components of Debt | The components of debt for the periods indicated were as follows ($000): September 30, June 30, 2017 2017 0.25% Convertible senior notes $ 345,000 $ - Convertible senior notes unamortized discount attributable to cash conversion option and debt issuance costs including initial purchaser discount (65,359 ) - Term loan, interest at LIBOR, as defined, plus 1.75% and 1.50%, respectively 80,000 85,000 Line of credit, interest at LIBOR, as defined, plus 1.75% and 1.50%, respectively 40,000 252,000 Credit facility unamortized debt issuance costs (1,400 ) (1,491 ) Yen denominated line of credit, interest at LIBOR, as defined, plus 1.75% 2,667 2,679 Note payable assumed in IPI acquisition 3,834 3,834 Total debt 404,742 342,022 Current portion of long-term debt (20,000 ) (20,000 ) Long-term debt, less current portion $ 384,742 $ 322,022 |
Summary of Total Interest Expense Recognized | The following table sets forth total interest expense recognized related to the Notes for the three months ended September 30, 2017: 0.25% contractual coupon $ 78 Amortization of debt discount and debt issuance costs including initial purchaser discount 1,107 Interest expense $ 1,185 |
Remaining Annual Principal Payments of Credit Obligations | Remaining annual principal payments under the Company’s existing credit obligations from September 30, 2017 were as follows: U.S. Dollar Term Yen Line Line of Note Convertible Period Loan of Credit Credit Payable Notes Total Year 1 $ 20,000 $ - $ - $ - $ - $ 20,000 Year 2 20,000 - - 3,834 - 23,834 Year 3 20,000 - - - - 20,000 Year 4 20,000 2,667 40,000 - - 62,667 Year 5 - - - - 345,000 345,000 Total $ 80,000 $ 2,667 $ 40,000 $ 3,834 $ 345,000 $ 471,501 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | The following table sets forth the computation of earnings per share for the periods indicated. Weighted average shares issuable upon the exercises of stock options and the release of performance and restricted shares are not included in the calculation because they were anti-dilutive and totaled approximately 87,000 and 368,000 for the three months ended September 30, 2017 and 2016, respectively. The earnings per share computation does not include the effects of the convertible note issuance as these notes are not convertible until January 1, 2018, ($000 except per share data): Three Months Ended September 30, 2017 2016 Net earnings $ 21,141 $ 16,294 Divided by: Weighted average shares 62,744 62,020 Basic earnings per common share $ 0.34 $ 0.26 Net earnings $ 21,141 $ 16,294 Divided by: Weighted average shares 62,744 62,020 Dilutive effect of common stock equivalents 2,539 1,570 Diluted weighted average common shares 65,283 63,590 Diluted earnings per common share $ 0.32 $ 0.26 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Financial Information of Company's Operation by Segment | The following tables summarize selected financial information of the Company’s operations by segment ($000): Three Months Ended September 30, 2017 II-VI II-VI Laser II-VI Performance Solutions Photonics Products Eliminations Total Revenues $ 93,262 $ 110,614 $ 57,627 $ - $ 261,503 Inter-segment revenues 7,184 4,578 827 (12,589 ) - Operating income 3,265 19,499 7,014 - 29,777 Interest expense (3,645 ) Other income (expense), net 767 Income taxes (5,758 ) Net earnings 21,141 Depreciation and amortization 8,306 6,163 4,347 - 18,816 Segment assets 704,405 566,198 313,202 - 1,583,805 Expenditures for property, plant & equipment 13,256 10,578 13,592 - 37,426 Investment - - 11,998 - 11,998 Three Months Ended September 30, 2016 II-VI II-VI Laser II-VI Performance Solutions Photonics Products Eliminations Total Revenues $ 79,290 $ 95,819 $ 46,411 $ - $ 221,520 Inter-segment revenues 5,940 3,438 1,733 (11,111 ) - Operating income 6,698 13,890 3,103 - 23,691 Interest expense (1,246 ) Other income (expense), net 1,402 Income taxes (7,553 ) Net earnings 16,294 Depreciation and amortization 5,650 4,848 4,384 - 14,882 Expenditures for property, plant & equipment 20,125 6,597 3,272 - 29,994 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation Expense by Award Type | Share-based compensation expense is allocated approximately 20% to cost of goods sold and 80% to selling, general and administrative expense, based on the employee classification of the grantees. Share-based compensation expense for the periods indicated was as follows ($000): Three Months Ended September 30, 2017 2016 Stock Options and Cash-Based Stock Appreciation Rights $ 2,463 $ 1,663 Restricted Share Awards and Cash-Based Restricted Share Unit Awards 2,563 1,878 Performance Share Awards and Cash-Based Performance Share Unit Awards 1,286 608 $ 6,312 $ 4,149 |
Fair Value of Financial Instr37
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Summary of Fair Value and Carrying Value of Convertible Notes | The fair value and carrying value of the convertible notes were as follows at September 30, 2017 ($000): Fair Value Carrying Value Convertible notes $ 384,000 $ 279,641 |
Summary by Level of Fair Value of Financial Instruments Measured on Recurring Basis | The following table provides a summary by level of the fair value of financial instruments that are measured on a recurring basis or for which fair value is disclosed for the periods presented ($000): Fair Value Measurements at September 30, 2017 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable September 30, Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Foreign currency forward contracts $ 218 $ - $ 218 $ - Liabilities: 0.25% convertible notes $ 384,000 $ - $ 384,000 $ - Contingent earnout arrangements 5,795 - - 5,795 |
EpiWorks | |
Reconciliation of Beginning and Ending Fair Value Measurements of Level Three Contingent Earnout Arrangements Related to Acquisition | The following table presents a reconciliation of the beginning and ending fair value measurements of the Company’s Level 3 contingent earnout arrangements related to the acquisition of II-VI EpiWorks and IPI ($000): Significant Unobservable Inputs (Level 3) Balance at July 1, 2017 $ 5,795 Contingent earnout arrangements Payments - Changes in fair value recorded in other expense, (income) - Balance at September 30, 2017 $ 5,795 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Guarantees [Abstract] | |
Change in Carrying Value of Company's Warranty Reserve | The following table summarizes the change in the carrying value of the Company’s warranty reserve, which is a component of Other accrued liabilities in the Company’s Condensed Consolidated Balance Sheets ($000): Three Months Ended September 30, 2017 ($000) Balance-Beginning of Year $ 4,546 Settlements during the period (1,610 ) Additional warranty liability recorded 1,032 Balance-End of Period $ 3,968 |
Post-Retirement Benefits (Table
Post-Retirement Benefits (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Pension Costs | Net periodic pension costs associated with the Swiss Plan included the following ($000): Three Months Ended September 30, 2017 2016 Service cost $ 952 $ 897 Interest cost 107 40 Expected return on plan assets (215 ) (181 ) Net amortization 105 (164 ) Net periodic pension costs $ 949 $ 592 |
Accumulated Other Comprehensi40
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income ("AOCI") by Component, Net of Tax | The changes in accumulated other comprehensive income (“AOCI") by component, net of tax, for the three months ended September 30, 2017 were as follows ($000): Foreign Total Currency Defined Accumulated Other Translation Benefit Comprehensive Adjustment Pension Plan Income (Loss) AOCI - June 30, 2017 $ (8,460 ) $ (5,318 ) $ (13,778 ) Other comprehensive income before reclassifications 11,097 - 11,097 Amounts reclassified from AOCI - 82 82 Net current-period other comprehensive income 11,097 82 11,179 AOCI - September 30, 2017 $ 2,637 $ (5,236 ) $ (2,599 ) |
Capital Lease (Tables)
Capital Lease (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments Due Under Non-Cancelable Capital Lease | The following table shows the future minimum lease payments due under the non-cancelable capital lease ($000): Fiscal Year Ending June 30, Amount 2018 (remaining) $ 1,934 2019 2,579 2020 2,579 2021 2,579 2022 2,579 Thereafter 24,503 Total minimum lease payments 36,753 Less amount representing interest 12,525 Present value of capitalized payments $ 24,228 Less: current portion $ 1,084 Long-term portion $ 23,144 |
Recently Issued Financial Acc42
Recently Issued Financial Accounting Standards - Additional Information (Detail) $ in Millions | 3 Months Ended |
Sep. 30, 2017USD ($) | |
ASU 2016-09 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Tax benefit would have recognized in absence of valuation allowance | $ 2.4 |
ASU 2014-09 | Military Related Contracts | Consolidated Revenues | Product Concentration Risk | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Percentage of consolidated revenues | 10.00% |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Aug. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | |||
Net cash paid at acquisition | $ 79,465 | ||
Goodwill | $ 250,342 | 270,103 | |
Kaiam Laser Limited, Inc | |||
Business Acquisition [Line Items] | |||
Net cash paid at acquisition | $ 79,500 | ||
Goodwill | $ 18,307 | ||
Business acquisition, transaction costs | 1,000 | ||
Business acquisition, revenue of acquired entity | 600 | ||
Business acquisition, (loss) earnings of acquired entity | (3,700) | ||
Integrated Photonics, Inc | |||
Business Acquisition [Line Items] | |||
Net cash paid at acquisition | 39,436 | ||
Goodwill | 17,107 | ||
Business acquisition, transaction costs | 300 | ||
Business acquisition, revenue of acquired entity | 5,400 | ||
Business acquisition, (loss) earnings of acquired entity | $ 400 | ||
Payment of additional amount for working capital adjustment | 700 | ||
Fair value of accounts receivable acquired | 2,100 | ||
Fair value of accounts receivable gross contractual amount | 2,100 | ||
Integrated Photonics, Inc | Upon Achievement of Financial And Transitional Objectives Relating to Finance Information Technology And Human Resources | |||
Business Acquisition [Line Items] | |||
Business acquisitions, contingent consideration, current | 2,500 | ||
Integrated Photonics, Inc | Upon Achievement of Financial And Transitional Objectives Relating to Finance Information Technology And Human Resources | Maximum | |||
Business Acquisition [Line Items] | |||
Business acquisitions, contingent consideration | $ 2,500 |
Allocation of Purchase Price of
Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Detail)) - USD ($) $ in Thousands | Sep. 30, 2017 | Aug. 31, 2017 | Jun. 30, 2017 |
Assets | |||
Goodwill | $ 270,103 | $ 250,342 | |
Kaiam Laser Limited, Inc | |||
Assets | |||
Accounts receivable | $ 79 | ||
Inventories | 4,559 | ||
Prepaid and other assets | 1,246 | ||
Property, plant & equipment | 64,482 | ||
Intangible assets | 5,146 | ||
Goodwill | 18,307 | ||
Total assets acquired | 93,819 | ||
Liabilities | |||
Accounts payable | 751 | ||
Other accrued liabilities | 2,486 | ||
Deferred tax liabilities | 11,117 | ||
Total liabilities assumed | 14,354 | ||
Net assets acquired | $ 79,465 | ||
Integrated Photonics, Inc | |||
Assets | |||
Accounts receivable | 2,083 | ||
Inventories | 3,968 | ||
Prepaid and other assets | 322 | ||
Property, plant & equipment | 11,257 | ||
Intangible assets | 22,213 | ||
Goodwill | 17,107 | ||
Total assets acquired | 56,950 | ||
Liabilities | |||
Accounts payable | 846 | ||
Other accrued liabilities | 1,032 | ||
Long-term debt assumed | 3,834 | ||
Deferred tax liabilities | 9,552 | ||
Total liabilities assumed | 15,264 | ||
Net assets acquired | $ 41,686 |
Purchase Price at the Date of A
Purchase Price at the Date of Acquisition (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Jun. 30, 2017 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||
Net cash paid at acquisition | $ 79,465 | |
Integrated Photonics, Inc | ||
Business Acquisition [Line Items] | ||
Net cash paid at acquisition | $ 39,436 | |
Fair value of cash earnout arrangement | 2,250 | |
Purchase price | $ 41,686 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 81,706 | $ 78,979 |
Work in progress | 74,116 | 61,679 |
Finished goods | 68,639 | 63,037 |
Inventories, Total | $ 224,461 | $ 203,695 |
Property Plant and Equipment (D
Property Plant and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 835,008 | $ 730,460 |
Less accumulated depreciation | (374,149) | (362,732) |
Property, Plant and Equipment, net | 460,859 | 367,728 |
Land and Land Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, gross | 9,228 | 5,667 |
Buildings and Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, gross | 200,774 | 144,293 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, gross | 529,412 | 492,042 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 95,594 | $ 88,458 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Balance-beginning of period | $ 250,342 |
Goodwill acquired | 18,307 |
Foreign currency translation | 1,454 |
Balance-end of period | 270,103 |
II-VI Laser Solutions | |
Goodwill [Line Items] | |
Balance-beginning of period | 84,180 |
Goodwill acquired | 18,307 |
Foreign currency translation | 830 |
Balance-end of period | 103,317 |
II-VI Photonics | |
Goodwill [Line Items] | |
Balance-beginning of period | 113,272 |
Foreign currency translation | 624 |
Balance-end of period | 113,896 |
II- VI Performance Products | |
Goodwill [Line Items] | |
Balance-beginning of period | 52,890 |
Balance-end of period | $ 52,890 |
Gross Carrying Amount and Accum
Gross Carrying Amount and Accumulated Amortization of Intangible Assets Other Than Goodwill (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 211,780 | $ 205,873 |
Accumulated Amortization | (75,875) | (71,916) |
Net Book Value | 135,905 | 133,957 |
Technology and Patents | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 66,096 | 65,438 |
Accumulated Amortization | (28,865) | (27,313) |
Net Book Value | 37,231 | 38,125 |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,872 | 15,806 |
Accumulated Amortization | (1,373) | (1,340) |
Net Book Value | 14,499 | 14,466 |
Customer Lists | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 128,237 | 123,058 |
Accumulated Amortization | (44,101) | (41,740) |
Net Book Value | 84,136 | 81,318 |
Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,575 | 1,571 |
Accumulated Amortization | (1,536) | (1,523) |
Net Book Value | $ 39 | $ 48 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | |
Goodwill And Other Intangible Assets [Line Items] | |||
Amortization expense recorded on intangible assets | $ 3,600 | $ 3,200 | |
Carrying amount of indefinite trade names acquired | $ 14,100 | ||
Kaiam Laser Limited, Inc | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Identifiable intangibles assets recorded in connection with acquisitions | $ 5,146 | ||
Technology and Patents | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Remaining amortization period of patents and customer lists, in months | 97 months | ||
Technology and Patents | Kaiam Laser Limited, Inc | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Identifiable intangibles assets recorded in connection with acquisitions | $ 400 | ||
Technology and Patents | Minimum [Member] | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Amortization period of finite lived intangible assets, in months | 60 months | ||
Technology and Patents | Maximum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Amortization period of finite lived intangible assets, in months | 240 months | ||
Customer Lists | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Remaining amortization period of patents and customer lists, in months | 145 months | ||
Customer Lists | Kaiam Laser Limited, Inc | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Identifiable intangibles assets recorded in connection with acquisitions | $ 4,700 | ||
Customer Lists | Minimum [Member] | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Amortization period of finite lived intangible assets, in months | 120 months | ||
Customer Lists | Maximum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Amortization period of finite lived intangible assets, in months | 240 months |
Estimated Amortization Expense
Estimated Amortization Expense for Existing Intangible Assets for Each of Five Succeeding Fiscal Years (Detail) $ in Thousands | Sep. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Remaining 2,018 | $ 10,678 |
2,019 | 14,008 |
2,020 | 13,052 |
2,021 | 12,356 |
2,022 | $ 10,903 |
Components of Debt (Detail)
Components of Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | $ 471,501 | |
Total debt | 404,742 | $ 342,022 |
Current portion of long-term debt | (20,000) | (20,000) |
Long-term debt, less current portion | 384,742 | 322,022 |
0.25% Convertible Senior Notes Due 2022 | ||
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | 345,000 | |
Convertible senior notes unamortized discount attributable to cash conversion option and debt issuance costs including initial purchaser discount | (65,359) | |
Note payable | ||
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | 3,834 | |
Integrated Photonics, Inc | Note payable | ||
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | 3,834 | 3,834 |
Line of credit | ||
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | 40,000 | 252,000 |
Term Loans | ||
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | 80,000 | 85,000 |
Yen denominated line of credit | ||
Line Of Credit Facility [Line Items] | ||
Total debt, Gross | 2,667 | 2,679 |
Credit Facility | ||
Line Of Credit Facility [Line Items] | ||
Credit facility unamortized debt issuance costs | $ (1,400) | $ (1,491) |
Components of Debt (Parenthetic
Components of Debt (Parenthetical) (Detail) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | |
0.25% Convertible Senior Notes Due 2022 | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, interest rate | 0.25% | |
London Interbank Offered Rate (LIBOR) | Term Loans | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, rate added on variable rate | 1.75% | 1.50% |
London Interbank Offered Rate (LIBOR) | Line of credit | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, rate added on variable rate | 1.75% | 1.50% |
London Interbank Offered Rate (LIBOR) | Yen denominated line of credit | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, rate added on variable rate | 1.75% |
Debt - Additional Information (
Debt - Additional Information (Detail) | Aug. 29, 2017USD ($) | Aug. 24, 2017USD ($) | Jul. 28, 2016USD ($) | Sep. 30, 2017USD ($)dJPY (¥)$ / shares | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2017JPY (¥) | Jun. 30, 2017JPY (¥) |
Line Of Credit Facility [Line Items] | ||||||||
Net proceeds after deducting initial purchasers discount and estimated offering expenses | $ 345,000,000 | |||||||
Proceeds from notes used to repurchase common stock | 49,875,000 | |||||||
Repayments of revolving credit facility | 257,000,000 | $ 10,000,000 | ||||||
Offering costs attributable to equity component | 1,694,000 | |||||||
Available credit under lines of credit | 285,600,000 | $ 73,500,000 | ||||||
Total outstanding letters of credit | $ 1,200,000 | $ 1,200,000 | ||||||
Weighted average interest rate of total borrowings | 1.80% | 2.00% | 1.80% | |||||
Revolving Credit Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument maturity date | Jul. 27, 2021 | |||||||
Line of credit, maximum borrowing capacity | $ 325,000,000 | |||||||
Credit facility, term | 5 years | |||||||
Term Loans | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Line of credit, maximum borrowing capacity | $ 100,000,000 | |||||||
Term loan, quarterly principal Payment | $ 5,000,000 | |||||||
Term loan, maturity date | Jul. 27, 2021 | |||||||
Term loan, first quarterly principal payment commencement date | Oct. 1, 2016 | |||||||
Yen denominated line of credit | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Line of credit, maximum borrowing capacity | $ 4,400,000 | ¥ 500,000,000 | ||||||
Debt instrument, month and year of maturity | 2020-08 | |||||||
Line of credit, outstanding | ¥ | ¥ 300,000,000 | ¥ 300,000,000 | ||||||
London Interbank Offered Rate (LIBOR) | Term Loans | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 1.75% | 1.50% | ||||||
London Interbank Offered Rate (LIBOR) | Yen denominated line of credit | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 1.75% | |||||||
Maximum | Revolving Credit Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Credit facility, optional additional borrowing amount | $ 100,000,000 | |||||||
Maximum | Base Rate Option | Revolving Credit Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 1.25% | |||||||
Maximum | Euro Rate Option | Revolving Credit Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 2.25% | |||||||
Maximum | London Interbank Offered Rate (LIBOR) | Yen denominated line of credit | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 1.75% | |||||||
Minimum [Member] | Base Rate Option | Revolving Credit Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 0.00% | |||||||
Minimum [Member] | Euro Rate Option | Revolving Credit Facility | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 1.00% | |||||||
Minimum [Member] | London Interbank Offered Rate (LIBOR) | Yen denominated line of credit | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, rate added on variable rate | 0.625% | |||||||
0.25% Convertible Senior Notes Due 2022 | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument, interest rate | 0.25% | 0.25% | ||||||
Debt instrument maturity date | Sep. 1, 2022 | |||||||
Debt instrument maturity date description | The Notes mature on September 1, 2022, unless earlier repurchased by the Company or converted by holders in accordance with the terms of the Notes. | |||||||
Debt instrument payment terms description | Interest is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2018. | |||||||
Debt instrument frequency of periodic payment | semi-annually | |||||||
Debt instrument interest payable beginning date | Mar. 1, 2018 | |||||||
Effective interest rate | 4.40% | 4.40% | ||||||
Debt instrument conversion, shares issued per $1,000 principal amount | 21.25 | |||||||
Debt instrument conversion, principal amount of each note converted | $ 1,000 | |||||||
Debt instrument conversion, conversion price per share | $ / shares | $ 47.06 | |||||||
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be convertible into common stock | d | 20 | |||||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible into common stock | d | 30 | |||||||
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be convertible | 130.00% | |||||||
Number of consecutive business days immediately after any five consecutive trading day period during the note measurement period | ¥ | 5 | |||||||
Number of consecutive trading days before five consecutive business days during the note measurement period | d | 5 | |||||||
Offering costs attributable to debt component | $ 8,400,000 | |||||||
Offering costs attributable to equity component | $ 1,700,000 | |||||||
0.25% Convertible Senior Notes Due 2022 | Maximum | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Debt instrument conversion obligation trading price as percentage of product common stock closing sale price and conversion rate | 98.00% | |||||||
0.25% Convertible Senior Notes Due 2022 | Initial Purchasers | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 300,000,000 | |||||||
Debt instrument, interest rate | 0.25% | |||||||
Sale of notes to initial purchasers settlement date | Aug. 29, 2017 | |||||||
Net proceeds after deducting initial purchasers discount and estimated offering expenses | $ 336,000,000 | |||||||
Proceeds from notes used to repurchase common stock | 49,900,000 | |||||||
Repayments of revolving credit facility | $ 257,000,000 | |||||||
0.25% Convertible Senior Notes Over-Allotment Option | Initial Purchasers | ||||||||
Line Of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 45,000,000 | |||||||
Number of days option granted to purchase additional principal amount of notes | 30 days |
Summary of Total Interest Expen
Summary of Total Interest Expense Recognized (Detail) - 0.25% Convertible Senior Notes Due 2022 $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Debt Instrument [Line Items] | |
0.25% contractual coupon | $ 78 |
Amortization of debt discount and debt issuance costs including initial purchaser discount | 1,107 |
Interest expense | $ 1,185 |
Summary of Total Interest Exp56
Summary of Total Interest Expense Recognized (Parenthetical) (Detail) | Sep. 30, 2017 |
0.25% Convertible Senior Notes Due 2022 | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 0.25% |
Remaining Annual Principal Paym
Remaining Annual Principal Payments of Credit Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Line Of Credit Facility [Line Items] | ||
Year 1 | $ 20,000 | |
Year 2 | 23,834 | |
Year 3 | 20,000 | |
Year 4 | 62,667 | |
Year 5 | 345,000 | |
Total | 471,501 | |
Term Loans | ||
Line Of Credit Facility [Line Items] | ||
Year 1 | 20,000 | |
Year 2 | 20,000 | |
Year 3 | 20,000 | |
Year 4 | 20,000 | |
Total | 80,000 | $ 85,000 |
Yen Line of Credit | ||
Line Of Credit Facility [Line Items] | ||
Year 4 | 2,667 | |
Total | 2,667 | 2,679 |
U.S. Dollar Line of Credit | ||
Line Of Credit Facility [Line Items] | ||
Year 4 | 40,000 | |
Total | 40,000 | $ 252,000 |
Note Payable | ||
Line Of Credit Facility [Line Items] | ||
Year 2 | 3,834 | |
Total | 3,834 | |
Convertible Notes | ||
Line Of Credit Facility [Line Items] | ||
Year 5 | 345,000 | |
Total | $ 345,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Income Tax Contingency [Line Items] | |||
Effective income tax rate | 21.40% | 31.70% | |
U.S. statutory rate | 35.00% | ||
Unrecognized tax benefits that would impact effective tax rate | $ 7.7 | $ 7.6 | |
Interest and penalties accrued | 0.3 | $ 0.3 | |
Liability for uncertain tax positions that would impact the effective tax rate if recognized | $ 1.3 | ||
United States Internal Revenue Service | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Tax year remain open to examination | 2,014 | ||
United States Internal Revenue Service | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Tax year remain open to examination | 2,017 | ||
State Jurisdictions | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Tax year remain open to examination | 2,012 | ||
State Jurisdictions | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Tax year remain open to examination | 2,017 | ||
Foreign Taxing Jurisdictions | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Tax year remain open to examination | 2,006 | ||
Foreign Taxing Jurisdictions | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Tax year remain open to examination | 2,017 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted Average | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Weighted average Shares issuable upon the exercises of stock options excluded from the dilutive share calculation | 87,000 | 368,000 |
Computation of Earnings Per Sha
Computation of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||
Net earnings | $ 21,141 | $ 16,294 |
Weighted average shares | 62,744 | 62,020 |
Basic earnings per common share | $ 0.34 | $ 0.26 |
Net earnings | $ 21,141 | $ 16,294 |
Weighted average shares | 62,744 | 62,020 |
Dilutive effect of common stock equivalents | 2,539 | 1,570 |
Diluted weighted average common shares | 65,283 | 63,590 |
Diluted earnings per common share | $ 0.32 | $ 0.26 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 3 |
Financial Information of Compan
Financial Information of Company's Operation by Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||
Revenues | $ 261,503 | $ 221,520 | |
Operating income | 29,777 | 23,691 | |
Interest expense | (3,645) | (1,246) | |
Other income (expense), net | 767 | 1,402 | |
Income taxes | (5,758) | (7,553) | |
Net earnings | 21,141 | 16,294 | |
Depreciation and amortization | 18,816 | 14,882 | |
Segment assets | 1,583,805 | $ 1,477,297 | |
Expenditures for property, plant & equipment | 37,426 | 29,994 | |
Investment | 11,998 | $ 11,727 | |
Eliminations | |||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||
Inter-segment revenues | (12,589) | (11,111) | |
II-VI Laser Solutions | Operating Segments | |||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||
Revenues | 93,262 | 79,290 | |
Inter-segment revenues | 7,184 | 5,940 | |
Operating income | 3,265 | 6,698 | |
Depreciation and amortization | 8,306 | 5,650 | |
Segment assets | 704,405 | ||
Expenditures for property, plant & equipment | 13,256 | 20,125 | |
II-VI Photonics | Operating Segments | |||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||
Revenues | 110,614 | 95,819 | |
Inter-segment revenues | 4,578 | 3,438 | |
Operating income | 19,499 | 13,890 | |
Depreciation and amortization | 6,163 | 4,848 | |
Segment assets | 566,198 | ||
Expenditures for property, plant & equipment | 10,578 | 6,597 | |
II- VI Performance Products | Operating Segments | |||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | |||
Revenues | 57,627 | 46,411 | |
Inter-segment revenues | 827 | 1,733 | |
Operating income | 7,014 | 3,103 | |
Depreciation and amortization | 4,347 | 4,384 | |
Segment assets | 313,202 | ||
Expenditures for property, plant & equipment | 13,592 | $ 3,272 | |
Investment | $ 11,998 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2017shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Percentage of share based compensation expense allocated to cost of sales | 20.00% |
Percentage of share based compensation expense allocated to selling, general and administrative expense | 80.00% |
Omnibus Incentive Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock authorized for issuance under the Plan | 4,900,000 |
Share-Based Compensation Expens
Share-Based Compensation Expense by Award Type (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share based compensation expense | $ 6,312 | $ 4,149 |
Stock Options and Cash-Based Stock Appreciation Rights | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share based compensation expense | 2,463 | 1,663 |
Restricted Share Awards and Cash-Based Restricted Share Unit Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share based compensation expense | 2,563 | 1,878 |
Performance Share Awards and Cash-Based Performance Share Unit Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share based compensation expense | $ 1,286 | $ 608 |
Fair Value of Financial Instr65
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Sep. 30, 2017 | Feb. 29, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Payment for earnout amount | $ 2 | ||
Convertible Notes | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Debt instrument, interest rate | 0.25% | ||
EpiWorks | Upon Achievement of Financial and Operational Targets For Capacity Wafers Output and Gross Margin | Maximum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Business acquisitions, contingent consideration | $ 6 | ||
IPI | Upon Achievement of Financial And Transitional Objectives Relating to Finance Information Technology And Human Resources | Maximum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Business acquisitions, contingent consideration | $ 2.5 |
Summary of Fair Value and Carry
Summary of Fair Value and Carrying Value of Convertible Notes (Detail) $ in Thousands | Sep. 30, 2017USD ($) |
Fair Value Disclosures [Abstract] | |
Convertible notes fair value | $ 384,000 |
Convertible notes carrying value | $ 279,641 |
Summary by Level of Fair Value
Summary by Level of Fair Value of Financial Instruments Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Liabilities: | ||
0.25% convertible notes | $ 384,000 | |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Foreign currency forward contracts | 218 | $ 191 |
Liabilities: | ||
Contingent earnout arrangements | 5,795 | 5,795 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Foreign currency forward contracts | 218 | 191 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Liabilities: | ||
Contingent earnout arrangements | 5,795 | $ 5,795 |
Fair Value, Measurements, Recurring | Convertible Notes | ||
Liabilities: | ||
0.25% convertible notes | 384,000 | |
Fair Value, Measurements, Recurring | Convertible Notes | Fair Value, Inputs, Level 2 | ||
Liabilities: | ||
0.25% convertible notes | $ 384,000 |
Summary by Level of Fair Valu68
Summary by Level of Fair Value of Financial Instruments Measured on Recurring Basis (Parenthetical) (Detail) | Sep. 30, 2017 |
Convertible Notes | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Debt instrument, interest rate | 0.25% |
Reconciliation of Beginning and
Reconciliation of Beginning and Ending Fair Value Measurements of Level Three Contingent Earnout Arrangements Related to Acquisition (Detail) - Fair Value, Inputs, Level 3 - EpiWorks and IPI $ in Thousands | Sep. 30, 2017USD ($) |
Business Acquisition Contingent Consideration [Line Items] | |
Balance - beginning of period | $ 5,795 |
Contingent earnout arrangements | |
Balance - end of period | $ 5,795 |
Change in Carrying Value of Com
Change in Carrying Value of Company's Warranty Reserve (Detail) $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Guarantees [Abstract] | |
Balance-Beginning of Year | $ 4,546 |
Settlements during the period | (1,610) |
Additional warranty liability recorded | 1,032 |
Balance-End of Period | $ 3,968 |
Schedule of Net Periodic Pensio
Schedule of Net Periodic Pension Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Net Periodic Benefit Cost [Abstract] | ||
Service cost | $ 952 | $ 897 |
Interest cost | 107 | 40 |
Expected return on plan assets | (215) | (181) |
Net amortization | 105 | (164) |
Net periodic pension costs | $ 949 | $ 592 |
Post-Retirement Benefits - Addi
Post-Retirement Benefits - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | ||
Contributions to the Compensation Plan by the employer | $ 0.9 | $ 0.9 |
Contributions to the Compensation Plan by the employer in remainder of fiscal year 2018 | $ 2.8 |
Share Repurchase Programs (Deta
Share Repurchase Programs (Detail) - USD ($) | 2 Months Ended | 3 Months Ended | 38 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Aug. 31, 2014 | |
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||
Purchase of common stock, shares | 1,316,587 | ||||
Purchase of Treasury Stock | $ 49,875,000 | $ 19,000,000 | |||
Offering and Sale of Notes | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||
Purchase of common stock, shares | 1,414,900 | ||||
Purchase of Treasury Stock | $ 49,900,000 | ||||
Program | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Purchase of common stock, shares | 0 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income ("AOCI") by Component, Net of Tax (Detail) $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | $ 900,563 |
Other comprehensive income before reclassifications | 11,097 |
Amounts reclassified from AOCI | 82 |
Net current-period other comprehensive income | 11,179 |
Ending Balance | 943,762 |
Foreign Currency Translation Adjustment | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (8,460) |
Other comprehensive income before reclassifications | 11,097 |
Net current-period other comprehensive income | 11,097 |
Ending Balance | 2,637 |
Defined Benefit Pension Plan | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (5,318) |
Amounts reclassified from AOCI | 82 |
Net current-period other comprehensive income | 82 |
Ending Balance | (5,236) |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (13,778) |
Ending Balance | $ (2,599) |
Capital Lease - Schedule of Fut
Capital Lease - Schedule of Future Minimum Lease Payments Due Under Non-Cancelable Capital Lease (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Leases [Abstract] | ||
2018 (remaining) | $ 1,934 | |
2,019 | 2,579 | |
2,020 | 2,579 | |
2,021 | 2,579 | |
2,022 | 2,579 | |
Thereafter | 24,503 | |
Total minimum lease payments | 36,753 | |
Less amount representing interest | 12,525 | |
Present value of capitalized payments | 24,228 | |
Less: current portion | 1,084 | |
Long-term portion | $ 23,144 | $ 23,415 |
Capital Lease - Additional Info
Capital Lease - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Capital Leased Assets [Line Items] | ||
Capital leases future minimum payments present value at inception | $ 25,000 | |
Property, plant and equipment estimated useful lives, years | 15 years | |
Depreciation | $ 15,219 | $ 11,708 |
Capital Leased Asset | ||
Capital Leased Assets [Line Items] | ||
Depreciation | $ 400 |