<SUBMISSION>
<ACCESSION-NUMBER>0000820318-02-000020
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20020930
<FILING-DATE>20021114
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>II-VI INC
<CIK>0000820318
<ASSIGNED-SIC>3827
<IRS-NUMBER>251214948
<STATE-OF-INCORPORATION>PA
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-16195
<FILM-NUMBER>02825201
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>375 SAXONBURG BLVD
<CITY>SAXONBURG
<STATE>PA
<ZIP>16056
<PHONE>724-352-4455
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>375 SAXONBURG BLVD
<CITY>SAXONBURG
<STATE>PA
<ZIP>16056
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>r1q03-10q.txt
<TEXT>
                                FORM 10-Q


                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934

     For the quarterly period ended September 30, 2002

[ ]  Transition report pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 for the transition period
     from              to          .
          -----------     --------

                    Commission File Number:  0-16195


                           II-VI INCORPORATED
         (Exact name of registrant as specified in its charter)

        PENNSYLVANIA                            25-1214948
(State or other jurisdiction of              (I.R.S. Employer
 incorporation or organization)             Identification No.)

  375 Saxonburg Boulevard
     Saxonburg, PA                                 16056
(Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code:  724-352-4455

Indicate by check mark whether the registrant  (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and  (2) has been subject to such filing requirements for the past 90
days.

                   Yes  x              No
                       ---                ---

Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date:

At November 8, 2002, 14,035,774 shares of Common Stock, no par value,
of the registrant were outstanding.









                           II-VI INCORPORATED


                                  INDEX




                                                               Page No.
                                                               --------

PART I - FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements:

         Condensed Consolidated Balance Sheets -
         September 30, 2002 and June 30, 2002.......................3

         Condensed Consolidated Statements of Earnings -
         Three months ended September 30, 2002 and 2001.............4

         Condensed Consolidated Statements of Cash Flows -
         Three months ended September 30, 2002 and 2001.............5

         Notes to Condensed Consolidated Financial
         Statements.................................................6


Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations..........12


Item 3.  Quantitative and Qualitative Disclosures
         about Market Risk.........................................16


Item 4.  Controls and Procedures...................................16


PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K..........................17















PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
                                            September 30,    June 30,
Assets                                         2002            2002
                                              --------       --------
Current Assets
  Cash and cash equivalents                   $  9,375       $  9,610
  Accounts receivable, net                      21,330         21,541
  Inventories                                   20,488         19,741
  Deferred income taxes                          2,903          3,457
  Other current assets                           2,205          1,488
                                              --------       --------
    Total Current Assets                        56,301         55,837

Property, Plant & Equipment, net                59,401         60,711
Goodwill, net                                   28,987         28,987
Intangible Assets, net                           4,841          3,233
Investments                                      1,822          1,850
Other Assets                                     1,636          1,283
                                              --------       --------
                                              $152,988       $151,901
                                              ========       ========

Liabilities and Shareholders' Equity

Current Liabilities
  Accounts payable                            $  5,225       $  3,970
  Accrued salaries, wages and bonuses            5,129          4,976
  Income taxes payable                           1,076          1,012
  Accrued profit sharing contribution              143            736
  Current portion of long-term debt              5,058          5,068
  Other current liabilities                      3,757          4,329
                                              --------       --------
    Total Current Liabilities                   20,388         20,091

Long-Term Debt--less current portion            28,175         29,435

Other Liabilities,
  primarily deferred income taxes                4,692          4,715

Shareholders' Equity
  Preferred stock, no par value;
  authorized - 5,000,000 shares;
  unissued Common stock, no par value;
  authorized - 30,000,000 shares;
  issued - 15,104,654 shares
  at September 30, 2002;
  15,101,450 shares at June 30, 2002            37,851         37,840
  Accumulated other comprehensive income           135            279
  Retained earnings                             63,657         61,451
                                              --------       --------
                                               101,643         99,570

Less treasury stock, at cost
- 1,068,880 shares                               1,910          1,910
                                              --------       --------
                                                99,733         97,660
                                              --------       --------
                                              $152,988       $151,901
                                              ========       ========

- See notes to condensed consolidated financial statements.















































II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
($000 except per share data)


                                               Three Months Ended
                                                  September 30,
                                               2002          2001
                                             --------      --------
Revenues

Net sales:
  Domestic                                   $14,154       $15,168
  International                               15,055        12,093
                                             -------       -------
                                              29,209        27,261
Contract research and development              2,362         1,432
                                             -------       -------
                                              31,571        28,693
                                             -------       -------


Costs, Expenses & Other Income

Cost of goods sold                            18,087        17,627
Contract research and development              2,244           963
Internal research and development                959           990
Selling, general and administrative            7,195         5,645
Interest expense                                 278           542
Other income, net                               (114)         (565)
                                             -------       -------
                                              28,649        25,202
                                             -------       -------

Earnings Before Income Taxes                   2,922         3,491

Income Taxes                                     716         1,152
                                             -------       -------

Net Earnings                                 $ 2,206       $ 2,339
                                             =======       =======

Basic Earnings Per Share                     $  0.16       $  0.17
                                             =======       =======

Diluted Earnings Per Share                   $  0.15       $  0.16
                                             =======       =======

- See notes to condensed consolidated financial statements.








II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)
                                                    Three Months Ended
                                                       September 30,
                                                      2002       2001
                                                    --------   --------
Cash Flows from Operating Activities
Net earnings                                         $2,206     $2,339
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
    Depreciation                                      2,336      2,110
    Amortization                                         85        107
    Gain on foreign currency transactions              (128)      (354)
    Net loss on disposal or writedown of assets          49          -
    Deferred income taxes                               590        431
    Increase (decrease) in cash from changes in:
        Accounts receivable                             528      1,609
        Inventories                                    (336)         6
        Accounts payable                                934       (175)
        Other operating net assets                   (1,098)    (3,206)
                                                    --------   --------
Net cash provided by operating activities             5,166      2,867
                                                    --------   --------

Cash Flows from Investing Activities
Additions to property, plant and equipment           (1,766)    (3,081)
Purchase of business                                 (3,205)         -
Dividend from (investment in) unconsolidated business     9     (1,500)
Proceeds from sale of assets                            574          6
                                                     -------    -------
Net cash used in investing activities                (4,388)    (4,575)
                                                     -------    -------

Cash Flows from Financing Activities
Proceeds (payments) on short-term borrowings           (500)     1,500
Proceeds from long-term borrowings                      431          -
Payments on long-term borrowings                     (1,267)       (26)
Proceeds from sale of common stock                       11         67
                                                    --------   --------
Net cash (used in) provided by financing activities  (1,325)     1,541
                                                    --------   --------

Effect of exchange rate changes
on cash and cash equivalents                            312       (169)

Net decrease in cash and cash equivalents              (235)      (336)

Cash and Cash Equivalents at Beginning of Period      9,610      8,093
                                                     -------    -------
Cash and Cash Equivalents at End of Period           $9,375     $7,757
                                                     =======    =======

Cash paid for interest                               $  373     $  349
                                                     =======    =======

Cash paid for income taxes                           $   76     $  264
                                                     =======    =======

- See notes to condensed consolidated financial statements.
II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited)


Note A  - Basis of Presentation
          ---------------------

The condensed consolidated financial statements for the three month
periods ended September 30, 2002 and 2001 are unaudited. In the opinion
of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation for the periods
presented have been included. These interim statements should be read
in conjunction with the audited consolidated financial statements and
footnotes thereto contained in the Company's 2002 Annual Report to
shareholders. The consolidated results of operations for the three
month periods ended September 30, 2002 and 2001 are not necessarily
indicative of the results to be expected for the full year.


Note B  - Inventories
          -----------

The components of inventories are as follows ($000):

                             September 30,      June 30,
                                 2002             2002
                               -------          -------
Raw materials                  $ 4,606          $ 4,638
Work in progress                 8,896            8,958
Finished goods                   6,986            6,145
                               -------          -------
                               $20,488          $19,741
                               =======          =======


Note C  - Property, Plant and Equipment
          -----------------------------

Property, plant and equipment (at cost/valuation) consist of the
following ($000):


                             September 30,      June 30,
                                 2002             2002
                               -------          -------
Land and land improvements    $  1,577         $  1,551
Buildings and improvements      29,810           30,008
Machinery and equipment         73,828           73,041
                               -------          -------
                               105,215          104,600
Less accumulated depreciation   45,814           43,889
                               -------          -------
                              $ 59,401         $ 60,711
                              ========         ========



II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited),
Continued


Note D  - Contract Receivables
          --------------------

The components of contract receivables, which is a component of
accounts receivable, net of allowance for doubtful accounts, are as
follows ($000):

                             September 30,      June 30,
                                 2002             2002
                               -------          -------
Billed
  Completed Contracts          $     5          $     5
  Contracts in Progress          1,384            1,978
                               -------          -------
                                 1,389            1,983
Unbilled                         1,928            1,598
                               -------          -------
                               $ 3,317          $ 3,581
                               =======          =======





Note E  - Debt
          ----

The Company has a $45.0 million secured credit agreement, which it
obtained in connection with the Company's acquisition of Laser Power
Corporation.  The facility has a five-year life effective August 14,
2000 and contains term and line of credit borrowing options.  The
facility is collateralized by the Company's accounts receivables and
inventory, a pledge of all of the capital stock of each of the
Company's existing direct and indirect domestic subsidiaries, and a
pledge of 65% of the stock of the Company's foreign subsidiaries.
Additionally, the facility is subject to certain restrictive covenants,
including those related to minimum net worth, leverage and interest
coverage.  This facility has an interest rate range of LIBOR plus 0.88%
to LIBOR plus 1.50%.  The average interest rate in effect as of
September 30, 2002 was 3.19%.  As of September 30, 2002, the total
borrowings of $30.3 million under this facility consisted of $20.0
million under the term loan option and $10.3 million under the line of
credit option.

In September 2002, the Company replaced its 237 million Yen loan with a
300 million Yen loan with the same bank.  The loan matures on September
25, 2007.  Interest is at a rate equal to the Japanese Yen base rate,
as defined in the loan agreement, plus 1.49%.  As of September 30,
2002, the Japanese Yen base rate was 0.07% resulting in a total
interest rate of 1.56%.


II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited),
Continued


Note F  - Earnings Per Share
          ------------------

The following table sets forth the computation of earnings per share
for the periods indicated:

                                            Three Months Ended
                                               September 30,
                                         ------------------------
(000 except per share data)                 2002            2001
-----------------------------------------------------------------
Net earnings                             $ 2,206         $ 2,339
Divided by:
   Weighted average shares                14,034          13,914
-----------------------------------------------------------------
Basic earnings per share                 $  0.16         $  0.17

Net earnings                             $ 2,206         $ 2,339
Divided by:
   Weighted average shares                14,034          13,914
   Dilutive effect of common
       stock equivalents                     337             398
-----------------------------------------------------------------
   Diluted weighted average
       common shares                      14,371          14,312
-----------------------------------------------------------------
Diluted earnings per share               $  0.15         $  0.16
-----------------------------------------------------------------
Weighted average shares issuable upon the exercise of stock options
that were not included in the calculation because they were
antidilutive, were immaterial for the three months ended
September 30, 2002 and 2001, respectively.


Note G  - Comprehensive Income
          --------------------

The components of comprehensive income were as follows for the
periods indicated ($000):

                                            Three Months Ended
                                               September 30,
                                         ------------------------
                                            2002            2001
-----------------------------------------------------------------
Net earnings                             $ 2,206         $ 2,339

Foreign currency translation
adjustments, net of tax                     (144)            209
-----------------------------------------------------------------
Comprehensive income                     $ 2,062         $ 2,548
-----------------------------------------------------------------
II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited),
Continued


Note H  - Segment Reporting
          -----------------

The Company has three reportable segments:  Infrared Optics, which is
primarily the Company's II-VI and Laser Power Optics infrared optics
and material products businesses; Near-Infrared Optics, which is
primarily the Company's VLOC  subsidiary; and Military Infrared Optics,
which is primarily the Company's Exotic Electro-Optics subsidiary; The
Company's Other segment is primarily the aggregation of the Company's
eV PRODUCTS division, the Company's Wide Band Gap (WBG) Silicon Carbide
development group, and the Company's corporate research and development
group.

The accounting policies of the segments are the same as those of the
Company.  Substantially all of the Company's corporate expenses are
allocated to the segments.  The Company evaluates segment performance
based upon reported segment profit or loss from operations.  Inter-
segment sales and transfers have been eliminated.

Effective July 1, 2002, the Company changed its segment reporting to
better reflect how the Company manages its businesses.  Prior period
segment information has been restated.

The following table summarizes selected financial information of the
Company's operations by segment ($000's):





<TABLE>
<CAPTION>
                                                   Three Months Ended September 30, 2002
                                    -----------------------------------------------------------
                                                                 Military
                                    Infrared    Near-Infrared    Infrared
                                     Optics        Optics         Optics      Other      Totals
-----------------------------------------------------------------------------------------------
<s>                                 <c>            <c>            <c>       <c>        <c>
Net revenues                        $18,354        $5,467         $5,794    $ 1,956    $ 31,571
Income (loss) from operations         4,231           362            257     (1,764)      3,086
Interest expense                          -             -              -          -        (278)
Other income, net                         -             -              -          -         114
Earnings before income taxes              -             -              -          -       2,922

Depreciation and amortization         1,056           552            424        389       2,421
Capital expenditures                    652           185            394        535       1,766

Goodwill, net                         5,516         1,927         21,544          -      28,987
Segment assets                       63,121        25,436         38,033     26,398     152,988
</TABLE>

II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited),
Continued

Note H  - Segment Reporting, Cont'd.
          --------------------------

<TABLE>
<CAPTION>
                                                   Three Months Ended September 30, 2002
                                    -----------------------------------------------------------
                                                                 Military
                                    Infrared    Near-Infrared    Infrared
                                     Optics        Optics         Optics      Other      Totals
-----------------------------------------------------------------------------------------------
<s>                                 <c>            <c>            <c>       <c>        <c>
Net revenues                        $16,164        $ 5,441        $ 5,216   $ 1,872    $ 28,693
Income (loss) from operations         2,876            226            867      (501)      3,468
Interest expense                          -              -              -         -        (542)
Other income, net                         -              -              -         -         565
Earnings before income taxes              -              -              -         -       3,491

Depreciation and amortization           990            571            422       234       2,217
Capital expenditures                  2,246            518            114       203       3,081

Goodwill, net                         5,516          1,698         22,022         -      29,236
Segment assets                       57,934         27,585         43,429    20,528     149,476
</TABLE>


Note I - Derivative Instruments
         ----------------------

Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities" requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value.

The Company from time to time purchases foreign currency forward
exchange contracts, primarily in Japanese Yen, that permit it to sell
specified amounts of these foreign currencies expected to be received
from its export sales for pre-established U.S. dollar amounts at
specified dates.  These contracts are entered into to limit
transactional exposure to changes in currency exchange rates of export
sales transactions in which settlement will occur in future periods and
which otherwise would expose the Company, on a basis of its aggregate
net cash flows in respective currencies, to foreign currency risk.

The Company recorded the fair value of contracts with a notional amount
of approximately $2.1 million as of September 30, 2002 on the statement
of financial position.  The Company does not account for these
contracts as hedges as defined by SFAS No. 133, and records the change
in the fair value of these contracts in the results of operations as
they occur.  The change in the fair value of these contracts increased
(decreased) net earnings by $65,000 and $(44,000) for the three months
ended September 30, 2002 and 2001, respectively.
II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited),
Continued


Note I - Derivative Instruments, Cont'd.
         -------------------------------

To satisfy certain provisions of its line of credit facility, on March
6, 2002 the Company entered into a one-year interest rate cap expiring
March 6, 2003, with a notional amount of $12.5 million replacing an
interest rate collar that expired on March 5, 2002.  These agreements
were entered into to limit interest rate exposure on one-half of the
$25 million term loan.  The floating rate option for the cap agreement
is the one-month LIBOR rate with a cap strike rate of 3.00%.  The one-
month LIBOR rate was 1.84% and 1.81% on June 30, 2002 and September 30,
2002, respectively.  The Company has elected not to account for this
agreement as a hedge as defined by SFAS No. 133, and recorded the
unrealized change in the fair value of this agreement as an increase or
decrease to interest expense in the results of operations.  The effect
of this instrument on net earnings for the three months ended September
30, 2002 was immaterial.


Note J - New Accounting Pronouncements
         -----------------------------

In June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, "Accounting for Asset Retirement Obligations."  SFAS 143
requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a
reasonable estimate of the fair value can be made.  The Statement is
effective for financial statements issued for fiscal years beginning
after June 15, 2002.  The Company evaluated its leased and owned
properties for potential asset retirement obligations under SFAS 143.
Based on this review, the Company identified obligations primarily
related to disposal of certain materials utilized in its manufacturing
process.  The adoption of SFAS 143 did not have a material effect on the
financial position or results of operations for the three months ended
September 30, 2002.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which provides guidance
that will eliminate inconsistencies in the accounting for the
impairment or disposal of long-lived assets under existing accounting
pronouncements.  The adoption of SFAS 144 had no financial impact on
the financial position or results of operations for the three months
ended September 30, 2002.









II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements  (Unaudited),
Continued

Note J - New Accounting Pronouncements, Cont'd.
         --------------------------------------

In June 2002, the FASB issued Statement of Financial Accounting
Standards No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities,"  SFAS 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and
nullified EITF Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)."  The principal
difference between SFAS 146 and Issue 94-3 relates to SFAS 146
requirements for recognition of a liability for a cost associated with
an exit or disposal activity.  SFAS 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized when
the liability is incurred.  Under Issue 94-3, a liability for an exit
cost as generally defined in Issue 94-3 was recognized at the date of
an entity's commitment to an exit plan.  The provisions of SFAS 146 are
effective for exit or disposal activities that are initiated after
December 31, 2002.


Note K - Acquisition of II-VI/L.O.T.
         ---------------------------

During the quarter ended September 30, 2002, the Company reached an
agreement with L.O.T. - Oriel Laser Optik Technologies Holding GmbH and
L.O.T. - Oriel Laser Optik GmbH & Co. KG of Darmstadt, Germany
(collectively L.O.T.) to establish a new European joint venture to
distribute II-VI Incorporated and Laser Power Corporation products in
Germany.  Prior to this acquisition, the distribution of products in
Germany was handled by L.O.T. for over 25 years.  II-VI and L.O.T.
created II-VI/L.O.T. GmbH (II-VI/L.O.T.) to better service the needs of
customers in Germany.  Approximately 10% of the Company's total sales
are in Germany.  The Company purchased a 75% controlling interest in
II-VI/L.O.T., for approximately $2.8 million, net of value added taxes
already or to be refunded to the Company that approximate $.5 million.
The major assets acquired were inventory of approximately $1.2 million
and intangible assets (customer lists and related information) of
approximately $1.6 million that are being amortized over a ten-year
useful life.  II-VI/L.O.T. is based in Darmstadt, Germany and will
provide distribution, marketing and laser specific know-how needed to
successfully sell both II-VI Incorporated and Laser Power Corporation
products in Germany to OEM and aftermarket customers.  The results of
II-VI/L.O.T. for the three months ended September 30, 2002 are included
in the Company's consolidated financial statements for the quarter
ended September 30, 2002.

At any time after July 1, 2005, the Company has a call option to
purchase the remaining interest in II-VI/L.O.T. and L.O.T. has a put
option to the Company to require the purchase of the remaining interest
in II-VI/L.O.T.  The price of the remaining interest is based upon a
formula, primarily related to the average sales of II-VI/L.O.T. for the
three fiscal years prior to the exercise of the option.
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS


Forward Looking Statements
--------------------------

This Management's Discussion and Analysis contains forward looking
statements as defined by Section 21E of the Securities Exchange Act of
1934, as amended, including the statements regarding projected growth
rates, markets, product development, financial position, capital
expenditures and foreign currency exposure.  Forward-looking statements
are also identified by words such as "expects," "anticipates,"
"intends," "plans," "projects" or similar expressions.

Actual results could materially differ from such statements due to the
following factors: materially adverse changes in economic or industry
conditions generally (including capital markets) or in the markets
served by the Company, the development and use of new technology and
the actions of competitors.

There are additional risk factors that could affect the Company's
business, results of operations or financial condition.  Investors are
encouraged to review the risk factors set forth in the Company's most
recent Form 10-K/A as filed with the Securities and Exchange Commission
on September 27, 2002.


Critical Accounting Policies
----------------------------

Our significant accounting policies are described in Note A of the
Consolidated Financial Statements for the year ended June 30, 2002 as
filed in Form 10-K/A, which were prepared in accordance with accounting
principles generally accepted in the United States of America.  In
preparing our financial statements, we made estimates and judgments
which affect the results of our operations and the value of assets and
liabilities we report.  Our actual results may differ from these
estimates.

We believe that the following summarizes critical accounting policies
which require significant judgments and estimates in our preparation of
our consolidated financial statements.

The Company records revenue, other than on long-term contracts, when a
product is shipped.  Revenue on long-term contracts is accounted for
using the percentage-of-completion method, whereby revenue and profits
are recognized throughout the performance period of the contract.
Percentage-of-completion is determined by relating the actual cost of
work performed to date to the estimated total cost for each contract.
Losses on contracts are recorded in full when identified.

The Company records an allowance for doubtful accounts receivable
including warranty reserves as a charge against earnings based on a
percentage of actual historical product returns over the past twelve
months.  Additional reserve is estimated for potential non-collection
of the receivable based on historical results.  The Company has not
experienced a non-collection of accounts receivable materially
affecting its financial position or results of operations over the
last twelve months.

The Company records a slow moving inventory reserve as a charge against
earnings for all products on hand that have not been sold to customers
in the past twelve months.  An additional reserve is recorded for
product on hand that is in excess of product sold to customers over the
past twelve months.

The Company records bonus and profit sharing estimates as a charge
against earnings based on a percentage of operating income.  These
estimates are adjusted to actual based on final results of operations
achieved during the fiscal year.  Certain bonuses are paid quarterly at
a level of 75% of the current year to date operating income with final
payment in August of the subsequent fiscal year.  Other bonuses and
profit sharing are paid annually in August of the subsequent fiscal
year.

The Company records an estimated tax liability to recognize the amount
of taxes payable or refundable for the current year and deferred tax
liabilities and assets for the future tax consequences of events that
have been recognized in the Company's financial statements or tax
returns.  Judgment is required in estimating the future tax
consequences of events that have been recognized in the Company's
financial statements or tax returns.

From time to time, estimated accruals are recorded as a charge against
earnings based on known circumstances where it is probable that a
liability has been incurred or is expected to be incurred and the
amount can reasonably be estimated.


Results of Operations
---------------------

Overview

Net earnings for the first quarter of fiscal 2003 were $2,206,000
($0.15 per share-diluted) on revenues of $31,571,000.  This compares to
net earnings of $2,339,000 ($0.16 per share-diluted) on revenues of
$28,693,000 in the first quarter of fiscal 2002.  Order bookings for
the first quarter of fiscal 2003 were $34,873,000 compared to
$27,801,000 for the same period last fiscal year, an increase of 25%.
Bookings for contract research and development for the first quarter of
fiscal year 2003 were $5,390,000 compared to $5,153,000 for the same
period last fiscal year.  Revenues for the first quarter of fiscal 2003
increased 10% to $31,571,000 compared to $28,693,000 for the same
period last fiscal year primarily due to higher shipments of infrared
optics.  Operating profit for the first quarter of fiscal 2003
decreased 11% to $3,086,000 compared to $3,468,000 for the same period
last fiscal year primarily due to lower margins in the military
infrared optics and lower sales volume from the Company's eV PRODUCTS
division.  This decrease was partially offset by an increase in
shipments and gross margins of infrared optics.

Relating to the Company's optics segments, the Company currently
expects a steady strengthening in the industrial aftermarket activity.
Uncertainties of the past few quarters are still present; however, the
industrial, scientific and medical market segments have shown an
increase in order activity.  The demand for military IR Optics is
continuing to remain strong.  The Company currently expects revenues
and income from operations for the fiscal year ending June 30, 2003 to
increase approximately 10% from the previous fiscal year.

Bookings, revenues and operating profit (loss) for the Company's
reportable segments are discussed below.  Certain amounts from prior
years have been reclassified to conform with the fiscal 2003
presentation.

Infrared Optics

Bookings for the quarter for Infrared Optics increased 56% to
$20,768,000 from $13,337,000 in the first quarter of last fiscal year.
This increase was attributable to the receipt of orders from several of
the Company's original equipment manufacturer (OEM) customers.
Specifically, the Company received two major blanket orders in the
current fiscal quarter from two large European customers for
approximately $5.5 million.

Revenues for the current fiscal quarter for Infrared Optics increased
14% to $18,354,000 from $16,164,000 in the first quarter of last fiscal
year.  This increase was attributable to increased shipments to several
of the Company's OEM customers.

Income from operations for the quarter increased to $4,231,000 from
$2,876,000 in the first quarter of last fiscal year.  The improvement
in operating profit for the current fiscal quarter as compared to the
same quarter of last fiscal year was due to a combination of increased
sales volume, facility consolidation and the acquisition of a majority
interest in a distributor in Germany, which is described in Note L of
the accompanying Condensed Consolidated Financial Statements.

Near-Infrared Optics

Bookings for the quarter for Near-Infrared Optics decreased 20% to
$6,900,000 from $8,584,000 in the first quarter of last fiscal year.  A
shift in order mix showed a strengthening in the Yttrium Aluminum
Garnet (YAG) bookings for the current fiscal quarter, but this was
offset by reduced contract research bookings as compared to the same
quarter for the prior fiscal year.

Revenues for the quarter for Near-Infrared Optics were $5,467,000
compared to $5,441,000 in the first quarter of last fiscal year.
Contract research revenue in this quarter increased as compared to the
same quarter last fiscal year, while product sales, primarily in the
optics and telecommunications product lines, decreased as compared to
the same quarter last fiscal year.

Income from operations for the quarter increased to $362,000 from
$226,000 in the first quarter of last fiscal year.  The improved
operating profit reflected stronger operations in the YAG product line
due to improved performance yields.


Military Infrared Optics

Bookings for the quarter for Military Infrared Optics were $4,576,000
as compared to $4,624,000 in the first quarter of last fiscal year.
The bookings results reflect an addition of new sapphire based orders
in the current quarter.

Revenues for the quarter for Military Infrared Optics increased 11% to
$5,794,000 compared to $5,216,000 in the first quarter of the last
fiscal year.  The increase in revenue was primarily due to the market
acceptance of a new sapphire based products.

Income from operations for the quarter decreased to $257,000 from
$867,000 in the first quarter of the prior fiscal year.  Decreased
gross margins in the current quarter contributed to the lower operating
profit.  The consolidation of the commercial operations in the fourth
quarter of FY02 from Laser Power Corporation to other II-VI facilities
decreased gross margins in the remaining military focused business due
to the absorption of costs previously allocated to the commercial
Infrared Optics business.  Higher than expected costs negatively
impacted operating profit in the current quarter relating to certain
fixed-price government contracts that were absent in the same quarter
of the prior fiscal year.

Other

Other bookings, revenues and operating profits (losses) primarily
includes the combined operations of the Company's eV PRODUCTS division,
the Company's Wide Band Gap (WBG) Silicon Carbide operations and the
Company's corporate research and development group.

Combined bookings for the quarter for eV PRODUCTS division and silicon
carbide group more than doubled to $2,629,000 as compared to $1,256,000
in the first quarter of last fiscal year.  The increase in the current
quarter was due to the receipt of a research and development government
contract awarded to the silicon carbide group partially offset by a
customer order cancellation for the eV PRODUCTS division.

Revenues for the quarter from these operations increased 4% to
$1,956,000 compared to $1,872,000 in the first quarter of the last
fiscal year.

Operating loss for the quarter of $1,764,000 was higher than the
operating loss of $501,000 in the first quarter of the prior fiscal
year.  The higher loss was attributable to lower sales volume for the
eV PRODUCTS division and additional research and development costs for
the WBG group associated with the Litton Systems, Inc. Silicon Carbide
Group acquired in the second quarter of the last fiscal year.

Overall

Manufacturing gross margin for the first quarter of fiscal 2003 was
$11,122,000 or 38% of revenues compared to $9,634,000 or 35% of
revenues for the same period last fiscal year.  The increased sales
volume for the quarter as compared to the prior year, the recently
completed facility consolidation for the Infrared Optics commercial
business and the acquisition of a majority interest in a distributor in
Germany all contributed to the increased gross margin.

Company-funded internal research and development expenses for the first
quarter of fiscal 2003 were $959,000 or 3% of revenues compared to
$990,000 or 3% of revenues for the same period last fiscal year.  These
expenditures for the quarter reflect continued silicon carbide crystal
growth technology and processing development.  These expenditures also
include corporate research and development activities in addition to
the research and development activities of the eV PRODUCTS division.

Selling, general and administrative expenses for the first quarter of
fiscal 2003 were $7,195,000 or 23% of revenues compared to $5,645,000
or 20% of revenues for the same period last fiscal year.  The dollar
and percentage increases for the quarter as compared to the same period
last fiscal year reflect costs associated with the acquisition of a
majority interest in a distributor in Germany.  In addition, the
Company recorded higher salary expenses as compared to the same quarter
last fiscal year for its world-wide profit driven bonus program.

Interest expense for the first quarter of fiscal 2003 was $278,000
compared to $542,000 for the same period last fiscal year.  The
decrease in interest expense reflects lower LIBOR based interest rates
and approximately a $5.0 million reduction in debt outstanding for the
quarter as compared to the first quarter of last fiscal year.

Other income for the first quarter of fiscal 2003 of $114,000 compared
to $565,000 for the same period last fiscal year.  The change was
primarily due to lower foreign currency gains as a result of the U.S.
dollar's performance relative to other currencies compared to the same
quarter of the prior fiscal year.  The balance of the other income in
both fiscal quarters was derived from royalty income and interest
income.

The Company's effective income tax rate for the first quarter of fiscal
2003 is 25% compared to an effective income tax rate of 33% for the
same period in fiscal 2002.  The income tax rate reflects the Company's
continued benefit from lower tax rates on its Singapore and China
operations and a favorable mix of U.S. and foreign income.


Liquidity and Capital Resources

In the first three months of fiscal 2003, cash generated from
operations of $5.2 million and proceeds from sale of assets of $0.6
million were used primarily to fund an investment of $1.8 million in
property, plant and equipment, to finance a $3.2 million investment for
a 75% majority ownership of a distributor in Germany and to pay down
$1.3 million of debt.  Cash transactions for the first three months of
fiscal 2003 plus cash on hand at the beginning of the fiscal year
resulted in a cash position of $9.4 million at September 30, 2002.

The Company believes internally generated funds, existing cash reserves
and available borrowing capacity will be sufficient to fund its working
capital needs, capital expenditures and scheduled debt payments for
fiscal 2003.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


Market Risks
------------

The Company is exposed to market risks arising from adverse changes in
interest rates and foreign currency exchange rates.  In the normal
course of business, the Company uses a variety of techniques and
instruments as part of its overall risk management strategy.

For the quarter ended September 30, 2002, the Company decreased its
borrowings by $1.3 million.  As of September 30, 2002, the total
borrowings of $33.2 million primarily include $20.0 million under the
term loan option and $10.3 million under the line of credit option.  As
such, the Company is exposed to changes in interest rates.  A change in
the interest rate of 1% would have changed the interest expense by
approximately $83,000 for the three month period ended September 30,
2002.

To satisfy certain provisions of its line of credit facility relating
to mitigating interest rate risk, on March 6, 2002 the Company entered
into an interest rate cap for a one-year period with a notional amount
of $12.5 million.  See Note I of the Notes to Condensed Consolidated
Financial Statements.






Item 4.  CONTROLS AND PROCEDURES

         (a)  Disclosure Controls and Procedures.
              ----------------------------------

              Within 90 days before filing this report, we evaluated
              the effectiveness of the design and operation of our
              disclosure controls and procedures.  Carl J. Johnson, the
              Company's Chairman and Chief Executive Officer, and Craig
              A. Creaturo, the Company's Treasurer (and principal
              financial officer), reviewed and participated in this
              evaluation.  Based on this evaluation, Messrs. Johnson
              and Creaturo concluded that, as of the date of their
              evaluation, the Company's disclosure controls were
              effective.

         (b)  Internal Controls.
              -----------------

              Since the date of the evaluation described above, there
              have not been any significant changes in the Company's
              internal accounting controls or in other factors that
              could significantly affect those controls.



PART II - OTHER INFORMATION


Item 6.   EXHIBITS AND REPORTS ON FORM 8-K.

          (a)  Exhibits.
               --------

               10.01  Second Amended                Filed herewith.
                      and Restated Letter
                      Agreement by and among
                      II-VI Japan and PNC Bank,
                      National Association
                      dated as of
                      September 25, 2002


              99.01  Certification Pursuant         Filed herewith.
                     to 18 U.S.C. Section 1350,
                     as Adopted Pursuant to
                     Section 906 of the
                     Sarbanes-Oxley Act
                     of 2002 for Carl J. Johnson


              99.02  Certification Pursuant         Filed herewith.
                     to 18 U.S.C. Section 1350,
                     as Adopted Pursuant to
                     Section 906 of the
                     Sarbanes-Oxley Act
                     of 2002 for Craig A. Creaturo

          (b)  Reports on Form 8-K.
               -------------------

               None.





















                               SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


                              II-VI INCORPORATED
                                 (Registrant)




Date:  November 14, 2002      By:     /s/ CARL J. JOHNSON
                                 ---------------------------------
                                         Carl J. Johnson
                              Chairman and Chief Executive Officer




Date:  November 14, 2002      By:     /s/ CRAIG A. CREATURO
                                 ---------------------------------
                                         Craig A. Creaturo
                                             Treasurer
































                               CERTIFICATIONS

I, Carl J. Johnson, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of II-VI
    Incorporated;

2.  Based on my knowledge, this quarterly report does not contain any
    untrue statement of a material fact or omit to state a material
    fact necessary to make the statements made, in light of the
    circumstances under which such statements were made, not misleading
    with respect to the period covered by this quarterly report;

3.  Based on my knowledge, the financial statements, and other
    financial information included in this quarterly report, fairly
    present in all material respects the financial condition, results
    of operations and cash flows of the registrant as of, and for, the
    periods presented in this quarterly report;

4.  The registrant's other certifying officer and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
    and we have:

a)  designed such disclosure controls and procedures to ensure that
    material information relating to the registrant, including its
    consolidated subsidiaries, is made known to us by others within
    those entities, particularly during the period in which this
    quarterly report is being prepared;

b)  evaluated the effectiveness of the registrant's disclosure controls
    and procedures as of a date within 90 days prior to the filing date
    of this quarterly report, (the "Evaluation Date"); and

c)  presented in this quarterly report our conclusions about the
    effectiveness of the disclosure controls and procedures based on
    our evaluation as of the Evaluation Date;

5.  The registrant's other certifying officer and I have disclosed,
    based on our most recent evaluation, to the registrant's auditors
    and the audit committee of registrant's board of directors (or
    persons performing the equivalent function):

a)  all significant deficiencies in the design or operation of internal
    controls which could adversely affect the registrant's ability to
    record, process, summarize and report financial data and have
    identified for the registrant's auditors any material weaknesses in
    internal controls; and

b)  any fraud, whether or not material, that involves management or
    other employees who have a significant role in the registrant's
    internal controls; and

6.  The registrant's other certifying officer and I have indicated in
    this quarterly report whether or not there were significant changes
    in internal controls or in other factors that could significantly
    affect internal controls subsequent to the date of our most recent
    evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.


November 14, 2002           By:    /s/ CARL J. JOHNSON
                               ------------------------------
                                     Carl J. Johnson
                            Chairman, Chief Executive Officer
                                    and Director


















































I, Craig A. Creaturo, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of II-VI
    Incorporated;

2.  Based on my knowledge, this quarterly report does not contain any
    untrue statement of a material fact or omit to state a material
    fact necessary to make the statements made, in light of the
    circumstances under which such statements were made, not misleading
    with respect to the period covered by this quarterly report;

3.  Based on my knowledge, the financial statements, and other
    financial information included in this quarterly report, fairly
    present in all material respects the financial condition, results
    of operations and cash flows of the registrant as of, and for, the
    periods presented in this quarterly report;

4.  The registrant's other certifying officer and I are responsible for
    establishing and maintaining disclosure controls and procedures (as
    defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
    and we have:

a)  designed such disclosure controls and procedures to ensure that
    material information relating to the registrant, including its
    consolidated subsidiaries, is made known to us by others within
    those entities, particularly during the period in which this
    quarterly report is being prepared;

b)  evaluated the effectiveness of the registrant's disclosure controls
    and procedures as of a date within 90 days prior to the filing date
    of this quarterly report, (the "Evaluation Date"); and

c)  presented in this quarterly report our conclusions about the
    effectiveness of the disclosure controls and procedures based on
    our evaluation as of the Evaluation Date;

5.  The registrant's other certifying officer and I have disclosed,
    based on our most recent evaluation, to the registrant's auditors
    and the audit committee of registrant's board of directors (or
    persons performing the equivalent function):

a)  all significant deficiencies in the design or operation of internal
    controls which could adversely affect the registrant's ability to
    record, process, summarize and report financial data and have
    identified for the registrant's auditors any material weaknesses in
    internal controls; and

b)  any fraud, whether or not material, that involves management or
    other employees who have a significant role in the registrant's
    internal controls; and

6.  The registrant's other certifying officer and I have indicated in
    this quarterly report whether or not there were significant changes
    in internal controls or in other factors that could significantly
    affect internal controls subsequent to the date of our most recent
    evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.


November 14, 2002           By:       /s/ CRAIG A. CREATURO
                               ------------------------------------
                                         Craig A. Creaturo
                            Treasurer (principal financial officer)


















































                          EXHIBIT INDEX


Exhibit Number                                 Description of Exhibit
--------------                                 ----------------------

10.01  Second Amended and Restated Letter          Filed herewith.
       Agreement by and among II-VI
       Japan and PNC Bank, National
       Association dated as of
       September 25, 2002


99.01  Certification Pursuant to 18 U.S.C.         Filed herewith.
       Section 1350, as Adopted Pursuant to
       Section 906 of the Sarbanes-Oxley Act
       of 2002 for Carl J. Johnson


99.02  Certification Pursuant to 18 U.S.C.         Filed herewith.
       Section 1350, as Adopted Pursuant to
       Section 906 of the Sarbanes-Oxley Act
       of 2002 for Craig A. Creaturo


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex1001.txt
<TEXT>
               SECOND AMENDED AND RESTATED LETTER AGREEMENT

                                                      September 25, 2002

II-VI Japan Incorporated
c/o II-VI Incorporated
375 Saxonburg Boulevard
Saxonburg, PA  16056

            Re:  300,000,000 Japanese Yen Term Loan
                 ----------------------------------

Gentlemen:

We are pleased to inform you that PNC Bank, National Association (the
"Bank") has approved II-VI Japan Incorporated's (the "Borrower") request
for (i) a  restatement of the existing 237,000,000 Japanese Yen rate
protection term loan between the Bank and Borrower's sole shareholder,
II-VI Incorporated ("II-VI") (the "Existing Rate Protection Term Loan"),
as presently governed by the terms of the Amended and Restated Letter
Agreement dated March 26, 1999 between the Bank and II-VI (the "Existing
Letter Agreement") and as evidenced by II-VI's 237,000,000 Rate
Protection Term Note (EuroYen/Cap) to the Bank, dated March 26, 1999
(the "Existing Rate Protection Term Note").  Such restatement shall
include, among other things, causing II-VI Japan Incorporated, a
[corporation existing under the laws of Japan] ("II-VI Japan") to become
the Borrower, an increase in loan amount from 237,000,000 Japanese Yen
to 300,000,000 Japanese Yen and the execution of a guaranty of such
indebtedness by II-VI Incorporated.  Upon execution of this letter (the
"Agreement"), the Existing Letter Agreement shall be deemed canceled and
all of the indebtedness outstanding thereunder shall be governed by the
terms and conditions of this Agreement and the Note.  All the details
regarding your restated loans are outlined in the following sections of
this Agreement.

1.  DEFINED TERMS.  Words and terms used herein without definition shall
have the respective meanings assigned thereto on Schedule I attached
hereto.

2.  YEN LOAN.

    (a)  TYPE OF FACILITY.  The credit facility covered by this
Agreement shall be a Rate Protection Term Loan (the "Rate Protection
Term Loan") in the amount of 300,000,000 Japanese Yen.

    (b)  INTEREST RATE.  Amounts outstanding under the Rate Protection
Term Loan will bear interest at the rate or rates as provided in the
Rate Protection Term Note executed by the Borrower in the form attached
hereto as Exhibit A (the "Rate Protection Term Note").

    (c)  REPAYMENT.  Principal of, and interest accrued on, the Rate
Protection Term Loan shall be payable on the dates and times as provided
in the Rate Protection Term Note.

    (d)  REPAYMENT.  The obligation of the Borrower to repay the Rate
Protection Term Loan shall be evidenced by the Rate Protection Term
Note.

    (e)  SECURITY.  The obligations of the Borrower under this Agreement
and the Note are secured by the Guaranty and, on a pari passu basis with
the obligations under the Credit Agreement, by the obligations of II-VI
and its subsidiaries under the Guaranty Agreement (as defined in the
Credit Agreement), the Security Agreements (as defined in the Credit
Agreement) and the Pledges Agreement (as defined in the Credit
Agreement) and such security shall remain in full force and effect
notwithstanding the termination of the Credit Agreement.

3.  USE OF PROCEEDS.  The proceeds of the Rate Protection Term Loan will
be used by the Borrower for purposes of foreign currency balance sheet
hedging within its intercorporate group.  It is acknowledged that
notwithstanding the title of this Agreement, the proceeds of the Rate
Protection Term Loan are not required to be used for rate protection
purposes.

4.  LOAN DOCUMENTS.  This Agreement, the Rate Protection Term Note, the
Guarantee and the other loan documents referenced herein and/or
delivered pursuant hereto are collectively referred to as the "Loan
Documents".

5.  GURARANTEE.  The Borrower must cause the Guarantor to execute and
deliver to the Bank a guaranty and suretyship agreement (the
"Guarantee"), in substantially the form of Exhibit B attached hereto,
under which the Guarantor will unconditionally guarantee the due and
punctual payment of all indebtedness owed to the Bank by the Borrower.

6.  CONDITIONS TO LENDING.  The obligation of the Bank to make the Rate
Protection Term Loan is subject to the conditions that:

    (a)  the Borrower shall (i) provide to the Bank this Agreement, the
Rate Protection Note, and the Guarantee, each duly executed by the
Borrower and the Guarantor, as the case may be; (ii) provide to the Bank
evidence of the due authorization by the Borrower and the Guarantor of
this Agreement, the Rate Protection Note, and the Guarantee; (iii)
provide to the Bank such other instruments as the Bank shall reasonably
require in form and substance satisfactory to the Bank; (iv) cause II-VI
and each of its domestic subsidiaries to execute and acknowledge an
Agreement in the form of Exhibit C attached hereto; and (v) provide to
the Bank an opinion of counsel to the Borrower and the Guarantor
addressing such matters relating to the Guarantor and this transaction
as the Bank may request.

7.  AFFIRMATIVE COVENANTS.  Unless waived in writing by the Bank or
until payment in full of the Rate Protection Term Loan,

    (a)  The Borrower shall comply with all affirmative covenants
applicable to a Subsidiary of a Loan Party (as defined in the Credit
Agreement) as set forth in the Credit Agreement.

    (b)  The Borrower shall maintain books and records in accordance
with GAAP and give representatives of the bank access thereto at all
reasonable times, including permission to examine, copy and make
abstracts from any of such books and records and such other information
as the Bank may from time to time reasonably request, and the Borrower
will make available to the Bank for examination copies of any reports,
statements or returns which the Borrower may make to or file with any
governmental department, bureau or agency, federal or state.

    (c)  The Borrower will promptly submit to Bank such other
information relating to the Borrower as the Bank may reasonably request.

    (d)  The Borrower will pay and discharge when due all indebtedness
and all taxes, assessments, charges, levies and other liabilities
imposed upon the Borrower, its income, profits, property or business,
except those which currently are being contested in good faith by
appropriate proceedings and for which the Borrower shall have set aside
adequate reserves or made other adequate provision with respect thereto
acceptable to the Bank in its sole discretion.

    (e)  The Borrower will do all things necessary to maintain, renew
and keep in full force and effect its organizational existence and all
rights, permits and franchises necessary to enable it to continue its
business; continue in operation in substantially the same manner as at
present; keep its properties in good operating condition and repair; and
make all necessary and proper repairs, renewals, replacements, additions
and improvements thereto.

    (f)  The Borrower will maintain with financially sound and reputable
insurers, insurance with respect to its property and business against
such casualties and contingencies, of such types and in such amounts as
is customary for established companies engaged in the same or similar
business and similarly situated.

    (g)  The Borrower will comply with all laws applicable to the
Borrower and to the operation of its business (including any statute,
rule or regulation relating to employment practices and pension benefits
or to environmental, occupational and health standards and controls).

    (h)  The Borrower shall cause, at all times, the indebtedness
outstanding under this Agreement to rank at least pari passu with all
other indebtedness for borrowed money of the Borrower.

8.  NEGATIVE COVENANTS.  Unless waived in writing by the Bank or until
payment in full of the Rate Protection Term Loan, the Borrower covenants
and agrees that it will not, without the Bank's prior written consent:

    (a)  Violate or breach any negative covenants applicable to a
Subsidiary of a Loan Party (as defined in the Credit Agreement) as set
forth in the Credit Agreement.

    (b)  Make or permit any material change in the nature of its
business as carried on as of the date of this Agreement.

9.  REPRESENTATIONS AND WARRANTIES.  To induce the Bank to extend the
Rate Protection Term Loan, the Borrower represents and warrants to the
Bank as follows;

    (a)  The Borrower is duly organized, validly existing and in good
standing under the laws of Japan and has the power and authority to own
and operate its assets and to conduct its business as now or proposed to
be carried on, and is duly qualified, licensed and in good standing to
do business in all jurisdictions where its ownership of property or the
nature of its business requires such qualification or licensing.

    (b)  The Borrower has the power to make and carry out the terms of
the Loan Documents and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents.

    (c)  The Loan Documents constitute the legally binding obligations
of the Borrower, enforceable against the Borrower in accordance with
their respective terms.

    (d)  All of the Borrower's Subsidiaries in existence on the date
hereof are listed on Schedule II attached hereto.

    (e)  The making and performance of the Loan Documents do not and
will not violate in any respect any provisions of (i) any law or
regulation or any order or decree of any governmental authority, agency
or court, or (ii) the organizational documents of the Borrower or of any
of its Subsidiaries, or (iii) any mortgage, contract or other
undertaking to which the Borrower is a party or which is binding upon
the Borrower or any of its Subsidiaries or any of their respective
assets, and do not and will not result in the creation or imposition of
any security interest, lien, charge or other encumbrance on any of their
respective assets pursuant to the provisions of any such mortgage,
contract or other undertaking.

    (f)  Neither the Borrower nor any of its Subsidiaries is in default
with respect to any material order, writ, injunction or decree (i) of
any court or (ii) of any applicable governmental instrumentality.  The
Borrower and each Subsidiary is substantially complying with all
applicable statutes and regulations of each governmental authority
having jurisdiction over its activities, except where failure to comply
would not have a material adverse effect on the Borrower and its
Subsidiaries, taken as a whole.

    (g)  There are no actions, suits, proceedings or governmental
investigations pending or, to the knowledge of the Borrower, threatened
against the Borrower which could result in a material adverse change in
its business, assets, operations, financial condition or results of
operations and there is no basis known to the Borrower or its officers
or directors for any such action, suit, proceedings or investigation.

    (h)  The Borrower has filed all returns and reports that are
required to be filed by it in connection with any applicable tax, duty
or charge levied, assessed or imposed upon the Borrower or its property,
including unemployment, social security and similar taxes and all of
such taxes have been either paid or adequate reserve or other provision
has been made therefor.

    (i)  The Borrower owns or is licensed to use all patents, patent
rights, trademarks, trade names, service marks, copyrights, intellectual
property, technology, know-how and processes necessary for the conduct
of its business as currently conducted that are material to the
condition (financial or otherwise), business or operations of the
Borrower.

    (j)  No part of the proceeds of the Advances will be used for
"purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time in
effect or for any purpose which violates the provisions of the
Regulations of such Board of Governors.

    (k)  As of the date hereof and after giving effect to the
transactions contemplated by the Loan Documents, (i) the aggregate value
of the Borrower's assets will exceed its liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii)
the Borrower will have sufficient cash flow to enable it to pay its
debts as they mature, and (iii) the Borrower will not have unreasonably
small capital for the business in which it is engaged.

    (l)  None of the Loan Documents contains or will contain any untrue
statement of material fact or omits or will omit to state a material
fact necessary in order to make the statements contained in this
Agreement or the Loan Documents not misleading.  There is no fact known
to the Borrower which materially adversely affects or, so far as the
Borrower can now foresee, might materially adversely affect the
business, assets, operations, financial condition or results of
operation of the Borrower and which has not otherwise been fully set
forth in this Agreement or in the Loan Documents.

10.  EVENTS OF DEFAULT.  The occurrence of any of the following events
(whatever the reason therefor and whether voluntary, involuntary or
effected by operation of law) will be deemed to be an "Event of
Default":

    (a)  the nonpayment of any principal, interest, reimbursement
obligation or other indebtedness under this Agreement, the Note or any
other Loan Document when due;

    (b)  the occurrence of any event of default or default and the lapse
of any notice or cure period under any Loan Document, the Credit
Agreement (including any Loan Document thereunder) or any other debt,
liability or obligation to the Bank of any Obligor;

    (c)  the filing by or against the Borrower of any proceeding in
bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or similar proceeding (and, in the case of any such
proceeding instituted against the Borrower, such proceeding is not
dismissed or stayed within sixty (60) days of the commencement thereof);

    (d)  any assignment by the Borrower for the benefit of creditors, or
any levy, garnishment, attachment or similar proceeding (in excess of
$100,000 in the aggregate) is instituted against any property of the
Borrower held by or deposited with the Bank (and, in the case of any
levy, garnishment, attachment or similar proceeding instituted against
any such property of the Borrower, such proceeding is not dissolved
within ten (10) days of the commencement thereof;

    (e)  the commencement of any foreclosure or forfeiture proceeding,
execution or attachment against any collateral (having a fair market
value in excess of $100,000 in the aggregate) securing the obligations
of any Obligor to the Bank, and the failure of such Obligor to discharge
such proceeding within ten (10) days of the commencement thereof;

    (f)  any Obligor ceases doing business as a going concern;

    (g)  the revocation or attempted revocation, in whole or in part, of
any guarantee by the Guarantor;

    (h)  any representation or warranty made by any Obligor to the Bank
in any Loan Document, or any other documents now or in the future
evidencing or securing the obligations of any Obligor to the Bank, is
false, erroneous or misleading in any material respect; or

    (i)  the failure of any Obligor to observe or perform any covenant
or other agreement with the Bank contained in any Loan Document, the
Credit Agreement or any other documents now or in the future evidencing
or securing the obligations of any Obligor to the Bank,

11.  CONSEQUENCES OF AN EVENT OF DEFAULT.  Upon the occurrence of an
Event of Default: (a) if an Event of Default specified in clause (c) or
(d) above shall occur, the unpaid principal balance of the Note then
outstanding and all interest accrued thereon together with any
additional amounts payable hereunder and thereunder shall be immediately
due and payable without demand or notice of any kind; and (b) if any
other Event of Default shall occur, the unpaid principal balance of the
Note then outstanding and all interest accrued thereon together with any
additional amounts payable hereunder and thereunder, at the option of
the Bank and without demand or notice of any kind, may be accelerated
and become immediately due and payable.  Upon the curing of all existing
Events of Default to the satisfaction of the Bank, the Bank shall return
such cash collateral to the Borrower; (e) at the option of the Bank, the
Note will bear interest at the Default Rate (as set for the in the Note)
from the date of the occurrence of the Event of Default; and (f) the
Bank may exercise from time to time any of the rights and remedies
available to the Bank under the Loan Documents or under applicable law.

12.  RIGHT OF SETOFF.  In addition to all liens upon and rights of
setoff against the money, securities or other property of the Borrower
given to the Bank by law, the Bank shall have, with respect to the
Borrower's obligations to the Bank under the Loan Documents and to the
extent permitted by law, a contractual possessory security interest in
and a contractual right of setoff against, and the Borrower hereby
assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to all deposits, moneys,
securities and other property of the Borrower now or hereafter in the
possession of or on deposit with, or in transit to, the Bank whether
held in a general or special account or deposit, whether held jointly
with someone else or whether held for safekeeping or otherwise,
excluding, however, all IRA, Keogh, and trust accounts.  Every such
security interest and right of setoff may be exercised without demand
upon or notice to the Borrower.  Every such right of setoff shall be
deemed to have been exercised immediately upon the occurrence of an
Event of Default hereunder without any action of the Bank, although the
Bank may enter such setoff on its books and records at a later time.

13.  NOTICES.  All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing
and will be effective upon receipt if delivered personally to such
party, or if sent by facsimile transmission with confirmation of
delivery, or by nationally recognized overnight courier service, to the
address set forth below or to such other address as any party may give
to the other in writing for such purpose.

To the Bank:

PNC Bank, National Association
One PNC Plaza
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
Attention:  William Armitage
Facsimile No:  (412) 762-3718

With a copy to:

PNC Bank, National Association
One PNC Plaza
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222
Attention:  Thomas S. Bott, Managing Counsel
Facsimile No.:  (412) 762-4334

To the Borrower:

II-VI Japan Incorporated
c/o II-VI Incorporated
375 Saxonburg Boulevard
Saxonburg, Pennsylvania 16056
Facsimile No.:  (724) 352-5299

Attention:  Craig A. Creaturo, Treasurer

With a copy to:

Sherrard, German & Kelly, PC
One Oliver Plaza, 35th Floor
Pittsburgh, Pennsylvania 15222
Attention:  Robert Courie, Esq.
Facsimile No.:  (412) 261-6221

14.  EXPENSES.  The Borrower shall reimburse the Bank for the Bank's
expenses (including the reasonable fees and expenses of the Bank's
outside and in-house counsel) in connection with the collection of all
of the Borrower's obligations to the Bank, including but not limited to
enforcement actions relating to the Loan Documents.

15.  GOVERNING LAW.  This Agreement, the Note and the other Loan
Documents shall be governed by the laws of the Commonwealth of
Pennsylvania, excluding its conflict of law rules.

16.  COUNTERPARTS.  This Agreement may be executed in counterparts, each
of which when executed by the Borrower and the Bank shall be regarded as
an original.

17.  ENTIRE AGREEMENT.  This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement between
the Borrower and the Bank concerning the Loans and supersedes all other
prior agreements and understandings, both written and oral, between the
parties with respect to the Loans.

18.  AMENDMENTS AND WAIVERS.  No modification, amendment or waiver of
any provision of this Agreement nor consent to any departure by the
Borrower therefrom will in any event be effective unless the same is in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  No notice to or demand on the Borrower in any case will entitle
the Borrower to any other or further notice or demand in the same,
similar or other circumstance.

19.  PRESERVATION OF RIGHTS.  No delay or omission on the part of the
Bank to exercise any right or power arising hereunder will impair any
such right or power or be considered a waiver of any such right or power
or any acquiescence therein, nor will the action or inaction of the Bank
impair any right or power arising hereunder.  The Bank's rights and
remedies hereunder are cumulative and not exclusive of any other rights
or remedies which the Bank may have under other agreements, at law or in
equity.

20.  SUCCESSORS AND ASSIGNS.  This Agreement will be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
heirs, executors, administrators, successors and assigns; provided,
however, that the Borrower may not assign this Agreement in whole or in
part without the prior written consent of the Bank and the Bank at any
time may assign this Agreement in whole or in part.

21.  INDEMNITY.  The Borrower agrees to indemnify each of the Bank, its
directors, officers and employees and each legal entity, if any, who
controls the Bank (the "Indemnified Parties") and to hold each
Indemnified Party harmless from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, all
reasonable fees of counsel with whom any Indemnified Party may consult
and all expenses of litigation or preparation therefor) which any
Indemnified Party may incur or which may be asserted against any
Indemnified Party in connection with or arising out of the matters
referred to in this Agreement or in the other Loan Documents by any
person, entity or governmental authority (including any person or entity
claiming derivatively on behalf of the Borrower), whether (a) arising
from or incurred in connection with any breach of a representation,
warranty or covenant by the Borrower, or (b) arising out of or resulting
from any suit, action, claim, proceeding or governmental investigation,
pending or threatened, whether based on statute, regulation or order, or
tort, or contract or otherwise, before any court or governmental
authority, which arises out of or relates to this Agreement, any other
Loan Document, or the use of the proceeds of the Loan; provided,
however, that the foregoing indemnity agreement shall not apply to
claims, damages, losses, liabilities and expenses solely attributable to
an Indemnified Party's gross negligence or willful misconduct.  The
indemnity agreement contained in this Section shall survive the
termination of this Agreement, payment of any Loan and assignment of any
rights hereunder.  The Borrower may participate at its expense in the
defense of any such action or claim.

22.  ASSIGNMENTS AND PARTICIPATIONS.  At any time, without any notice to
the Borrower, the Bank may sell, assign, transfer, negotiate, grant
participation in, or otherwise dispose of all or any part of the Bank's
interest in the Loans.  The Borrower hereby authorizes the Bank to
provide, without any notice to the Borrower, any information concerning
the Borrower, including information pertaining to the Borrower's
financial condition, business operations or general creditworthiness, to
any person or entity which may succeed to or participate in all or any
part of the Bank's interest in the Loans.

23.  CONSENT TO JURISDICITON.  The Borrower hereby agrees that any
action or proceeding arising out of or relating to this Agreement or the
other Loan Documents may be commenced in, and Borrower irrevocably
consents to the exclusive jurisdiction of, any state or federal court
located for the county or judicial district where the Bank's office
indicated above is located, and consents that all service of process be
sent by nationally recognized overnight courier service directed to the
Borrower at the Borrower's address set forth herein and service so made
will be deemed to be completed on the business day after deposit with
such courier; provided that nothing contained in this Agreement will
prevent the Bank from bringing any action, enforcing any award or
judgment or exercising any rights against the Borrower individually,
against any security or against any property of the Borrower within any
other county, state or other foreign or domestic jurisdiction.  The
Borrower acknowledges and agrees that the venue provided above is the
most convenient forum for both the Bank and the Borrower.  The Borrower
waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement or any
other Loan Document.

24.  WAIVER OF JURY TRIAL.  THE BORROWER AND THE BANK IRREVOCABLY WAIVE
ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH LOAN
DOCUMENTS.  THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE FOREGOING
WAIVER IS KNOWING AND VOLUNTARY.

If the foregoing accurately reflects the understanding of the parties,
please execute the duplicate original of this Agreement and the other
Loan Documents and return them to me.

Very truly yours,

PNC BANK, NATIONAL ASSOCIATION

By   /s/ ROBERT S. FOUST
     -------------------
         Robert S. Foust
         Vice President


Agreed to and accepted, with the intent to
be legally bound, this 25th day of September, 2002.

II-VI JAPAN INCORPORATED

By   /s/  YASUHIRO SAKAKIBARA
     ------------------------
Name:     Yasuhiro Sakakibara
Title:       President
                     SCHEDULE I TO LETTER AGREEMENT

                             Defined Terms
                             -------------

In addition to the words and terms defined elsewhere in the Agreement,
the following words and terms shall have the following respective
meanings:

BUSINESS DAY shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania; and (i) if the
applicable Business Day relates to any Advance to which the Euro-Rate
Option applies, such day must also be a day on which dealings are
carried on in the London interbank market, (ii) with respect to advances
or payments of Advances or any other matters relating to Advances
denominated in an Optional Currency, such day also shall be a day on
which dealings in deposits in the relevant Optional Currency are carried
on in the applicable interbank market, and (iii) with respect to
advances or payments of Advances denominated in an Optional Currency,
such day shall also be a day on which all applicable banks into which
Advance proceeds may be deposited are open for business and foreign
exchange markets are open for business in the principal financial center
of the country of such currency.

CLOSING DATE shall mean the date upon which this Agreement has been
executed by the Borrower and the Bank and all conditions precedent
specified in Section 6 of the Agreement have been satisfied or waived
by the Bank.

CREDIT AGREEMENT shall mean the Credit Agreement dated as of August 14,
2000 among II-VI, the Subsidiary Guarantors party thereto, the Lenders
party thereto, and PNC Bank, National Association, as Agent, as
previously amended and as shall be hereafter amended, restated, modified
or supplemented from time to time.  In the event that the Credit
Agreement is terminated or the Bank is no longer a lender under the
Credit Agreement, the term Credit Agreement shall mean the Credit
Agreement as it exists immediately prior to (i) such termination or (ii)
the date on which the Bank is no longer a Lender under the Credit
Agreement.

DEFAULT shall mean any event or condition which with notice or passage
of time or both would constitute an Event of Default.

EVENT OF DEFAULT shall have the meaning assigned to such term in Section
10 of the Agreement.

GUARANTOR shall mean II-VI Incorporated, a Pennsylvania corporation.

GUARANTEE shall have the meaning assigned to such term in Section 5 of
the Agreement.

LOANS shall mean the Rate Protection Term Loan.

LOAN DOCUMENTS shall have the meaning assigned to such term in Section 4
of the Agreement.

MATERIAL ADVERSE CHANGE shall mean any set of circumstances or events
which (a) has or could reasonably be expected to have any material
adverse effect upon the validity or enforceability of the Agreement or
any of the other Loan Documents, (b) is or could reasonably be expected
to be material and adverse to the business, properties, assets,
financial condition or results of operations of the Borrower and its
Subsidiaries, taken as a whole, (e) impairs materially or could
reasonably be expected to impair materially the ability of the Borrower
and its Subsidiaries taken as a whole to duly and punctually pay their
indebtedness, or (d) impairs materially or could reasonably be expected
to impair materially the ability of the Bank to enforce its legal
remedies pursuant to the Agreement or any other Loan Document.

NOTE shall mean the Rate Protection Term Note.

OBLIGOR means the Borrower and the Guarantor.

PERSON shall mean any individual, company, partnership, limited
liability company, joint venture, corporation, association, business
trust, unincorporated organization, or any other entity.

SUBSIDIARY shall mean, at any time, any Person of which 50% or more (by
number of shares or number of votes) of the outstanding capital stock or
shares of beneficial interest normally entitled to vote for the election
of one or more directors (regardless of any contingency which does or
may suspend or dilute the voting rights) is at such time owned directly
or indirectly through one or more Subsidiaries by Borrower (including,
without limitation, the entities listed on Schedule II attached hereto),
or (ii) any Person which is Controlled or capable of being Controlled by
Borrower or one or more of Borrower's Subsidiaries.



























                               SCHEDULE II

                              Subsidiaries
                              ------------



                                 [None]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>ex9901.txt
<TEXT>
                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                            AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of II-VI Incorporated (the
"Corporation") on Form 10-Q for the period ending September 30, 2002 as
filed with the Securities and Exchange Commission on the date hereof
(the "Report"), each of the undersigned officers of the Corporation
certifies, pursuant to 18 U.S.C. S.S. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

  (1) The Report fully complies with the requirements of Section 13(a)
      or 15(d) of the Securities Exchange Act of 1934; and

  (2) The information contained in the Report fairly presents, in all
      material respects, the financial condition and result of
      operations of the Corporation.


Date:  November 14, 2002             /s/ CARL J.JOHNSON
                                     ------------------
                                      Carl J. Johnson
                                    Chairman of the Board
                                  and Chief Executive Officer



*This certification is made solely for purposes of 18 U.S.C. Section
 1350, subject to the knowledge standard contained therein, and not for
 any other purpose.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>ex9902.txt
<TEXT>
                        CERTIFICATION PURSUANT TO
                         18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO
               SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of II-VI Incorporated (the
"Corporation") on Form 10-Q for the period ending September 30, 2002 as
filed with the Securities and Exchange Commission on the date hereof
(the "Report"), each of the undersigned officers of the Corporation
certifies, pursuant to 18 U.S.C. S.S. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

  (1) The Report fully complies with the requirements of Section 13(a)
      or 15(d) of the Securities Exchange Act of 1934; and

  (2) The information contained in the Report fairly presents, in all
      material respects, the financial condition and result of
      operations of the Corporation.


Date:  November 14, 2002              /s/ CRAIG A. CREATURO
                                      ----------------------
                                         Craig A. Creaturo
                              Treasurer (principal financial officer)




*This certification is made solely for purposes of 18 U.S.C. Section
 1350, subject to the knowledge standard contained therein, and not for
 any other purpose.


</TEXT>
</DOCUMENT>
</SUBMISSION>
