EX-99 3 ex9901.txt EXHIBIT 99.01 Release Date: January 21, 2004 Contact: Craig A. Creaturo Chief Accounting Officer and Treasurer (724) 352-4455 ccreaturo@ii-vi.com Homepage: www.ii-vi.com II-VI INCORPORATED REPORTS SECOND QUARTER EARNINGS ON RECORD REVENUES AND RECORD BOOKINGS PITTSBURGH, PA., January 21, 2004 -- II-VI Incorporated (NASDAQ NMS: IIVI) today reported results for its second fiscal quarter ended December 31, 2003. Net earnings for the quarter were $3,424,000 ($0.23 per share- diluted). These results compare with net earnings of $2,769,000 ($0.19 per share-diluted) in the second quarter of last fiscal year. For the six months ended December 31, 2003, net earnings were $6,538,000 ($0.45 per share-diluted). This compares with net earnings of $4,975,000 ($0.35 per share-diluted) for the same period last fiscal year. Bookings for the quarter increased 28% to a record $41,110,000 compared to $32,033,000 in the second quarter of last fiscal year. Bookings for the six months ended December 31, 2003 increased 13% to $75,692,000 from $66,906,000 for the same period last year. Bookings are defined as customer orders received that are expected to be converted into revenues during the next 12 months. Revenues for the quarter increased 10% to a record $34,635,000 from $31,431,000 in the second quarter of last fiscal year. Revenues for the six months ended December 31, 2003 increased 9% to $68,729,000 from $63,002,000 for the same period last fiscal year. Francis J. Kramer, president and chief operating officer said, "Record quarterly bookings and our third consecutive quarter of record revenues indicate strong demand for II-VI products across most markets. However, orders for near-infrared optics used in semiconductor manufacturing have not yet recovered. If demand from that industry were to improve during the second half of our fiscal year, our growth in this business area will accelerate. In the meantime, we continue to execute our plan for revenue and earnings growth while producing strong cash flow; this strategy enables us to continue to pay down debt, to invest in developing technologies and to make strategic capital investments to power future growth." Segment Bookings and Revenues Bookings for the quarter for infrared optics increased 19% to $21.9 million from $18.4 million in the second quarter of last fiscal year. Bookings for the six months ended December 31, 2003 for infrared optics increased 13% to $44.2 million from $39.1 million for the same period last fiscal year. Revenues for the quarter for infrared optics increased 13% to $19.9 million from $17.6 million in the second quarter of the last fiscal year. Revenues for the six months ended December 31, 2003 for infrared optics increased 11% to $39.8 million from $35.9 million for the same period last fiscal year. Bookings for the quarter for near-infrared optics increased 40% to $7.0 million from $5.0 million in the second quarter of last fiscal year. Bookings for the six months ended December 31, 2003 for near-infrared optics decreased 3% to $11.6 million from $11.9 million for the same period last fiscal year. Revenues for the quarter for near-infrared optics decreased 9% to $5.2 million from $5.7 million in the second quarter of the last fiscal year. Revenues for the six months ended December 31, 2003 for near-infrared optics held steady at $11.1 million compared to the same period last fiscal year. Bookings for the quarter for military optics increased 58% to $10.6 million from $6.7 million in the second quarter of the last fiscal year. Bookings for the six months ended December 31, 2003 for military optics increased 48% to $16.7 million from $11.3 million for the same period last fiscal year. Revenues for the quarter for military optics increased 12% to $6.5 million compared to $5.8 million in the second quarter of the last fiscal year. Revenues for the six months ended December 31, 2003 for military optics increased 5% to $12.2 million from $11.6 million for the same period last fiscal year. Combined bookings for the quarter for the "Other" category for segment reporting purposes (which primarily represent the eV PRODUCTS division and the Wide Bandgap Materials group) were $1.6 million compared to $2.0 million in the second quarter of the last fiscal year. Combined bookings for the six months ended December 31, 2003 for these same groups were $3.2 million compared to $4.6 million for the same period last fiscal year. Revenues for the quarter from these groups were $3.0 million compared to $2.3 million in the second quarter of last fiscal year. Revenues for the six months ended December 31, 2003 for these same groups were $5.6 million compared to $4.3 million for the same period last fiscal year. Outlook For the third fiscal quarter ending March 31, 2004, the Company currently forecasts revenues to range from $34 million to $36 million and earnings per share to range from $0.21 to $0.24. For the fiscal year ending June 30, 2004, the Company currently expects revenues to range from $139 million to $143 million and earnings per share to range from $0.92 to $0.98. As discussed in more detail below, actual results may differ from these forecasts due to factors such as 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 Thursday, January 22, 2004 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://www.firstcallevents.com/service/ajwz396789808gf12.html. 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 and Laser Power brand names and used primarily in high-power CO2 lasers. The Company's near-infrared optics business manufactures near-infrared and visible light products for industrial, scientific and medical instruments and laser gain material 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 brand name. The Company's eV PRODUCTS division manufactures and markets solid-state x-ray and gamma-ray detection materials and products for use in medical, industrial, environmental and scientific applications. The Company's Wide Bandgap Materials (WBG) group manufactures and markets single crystal silicon carbide substrates for use in solid-state lighting, wireless infrastructure, RF electronics and power switching industries. This press release contains forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934. Any information which is not historical in nature constitutes such forward-looking statements. Actual results may differ from the results described in any forward-looking statements due to, among other things, changes in market demand for infrared, near-infrared and military infrared optics, and products of the eV PRODUCTS division and Wide Bandgap Materials group, the Company's ability to maintain or increase market share, the Company's ability to effectively address market opportunities, and general market and economic conditions throughout the world. Additional information on potential factors that could affect the Company's financial results was included in the Company's Form 10-K for the year ended June 30, 2003 as filed with the Securities and Exchange Commission. CONTACT: Craig A. Creaturo, Chief Accounting Officer and Treasurer of II-VI Incorporated, 724-352-4455, or e-mail, ccreaturo@ii-vi.com. II-VI Incorporated and Subsidiaries Condensed Consolidated Statements of Earnings (Unaudited) (000 except per share data) Three Months Ended December 31, 2003 2002 -------- -------- Revenues Net sales $32,973 $28,898 Contract research and development 1,662 2,533 -------- -------- 34,635 31,431 -------- -------- Costs, Expenses & Other (Income) Expense Cost of goods sold 18,991 17,540 Contract research and development 1,376 2,132 Internal research and development 1,367 552 Selling, general and administrative 7,782 6,692 Interest expense 117 247 Other (income) expense, net (149) 601 -------- -------- 29,484 27,764 -------- -------- Earnings Before Income Taxes 5,151 3,667 Income Taxes 1,727 898 -------- -------- Net Earnings $ 3,424 $ 2,769 ======== ======== Diluted Earnings Per Share $ 0.23 $ 0.19 ======== ======== Average Shares Outstanding - Diluted 14,668 14,408 II-VI Incorporated and Subsidiaries Condensed Consolidated Statements of Earnings (Unaudited) (000 except per share data) Six Months Ended December 31, 2003 2002 -------- -------- Revenues Net sales $65,026 $58,107 Contract research and development 3,703 4,895 -------- -------- 68,729 63,002 -------- -------- Costs, Expenses & Other (Income) Expense Cost of goods sold 37,057 35,627 Contract research and development 3,367 4,376 Internal research and development 2,454 1,511 Selling, general and administrative 16,008 13,887 Interest expense 251 525 Other (income) expense, net (240) 487 -------- -------- 58,897 56,413 -------- -------- Earnings Before Income Taxes 9,832 6,589 Income Taxes 3,294 1,614 -------- -------- Net Earnings $ 6,538 $ 4,975 ======== ======== Diluted Earnings Per Share $ 0.45 $ 0.35 ======== ======== Average Shares Outstanding - Diluted 14,654 14,388 II-VI Incorporated and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) ($000) December 31, June 30, 2003 2002 ------------ --------- Assets Current Assets Cash and cash equivalents $ 15,259 $ 15,583 Accounts receivable, net 21,126 22,086 Inventories 28,067 24,384 Deferred income taxes 3,489 3,794 Other current assets 1,750 1,968 --------- --------- Total Current Assets 69,691 67,815 Property, Plant & Equipment, net 59,920 57,954 Goodwill, net 28,987 28,987 Investment 1,785 1,792 Other Intangible Assets, net 6,309 4,643 Other Assets 2,189 1,602 --------- --------- $168,881 $162,793 ========= ========= Liabilities and Shareholders' Equity Current Liabilities Accounts payable $ 5,461 $ 6,115 Current portion of long-term debt 7,549 6,923 Other current liabilities 14,954 14,577 --------- --------- Total Current Liabilities 27,964 27,615 Long-Term Debt-less current portion 13,057 16,782 Other Liabilities, primarily deferred income taxes 8,119 6,875 Shareholders' Equity 119,741 111,521 --------- --------- $168,881 $162,793 ========= ========= 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 Six Months Ended December 31, December 31, --------------------- ------------------- Segment Information 2003 2002 2003 2002 ------------------- -------- -------- -------- ------- Revenues Infrared Optics $19,891 $17,572 $39,797 $35,926 Near-Infrared Optics 5,181 5,679 11,132 11,146 Military Infrared Optics 6,517 5,799 12,199 11,593 Other 3,046 2,381 5,601 4,337 ------------------- -------- -------- -------- ------- Total Revenues $34,635 $31,431 $68,729 $63,002 ======== ======== ======== ======= Segment earnings (loss) Infrared Optics $ 5,158 $ 4,416 $10,609 $ 8,647 Near-Infrared Optics 148 396 692 758 Military Infrared Optics 245 234 239 491 Other (432) (531) (1,697) (2,295) ------------------- -------- -------- -------- ------- Total Segment Earnings $ 5,119 $ 4,515 $ 9,843 $ 7,601 ======== ======== ======== ======= Three Months Ended Six Months Ended December 31, December 31, Other Selected --------------------- ------------------- Financial Information 2003 2002 2003 2002 ---------------------- -------- -------- -------- ------- Earnings before interest, $7,655 $6,376 $14,828 $11,997 income taxes, depreciation and amortization (EBITDA) Cash paid for capital $2,966 $1,086 $ 5,719 $ 2,852 expenditures Payments on indebtedness, $2,385 $2,517 $ 3,397 $ 3,853 net of borrowings 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 Six Months Ended December 31, December 31, --------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- ------- Total Segment Earnings $5,119 $4,515 $9,843 $7,601 Interest expense 117 247 251 525 Other (income) expense, net (149) 601 (240) 487 -------- -------- -------- ------- Earnings before $5,151 $3,667 $9,832 $6,589 income taxes ======== ======== ======== ======= EBITDA $7,655 $6,376 $14,828 $11,997 Interest expense 117 247 251 525 Depreciation and 2,387 2,462 4,745 4,883 amortization -------- -------- -------- ------- Earnings before $5,151 $3,667 $ 9,832 $ 6,589 income taxes ======== ======== ======== ======= # # # #