Exhibit 99
Release Date: August 4, 2004 Contact: Craig A. Creaturo
Chief Accounting Officer
and Treasurer
(724) 352-4455
ccreaturo@ii-vi.com
Homepage: www.ii-vi.com
II-VI INCORPORATED
ACHIEVES RECORD FOURTH QUARTER AND FISCAL YEAR 2004 EARNINGS,
REVENUES AND BOOKINGS; RAISES FISCAL YEAR 2005 GUIDANCE
PITTSBURGH, PA., August 4, 2004 -- II-VI Incorporated (NASDAQ NMS: IIVI)
today reported results for its fourth fiscal quarter and year ended June
30, 2004. Net earnings for the quarter were a record $6,024,000 ($0.41
per share-diluted). These results compare with net earnings of
$3,626,000 ($0.25 per share-diluted) in the fourth quarter of last fiscal
year. For the fiscal year ended June 30, 2004, net earnings were
$17,337,000 ($1.18 per share-diluted). This compares with net earnings
of $11,620,000 ($0.81 per share-diluted) for the same period last fiscal
year.
Bookings for the quarter increased 41% to a record $45,702,000 compared
to $32,359,000 in the fourth quarter of last fiscal year. Bookings for
the fiscal year ended June 30, 2004 increased 19% to $162,775,000 from
$136,337,000 for the same period last year. Bookings are defined as
customer orders received that are expected to be converted into revenues
during the next 12 months.
Revenues for the quarter increased 31% to a record $42,990,000 from
$32,852,000 in the fourth quarter of last fiscal year. Revenues for the
fiscal year ended June 30, 2004 increased 18% to $150,848,000 from
$128,210,000 for the same period last fiscal year.
Francis J. Kramer, president and chief operating officer said, "Record
revenues and bookings for both the fourth quarter and fiscal year attest
to strong worldwide demand for II-VI products. Record earnings for the
same periods result from operating improvements in every II-VI business
segment. While the infrared optics segment fueled earnings growth,
strong bookings and revenues were achieved in near infrared and military
infrared optics segments, as well as by the Compound Semiconductor Group.
Earnings for the quarter ended June 30, 2004 benefited by a lowering of
our effective tax rate for fiscal year 2004."
Kramer continued, "Given current business conditions, we anticipate first
quarter fiscal year 2005 revenues to increase over 20% and earnings per
share to increase over 50% from the comparable year-ago quarter. We also
are increasing our guidance for fiscal year 2005."
Segment Bookings and Revenues
Bookings for the quarter for infrared optics increased 28% to $23.1
million from $18.0 million in the fourth quarter of last fiscal year.
Bookings for the fiscal year ended June 30, 2004 for infrared optics
increased 14% to $90.4 million from $79.3 million for the same period
last fiscal year. Revenues for the quarter for infrared optics increased
34% to $24.2 million from $18.0 million in the fourth quarter of the last
fiscal year. Revenues for the fiscal year ended June 30, 2004 for
infrared optics increased 19% to $87.7 million from $73.6 million for the
same period last fiscal year.
Bookings for the quarter for near-infrared optics increased 89% to $11.5
million from $6.1 million in the fourth quarter of last fiscal year.
Bookings for the fiscal year ended June 30, 2004 for near-infrared optics
increased 22% to $30.2 million from $24.8 million for the same period
last fiscal year. Revenues for the quarter for near-infrared optics
increased 30% to $7.9 million from $6.1 million in the fourth quarter of
the last fiscal year. Revenues for the fiscal year ended June 30, 2004
for near-infrared optics increased 13% to $25.8 million from $22.8
million for the same period last fiscal year.
Bookings for the quarter for military infrared optics increased 93% to
$8.7 million from $4.5 million in the fourth quarter of the last fiscal
year. Bookings for the fiscal year ended June 30, 2004 for military
infrared optics increased 26% to $29.2 million from $23.1 million for the
same period last fiscal year. Revenues for the quarter for military
infrared optics increased 10% to $7.3 million compared to $6.6 million in
the fourth quarter of the last fiscal year. Revenues for the fiscal year
ended June 30, 2004 for military infrared optics increased 10% to $25.3
million from $23.0 million for the same period last fiscal year.
Combined bookings for the quarter for the "Compound Semiconductor Group"
category for segment reporting purposes (which primarily represent the eV
PRODUCTS division and the Wide Bandgap Materials group) were $2.3 million
compared to $3.8 million in the fourth quarter of the last fiscal year.
Combined bookings for the fiscal year ended June 30, 2004 for this Group
were $13.0 million compared to $9.2 million for the same period last
fiscal year. Combined revenues for the quarter for this Group were $3.6
million compared to $2.2 million in the fourth quarter of last fiscal
year. Combined revenues for the fiscal year ended June 30, 2004 for this
Group were $12.1 million compared to $8.7 million for the same period
last fiscal year.
Outlook
For the first fiscal quarter ending September 30, 2004, the Company
currently forecasts revenues to range from $41 million to $43 million and
earnings per share to range from $0.32 to $0.35. For the fiscal year
ending June 30, 2005, the Company expects revenues to range from $167
million to $172 million and earnings per share to range from $1.35 to
$1.43. As discussed in more detail below, actual results may differ from
these forecasts due to numerous factors including changes in product
demand, competition and general economic conditions.
Webcast Information
The Company will host a conference call at 10:00 a.m. Eastern Time on
Thursday, August 5, 2004 to discuss these results. The conference call
will be broadcast live over the Internet and can be accessed by all
interested parties from the Company's web site at www.ii-vi.com as well
as at http://phx.corporate-ir.net/playerlink.zhtml?c=65340&s=wm&e=921038.
Please allow extra time prior to the call to visit the site and, if
needed, download the media software required to listen to the Internet
broadcast. A replay of the webcast will be available for 2 weeks
following the call.
Headquartered in Saxonburg, Pennsylvania, II-VI Incorporated designs,
manufactures and markets optical and opto-electronic components, devices
and materials for infrared, near-infrared, visible light, x-ray and
gamma-ray instrumentation. The Company's infrared optics business
manufactures optical and opto-electronic components sold under the II-VI
brand name are used primarily in CO2 lasers. The Company's near-infrared
optics business manufactures near-infrared and visible light products for
industrial, scientific, military and medical instruments and laser gain
materials and products for solid-state YAG and YLF lasers at the
Company's VLOC subsidiary. The Company's military infrared optics
business manufactures infrared products for military applications under
the Exotic Electro-Optics (EEO) brand name. In the Company's Compound
Semiconductor Group, the eV PRODUCTS division manufactures and markets
solid-state x-ray and gamma-ray detection products and materials for use
in medical, industrial, environmental, scientific and homeland security
applications; the Company's Wide Band Gap Materials (WBG) group
manufactures and markets single crystal silicon carbide substrates for
use in the solid-state lighting, wireless infrastructure, RF electronics
and power switching industries.
This press release contains forward-looking statements as defined by
Section 21E of the Securities Exchange Act of 1934. Any information
which is not historical in nature constitutes such forward-looking
statements. Actual results may differ from the results described in any
forward-looking statements due to, among other things, changes in market
demand for infrared, near-infrared and military infrared optics, and
products of the Compound Semiconductor Group, including eV PRODUCTS
division and Wide Bandgap Materials group, the Company's ability to
maintain or increase market share, the Company's ability to effectively
address market opportunities, and general market and economic conditions
throughout the world. Additional information on potential factors that
could affect the Company's financial results was included in the
Company's Form 10-K for the year ended June 30, 2003 as filed with the
Securities and Exchange Commission.
CONTACT: Craig A. Creaturo, Chief Accounting Officer and Treasurer of
II-VI Incorporated, 724-352-4455, or e-mail, ccreaturo@ii-vi.com.
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
Three Months Ended
June 30,
2004 2003
---------- ----------
Revenues
Net sales $ 40,663 $ 29,798
Contract research and development 2,327 3,054
---------- ----------
42,990 32,852
---------- ----------
Costs, Expenses & Other Expense (Income)
Cost of goods sold 22,976 16,543
Contract research and development 1,960 3,234
Internal research and development 1,252 714
Selling, general and administrative 9,199 6,959
Interest expense 60 150
Other (expense) income, net 137 (97)
---------- ----------
35,584 27,503
---------- ----------
Earnings Before Income Taxes 7,406 5,349
Income Taxes 1,382 1,723
---------- ----------
Net Earnings $ 6,024 $ 3,626
========== ==========
Diluted Earnings Per Share $ 0.41 $ 0.25
========== ==========
Average Shares Outstanding - Diluted 14,780 14,556
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
Year Ended
June 30,
2004 2003
---------- ----------
Revenues
Net sales $ 142,162 $ 117,210
Contract research and development 8,686 11,000
---------- ----------
150,848 128,210
---------- ----------
Costs, Expenses & Other Expense (Income)
Cost of goods sold 79,558 69,408
Contract research and development 7,135 10,436
Internal research and development 4,965 2,660
Selling, general and administrative 34,359 28,510
Interest expense 412 849
Other (expense) income, net 2 297
---------- ----------
126,431 112,160
---------- ----------
Earnings Before Income Taxes 24,417 16,050
Income Taxes 7,080 4,430
---------- ----------
Net Earnings $ 17,337 $ 11,620
========== ==========
Diluted Earnings Per Share $ 1.18 $ 0.81
========== ==========
Average Shares Outstanding - Diluted 14,718 14,390
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
June 30, June 30,
2004 2003
------------ ---------
Assets
Current Assets
Cash and cash equivalents $ 21,683 $ 15,583
Accounts receivable, net 25,540 22,086
Inventories 29,201 24,384
Deferred income taxes 4,561 3,794
Other current assets 1,595 1,968
------------ ---------
Total Current Assets 82,580 67,815
Property, Plant & Equipment, net 62,339 57,954
Goodwill, net 28,987 28,987
Investment 1,888 1,792
Other Intangible Assets, net 5,852 4,643
Other Assets 2,288 1,602
------------ ---------
$183,934 $162,793
============ =========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 8,337 $ 6,115
Current portion of long-term debt 7,550 6,923
Other current liabilities 19,909 14,577
------------ ---------
Total Current Liabilities 35,796 27,615
Long-Term Debt-less current portion 7,986 16,782
Other Liabilities, primarily deferred
income taxes 8,285 6,875
Shareholders' Equity 131,867 111,521
------------ ---------
$183,934 $162,793
============ =========
II-VI Incorporated and Subsidiaries
Condensed Segment and Other Selected Financial Information (Unaudited)
($000)
The following segment and other financial information includes segment
earnings (defined as earnings before income taxes, interest expense and
other income or expense, net) and earnings before interest, income
taxes, depreciation and amortization (EBITDA). Management believes
segment earnings are a useful performance measure because they reflect
the results of segment performance over which management has direct
control. Similarly, EBITDA reflects operating profitability before
certain non-operating expenses and non-cash charges.
Three Months Ended Year Ended
June 30, June 30,
------------------ -----------------
Segment Information 2004 2003 2004 2003
- ----------------- -------- -------- -------- -------
Revenues
Infrared Optics $24,230 $17,997 $ 87,652 $ 73,638
Near-Infrared Optics 7,879 6,051 25,786 22,844
Military Infrared Optics 7,276 6,622 25,322 23,003
Compound Semiconductor Group 3,605 2,182 12,088 8,725
- ----------------- -------- -------- -------- -------
Total Revenues $42,990 $32,852 $150,848 $128,210
======== ======== ======== ========
Segment earnings (loss)
Infrared Optics $ 6,423 $ 5,856 $ 23,564 $ 19,965
Near-Infrared Optics 999 547 2,350 1,698
Military Infrared Optics 371 (103) 886 (65)
Compound Semiconductor Group (190) (898) (1,969) (4,402)
- ----------------- -------- -------- -------- -------
Total Segment Earnings $ 7,603 $ 5,402 $ 24,831 $ 17,196
======== ======== ======== ========
Three Months Ended Year Ended
June 30, June 30,
Other Selected --------------------- -------------------
Financial Information 2004 2003 2004 2003
- ---------------------- -------- -------- -------- -------
Earnings before interest,
income taxes, depreciation $ 9,858 $ 7,575 $ 34,461 $ 26,226
and amortization (EBITDA)
Cash paid for capital
expenditures $ 3,840 $ 2,964 $ 12,729 $ 7,017
Payments on indebtedness,
net of borrowings $ 2,387 $ 2,014 $ 8,423 $ 10,885
II-VI Incorporated and Subsidiaries
Condensed Segment and Other Selected Financial Information (Unaudited)
(cont.)
($000)
Reconciliation of Segment Earnings and EBITDA
to Earnings Before Income Taxes
Three Months Ended Year Ended
June 30, June 30,
--------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- -------
Total Segment Earnings $ 7,603 $ 5,402 $ 24,831 $ 17,196
Interest expense 60 150 412 849
Other (income) expense, net 138 (97) 2 297
-------- -------- -------- --------
Earnings before
income taxes $ 7,406 $ 5,349 $ 24,417 $ 16,050
======== ======== ======== ========
EBITDA $ 9,858 $ 7,575 $ 34,461 $ 26,226
Interest expense 60 150 412 849
Depreciation and
amortization 2,392 2,076 9,632 9,327
-------- -------- -------- --------
Earnings before
income taxes $ 7,406 $ 5,349 $ 24,417 $ 16,050
======== ======== ======== ========
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