PITTSBURGH, Aug. 8 -
FlashResults
II-VI Incorporated (IIVI)
(Numbers in Thousands, Except
Per Share Data)
4th quarter ended 4th quarter ended
6/30/2005 YTD 6/30/2004 YTD
Sales $57,007 $194,040 $42,990 $150,848
Net Income $6,830 $24,843 $6,024 $17,337
Average Shares 29,876 29,909 29,560 29,436
EPS $0.23 $0.83 $0.20 $0.59
II-VI Incorporated (Nasdaq: IIVI) today reported results for its fourth quarter and fiscal year ended June 30, 2005. Net earnings for the quarter were a record $6,830,000 ($0.23 per share-diluted). These results compare with net earnings of $6,024,000 ($0.20 per share-diluted) in the fourth quarter of last fiscal year. For the fiscal year ended June 30, 2005, net earnings were a record $24,843,000 ($0.83 per share-diluted). This compares with net earnings of $17,337,000 ($0.59 per share-diluted) last fiscal year. These results include contributions from Marlow Industries, Inc. (Marlow), the Company's recently acquired subsidiary, during the quarter and in seven of the twelve months ended June 30, 2005.
All per share data for this quarter and former periods cited in this press release have been adjusted to account for the two-for-one split of the Company's common shares paid as a stock dividend to shareholders of record on March 2, 2005 and distributed on March 22, 2005.
Bookings for the quarter increased 10% to $50,436,000 compared to $45,702,000 in the fourth quarter of last fiscal year. Bookings for the year ended June 30, 2005 increased 15% to $187,776,000 from $162,775,000 last fiscal year. Bookings are defined as customer orders received that are expected to be converted into revenues during the next 12 months. Bookings for the year ended June 30, 2005 exclude approximately $11.7 million in backlog received from Marlow at the time of its acquisition by the Company.
Revenues for the quarter increased 33% to a record $57,007,000 from $42,990,000 in the fourth quarter of last fiscal year. Revenues for the year ended June 30, 2005 increased 29% to a record $194,040,000 from $150,848,000 last fiscal year.
Francis J. Kramer, president and chief operating officer, said, "We are pleased to report II-VI's financial and operational achievements in both the quarter and fiscal year ended June 30, 2005. Double-digit growth in bookings and revenues for our infrared optics and near-infrared optics products for the year attests to strong customer demand, while the acquisition of Marlow further accelerated growth. We continue to increase our manufacturing capacity to meet demand and have nearly completed significant facility expansions in Saxonburg, Pennsylvania and Singapore, as well as a new production site in Vietnam. We expect fiscal year 2006 to be another year of solid performance by II-VI."
Segment Bookings and Revenues
Bookings for the quarter for infrared optics increased 16% to $26.8 million from $23.1 million in the fourth quarter of last fiscal year. Bookings for the fiscal year ended June 30, 2005 for infrared optics increased 13% to $102.0 million from $90.4 million last fiscal year. Revenues for the quarter for infrared optics increased 16% to $28.2 million from $24.2 million in the fourth quarter of the last fiscal year. Revenues for the year ended June 30, 2005 for infrared optics increased 16% to $101.3 million from $87.7 million last fiscal year.
Bookings for the quarter for near-infrared optics decreased 36% to $7.4 million from $11.5 million in the fourth quarter of last fiscal year; bookings for the year-ago quarter included approximately $2.7 million of orders for the UV filter product line while none were received in the just completed quarter. Bookings for the year ended June 30, 2005 for near-infrared optics increased 11% to $33.5 million from $30.2 million last fiscal year. Revenues for the quarter for near-infrared optics increased 16% to $9.1 million from $7.9 million in the fourth quarter of the last fiscal year. Revenues for the year ended June 30, 2005 for near-infrared optics increased 32% to $33.9 million from $25.8 million last fiscal year.
Bookings for the quarter for military infrared optics increased 9% to $9.5 million from $8.7 million in the fourth quarter of the last fiscal year. Bookings for the year ended June 30, 2005 for military infrared optics decreased 14% to $25.0 million from $29.2 million last fiscal year. Revenues for the quarter for military infrared optics increased 15% to $8.3 million from $7.3 million in the fourth quarter of the last fiscal year. Revenues for the year ended June 30, 2005 for military infrared optics increased 8% to $27.3 million from $25.3 million last fiscal year.
Bookings for the quarter for the "Compound Semiconductor Group" (primarily the Marlow Industries, Inc. subsidiary, the eV PRODUCTS division and the Wide Bandgap Materials group) were $6.7 million, including $6.9 million from Marlow, compared to $2.3 million in the fourth quarter of the last fiscal year. During the quarter the eV PRODUCTS division received order cancellations of approximately $1.9 million. Bookings for the year ended June 30, 2005 for this group were $27.3 million, including $17.3 million from Marlow, compared to $13.0 million last fiscal year. Revenues for the quarter from this group were $11.3 million, including $8.2 million of revenues from Marlow, compared to $3.6 million in the fourth quarter of last fiscal year. Revenues for the year ended June 30, 2005 for this group were $31.5 million, including $19.8 million from Marlow, compared to $12.1 million last fiscal year.
Outlook
For the first fiscal quarter ending September 30, 2005, the Company currently forecasts revenues to range from $54 million to $55 million and earnings per share to range from $0.19 to $0.20. For the fiscal year ending June 30, 2006, the Company expects revenues to range from $216 million to $222 million and earnings per share to range from $0.84 to $0.88. Earnings per share guidance for the quarter ending September 30, 2005 and fiscal year ending June 30, 2006 reflects implementation of Statement of Financial Accounting Standards No. 123 (Revised 2004) "Share-Based Payment" (FAS 123(R)). FAS 123(R) requires expensing the calculated fair value of incentive stock options. This non-cash stock option charge currently is expected to reduce earnings per share by approximately $0.01 to $0.02 in the quarter ending September 30, 2005 and approximately $0.06 to $0.08 in the fiscal year ending June 30, 2006. As discussed in more detail below, actual results may differ from these forecasts due to numerous factors including changes in product demand, competition and general economic conditions.
Webcast Information
The Company will host a conference call at 10:00 a.m. Eastern Time on Tuesday, August 9, 2005 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 http://www.ii-vi.com as well as at http://phx.corporate-ir.net/playerlink.zhtml?c=65340&s=wm&e=1109630. Please allow extra time prior to the call to visit the site and, if needed, download the media software required to listen to the Internet broadcast. A replay of the webcast will be available for 2 weeks following the call.
Headquartered in Saxonburg, Pennsylvania, II-VI Incorporated designs, manufactures and markets optical and opto-electronic components, devices and materials for infrared, near-infrared, visible light, x-ray and gamma ray instrumentation. The Company's infrared optics business manufactures optical and opto-electronic components sold under the II-VI brand name and used primarily in CO2 lasers. The Company's near-infrared optics business 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 at the Company's VLOC subsidiary. The Company's military infrared optics business manufactures infrared products for military applications under the Exotic Electro-Optics (EEO) brand name. In the Company's Compound Semiconductor Group, the eV PRODUCTS division manufactures and markets solid-state x-ray and gamma-ray sensor products and materials for use in medical, industrial, environmental, scientific and homeland security applications; the Company's 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; Marlow Industries, Inc. designs and manufacturers thermoelectric cooling and power generation solutions for use in defense, space, photonics, telecommunications, medical, consumer and industrial markets.
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 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 Company's ability to successfully integrate Marlow's operations into the Company's organization and to realize synergies in material growth and utilization of our worldwide manufacturing and distribution networks; (ii) the failure of any one or more of the assumptions stated above to prove to be correct; (iii) 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, 2004; (iv) purchasing patterns from customers and end-users; (v) timely release of new products, and acceptance of such new products by the market; (vi) the introduction of new products by competitors and other competitive responses; and/or (vii) the Company's ability to devise and execute strategies to respond to market conditions.
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)
Three Months Ended
June 30,
2005 2004
Revenues
Net $54,162 $40,663
sales
Contract research and development 2,845 2,327
57,007 42,990
Costs, Expenses & Other (Income) Expense
Cost of goods sold 30,739 22,976
Contract research and development 1,859 1,960
Internal research and development 1,805 1,252
Selling, general and administrative 12,507 9,199
Interest expense 373 60
Other expense, net 449 137
47,732 35,584
Earnings Before Income Taxes 9,275 7,406
Income Taxes 2,445 1,382
Net Earnings $6,830 $6,024
Diluted Earnings Per Share $0.23 $0.20
Diluted Shares Outstanding 29,876 29,560
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)
(000 except per share data)
Year Ended
June 30,
2005 2004
Revenues
Net $184,634 $142,162
sales
Contract research and development 9,406 8,686
194,040 150,848
Costs, Expenses & Other (Income) Expense
Cost of goods sold 104,877 79,558
Contract research and development 6,787 7,135
Internal research and development 5,847 4,965
Selling, general and administrative 41,895 34,359
Interest expense 945 412
Other (income) expense, net (261) 2
160,090 126,431
Earnings Before Income Taxes 33,950 24,417
Income Taxes 9,107 7,080
Net Earnings $24,843 $17,337
Diluted Earnings Per Share $0.83 $0.59
Diluted Shares Outstanding 29,909 29,436
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
June 30, June 30,
2005 2004
Assets
Current Assets
Cash and cash equivalents $21,675 $21,683
Accounts receivable, net 35,023 25,540
Inventories 44,916 29,201
Deferred income taxes 6,960 4,561
Prepaids and other current assets 2,202 1,595
Total Current Assets 110,776 82,580
Property, Plant & Equipment, net 77,900 62,339
Goodwill 39,537 28,987
Investment 2,249 1,888
Other Intangible Assets, net 16,332 5,852
Other Assets 4,922 2,288
$251,716 $183,934
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $10,073 $8,337
Current portion of long-term debt 3,801 7,550
Other current liabilities 23,048 19,909
Total Current Liabilities 36,922 35,796
Long-Term Debt - less current portion 41,180 7,986
Other Liabilities, primarily deferred 14,748 8,285
income taxes
Shareholders' Equity 158,866 131,867
$251,716 183,934
II-VI Incorporated and Subsidiaries
Condensed Segment and Other Selected Financial Information (Unaudited)
($000)
The following segment and other financial information includes segment
earnings (defined as earnings before income taxes, interest expense and
other income or expense, net) and earnings before interest, income taxes,
depreciation and amortization (EBITDA). Management believes segment
earnings are a useful performance measure because they reflect the
results of segment performance over which management has direct control.
Similarly, EBITDA reflects operating profitability before certain non-
operating expenses and non-cash charges.
Three Months Ended Year Ended
June 30, June 30,
Segment Information 2005 2004 2005 2004
Revenues
Infrared Optics $28,220 $24,230 $101,295 $87,652
Near-Infrared Optics 9,149 7,879 33,917 25,786
Military Infrared Optics 8,339 7,276 27,310 25,322
Compound Semiconductor Group 11,299 3,605 31,518 12,088
Total Revenues $57,007 $42,990 $194,040 $150,848
Segment earnings (loss)
Infrared Optics $8,803 $6,423 $32,748 $23,564
Near-Infrared Optics 665 999 2,317 2,350
Military Infrared Optics 773 371 1,046 886
Compound Semiconductor Group (144) (190) (1,477) (1,969)
Total Segment Earnings $10,097 $7,603 $34,634 $24,831
Three Months Ended Year Ended
June 30, June 30,
Other Selected Financial
Information 2005 2004 2005 2004
Earnings before interest,
income taxes, depreciation
and amortization (EBITDA) $13,356 $9,858 $47,600 $34,461
Cash paid for capital
expenditures $7,447 $3,840 $19,141 $12,729
Net borrowings (payments) on
indebtedness $3,435 $(2,387) $29,475 $(8,423)
II-VI Incorporated and Subsidiaries
Condensed Segment and Other Selected Financial Information (Unaudited)
(cont.)
($000)
Reconciliation of Segment Earnings and EBITDA
to Earnings Before Income Taxes
Three Months Ended Year Ended
June 30, June 30,
2005 2004 2005 2004
Total Segment Earnings $10,097 $7,603 $34,634 $24,831
Interest expense 373 60 945 412
Other (income) expense, net 449 137 (261) 2
Earnings before income
taxes $9,275 $7,406 $33,950 $24,417
EBITDA $13,356 $9,858 $47,600 $34,461
Interest expense 373 60 945 412
Depreciation and
amortization 3,708 2,392 12,705 9,632
Earnings before
income taxes $9,275 $7,406 $33,950 $24,417
