PITTSBURGH, Aug. 4, 2009 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) today reported results for its fourth quarter and fiscal year ended June 30, 2009.
During the quarter the Company sold its x-ray and gamma-ray radiation sensor business, eV PRODUCTS, Inc., which operated as a business within the Compound Semiconductor Group. Results for all periods presented reflect the presentation of eV PRODUCTS as a discontinued operation.
Revenues from continuing operations for the quarter decreased 28% to $66,067,000 from $91,809,000 in the fourth quarter of last fiscal year. Revenues from continuing operations for the year ended June 30, 2009 decreased 8% to $292,222,000 from $316,191,000 for the same period last fiscal year.
Bookings from continuing operations for the quarter decreased 38% to $57,245,000 compared to $92,159,000 in the fourth quarter of last fiscal year. Bookings from continuing operations for the year ended June 30, 2009 decreased 24% to $261,129,000 from $345,316,000 for the same period last fiscal year. Bookings from continuing operations are defined as customer orders received that are expected to be converted into revenues during the next 12 months.
Earnings from continuing operations for the quarter were $6,265,000 or $0.21 per share-diluted. These results compare with earnings from continuing operations of $15,351,000 or $0.50 per share-diluted in the fourth quarter of last fiscal year. For the year ended June 30, 2009, earnings from continuing operations were $38,858,000 or $1.29 per share-diluted. This compares with earnings from continuing operations of $65,693,000 or $2.16 per share-diluted for the same period in the last fiscal year, which included a $15,913,000 or $0.52 per share-diluted after-tax gain on the sale of an equity investment.
Francis J. Kramer, president and chief executive officer, said, "Revenues for the fourth quarter increased 3% from the third quarter ended March 31, 2009 and exceeded our guidance. Every business segment outperformed our expectations. Demand for, and growth in, military applications remains strong across all business segments except for the UV Filter product line of our Near-Infrared Optics segment which we previously announced is experiencing a reduction in demand. While the Infrared Optics business continues to experience low levels of industrial demand, operating margins are improving due to cost reduction initiatives begun during the second quarter. We expect these operating improvements to drive bottom line performance when the worldwide economy improves. Fiscal year 2008 was a record-setting year for II-VI revenues, bookings and earnings per share. In fiscal year 2009 we experienced a worldwide economic environment unprecedented in Company history. Yet combined revenues delivered by our Military and Materials and Compound Semiconductor Group businesses increased 10%."
Kramer continued, "Cash from operations together with proceeds from the sale of eV PRODUCTS increased our cash position by more than $12 million during the quarter with our year-end cash increasing to approximately $96 million. We also paid off the $2.5 million balance on our line-of-credit facility and made capital expenditures of approximately $3.3 million -- half of which we invested in our Military and Materials business segment."
Segment Information from Continuing Operations ($000s)
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 Year Ended
June 30, June 30,
% %
Increase Increase
2009 2008 (Decrease) 2009 2008 (Decrease)
-------- -------- -------- -------- -------- --------
Bookings:
Infrared
Optics $ 23,115 $ 43,607 (47)% $119,299 $161,732 (26)%
Near-
Infrared
Optics 9,715 23,359 (58)% 37,774 65,932 (43)%
Military &
Materials 11,895 15,533 (23)% 49,967 61,871 (19)%
Compound
Semi-
conductor
Group 12,520 9,660 30% 54,089 55,781 (3)%
-------- -------- -------- --------
Total
Book-
ings $ 57,245 $ 92,159 (38)% $261,129 $345,316 (24)%
======== ======== ======== ========
Revenues:
Infrared
Optics $ 25,880 $ 43,372 (40)% $130,949 $151,911 (14)%
Near-
Infrared
Optics 10,054 15,269 (34)% 45,559 58,689 (22)%
Military &
Materials 13,948 14,316 (3)% 57,016 50,507 13%
Compound
Semi-
conductor
Group 16,185 18,852 (14)% 58,698 55,084 7%
-------- -------- -------- --------
Total
Reve-
nues $ 66,067 $ 91,809 (28)% $292,222 $316,191 (8)%
======== ======== ======== ========
Segment
Earnings:
Infrared
Optics $ 3,577 $ 10,801 (67)% $ 28,036 $ 36,189 (23)%
Near-
Infrared
Optics 1,308 3,442 (62)% 7,111 11,886 (40)%
Military &
Materials 1,414 1,882 (25)% 6,525 7,065 (8)%
Compound
Semi-
conductor
Group 2,348 2,266 4% 6,173 6,522 (5)%
-------- -------- -------- --------
Total
Segment
Earnings $ 8,647 $ 18,391 (53)% $ 47,845 $ 61,662 (22)%
======== ======== ======== ========
Outlook
For the first fiscal quarter ending September 30, 2009, the Company currently forecasts revenues to range from $57 million to $61 million and earnings per share to range from $0.12 to $0.16. Comparable results for the quarter ended September 30, 2008 were revenues from continuing operations of $87.8 million and earnings per share from continuing operations of $0.57, which included the favorable impact of tax-related matters of approximately $0.12 per share. The first fiscal quarter tends to be lower in revenues due to slight seasonality of European sales.
Under normal conditions, the Company provides guidance for the fiscal year as part of its earnings release. However, given the current economic conditions and limited market visibility, the Company is not yet confident in providing specific revenue and earnings per share guidance for the full fiscal year ending June 30, 2010.
Webcast Information
The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday, August 4, 2009 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://investor.shareholder.com/media/eventdetail.cfm?eventid=70773&CompanyID=IIVI&e=1&mediaKey=7FC911A81023DCCBD70A22918E31F830. 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 two weeks following the call.
Planned Director Retirement
Duncan A.J. Morrison will retire from the Board of Directors when his current term expires at the upcoming Annual Meeting of Shareholders on November 6, 2009. Mr. Morrison has served as a Director of the Company and Chairman of the Company's Audit Committee since 1982. Effective with Mr. Morrison's retirement, it is anticipated that current Director Wendy F. DiCicco will be appointed by the Board of Directors to the role of Audit Committee Chairman. Ms. DiCicco has been a Director and Audit Committee member of the Company since 2006.
Dr. Carl J. Johnson, Chairman, said, "Duncan has been a valuable asset to the Company in his roles as Director and Chairman of the Audit Committee and we will miss his wisdom, insight and counsel. We wish him well in his retirement and thank him for his exemplary 27 years of service to II-VI Incorporated."
About II-VI Incorporated
II-VI Incorporated, the worldwide leader in crystal growth technology, 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 thermoelectronics 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 delivery 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 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 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, including any worsening of the global economic downturn, 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, 2008; (iii) the purchasing patterns from 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; and/or (vi) 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 Year Ended
June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues
Net sales:
Domestic $ 37,154 $ 41,588 $ 153,830 $ 154,980
International 25,497 47,584 127,928 148,922
--------- --------- --------- ---------
62,651 89,172 281,758 303,902
Contract research
and development 3,416 2,637 10,464 12,289
--------- --------- --------- ---------
Total Revenues 66,067 91,809 292,222 316,191
--------- --------- --------- ---------
Costs, Expenses, Other
Expense (Income)
Cost of goods sold $ 39,077 $ 51,907 $ 168,615 $ 176,541
Contract research and
development 2,290 2,053 7,489 9,444
Internal research and
development 2,286 2,346 10,205 7,734
Selling, general and
administrative 13,767 17,112 58,068 60,810
Interest expense 28 26 178 242
Other expense (income),
net 187 (200) 1,402 (2,754)
Gain on sale of equity
investment, pre-tax -- -- -- (26,455)
--------- --------- --------- ---------
Total Costs, Expenses,
Other Expense Income 57,635 73,244 245,957 225,562
--------- --------- --------- ---------
Earnings from Continuing
Operations Before Income
Taxes 8,432 18,565 46,265 90,629
Income Taxes 2,167 3,214 7,407 24,936
--------- --------- --------- ---------
Earnings from Continuing
Operations 6,265 15,351 38,858 65,693
Loss from Discontinued
Operation (including
loss on disposal in
fiscal year 2009 of
$1,979), Net of
Income Taxes (148) (513) (2,077) (1,425)
--------- --------- --------- ---------
Net Earnings $ 6,117 $ 14,838 $ 36,781 $ 64,268
========= ========= ========= =========
Diluted Earnings
Per Share:
Continuing operations $ 0.21 $ 0.50 $ 1.29 $ 2.16
Discontinued operation $ (0.00) $ (0.02) $ (0.07) $ (0.05)
Consolidated $ 0.21 $ 0.49 $ 1.22 $ 2.11
Basic Earnings
Per Share:
Continuing operations $ 0.21 $ 0.52 $ 1.31 $ 2.21
Discontinued operation $ (0.01) $ (0.02) $ (0.07) $ (0.05)
Consolidated $ 0.21 $ 0.50 $ 1.24 $ 2.16
Average Shares
Outstanding - Diluted 29,817 30,558 30,082 30,489
========= ========= ========= =========
Average Shares
Outstanding - Basic 29,528 29,781 29,667 29,691
========= ========= ========= =========
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
June 30, June 30,
2009 2008
--------- ---------
Assets
Current Assets
Cash and cash equivalents $ 95,930 $ 69,835
Marketable securities -- 3,000
Accounts receivable, net 43,109 55,866
Inventories 76,620 69,642
Deferred income taxes 9,705 8,943
Prepaid and refundable income taxes -- 5,368
Prepaid and other current assets 4,943 5,386
Assets-held-for-sale -- 8,229
--------- ---------
Total Current Assets 230,307 226,269
Property, Plant & Equipment, net 86,413 86,331
Goodwill 26,141 26,531
Other Intangible Assets, net 12,271 13,268
Investments 9,548 3,665
Other Assets 3,602 4,862
--------- ---------
Total Assets $ 368,282 $ 360,926
========= =========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 9,242 $ 16,412
Accruals and other current
liabilities 22,821 28,136
Liabilities held-for-sale -- 1,977
--------- ---------
Total Current Liabilities 32,063 46,525
Long-Term Debt 3,665 3,791
Deferred Income Taxes 1,910 5,210
Other Liabilities 8,268 15,274
--------- ---------
Total Liabilities 45,906 70,800
Shareholders' Equity 322,376 290,126
--------- ---------
Total Liabilities and
Shareholders' Equity $ 368,282 $ 360,926
========= =========
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)
Year Ended
June 30,
------------------------
2009 2008
Cash Flows from Operating Activities
Net cash provided by:
Continuing operations $ 48,835 $ 45,456
Discontinued operation 78 460
--------- ---------
Net cash provided by operating
activities 48,913 45,916
--------- ---------
Cash Flows from Investing Activities
Redemption of (investment in)
marketable securities 3,000 (3,000)
Proceeds from sale of equity investment -- 30,236
Additions to property, plant and
equipment (15,557) (17,855)
Investment in unconsolidated business (4,853) --
Payments on deferred purchase price of
businesses (913) (295)
Purchase of business, net of cash
acquired -- (2,387)
Other 45 419
--------- ---------
Net cash (used in) provided by investing
activities:
Continuing operations (18,278) 7,118
Discontinued operation 3,018 (1,527)
--------- ---------
Net cash (used in) provided by
investing activities (15,260) 5,591
--------- ---------
Cash Flows from Financing Activities
Proceeds from exercise of stock options 1,798 3,764
Excess tax benefits from share-based
compensation expense 1,314 4,132
Proceeds from long-term borrowings 7,000 3,000
Payments on long-term borrowings (7,509) (14,749)
Purchase of treasury stock (12,880) (5,865)
--------- ---------
Net cash used in financing activities (10,277) (9,718)
--------- ---------
Effect of exchange rate changes on
cash and cash equivalents 2,719 (4,572)
--------- ---------
Net increase in cash and cash
equivalents 26,095 37,217
Cash and Cash Equivalents at Beginning
of Period 69,835 32,618
--------- ---------
Cash and Cash Equivalents at End of
Period $ 95,930 $ 69,835
========= =========
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 Year Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
EBITDA $ 12,579 $ 22,081 $ 61,797 $106,395
EBITDA excluding pre-tax
gain on sale of equity
investment $ 12,579 $ 22,081 $ 61,797 $ 79,940
Cash paid for capital
expenditures $ 3,273 $ 5,451 $ 15,557 $ 17,855
Net payments on
indebtedness $ 2,500 $ -- $ 509 $ 11,749
Incentive stock option
and performance share
compensation expense,
pre-tax $ 1,152 $ 1,058 $ 4,951 $ 3,980
Cash paid for shares
repurchased through the
Company's stock
repurchase programs $ -- $ -- $ 12,880 $ 5,865
Shares repurchased
through the Company's
stock repurchase programs -- -- 500,000 186,400
Reconciliation of Segment
Earnings and EBITDA to
Earnings Before Income Three Months Ended Year Ended
Taxes June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Total Segment Earnings $ 8,647 $ 18,391 $ 47,845 $ 61,662
Interest expense 28 26 178 242
Other expense (income),
net 187 (200) 1,402 (29,209)
-------- -------- -------- --------
Earnings before income
taxes $ 8,432 $ 18,565 $ 46,265 $ 90,629
======== ======== ======== ========
EBITDA $ 12,579 $ 22,081 $ 61,797 $106,395
Interest expense 28 26 178 242
Depreciation and
amortization 4,119 3,490 15,354 15,524
-------- -------- -------- --------
Earnings before income
taxes $ 8,432 $ 18,565 $ 46,265 $ 90,629
======== ======== ======== ========