Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - II-VI INC | d201452d8k.htm |
| EX-10.1 - EX-10.1 - II-VI INC | d201452dex101.htm |
Exhibit 99.1
II-VI Incorporated Reports Record FY16 Fourth Quarter and Full Year Bookings and Revenues;
Dr. Vincent D. Mattera, Jr. Appointed CEO;
Expanding Platform Investments
PITTSBURGH, August 2, 2016 (GLOBE NEWSWIRE) — II-VI Incorporated (Nasdaq:IIVI) (“II-VI” or the “Company”) today reported results for its fourth fiscal quarter and full year ended June 30, 2016. It also announced its expected investments in R&D platforms, including VCSEL as well as optoelectronic materials and device technologies to address the growing 3D sensing market.
The Company’s Board of Directors has appointed Dr. Vincent D. Mattera, Jr. as President and Chief Executive Officer effective September 1, 2016 following the retirement of current CEO Francis J. Kramer. Dr. Mattera has served as the President since 2014.
Dr. Mattera was a member of the II-VI Board of Directors from 2000 to 2002 before joining the Company in 2004 as a Vice President. Prior to that, he held several leading positions over 20 years at AT&T Bell Laboratories, Lucent Technologies Microelectronics Division, and Agere Systems. Dr. Mattera was re-elected to the Board in 2014.
Francis J. Kramer has served as the CEO since 2007 and will continue as the Chairman of the Board of Directors. Mr. Kramer joined the Company in 1983. In his 33 year tenure, Mr. Kramer led the Company’s growth to become the international market leader it is today. He successfully completed 20 acquisitions in 20 years, drove the Company’s manufacturing and sales footprint, diversified the Company’s product portfolio and established the culture that focuses on the consistent delivery of strategic, profitable growth worldwide.
Francis J. Kramer, Chairman and Chief Executive Officer, said, “FY16 was a solid and exciting year for II-VI. All segments showed progress in the market, contributed to improvements in the Company’s overall margins, and will enter fiscal year 2017 with favorable momentum. Much of this success is due to the strategic moves we’ve made during Chuck Mattera’s tenure with II-VI. I’m very happy to congratulate Chuck on this well-deserved appointment. He will make a great CEO for II-VI, the third in our 45 year history, with his extensive market and technology development experience, his knowledge of our worldwide operations and customers, and his dedication to II-VI. He has a very good and extensive team throughout the Company to support him and we all look forward to his success.”
“Regarding our investments, the additional R&D and capital platform investments we are planning to make over the next four to five quarters are intended to position us to capture a meaningful market share in end markets with expected growth in the billions of dollars over the next several years. Many of these markets are still in the early stages of growth. While there are risks with respect to timing and speed of adoption, the platforms we are targeting build on many technologies in which II-VI has a strong competitive advantage. We expect the returns on our investment to be accretive within the next two years.”
Table 1
$ in Millions, except per share amounts
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Consolidated bookings (1) |
$ | 244.9 | $ | 235.5 | $ | 197.5 | $ | 875.3 | $ | 761.7 | ||||||||||
| Non-GAAP bookings (1)(2) |
$ | 232.8 | $ | 233.3 | $ | 197.5 | $ | 861.0 | $ | 761.7 | ||||||||||
| Consolidated revenues |
$ | 241.4 | $ | 205.1 | $ | 196.7 | $ | 827.2 | $ | 742.0 | ||||||||||
| Non-GAAP revenues (2) |
$ | 231.7 | $ | 200.9 | $ | 196.7 | $ | 813.3 | $ | 742.0 | ||||||||||
| Net earnings |
$ | 14.3 | $ | 14.9 | $ | 17.1 | $ | 65.5 | $ | 66.0 | ||||||||||
| Non-GAAP net earnings (3) |
$ | 25.2 | $ | 21.8 | $ | 17.1 | $ | 83.6 | $ | 58.9 | ||||||||||
| Diluted earnings per share |
$ | 0.23 | $ | 0.24 | $ | 0.27 | $ | 1.04 | $ | 1.05 | ||||||||||
| Non-GAAP diluted earnings per share (3) |
$ | 0.40 | $ | 0.35 | $ | 0.27 | $ | 1.33 | $ | 0.94 | ||||||||||
| Other Selected Financial Metrics |
||||||||||||||||||||
| Gross margin |
38.4 | % | 37.9 | % | 38.1 | % | 37.8 | % | 36.6 | % | ||||||||||
| Return on sales |
5.9 | % | 7.3 | % | 8.7 | % | 7.9 | % | 8.9 | % | ||||||||||
| Non-GAAP return on sales (3) |
10.9 | % | 10.9 | % | 8.7 | % | 10.3 | % | 7.9 | % | ||||||||||
| (1) | Bookings are orders the Company expects to convert to revenues within the next twelve months. |
| (2) | Excludes the Company’s recent acquisitions of EpiWorks and ANADIGICS. See Table 2 for reconciliation. |
| (3) | Excludes acquired businesses and one-time transaction and restructuring expenses in fiscal year 2016 and one-time settlement received in fiscal year 2015 related to certain payment obligations from the prior year. See Tables 7 and 8 for Reconciliation of Reported Earnings to Non-GAAP Earnings. |
| (4) | EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. |
II-VI Incorporated
August 2, 2016
Page 2
As discussed below under “Use of Non-GAAP Financial Measures,” the Company is presenting certain non-GAAP financial measures in this release. Investors should consider non-GAAP adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with generally accepted accounting principles (“GAAP”). Please refer to the attached schedules for the applicable GAAP to non-GAAP reconciliations.
Sale of Certain Non-Strategic RF Business Assets of the former ANADIGICS
In June 2016, the Company completed the sale of certain commercial and product line assets associated with the RF products of the former ANADIGICS, Inc. for $50 million including a potential $5 million earn out. This transaction includes an asset purchase agreement, a supply agreement and other agreements to cooperate in various areas. The Company further completed a restructuring of the remaining business for $7.5 million in severance and lease termination costs to simplify the operations. We achieved a significant reduction of losses in the acquired business, and positioned the organization to support our expanding customers for VCSEL as well as optoelectronic materials and devices.
Expansion in R&D and Capital Expenditures for Platform Investments
The Company previously announced its intention to increase its capability to serve the growing 3D sensing applications initially for the consumer market where it believes it has a compelling competitive advantage. The Company also sees the opportunity to expand its other product lines. Therefore, during fiscal year 2017, the Company plans to increase the investments in R&D and capital equipment to deliver revenues in several areas expected to materialize in the next 12-18 months. The Company’s R&D spending in total is expected to increase 20-25 percent over the annualized fourth quarter FY16 run rate. Its total capital expenditures are expected to increase $40-50 million from FY16 levels.
Expansion of Credit Facility
The Company announced that it has amended and restated its existing credit agreement. This Agreement amends the previous credit facility that would have expired in September of 2018. The Agreement provides up to a $325 million (increased from $225 million) unsecured revolving credit facility and a $100 million unsecured term loan. The Company has the option to request an increase to the size of the Amended Credit Facility in an aggregate additional amount not to exceed $100 million. The Agreement was concluded on similar or better terms than the prior credit agreement and has an expiration date of July 28, 2021.
Outlook
The outlook for the first fiscal quarter ending September 30, 2016 is revenue of $210 million to $225 million and earnings per share of $0.22 to $0.27. The additional R&D investment in the first fiscal quarter is expected to be around $0.10 per share. This is all at prevailing exchange rates and all earnings per share comments refer to diluted shares. Comparable results for the quarter ended September 30, 2015 were revenues of $189.2 million and diluted earnings per share of $0.27. As discussed in more detail below, actual results may differ from these forecasts due to various factors including, but not limited to, changes in product demand, competition and general economic conditions.
II-VI Incorporated
August 2, 2016
Page 3
Segment Information
Operating income is defined as earnings before income taxes, interest expense and other expense or income, net.
Table 2
$ in Millions
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Bookings: |
||||||||||||||||||||
| Non-GAAP II-VI Laser Solutions |
$ | 76.6 | $ | 79.6 | $ | 74.5 | $ | 291.7 | $ | 284.8 | ||||||||||
| Acquired businesses |
12.1 | 2.2 | — | 14.3 | — | |||||||||||||||
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| Consolidated II-VI Laser Solutions |
$ | 88.7 | $ | 81.8 | $ | 74.5 | $ | 306.0 | $ | 284.8 | ||||||||||
| II-VI Photonics |
106.5 | 103.0 | 78.5 | 372.2 | 282.9 | |||||||||||||||
| II-VI Performance Products |
49.7 | 50.7 | 44.5 | 197.1 | 194.0 | |||||||||||||||
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| Total Bookings |
$ | 244.9 | $ | 235.5 | $ | 197.5 | $ | 875.3 | $ | 761.7 | ||||||||||
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| Revenues: |
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| Non-GAAP II-VI Laser Solutions |
$ | 77.7 | $ | 69.6 | $ | 74.1 | $ | 289.1 | $ | 287.9 | ||||||||||
| Acquired Businesses |
9.7 | 4.2 | — | 13.9 | — | |||||||||||||||
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| Consolidated II-VI Laser Solutions |
$ | 87.4 | $ | 73.8 | $ | 74.1 | $ | 303.0 | $ | 287.9 | ||||||||||
| II-VI Photonics |
99.1 | 80.6 | 72.0 | 325.9 | 260.8 | |||||||||||||||
| II-VI Performance Products |
54.9 | 50.7 | 50.6 | 198.3 | 193.3 | |||||||||||||||
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| Total Revenues |
$ | 241.4 | $ | 205.1 | $ | 196.7 | $ | 827.2 | $ | 742.0 | ||||||||||
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| Operating Income (Loss): |
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| Non-GAAP II-VI Laser Solutions |
$ | 20.8 | $ | 12.3 | $ | 15.8 | $ | 56.8 | $ | 55.0 | ||||||||||
| Acquired Businesses |
(13.4 | ) | (6.9 | ) | — | (20.6 | ) | — | ||||||||||||
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| Consolidated II-VI Laser Solutions |
$ | 7.4 | $ | 5.4 | $ | 15.8 | $ | 36.2 | $ | 55.0 | ||||||||||
| II-VI Photonics |
14.5 | 9.6 | 4.1 | 37.8 | 7.2 | |||||||||||||||
| II-VI Performance Products |
7.0 | 4.4 | 3.3 | 17.8 | 14.6 | |||||||||||||||
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| Total Operating Income |
$ | 28.9 | $ | 19.4 | $ | 23.2 | $ | 91.8 | $ | 76.8 | ||||||||||
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| Non-GAAP Operating Income |
$ | 42.3 | $ | 26.3 | $ | 23.2 | $ | 112.4 | $ | 76.8 | ||||||||||
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| Operating Margin: |
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| Non-GAAP II-VI Laser Solutions |
26.8 | % | 17.7 | % | 21.3 | % | 19.6 | % | 19.1 | % | ||||||||||
| Consolidated II-VI Laser Solutions |
8.5 | % | 7.3 | % | 21.3 | % | 11.9 | % | 19.1 | % | ||||||||||
| II-VI Photonics |
14.6 | % | 11.9 | % | 5.7 | % | 11.6 | % | 2.8 | % | ||||||||||
| II-VI Performance Products |
12.8 | % | 8.7 | % | 6.5 | % | 9.0 | % | 7.6 | % | ||||||||||
| Total Operating Margin |
12.0 | % | 9.5 | % | 11.8 | % | 11.1 | % | 10.4 | % | ||||||||||
| Total Non-GAAP Operating Margin |
18.3 | % | 13.1 | % | 11.8 | % | 13.8 | % | 10.4 | % | ||||||||||
II-VI Incorporated
August 2, 2016
Page 4
Table 3 is a reconciliation of Operating Income reported in this press release to reported Net Earnings.
Table 3
$ in Millions
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Non-GAAP operating income |
$ | 42.3 | $ | 26.3 | $ | 23.2 | $ | 112.4 | $ | 76.8 | ||||||||||
| Acquired businesses and one-time expenses |
13.4 | 6.9 | — | 20.6 | — | |||||||||||||||
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| Operating income |
$ | 28.9 | $ | 19.4 | $ | 23.2 | $ | 91.8 | $ | 76.8 | ||||||||||
| Interest expense |
1.1 | 0.8 | 0.8 | 3.1 | 3.9 | |||||||||||||||
| Other expense (income), net |
(0.4 | ) | 1.3 | (0.1 | ) | (1.3 | ) | (6.2 | ) | |||||||||||
| Income taxes |
13.9 | 2.4 | 5.4 | 24.5 | 13.1 | |||||||||||||||
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| Net Earnings |
$ | 14.3 | $ | 14.9 | $ | 17.1 | $ | 65.5 | $ | 66.0 | ||||||||||
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Income tax expense in the quarter ended June 30, 2016 includes $8.7 million or $0.14 per diluted share representing a valuation allowance on certain U.S. tax assets.
Table 4 is a reconciliation of Operating Income reported in this press release to reported EBITDA.
Table 4
$ in Millions
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Operating income |
$ | 28.9 | $ | 19.4 | $ | 23.2 | $ | 91.8 | $ | 76.8 | ||||||||||
| Depreciation and amortization |
14.9 | 14.7 | 13.9 | 56.7 | 53.1 | |||||||||||||||
| Other income (expense) |
0.4 | (1.3 | ) | 0.1 | 1.3 | 6.2 | ||||||||||||||
| Acquired businesses and one-time expenses, pre-tax |
13.0 | 7.1 | — | 20.3 | — | |||||||||||||||
| Acquired depreciation and amortization |
(1.5 | ) | (0.8 | ) | — | (2.3 | ) | — | ||||||||||||
| Settlement agreement |
— | — | — | — | (7.7 | ) | ||||||||||||||
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| Non-GAAP EBITDA |
$ | 55.7 | $ | 39.1 | $ | 37.2 | $ | 167.8 | $ | 128.4 | ||||||||||
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Table 5 is a reconciliation of EBITDA reported in this press release to reported Net Earnings.
II-VI Incorporated
August 2, 2016
Page 5
Table 5
$ in Millions
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Non-GAAP EBITDA |
$ | 55.7 | $ | 39.1 | $ | 37.2 | $ | 167.8 | $ | 128.4 | ||||||||||
| Non-GAAP EBITDA margin (3)(4) |
24.0 | % | 27.7 | % | 18.9 | % | 20.6 | % | 17.3 | % | ||||||||||
| Acquired businesses and one-time expenses, pre-tax |
$ | (13.0 | ) | $ | (7.1 | ) | $ | — | $ | (20.3 | ) | $ | — | |||||||
| Acquired depreciation and amortization |
1.5 | 0.8 | — | 2.3 | — | |||||||||||||||
| Settlement agreement |
— | — | — | — | 7.7 | |||||||||||||||
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| EBITDA |
$ | 44.2 | $ | 32.8 | $ | 37.2 | $ | 149.8 | $ | 136.1 | ||||||||||
| EBITDA margin (4) |
18.3 | % | 16.0 | % | 18.9 | % | 18.1 | % | 18.3 | % | ||||||||||
| Interest expense |
$ | 1.1 | $ | 0.8 | $ | 0.8 | $ | 3.1 | $ | 3.9 | ||||||||||
| Depreciation and amortization |
14.9 | 14.7 | 13.9 | 56.7 | 53.1 | |||||||||||||||
| Income taxes |
13.9 | 2.4 | 5.4 | 24.5 | 13.1 | |||||||||||||||
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| Net Earnings |
$ | 14.3 | $ | 14.9 | $ | 17.1 | $ | 65.5 | $ | 66.0 | ||||||||||
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II-VI Incorporated
August 2, 2016
Page 6
Table 6 is a table of other selected financial information.
Table 6
$ Millions, except share information
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Cash paid for capital expenditures |
$ | 25.5 | $ | 13.5 | $ | 12.1 | $ | 58.2 | $ | 52.3 | ||||||||||
| Net borrowings (payments) on indebtedness |
$ | (27.2 | ) | $ | 116.2 | $ | (12.0 | ) | $ | 59.5 | $ | (65.5 | ) | |||||||
| Share-based compensation expense, pre-tax |
$ | 1.2 | $ | 1.6 | $ | 2.8 | $ | 9.7 | $ | 11.4 | ||||||||||
| Cash paid for shares repurchased through the Company’s share repurchase program |
$ | — | $ | — | $ | — | $ | 6.3 | $ | 12.7 | ||||||||||
| Shares repurchased through the Company’s share repurchase program |
— | — | — | 380,538 | 936,049 | |||||||||||||||
| Average diluted shares outstanding |
63,297,333 | 63,052,772 | 62,767,763 | 62,909,031 | 62,586,294 | |||||||||||||||
Webcast Information
The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday, August 2, 2016 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 website at www.ii-vi.com as well as at http://tinyurl.com/jpzs27g. A replay of the webcast will be available for two weeks following the call.
Use of Non-GAAP Financial Measures
The Company has disclosed adjusted financial measurements in this press release that present financial information considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although the Company’s management uses these measurements as an aid in monitoring the Company’s on-going financial performance. The adjusted non-GAAP net earnings and adjusted non-GAAP earnings per share measure the earnings of the Company, excluding non-recurring or unusual items that are considered by management to be outside of the Company’s standard operations. EBITDA is an adjusted non-GAAP financial measurement that is considered by management to be useful in measuring the profitability between companies within the industry by reflecting operating results of the Company excluding non-operating factors. There are limitations associated with the use of non-GAAP financial measures, including that such measures may not be entirely comparable to similarly titled measures used by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance that items excluded from the non-GAAP financial measures will not occur in the future, or that there could be cash costs associated with items excluded from the non-GAAP financial measures. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.
II-VI Incorporated
August 2, 2016
Page 7
About II-VI Incorporated
II-VI Incorporated, a global leader in engineered materials and optoelectronic components and devices, is a vertically integrated manufacturing company that develops innovative products for diversified applications in the industrial, optical communications, military, life sciences, semiconductor equipment, and consumer markets. Headquartered in Saxonburg, Pennsylvania, with research and development, manufacturing, sales, service, and distribution facilities worldwide, the Company produces a wide variety of application-specific photonic and electronic materials and components, and deploys them in various forms including integrated with advanced software to enable our customers.
Forward-looking Statements
This press release contains forward-looking statements relating to future events and expectations that are based on certain assumptions and contingencies. 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 in this release have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global 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, 2015; (iii) the purchasing patterns of customers and end-users; (iv) the 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; (vi) the Company’s ability to assimilate recently acquired businesses, and risks, costs and uncertainties associated with such acquisitions; and/or (vii) the Company’s ability to devise and execute strategies to respond to market conditions. The Company disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or developments, or otherwise.
II-VI Incorporated
August 2, 2016
Page 8
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
($000 except per share data)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2016 | 2016 | 2015 | ||||||||||
| Revenues |
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| Net sales: |
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| Domestic |
$ | 83,740 | $ | 74,884 | $ | 75,233 | ||||||
| International |
157,730 | 130,221 | 121,450 | |||||||||
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| Total Revenues |
241,470 | 205,105 | 196,683 | |||||||||
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| Costs, Expenses & Other Expense (Income) |
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| Cost of goods sold |
148,859 | 127,436 | 121,687 | |||||||||
| Internal research and development |
20,102 | 14,946 | 12,598 | |||||||||
| Selling, general and administrative |
43,595 | 43,333 | 39,185 | |||||||||
| Interest expense |
1,066 | 769 | 777 | |||||||||
| Other expense (income), net |
(429 | ) | 1,257 | (97 | ) | |||||||
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| Total Costs, Expenses, & Other Expense (Income) |
213,193 | 187,741 | 174,150 | |||||||||
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| Earnings Before Income Taxes |
28,277 | 17,364 | 22,533 | |||||||||
| Income Taxes |
13,934 | 2,426 | 5,464 | |||||||||
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| Net Earnings |
$ | 14,343 | $ | 14,938 | $ | 17,069 | ||||||
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| Diluted Earnings Per Share |
$ | 0.23 | $ | 0.24 | $ | 0.27 | ||||||
| Basic Earnings Per Share |
$ | 0.23 | $ | 0.24 | $ | 0.28 | ||||||
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| Average Shares Outstanding - Diluted |
63,297 | 63,053 | 62,768 | |||||||||
| Average Shares Outstanding - Basic |
61,707 | 61,369 | 61,154 | |||||||||
II-VI Incorporated
August 2, 2016
Page 9
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
($000 except per share data)
| Year Ended | ||||||||
| June 30, | June 30, | |||||||
| 2016 | 2015 | |||||||
| Revenues |
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| Net sales: |
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| Domestic |
$ | 303,552 | $ | 274,142 | ||||
| International |
523,664 | 467,819 | ||||||
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| Total Revenues |
827,216 | 741,961 | ||||||
|
|
|
|
|
|||||
| Costs, Expenses & Other Expense (Income) |
||||||||
| Cost of goods sold |
514,403 | 470,363 | ||||||
| Internal research and development |
60,354 | 51,260 | ||||||
| Selling, general and administrative |
160,646 | 143,539 | ||||||
| Interest expense |
3,081 | 3,863 | ||||||
| Other expense (income), net |
(1,223 | ) | (6,176 | ) | ||||
|
|
|
|
|
|||||
| Total Costs, Expenses, & Other Expense (Income) |
737,261 | 662,849 | ||||||
|
|
|
|
|
|||||
| Earnings Before Income Taxes |
89,955 | 79,112 | ||||||
| Income Taxes |
24,469 | 13,137 | ||||||
|
|
|
|
|
|||||
| Net Earnings |
$ | 65,486 | $ | 65,975 | ||||
|
|
|
|
|
|||||
| Diluted Earnings Per Share |
$ | 1.04 | $ | 1.05 | ||||
| Basic Earnings Per Share |
$ | 1.07 | $ | 1.08 | ||||
|
|
|
|
|
|||||
| Average Shares Outstanding - Diluted |
62,909 | 62,586 | ||||||
| Average Shares Outstanding - Basic |
61,366 | 61,219 | ||||||
II-VI Incorporated
August 2, 2016
Page 10
| II-VI Incorporated and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) ($000)
|
||||||||
| June 30, | June 30, | |||||||
| 2016 | 2015 | |||||||
| Assets |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 218,445 | $ | 173,634 | ||||
| Accounts receivable |
164,817 | 140,772 | ||||||
| Inventories |
175,133 | 164,388 | ||||||
| Deferred income taxes |
— | 13,260 | ||||||
| Prepaid and refundable income taxes |
6,535 | 6,881 | ||||||
| Prepaid and other current assets |
18,033 | 14,033 | ||||||
|
|
|
|
|
|||||
| Total Current Assets |
582,963 | 512,968 | ||||||
| Property, plant & equipment, net |
242,857 | 203,812 | ||||||
| Goodwill |
233,755 | 195,894 | ||||||
| Other intangible assets, net |
124,590 | 122,462 | ||||||
| Investment |
11,354 | 11,914 | ||||||
| Deferred income taxes |
15,009 | 2,210 | ||||||
| Other assets |
9,224 | 8,904 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 1,219,752 | $ | 1,058,164 | ||||
|
|
|
|
|
|||||
| Liabilities and Shareholders’ Equity |
||||||||
| Current Liabilities |
||||||||
| Current portion of long-term debt |
$ | 20,000 | $ | 20,000 | ||||
| Accounts payable |
53,796 | 45,275 | ||||||
| Accruals and other current liabilities |
97,446 | 73,881 | ||||||
|
|
|
|
|
|||||
| Total Current Liabilities |
171,242 | 139,156 | ||||||
| Long-term debt |
215,917 | 155,957 | ||||||
| Deferred income taxes |
13,141 | 7,105 | ||||||
| Other liabilities |
37,114 | 26,865 | ||||||
|
|
|
|
|
|||||
| Total Liabilities |
437,414 | 329,083 | ||||||
| Total Shareholders’ Equity |
782,338 | 729,081 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Shareholders’ Equity |
$ | 1,219,752 | $ | 1,058,164 | ||||
|
|
|
|
|
|||||
II-VI Incorporated
August 2, 2016
Page 11
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)
| Year Ended | ||||||||
| June 30, | ||||||||
| 2016 | 2015 | |||||||
| Cash Flows from Operating Activities |
||||||||
| Net cash provided by operating activities |
$ | 122,970 | $ | 129,366 | ||||
|
|
|
|
|
|||||
| Cash Flows from Investing Activities |
||||||||
| Additions to property, plant & equipment |
(58,170 | ) | (52,313 | ) | ||||
| Proceeds from the sale of business |
45,000 | — | ||||||
| Purchases of businesses, net of cash acquired |
(122,157 | ) | — | |||||
| Other investing activities |
161 | 67 | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(135,166 | ) | (52,246 | ) | ||||
|
|
|
|
|
|||||
| Cash Flows from Financing Activities |
||||||||
| Proceeds from borrowings |
125,200 | 3,000 | ||||||
| Payments on borrowings |
(65,700 | ) | (68,500 | ) | ||||
| Purchases of treasury stock |
(6,284 | ) | (12,729 | ) | ||||
| Payments on earn-out arrangement |
— | (2,350 | ) | |||||
| Proceeds from exercises of stock options |
9,653 | 5,196 | ||||||
| Other financing activities |
(1,417 | ) | (681 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
61,452 | (76,064 | ) | |||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash and cash equivalents |
(4,445 | ) | (2,082 | ) | ||||
| Net increase (decrease) in cash and cash equivalents |
44,811 | (1,026 | ) | |||||
| Cash and Cash Equivalents at Beginning of Period |
173,634 | 174,660 | ||||||
|
|
|
|
|
|||||
| Cash and Cash Equivalents at End of Period |
$ | 218,445 | $ | 173,634 | ||||
|
|
|
|
|
|||||
II-VI Incorporated
August 2, 2016
Page 12
Table 7
II-VI Incorporated and Subsidiaries
Reconciliation of Selected Non-GAAP Financial Measurements
($ Millions, except per share amounts)
Reconciliation of Reported Earnings to Non-GAAP Earnings
(Unaudited)
| Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| 2016 | 2016 | 2015 | ||||||||||
| Reported Earnings |
$ | 14.3 | $ | 14.9 | $ | 17.1 | ||||||
| Add back acquired businesses |
||||||||||||
| EpiWorks and ANADIGICS |
4.4 | 1.8 | — | |||||||||
| Add back one-time items: |
||||||||||||
| Acquisition transaction expenses and one-time expenses |
6.7 | 5.3 | — | |||||||||
| Income tax impact on one-time items |
(0.2 | ) | (0.2 | ) | — | |||||||
|
|
|
|
|
|
|
|||||||
| Adjusted Non-GAAP Earnings |
$ | 25.2 | $ | 21.8 | $ | 17.1 | ||||||
|
|
|
|
|
|
|
|||||||
| Per share data: |
||||||||||||
| Reported Earnings: |
||||||||||||
| Earnings - Diluted Earnings Per Share |
$ | 0.23 | $ | 0.24 | $ | 0.27 | ||||||
|
|
|
|
|
|
|
|||||||
| Earnings - Basic Earnings Per Share |
$ | 0.23 | $ | 0.24 | $ | 0.28 | ||||||
|
|
|
|
|
|
|
|||||||
| Per share, After-Tax Impact of Special Items on: |
||||||||||||
| Earnings - Diluted Earnings Per Share |
$ | 0.17 | $ | 0.11 | $ | — | ||||||
|
|
|
|
|
|
|
|||||||
| Earnings - Basic Earnings Per Share |
$ | 0.18 | $ | 0.11 | $ | — | ||||||
|
|
|
|
|
|
|
|||||||
| Adjusted Non-GAAP Earnings: |
||||||||||||
| Adjusted Non-GAAP Earnings - Diluted Earnings Per Share |
$ | 0.40 | $ | 0.35 | $ | 0.27 | ||||||
|
|
|
|
|
|
|
|||||||
| Adjusted Non-GAAP Earnings - Basic Earnings Per Share |
$ | 0.41 | $ | 0.36 | $ | 0.28 | ||||||
|
|
|
|
|
|
|
|||||||
II-VI Incorporated
August 2, 2016
Page 13
Table 8
II-VI Incorporated and Subsidiaries
Reconciliation of Selected Non-GAAP Financial Measurements
($ Millions, except per share amounts)
Reconciliation of Reported Earnings to Non-GAAP Earnings
(Unaudited)
| Year Ended | ||||||||
| June 30, | June 30, | |||||||
| 2016 | 2015 | |||||||
| Reported Earnings |
$ | 65.5 | $ | 66.0 | ||||
| Add back acquired businesses |
||||||||
| EpiWorks and ANADIGICS |
6.3 | — | ||||||
| Add back one-time items: |
||||||||
| Acquisition transaction expenses and one-time expenses |
12.3 | — | ||||||
| Subtract: |
||||||||
| Settlement agreement |
— | (7.7 | ) | |||||
| Income tax impact on unusual items |
(0.5 | ) | 0.6 | |||||
|
|
|
|
|
|||||
| Adjusted Non-GAAP Earnings |
$ | 83.6 | $ | 58.9 | ||||
|
|
|
|
|
|||||
| Per share data: |
||||||||
| Reported Earnings: |
||||||||
| Earnings - Diluted Earnings Per Share |
$ | 1.04 | $ | 1.05 | ||||
|
|
|
|
|
|||||
| Earnings - Basic Earnings Per Share |
$ | 1.07 | $ | 1.08 | ||||
|
|
|
|
|
|||||
| Per share, After-Tax Impact of Special Items on: |
||||||||
| Earnings - Diluted Earnings Per Share |
$ | 0.29 | $ | (0.11 | ) | |||
|
|
|
|
|
|||||
| Earnings - Basic Earnings Per Share |
$ | 0.29 | $ | (0.12 | ) | |||
|
|
|
|
|
|||||
| Adjusted Non-GAAP Earnings: |
||||||||
| Adjusted Non-GAAP Earnings - Diluted Earnings Per Share |
$ | 1.33 | $ | 0.94 | ||||
|
|
|
|
|
|||||
| Adjusted Non-GAAP Earnings - Basic Earnings Per Share |
$ | 1.36 | $ | 0.96 | ||||
|
|
|
|
|
|||||
| CONTACT: | II-VI Incorporated | |
| Mary Jane Raymond, Chief Financial Officer | ||
| (724) 352-4455 |
# # # #