II-VI Incorporated
375 Saxonburg Boulevard Saxonburg, Pennsylvania 16056
Telephone (724) 352-4455
Exhibit 99.1
| Press Release |
|
II-VI Incorporated 375 Saxonburg Boulevard Saxonburg, Pennsylvania 16056 Telephone (724) 352-4455 |
| Release Date: April 22, 2008 | 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 THIRD QUARTER RESULTS
ON RECORD REVENUES AND BOOKINGS
PITTSBURGH, PA., April 22, 2008 — II-VI Incorporated (NASDAQ Global Select: IIVI) today reported results for its third quarter ended March 31, 2008.
On April 4, 2008, the Company announced its intention to sell its x-ray and gamma-ray radiation sensor division, doing business as eV PRODUCTS, Inc. and operating as a business within the Compound Semiconductor Group. Results for the quarter ended March 31, 2008 and all comparative financial data included herein reflect the presentation of eV PRODUCTS as a discontinued operation.
Revenues from continuing operations for the quarter ended March 31, 2008 increased 25% to a record $80,956,000 from $64,836,000 in the third quarter of last fiscal year. Revenues from continuing operations for the nine months ended March 31, 2008 increased 21% to $224,382,000 from $184,841,000 in the same period last fiscal year.
Bookings from continuing operations for the quarter ended March 31, 2008 increased 44% to a record $93,735,000 compared to $65,261,000 in the third quarter of last fiscal year. Bookings from continuing operations for the nine months ended March 31, 2008 increased 29% to $253,156,000 from $196,157,000 in the same period last fiscal year. Bookings are defined as customer orders received that are expected to be converted into revenues during the next 12 months.
For the third quarter ended March 31, 2008, net earnings from continuing operations were $13,353,000 or $0.44 per share-diluted compared with $10,122,000 or $0.33 per share-diluted in the third quarter of last fiscal year. After giving effect to a net loss from discontinued operation ($305,000 or $0.01 per share-diluted compared to a net loss of $73,000 or $0.00 per share-diluted in the same period one year ago), consolidated net earnings were $13,048,000 or $0.43 per share-diluted compared with $10,049,000 or $0.33 per share-diluted in the third quarter 2007.
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II-VI Incorporated
April 22, 2008
Page 2
For the nine months ended March 31, 2008, net earnings from continuing operations were $50,342,000 or $1.65 per share-diluted compared with $27,086,000 or $0.90 per share diluted in the same period of last fiscal year. After giving effect to a net loss from the discontinued operation ($912,000 or $0.03 per share-diluted compared to a net loss of $429,000 or $0.01 per share-diluted in the same period one year ago), consolidated net earnings were $49,430,000 or $1.62 per share-diluted compared with $26,657,000 or $0.88 per share-diluted in the same period 2007. Net earnings for the nine months ended March 31, 2008 include an after-tax gain of $0.52 per share-diluted on the sale of an equity investment.
Francis J. Kramer, president and chief executive officer said, “We are pleased to report another quarter of record bookings and revenues which attest to the strong market acceptance of our current product line. These results are consistent with our preliminary announcement on April 4, 2008. The Military & Materials and Compound Semiconductor Group segments recorded sizeable bookings increases in both the quarter and fiscal year-to-date. This quarter HIGHYAG Lasertechnologie GmbH, in which we acquired a majority interest in January 2008, made its first contributions to bookings and revenues, while Pacific Rare Specialty Metals & Chemicals posted another quarter of solid performance. As expected, Infrared Optics was a significant driver of segment bookings, revenues and earnings. Reduced tax exposure yielded a lower income tax rate which also contributed to the bottom line for the quarter.”
Kramer continued, “Robust bookings throughout this year have significantly increased our order backlog and we believe we have good visibility for the remainder of the fourth quarter and fiscal year ending June 30, 2008. We are also providing initial guidance for the next fiscal year which ends June 30, 2009. Both of these forecasts are based solely on the performance of our continuing operations. While we recognize that global economic challenges and uncertainties may persist during the next 15 months, we remain confident in II-VI’s ability to deliver on our growth objectives.”
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II-VI Incorporated
April 22, 2008
Page 3
Segment Information for Continuing Operations
The following segment information includes segment earnings from continuing operations (defined as earnings from continuing operations before income taxes, interest expense and other income or expense, net). Management believes segment earnings from continuing operations are a useful performance measure because they reflect the results of segment performance over which management has direct control.
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||||
| 2008 | 2007 | % Increase (Decrease) |
2008 | 2007 | % Increase (Decrease) |
|||||||||||||
| Bookings: |
||||||||||||||||||
| Infrared Optics |
$ | 43,607 | $ | 34,726 | 26 | % | $ | 118,124 | $ | 98,853 | 19 | % | ||||||
| Near-Infrared Optics |
8,332 | 8,826 | (6 | )% | 42,573 | 41,421 | 3 | % | ||||||||||
| Military & Materials |
15,823 | 5,778 | 174 | % | 46,338 | 20,357 | 128 | % | ||||||||||
| Compound Semiconductor Group |
25,973 | 15,931 | 63 | % | 46,121 | 35,526 | 30 | % | ||||||||||
| Total Bookings |
$ | 93,735 | $ | 65,261 | 44 | % | $ | 253,156 | $ | 196,157 | 29 | % | ||||||
| Revenues: |
||||||||||||||||||
| Infrared Optics |
$ | 41,004 | $ | 34,000 | 21 | % | $ | 108,539 | $ | 97,652 | 11 | % | ||||||
| Near-Infrared Optics |
14,769 | 12,866 | 15 | % | 43,420 | 35,105 | 24 | % | ||||||||||
| Military & Materials |
11,975 | 7,065 | 69 | % | 36,191 | 19,714 | 84 | % | ||||||||||
| Compound Semiconductor Group |
13,208 | 10,905 | 21 | % | 36,232 | 32,370 | 12 | % | ||||||||||
| Total Revenues |
$ | 80,956 | $ | 64,836 | 25 | % | $ | 224,382 | $ | 184,841 | 21 | % | ||||||
| Segment Earnings: |
||||||||||||||||||
| Infrared Optics |
$ | 10,200 | $ | 8,817 | 16 | % | $ | 25,388 | $ | 26,414 | (4 | )% | ||||||
| Near-Infrared Optics |
2,705 | 1,512 | 79 | % | 8,444 | 4,346 | 94 | % | ||||||||||
| Military & Materials |
1,415 | 966 | 46 | % | 5,183 | 1,810 | 186 | % | ||||||||||
| Compound Semiconductor Group |
1,263 | 947 | 33 | % | 4,256 | 2,467 | 73 | % | ||||||||||
| Total Segment Earnings |
$ | 15,583 | $ | 12,242 | 27 | % | $ | 43,271 | $ | 35,037 | 24 | % | ||||||
Outlook
For the fourth fiscal quarter ending June 30, 2008, the Company currently forecasts revenues from continuing operations to range from $85.0 million to $88.0 million and earnings per share from continuing operations to range from $0.40 to $0.44. For the fiscal year ending June 30, 2008, the Company expects revenues from continuing operations to range from $309 million to $312 million and earnings per share from continuing operations to range from $2.05 to $2.09. Net earnings from continuing operations for the fiscal year ending June 30, 2008 include the after-tax gain on sale of equity investment of $0.52 per share.
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II-VI Incorporated
April 22, 2008
Page 4
For the fiscal year ending June 30, 2009, the Company anticipates revenues from continuing operations to increase approximately 11% from the revenues from continuing operations forecasted for June 30, 2008. The Company also anticipates earnings per share from continuing operations to increase approximately 12% from the earnings per share from continuing operations forecasted for June 30, 2008 excluding the after-tax gain on sale of equity investment of $0.52 per share.
Webcast Information
The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday, April 22, 2008 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://www.videonewswire.com/event.asp?id=47044. Please allow extra time prior to the call to visit the site and, if needed, to download the media software required to listen to the internet broadcast. A replay of the webcast will be available for two weeks following the call.
About II-VI Incorporated
II-VI Incorporated, a worldwide leader in engineered materials and components, is a vertically-integrated manufacturing company that creates and markets products for a diversified customer base including industrial manufacturing, military and aerospace, high-power electronics and telecommunications, and thermoelectric applications. Headquartered in Saxonburg, Pennsylvania, with manufacturing, sales, and distribution facilities worldwide, the Company produces numerous crystalline compounds including zinc selenide for infrared laser optics, silicon carbide for high-power electronic and microwave applications, and bismuth telluride for thermoelectric coolers.
In the Company’s infrared optics business, II-VI Infrared manufactures optical and opto-electronic components for industrial laser and thermal imaging systems, and HIGHYAG Lasertechnologie GmbH (HIGHYAG) manufactures fiber-delivered beam transmission systems and processing tools for industrial lasers. In the Company’s near-infrared optics business, VLOC manufactures near-infrared and visible light products for industrial, scientific, military and medical instruments and laser gain materials and products for solid-state YAG and YLF lasers. In the Company’s military & materials business, Exotic Electro-Optics (EEO) manufactures infrared products for military applications, and Pacific Rare Specialty Metals & Chemicals (PRM) produces and refines selenium and tellurium materials. In the Company’s Compound Semiconductor Group, the Wide Bandgap Materials (WBG) group manufactures and markets single crystal silicon carbide substrates for use in the solid-state lighting, wireless infrastructure, RF electronics and power switching industries; the Marlow Industries, Inc. subsidiary designs and manufactures thermoelectric cooling and power generation solutions for use in defense, space, photonics, telecommunications, medical, consumer and industrial markets; and, the Worldwide Materials Group (WMG) provides expertise in materials development, process development, and manufacturing scale up.
This press release contains forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The forward-looking statements in this press release involve risks and uncertainties, which could cause actual results, performance or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that
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II-VI Incorporated
April 22, 2008
Page 5
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 failure of any one or more of the assumptions stated above to prove to be correct; (ii) the risks relating to forward-looking statements and other “Risk Factors” discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007; (iii) purchasing patterns from customers and end-users; (iv) timely release of new products, and acceptance of such new products by the market; (v) the introduction of new products by competitors and other competitive responses; and/or (vi) the Company’s ability to devise and execute strategies to respond to market conditions.
CONTACT: Craig A. Creaturo, Chief Financial Officer and Treasurer of II-VI Incorporated, 724-352-4455, or e-mail, ccreaturo@ii-vi.com.
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II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues |
||||||||||||||||
| Net sales |
$ | 78,228 | $ | 61,613 | $ | 214,730 | $ | 177,012 | ||||||||
| Contract research and development |
2,728 | 3,223 | 9,652 | 7,829 | ||||||||||||
| Total Revenues |
80,956 | 64,836 | 224,382 | 184,841 | ||||||||||||
| Costs, Expenses, Other (Income) Expense |
||||||||||||||||
| Cost of goods sold |
$ | 45,574 | $ | 34,799 | $ | 124,634 | $ | 99,656 | ||||||||
| Contract research and development |
2,085 | 2,384 | 7,391 | 5,854 | ||||||||||||
| Internal research and development |
1,992 | 1,447 | 5,388 | 4,008 | ||||||||||||
| Selling, general and administrative |
15,722 | 13,964 | 43,698 | 40,286 | ||||||||||||
| Interest expense |
22 | 204 | 216 | 873 | ||||||||||||
| Other (income), net |
(654 | ) | (507 | ) | (2,554 | ) | (2,060 | ) | ||||||||
| Gain on sale of equity investment, pre-tax |
— | — | (26,455 | ) | — | |||||||||||
| Total Costs, Expenses, Other (Income) Expense |
64,741 | 52,291 | 152,318 | 148,617 | ||||||||||||
| Earnings from Continuing Operation Before Income Taxes |
16,215 | 12,545 | 72,064 | 36,224 | ||||||||||||
| Income Taxes |
2,862 | 2,423 | 21,722 | 9,138 | ||||||||||||
| Earnings from Continuing Operations |
13,353 | 10,122 | 50,342 | 27,086 | ||||||||||||
| Loss from Discontinued Operation, Net of Income Tax Benefit |
(305 | ) | (73 | ) | (912 | ) | (429 | ) | ||||||||
| Net Earnings |
$ | 13,048 | $ | 10,049 | $ | 49,430 | $ | 26,657 | ||||||||
| Diluted Earnings Per Share: |
||||||||||||||||
| Continuing operations |
$ | 0.44 | $ | 0.33 | $ | 1.65 | $ | 0.90 | ||||||||
| Discontinued operation |
$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.01 | ) | ||||
| Consolidated |
$ | 0.43 | $ | 0.33 | $ | 1.62 | $ | 0.88 | ||||||||
| Average Shares Outstanding – Diluted |
30,588 | 30,336 | 30,436 | 30,159 | ||||||||||||
| Average Shares Outstanding – Basic |
29,692 | 29,411 | 29,661 | 29,306 | ||||||||||||
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(000)
| March 31, 2008 |
June 30, 2007 | |||||
| Assets |
||||||
| Current Assets |
||||||
| Cash and cash equivalents |
$ | 62,132 | $ | 32,618 | ||
| Accounts receivable, net |
48,766 | 44,964 | ||||
| Inventories |
66,918 | 57,898 | ||||
| Assets held-for-sale |
8,275 | 8,004 | ||||
| Deferred income taxes |
9,177 | 9,172 | ||||
| Prepaid and other current assets |
3,511 | 2,313 | ||||
| Total Current Assets |
198,779 | 154,969 | ||||
| Property, Plant & Equipment, net |
85,518 | 82,666 | ||||
| Goodwill |
26,717 | 24,489 | ||||
| Other Intangible Assets, net |
13,076 | 13,920 | ||||
| Investments |
3,665 | 6,982 | ||||
| Other Assets |
5,081 | 4,898 | ||||
| Total Assets |
$ | 332,836 | $ | 287,924 | ||
| Liabilities and Shareholders’ Equity |
||||||
| Current Liabilities |
||||||
| Accounts payable |
$ | 14,531 | $ | 13,812 | ||
| Accruals and other current liabilities |
23,409 | 28,860 | ||||
| Liabilities held-for-sale |
1,415 | 1,607 | ||||
| Current portion of long-term debt |
— | 55 | ||||
| Total Current Liabilities |
39,355 | 44,334 | ||||
| Long-Term Debt – less current portion |
4,024 | 14,940 | ||||
| Deferred Income Taxes |
1,603 | 5,502 | ||||
| Other Liabilities |
16,139 | 3,708 | ||||
| Total Liabilities |
61,121 | 68,484 | ||||
| Shareholders’ Equity |
271,715 | 219,440 | ||||
| Total Liabilities and Shareholders’ Equity |
$ | 332,836 | $ | 287,924 | ||
II-VI Incorporated and Subsidiaries
Other Selected Financial Information (Unaudited)
($000 except per share data)
The following other selected financial information for continuing operations includes earnings from continuing operations before interest, income taxes, depreciation and amortization (EBITDA). Management believes EBITDA from continuing operations is a useful performance measure because it reflects operating profitability before certain non-operating expenses and non-cash charges.
Other Selected Financial Information for Continuing Operations
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| EBITDA |
$ | 20,077 | $ | 16,369 | $ | 84,314 | $ | 48,514 | ||||||||
| EBITDA excluding pre-tax gain on sale of equity investment |
$ | 20,077 | $ | 16,369 | $ | 57,859 | $ | 48,514 | ||||||||
| Cash paid for capital expenditures |
$ | 3,773 | $ | 5,212 | $ | 12,404 | $ | 13,130 | ||||||||
| Net payments on indebtedness |
$ | — | $ | 4,514 | $ | 11,749 | $ | 16,790 | ||||||||
| Incentive stock option and performance share compensation expense, pre-tax |
$ | 820 | $ | 727 | $ | 2,922 | $ | 2,263 | ||||||||
| Cash paid for shares repurchased through the Company’s stock repurchase program |
$ | 5,271 | $ | — | $ | 5,865 | $ | 502 | ||||||||
| Shares repurchased through the Company’s stock repurchase program |
166,400 | — | 186,400 | 19,500 | ||||||||||||
| Reconciliation of Segment Earnings and EBITDA to Earnings Before Income Taxes |
Three Months Ended March 31, |
Nine Months Ended March 31, |
||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Total Segment Earnings from continuing operations |
$ | 15,583 | $ | 12,242 | $ | 43,271 | $ | 35,037 | ||||||||
| Interest expense |
22 | 204 | 216 | 873 | ||||||||||||
| Other (income), net |
(654 | ) | (507 | ) | (2,554 | ) | (2,060 | ) | ||||||||
| Gain on sale of equity investment, pre-tax |
— | — | (26,455 | ) | — | |||||||||||
| Earnings from continuing operations before income taxes |
$ | 16,215 | $ | 12,545 | $ | 72,064 | $ | 36,224 | ||||||||
| EBITDA from continuing operations |
$ | 20,077 | $ | 16,369 | $ | 84,314 | $ | 48,514 | ||||||||
| Interest expense |
22 | 204 | 216 | 873 | ||||||||||||
| Depreciation and amortization |
3,840 | 3,620 | 12,034 | 11,417 | ||||||||||||
| Earnings from continuing operations before income taxes |
$ | 16,215 | $ | 12,545 | $ | 72,064 | $ | 36,224 | ||||||||
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