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Segment and Geographic Reporting | 12 Months Ended
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Jun. 30, 2017
Segment Reporting [Abstract] |
Segment and Geographic Reporting |
Note 11. | Segment and Geographic Reporting
The Company reports its business segments using the “management approach” model for segment reporting. This means that the Company determines its reportable business segments based on the way the chief operating decision maker organizes business segments within the Company for making operating decisions and assessing performance. The Company reports its financial results in the following three segments: (i) II-VI Laser Solutions, (ii) II-VI Photonics, and (iii) II-VI Performance Products, and the Company’s chief operating decision maker receives and reviews financial information based on these segments. The Company evaluates business segment performance based upon segment operating income, which is defined as earnings before income taxes, interest and other income or expense. The segments are managed separately due to the market, production requirements and facilities unique to each segment. The II-VI Laser Solutions segment is located in the United States, Singapore, China, Germany, Switzerland, Japan, Belgium, the United Kingdom, Italy, South Korea, the Philippines and Taiwan. II-VI Laser Solutions is directed by the President of II-VI Laser Solutions, while each geographic location is directed by a general manager, and is further divided into production and administrative units that are directed by managers. II-VI Laser Solutions designs, manufactures and markets optical and electro-optical components and materials sold under the II-VI Infrared brand name and used primarily in high-power CO2 lasers, fiber-delivered beam delivery systems and processing tools and direct diode lasers for industrial lasers sold under the II-VI HIGHYAG and II-VI Laser Enterprise brand names. II-VI Laser Solutions also manufactures compound semiconductor epitaxial wafers for applications in optical components, wireless devices, and high-speed communication systems and manufactures 6-inch gallium arsenide wafers allowing for the production of high performance lasers and integrated circuits in high volume sold under the II-VI EpiWorks and II-VI OptoElectronic Devices Division brand names. The II-VI Photonics segment is located in the United States, China, Vietnam, Germany, Japan, the United Kingdom., Italy and Hong Kong. II-VI Photonics is directed by the President of II-VI Photonics and is further divided into production and administrative units that are directed by managers. II-VI Photonics manufactures crystal materials, optics, microchip lasers and optoelectronic modules for use in optical communication networks and other diverse consumer and commercial applications. In addition, the segment also manufactures pump lasers, optical isolators, and optical amplifiers and micro-optics for optical amplifiers for both terrestrial and submarine applications within the optical communications market. The II-VI Performance Products segment is located in the United States, Vietnam, Japan, China, Germany and the Philippines. II-VI Performance Products is directed by the President of II-VI Performance Products, while each geographic location is directed by a general manager. II-VI Performance Products is further divided into production and administrative units that are directed by managers. II-VI Performance Products designs, manufactures and markets infrared optical components and high-precision optical assemblies for military, medical and commercial laser imaging applications. In addition, the segment designs, manufactures and markets unique engineered materials for thermoelectric and silicon carbide applications servicing the semiconductor, military and medical markets. On June 19, 2017, the Company completed its acquisition of IPI. See Note 2. Acquisitions. The operating results of this acquisition have been reflected in the selected financial information of the Company’s II-VI Photonics segment The accounting policies of the segments are the same as those of the Company. The Company’s corporate expenses are allocated to the segments. The Company evaluates segment performance based upon reported segment operating income, which is defined as earnings from continuing operations before income taxes, interest and other income or expense. Inter-segment sales and transfers have been eliminated. The following tables summarize selected financial information of the Company’s operations by segment:
|  | II-VI |  |  |  |  |  |  | II-VI |  |  |  |  |  |  |  |  |
|  | Laser |  |  | II-VI |  |  | Performance |  |  |  |  |  |  |  |  |
|  | Solutions |  |  | Photonics |  |  | Products |  |  | Eliminations |  |  | Total |
($000) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 339,341 |  |  | $ | 418,515 |  |  | $ | 214,190 |  |  | $ | - |  |  | $ | 972,046 |
Inter-segment revenues |  |  | 33,792 |  |  |  | 14,236 |  |  |  | 10,189 |  |  |  | (58,217 | ) |  |  | - |
Operating income |  |  | 30,931 |  |  |  | 62,975 |  |  |  | 21,635 |  |  |  | - |  |  |  | 115,541 |
Interest expense |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,809 | )
Other income, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,056 |
Income taxes |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (23,514 | )
Net earnings |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 95,274 |
Depreciation and amortization |  |  | 24,958 |  |  |  | 21,442 |  |  |  | 17,237 |  |  |  | - |  |  |  | 63,637 |
Expenditures for property, plant & equipment |  |  | 82,760 |  |  |  | 27,397 |  |  |  | 32,788 |  |  |  | - |  |  |  | 142,945 |
Segment assets |  |  | 589,239 |  |  |  | 578,315 |  |  |  | 309,743 |  |  |  | - |  |  |  | 1,477,297 |
Equity investment |  |  | - |  |  |  | - |  |  |  | 11,727 |  |  |  | - |  |  |  | 11,727 |
Goodwill |  |  | 84,180 |  |  |  | 113,272 |  |  |  | 52,890 |  |  |  | - |  |  |  | 250,342 |
|  | II-VI |  |  |  |  |  |  | II-VI |  |  |  |  |  |  |  |  |
|  | Laser |  |  | II-VI |  |  | Performance |  |  |  |  |  |  |  |  |
|  | Solutions |  |  | Photonics |  |  | Products |  |  | Eliminations |  |  | Total |
($000) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 303,002 |  |  | $ | 325,879 |  |  | $ | 198,335 |  |  | $ | - |  |  | $ | 827,216 |
Inter-segment revenues |  |  | 24,290 |  |  |  | 12,081 |  |  |  | 7,274 |  |  |  | (43,645 | ) |  |  | - |
Operating income |  |  | 36,184 |  |  |  | 37,849 |  |  |  | 17,780 |  |  |  | - |  |  |  | 91,813 |
Interest expense |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,081 | )
Other income, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,223 |
Income taxes |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (24,469 | )
Net earnings |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 65,486 |
Depreciation and amortization |  |  | 17,222 |  |  |  | 19,855 |  |  |  | 19,586 |  |  |  | - |  |  |  | 56,663 |
Expenditures for property, plant & equipment |  |  | 25,620 |  |  |  | 21,096 |  |  |  | 11,454 |  |  |  | - |  |  |  | 58,170 |
Segment assets |  |  | 469,754 |  |  |  | 467,486 |  |  |  | 274,741 |  |  |  | - |  |  |  | 1,211,981 |
Equity investment |  |  | - |  |  |  | - |  |  |  | 11,354 |  |  |  | - |  |  |  | 11,354 |
Goodwill |  |  | 84,105 |  |  |  | 96,760 |  |  |  | 52,890 |  |  |  | - |  |  |  | 233,755 |
|  | II-VI |  |  |  |  |  |  | II-VI |  |  |  |  |  |  |  |  |
|  | Laser |  |  | II-VI |  |  | Performance |  |  |  |  |  |  |  |  |
|  | Solutions |  |  | Photonics |  |  | Products |  |  | Eliminations |  |  | Total |
($000) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 287,881 |  |  | $ | 260,825 |  |  | $ | 193,255 |  |  | $ | - |  |  | $ | 741,961 |
Inter-segment revenues |  |  | 21,021 |  |  |  | 13,210 |  |  |  | 9,325 |  |  |  | (43,556 | ) |  |  | - |
Operating income |  |  | 55,039 |  |  |  | 7,208 |  |  |  | 14,552 |  |  |  | - |  |  |  | 76,799 |
Interest expense |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,863 | )
Other income, net |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,176 |
Income taxes |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (13,137 | )
Net earnings |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 65,975 |
Depreciation and amortization |  |  | 14,127 |  |  |  | 21,073 |  |  |  | 17,883 |  |  |  | - |  |  |  | 53,083 |
Expenditures for property, plant & equipment |  |  | 27,349 |  |  |  | 11,324 |  |  |  | 13,640 |  |  |  | - |  |  |  | 52,313 |
Geographic information for revenues from the country of origin (shipped from), and long-lived assets from the country of origin, which include property, plant and equipment, net of related depreciation, and certain other long-term assets, were as follows:
|  | Revenues |
Year Ended June 30, |  | 2017 |  |  | 2016 |  |  | 2015 |
($000) |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 294,200 |  |  | $ | 266,347 |  |  | $ | 241,974 |
Non-United States |  |  |  |  |  |  |  |  |  |  |  |
China |  |  | 208,595 |  |  |  | 172,292 |  |  |  | 140,586 |
Hong Kong |  |  | 190,702 |  |  |  | 140,821 |  |  |  | 109,428 |
Germany |  |  | 88,304 |  |  |  | 72,070 |  |  |  | 77,524 |
Japan |  |  | 76,212 |  |  |  | 57,287 |  |  |  | 52,864 |
Switzerland |  |  | 50,497 |  |  |  | 54,760 |  |  |  | 56,940 |
Vietnam |  |  | 22,497 |  |  |  | 24,267 |  |  |  | 24,307 |
Italy |  |  | 10,791 |  |  |  | 10,160 |  |  |  | 9,313 |
United Kingdom |  |  | 8,473 |  |  |  | 8,154 |  |  |  | 7,749 |
Belgium |  |  | 7,503 |  |  |  | 6,026 |  |  |  | 5,731 |
Korea |  |  | 6,584 |  |  |  | 3,887 |  |  |  | - |
Singapore |  |  | 3,913 |  |  |  | 3,039 |  |  |  | 3,897 |
Philippines |  |  | 3,057 |  |  |  | 8,106 |  |  |  | 11,334 |
Taiwan |  |  | 718 |  |  |  | - |  |  |  | - |
Australia |  |  | - |  |  |  | - |  |  |  | 314 |
Total Non-United States |  |  | 677,846 |  |  |  | 560,869 |  |  |  | 499,987 |
|  | $ | 972,046 |  |  | $ | 827,216 |  |  | $ | 741,961 |
|  | Long-Lived Assets |
June 30, |  | 2017 |  |  | 2016 |  |  | 2015 |
($000) |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 240,029 |  |  | $ | 137,521 |  |  | $ | 102,171 |
Non-United States |  |  |  |  |  |  |  |  |  |  |  |
China |  |  | 62,024 |  |  |  | 51,824 |  |  |  | 46,794 |
Switzerland |  |  | 36,795 |  |  |  | 38,202 |  |  |  | 26,384 |
Germany |  |  | 15,323 |  |  |  | 15,162 |  |  |  | 15,790 |
Vietnam |  |  | 8,272 |  |  |  | 8,895 |  |  |  | 7,985 |
Philippines |  |  | 6,115 |  |  |  | 4,399 |  |  |  | 6,003 |
Hong Kong |  |  | 1,914 |  |  |  | 1,765 |  |  |  | 2,476 |
Other |  |  | 1,100 |  |  |  | 1,146 |  |  |  | 1,282 |
Total Non-United States |  |  | 131,543 |  |  |  | 121,393 |  |  |  | 106,714 |
|  | $ | 371,572 |  |  | $ | 258,914 |  |  | $ | 208,885 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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