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Segment Reporting

6 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Segment Reporting

Note 13. Segment 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.

As discussed in Note 1, the Company realigned the composition of its operating segments. The Company moved Laser Systems Group from II-VI Laser Solutions to II-VI Photonics and moved IPI from II-VI Photonics to II-VI Performance Products.  All applicable segment information has been restated to reflect this change.

In September and November 2018, the Company completed its acquisitions of CoAdna and an additional product line. See Note 4. Acquisitions.  The operating results of these acquisitions have been reflected in the selected financial information of the Company’s II-VI Photonics segment since the date of the acquisitions.

The accounting policies are consistent across each of the segments. To the extent possible, the Company’s corporate expenses and assets are allocated to the segments. The Company evaluates segment performance based upon reported segment operating income, which is defined as earnings before income taxes, interest and other income or expense. Eliminations and Other include eliminating inter-segment sales and transfers as well as transaction costs related to the Finisar transaction.

The following tables summarize selected financial information of the Company’s operations by segment ($000):

		Three Months Ended December 31, 2018
		II-VI								II-VI
		Laser				II-VI				Performance				Eliminations &
		Solutions				Photonics				Products				Other				Total
Revenues		$	105,577			$	159,694			$	77,568			$	-			$	342,839
Inter-segment revenues			13,632				2,440				6,059				(22,131	)			-
Operating income (expense)			12,222				23,087				11,400				(7,103	)			39,606
Interest expense			-				-				-				-				(5,580	)
Other income (expense), net			-				-				-				-				701
Income taxes			-				-				-				-				(6,025	)
Net earnings			-				-				-				-				28,702
Depreciation and amortization			10,626				6,462				5,241				-				22,329
Segment assets			697,948				697,856				481,331				-				1,877,134
Expenditures for property, plant & equipment			15,301				11,223				11,945				-				38,468
Investments			-				-				76,441				-				76,441

		Three Months Ended December 31, 2017
		II-VI								II-VI
		Laser				II-VI				Performance				Eliminations &
		Solutions				Photonics				Products				Other				Total
Revenues		$	105,033			$	115,304			$	61,133			$	-			$	281,470
Inter-segment revenues			6,887				5,497				6,320				(18,704	)			-
Operating income (expense)			9,442				16,237				6,807				-				32,486
Interest expense			-				-				-				-				(4,644	)
Other income (expense), net			-				-				-				-				2,026
Income taxes			-				-				-				-				(20,272	)
Net earnings			-				-				-				-				9,596
Depreciation and amortization			8,829				5,669				4,911				-				19,409
Expenditures for property, plant & equipment			23,422				7,893				8,082				-				39,397

		Six Months Ended December 31, 2018
		II-VI								II-VI
		Laser				II-VI				Performance				Eliminations &
		Solutions				Photonics				Products				Other				Total
Revenues		$	211,752			$	294,850			$	150,670			$	-			$	657,272
Inter-segment revenues			27,185				5,336				11,721				(44,242	)			-
Operating income (expense)			24,532				38,999				20,391				(7,103	)			76,819
Interest expense			-				-				-				-				(11,164	)
Other income (expense), net			-				-				-				-				1,414
Income taxes			-				-				-				-				(12,218	)
Net earnings			-				-				-				-				54,851
Depreciation and amortization			21,473				12,661				10,365				-				44,499
Expenditures for property, plant & equipment			26,894				23,274				23,219				-				73,386

		Six Months Ended December 31, 2017
		II-VI								II-VI
		Laser				II-VI				Performance				Eliminations &
		Solutions				Photonics				Products				Other				Total
Revenues		$	192,969			$	231,244			$	118,760			$	-			$	542,973
Inter-segment revenues			14,067				8,360				12,310				(34,737	)			-
Operating income (expense)			12,094				35,663				14,504				-				62,261
Interest expense			-				-				-				-				(8,289	)
Other income (expense), net			-				-				-				-				2,796
Income taxes			-				-				-				-				(26,030	)
Net earnings			-				-				-				-				30,737
Depreciation and amortization			17,053				11,176				9,996				-				38,225
Expenditures for property, plant & equipment			36,183				17,676				22,965				-				76,823

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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