Release Date: January 19, 2005 Contact: Craig A. Creaturo
Chief Financial
Officer and Treasurer
(724) 352-4455
ccreaturo@ii-vi.com
Homepage: www.ii-vi.com
II-VI INCORPORATED
REPORTS SECOND QUARTER EARNINGS ON RECORD REVENUES
AND RECORD BOOKINGS
PITTSBURGH, PA., January 19, 2005 -- II-VI Incorporated (NASDAQ NMS:
IIVI) today reported results for its second fiscal quarter ended
December 31, 2004. Net earnings for the quarter were $5,793,000 ($0.39
per share-diluted). These results compare with net earnings of
$3,424,000 ($0.23 per share-diluted) in the second quarter of last
fiscal year. For the six months ended December 31, 2004, net earnings
were $11,752,000 ($0.79 per share-diluted). This compares with net
earnings of $6,538,000 ($0.45 per share-diluted) for the same period
last fiscal year. The results of our recently acquired subsidiary,
Marlow Industries, Inc. (Marlow) are included for one month in the
Company's financial results for both the three months and six months
ended December 31, 2004.
Bookings for the quarter increased 20% to a record $49,380,000 compared
to $41,110,000 in the second quarter of last fiscal year. Bookings for
the six months ended December 31, 2004 increased 15% to $86,912,000
from $75,692,000 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 25% to a record $43,213,000 from
$34,635,000 in the second quarter of last fiscal year. Revenues for
the six months ended December 31, 2004 increased 22% to $83,720,000
from $68,729,000 for the same period last fiscal year.
Francis J. Kramer, president and chief operating officer said, "Record
revenues and bookings for the second quarter attest to the continued
strong worldwide demand for II-VI products. In particular, demand for
infrared and near-infrared optics accelerated during the quarter as the
pace of both laser production and usage increased. We also completed
the acquisition of Marlow Industries, Inc. during the quarter and
currently are working on enhancements to material production and
assembly operations to maximize the operational and financial
contribution of this new member of the II-VI organization."
Segment Bookings and Revenues
Bookings for the quarter for infrared optics increased 19% to $26.1
million from $21.9 million in the second quarter of last fiscal year.
Bookings for the six months ended December 31, 2004 for infrared optics
increased 11% to $49.1 million from $44.2 million for the same period
last fiscal year. Revenues for the quarter for infrared optics
increased 18% to $23.5 million from $19.9 million in the second quarter
of the last fiscal year. Revenues for the six months ended December
31, 2004 for infrared optics increased 17% to $46.6 million from $39.8
million for the same period last fiscal year.
Bookings for the quarter for near-infrared optics increased 29% to $9.0
million from $7.0 million in the second quarter of last fiscal year.
Bookings for the six months ended December 31, 2004 for near-infrared
optics increased 39% to $16.1 million from $11.6 million for the same
period last fiscal year. Revenues for the quarter for near-infrared
optics increased 60% to $8.3 million from $5.2 million in the second
quarter of the last fiscal year. Revenues for the six months ended
December 31, 2004 for near-infrared optics increased 45% to $16.1
million from $11.1 million for to the same period last fiscal year.
Bookings for the quarter for military infrared optics decreased 50% to
$5.3 million from $10.6 million in the second quarter of the last
fiscal year. Bookings for the six months ended December 31, 2004 for
military infrared optics decreased 35% to $10.9 million from $16.7
million for the same period last fiscal year. Revenues for the quarter
for military infrared optics increased 3% to $6.7 million from $6.5
million in the second quarter of the last fiscal year. Revenues for
the six months ended December 31, 2004 for military infrared optics
increased 7% to $13.1 million from $12.2 million for the same period
last fiscal year.
Bookings for the quarter for the "Compound Semiconductor Group" (which
primarily represent the eV PRODUCTS division, the Wide Bandgap
Materials group and Marlow Industries, Inc.) were $9.0 million,
including $4.1 million from Marlow, compared to $1.7 million in the
second quarter of the last fiscal year. Bookings for the six months
ended December 31, 2004 for these same groups were $10.9 million
compared to $3.3 million for the same period last fiscal year.
Revenues for the quarter from these groups were $4.7 million, including
$2.3 million of revenues from Marlow, compared to $3.0 million in the
second quarter of last fiscal year. Revenues for the six months ended
December 31, 2004 for these same groups were $8.0 million compared to
$5.6 million for the same period last fiscal year.
Outlook
For the third fiscal quarter ending March 31, 2005, the Company
currently forecasts revenues to range from $50 million to $52 million
and earnings per share to range from $0.38 to $0.41. For the fiscal
year ending June 30, 2005, the Company expects revenues to range from
$184 million to $188 million and earnings per share to range from $1.54
to $1.61. 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, January 20, 2005 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=998869. 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 and 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 sensor
products and materials for use in medical, industrial, environmental,
scientific and homeland security applications; the Company's Wide
Bandgap Materials (WBG) group manufactures and markets single crystal
silicon carbide substrates for use in the solid-state lighting,
wireless infrastructure, RF electronics and power switching industries;
Marlow Industries, Inc. designs and manufacturers thermoelectric
cooling and power generation solutions for use in defense, space,
photonics, telecommunications, medical, consumer and industrial
markets.
This press release contains forward-looking statements based on certain
assumptions and contingencies that involve risks and uncertainties.
The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and
relate to the Company's performance on a going-forward basis. The
forward-looking statements in this press release involve risks and
uncertainties, which could cause actual results, performance or trends,
including the above mentioned anticipated revenues and earnings, to
differ materially from those expressed in the forward-looking
statements herein or in previous disclosures. The Company believes
that all forward-looking statements made by it have a reasonable basis,
but there can be no assurance that management's expectations, beliefs
or projections as expressed in the forward-looking statements will
actually occur or prove to be correct. In addition to general industry
and economic conditions, factors that could cause actual results to
differ materially from those discussed in the forward-looking
statements in this press release include, but are not limited to: (i)
the Company's ability to successfully integrate Marlow's operations
into the Company's organization and to realize synergies in material
growth and utilization of our worldwide manufacturing and distribution
networks (ii) the failure of any one or more of the assumptions stated
above to prove to be correct; (iii) the risks relating to forward-
looking statements and other "Risk Factors" discussed in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2004;
(iv) purchasing patterns from customers and end-users; (v) timely
release of new products, and acceptance of such new products by the
market; (vi) the introduction of new products by competitors and other
competitive responses; and/or (vii) the Company's ability to devise and
execute strategies to respond to market conditions.
CONTACT: Craig A. Creaturo, Chief Financial Officer and Treasurer of
II-VI Incorporated, 724-352-4455, or e-mail, ccreaturo@ii-vi.com.
- more -
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
Three Months Ended
December 31,
2004 2003
---------- ----------
Revenues
Net sales $41,455 $32,973
Contract research and development 1,758 1,662
---------- ----------
43,213 34,635
---------- ----------
Costs, Expenses & Other (Income) Expense
Cost of goods sold 23,180 18,991
Contract research and development 916 1,376
Internal research and development 1,584 1,367
Selling, general and administrative 9,713 7,782
Interest expense 88 117
Other (income), net (203) (149)
---------- ----------
35,278 29,484
---------- ----------
Earnings Before Income Taxes 7,935 5,151
Income Taxes 2,142 1,727
---------- ----------
Net Earnings $ 5,793 $ 3,424
========== ==========
Diluted Earnings Per Share $ 0.39 $ 0.23
========== ==========
Diluted Shares Outstanding 14,992 14,671
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
Six Months Ended
December 31,
2004 2003
---------- ----------
Revenues
Net sales $79,279 $65,026
Contract research and development 4,441 3,703
---------- ----------
83,720 68,729
---------- ----------
Costs, Expenses & Other (Income) Expense
Cost of goods sold 43,594 37,057
Contract research and development 3,224 3,367
Internal research and development 2,632 2,454
Selling, general and administrative 18,714 16,008
Interest expense 151 251
Other (income), net (694) (240)
---------- ----------
67,621 58,897
---------- ----------
Earnings Before Income Taxes 16,099 9,832
Income Taxes 4,347 3,294
---------- ----------
Net Earnings $11,752 $ 6,538
========== ==========
Diluted Earnings Per Share $ 0.79 $ 0.45
========== ==========
Diluted Shares Outstanding 14,951 14,656
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
December 31, June 30,
2004 2004
------------ ------------
Assets
Current Assets
Cash and cash equivalents $ 16,270 $ 21,683
Accounts receivable, net 28,622 25,540
Inventories 41,449 29,201
Deferred income taxes 7,280 4,561
Other current assets 1,956 1,595
------------ ------------
Total Current Assets 95,577 82,580
Property, Plant & Equipment, net 73,445 62,339
Goodwill, net 46,653 28,987
Investment 2,004 1,888
Other Intangible Assets, net 5,675 5,852
Other Assets 3,692 2,288
------------ ------------
$227,046 $183,934
============ ============
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 8,816 $ 8,337
Current portion of long-term debt 51 7,550
Other current liabilities 16,784 19,909
------------ ------------
Total Current Liabilities 25,651 35,796
Long-Term Debt-less current portion 43,660 7,986
Other Liabilities,
primarily deferred income taxes 11,439 8,285
Shareholders' Equity 146,296 131,867
------------ ------------
$227,046 $183,934
============ ============
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 Six Months Ended
December 31, December 31,
--------------------- -----------------
Segment Information 2004 2003 2004 2003
- ------------------- -------- -------- -------- -------
Revenues
Infrared Optics $23,513 $19,891 $46,578 $39,797
Near-Infrared Optics 8,313 5,181 16,060 11,132
Military Infrared Optics 6,684 6,517 13,095 12,199
Compound Semiconductor Group 4,703 3,046 7,987 5,601
-------- -------- -------- -------
Total Revenues $43,213 $34,635 $83,720 $68,729
======== ======== ======== =======
Segment earnings (loss)
Infrared Optics $ 7,705 $ 5,158 $15,240 $10,609
Near-Infrared Optics 531 148 997 692
Military Infrared Optics 358 245 639 239
Compound Semiconductor Group (774) (432) (1,320) (1,697)
-------- -------- -------- -------
Total Segment Earnings $ 7,820 $ 5,119 $15,556 $ 9,843
======== ======== ======== =======
Three Months Ended Six Months Ended
December 31, December 31,
Other Selected --------------------- -------------------
Financial Information 2004 2003 2004 2003
- ---------------------- -------- -------- -------- -------
Earnings before interest,
income taxes, depreciation
and amortization (EBITDA) $10,957 $ 7,655 $21,794 $14,828
Cash paid for capital
expenditures $ 3,778 $ 2,966 $ 7,975 $ 5,719
Net borrowings (payments)
on indebtedness $27,913 $(2,385) $28,000 $(3,397)
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 Six Months Ended
December 31, December 31,
--------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- -------
Total Segment Earnings $ 7,820 $ 5,119 $ 15,556 $ 9,843
Interest expense 88 117 151 251
Other (income) expense, net (203) (149) (694) (240)
-------- -------- -------- -------
Earnings before
income taxes $ 7,935 $ 5,151 $ 16,099 $ 9,832
======== ======== ======== =======
EBITDA $10,957 $ 7,655 $ 21,794 $14,828
Interest expense 88 117 151 251
Depreciation and
amortization 2,934 2,387 5,544 4,745
-------- -------- -------- -------
Earnings before
income taxes $ 7,935 $ 5,151 $ 16,099 $ 9,832
======== ======== ======== =======
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