XML 45 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Segment and Geographic Reporting
 12 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment and Geographic Reporting Segment and Geographic 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.
Effective July 1, 2019, the Company realigned the composition of its operating segments. The Company combined II-VI Laser Solutions and II-VI Performance Products and renamed the combined segment Compound Semiconductors.  All applicable segment information has been restated to reflect this change. Additionally, the Company changed the name of II-VI Photonics to Photonic Solutions.
The Company reports its financial results in two segments, 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 Compound Semiconductors segment has locations in the United States, Singapore, China, Germany, Switzerland, Japan, Belgium, the United Kingdom, Italy, South Korea, the Philippines, Vietnam, Sweden, and Taiwan. This segment designs, manufactures and markets: (i) optical and electro-optical components and materials sold under the II-VI Infrared brand name and used primarily in high-power CO2 lasers, fiber-delivered beam delivery systems and processing tools and direct diode lasers for industrial lasers sold under the II-VI HIGHYAG and II-VI Laser Enterprise brand names; (ii) infrared optical components and high-precision optical assemblies for aerospace and defense, medical and commercial laser imaging applications; (iii) semiconductor lasers and detectors for optical interconnects and sensing applications with InP; and (iv) unique engineered materials for thermoelectric and silicon carbide applications servicing the semiconductor, aerospace and defense and medical markets. Compound Semiconductors also manufactures compound semiconductor epitaxial wafers for applications in optical components, wireless devices, and high-speed communication systems and manufactures 6-inch GaAs wafers allowing for the production of high performance lasers and integrated circuits in high volume sold under the II-VI EpiWorks and II-VI OptoElectronic Devices Division brand names.
The Photonic Solutions segment has locations in the United States, China, Vietnam, Germany, Japan, the United Kingdom, Italy, Malaysia, Australia, and Hong Kong. This segment manufactures crystal materials, optics, microchip lasers and optoelectronic modules for use in optical communication networks and other diverse consumer and commercial applications.  In addition, the segment manufactures pump lasers, optical isolators, and optical amplifiers and micro-optics for optical amplifiers, for both terrestrial and submarine applications within the optical communications market.
In September 2019, the Company completed its acquisition of Finisar. See Note 3. The operating results of this acquisition have been reflected in the selected financial information of the Company’s Photonic Solutions segment and Compound Semiconductors Segment beginning on October 1, 2019, with the results from September 24, 2019 to September 30, 2019 reflected in Unallocated and Other.
The accounting policies are consistent across both of the segments. To the extent possible, the Company’s corporate expenses are allocated to the segments. The Company evaluates segment performance based upon reported segment operating income, which is defined as earnings from continuing operations before income taxes, interest and other income or expense. Unallocated and Other include eliminating inter-segment sales and transfers as well as transaction costs related to the pending Finisar acquisition.
The following tables summarize selected financial information of the Company’s operations by segment:
Photonic SolutionsCompound SemiconductorsUnallocated
& Other		Total
($000)
2020
Revenues$1,536,790 $821,230 $22,051 $2,380,071 
Inter-segment revenues31,515 164,884 (196,399)— 
Operating income (loss)49,930 62,279 (72,730)39,479 
Interest expense— — — (89,409)
Other income (expense), net— — — (13,998)
Income taxes— — — (3,101)
Net earnings (loss)— — — (67,029)
Depreciation and amortization112,203 104,936 3,743 220,882 
Expenditures for property, plant & equipment45,795 88,318 2,764 136,877 
Segment assets3,502,467 1,732,247 — 5,234,714 
Goodwill1,052,494 186,515 — 1,239,009 

Photonic SolutionsCompound SemiconductorsUnallocated
& Other		Total
($000)
2019
Revenues$638,889 $723,607 $— $1,362,496 
Inter-segment revenues12,568 94,405 (106,973)— 
Operating income (loss)81,898 82,414 (15,643)148,668 
Interest expense— — — (22,417)
Other income (expense), net— — — 2,562 
Income taxes— — — (21,296)
Net earnings— — — 107,517 
Depreciation and amortization26,273 66,092 — 92,365 
Expenditures for property, plant & equipment44,851 83,899 — 128,750 
Segment assets681,610 1,272,163 — 1,953,773 
Goodwill134,057 185,721 — 319,778 

Photonic SolutionsCompound SemiconductorsUnallocated
& Other		Total
($000)
2018
Revenues$486,485 $672,309 $— $1,158,794 
Inter-segment revenues24,867 37,723 (62,591)— 
Operating income63,152 73,611 — 136,763 
Interest expense— — — (18,352)
Other income, net— — — 3,783 
Income taxes— — — (34,192)
Net earnings— — — 88,002 
Depreciation and amortization23,242 57,528 — 80,770 
Expenditures for property, plant & equipment36,122 125,201 — 161,323 
Geographic information for revenues from the legal country of origin, and long-lived assets from the country of origin, which include property, plant and equipment, net of related depreciation, and certain other long-term assets, were as follows:
Revenues
Year Ended June 30,202020192018
($000)
United States$1,432,492 $405,404 $373,735 
Non-United States
Hong Kong299,359 319,601 186,978 
China292,138 290,287 253,672 
Japan146,325 109,670 89,153 
Germany124,934 155,000 132,161 
Switzerland35,895 32,770 49,557 
Vietnam22,152 22,322 26,898 
Korea8,537 11,674 9,757 
Singapore5,791 6,868 5,941 
Philippines4,479 4,179 3,909 
United Kingdom4,226 2,712 9,359 
Taiwan3,743 2,005 1,705 
Belgium— 4 4,511 
Italy— — 11,458 
Total Non-United States947,579 957,092 785,059 
$2,380,071 $1,362,496 $1,158,794 

Long-Lived Assets
June 30,20202019
($000)
United States$754,815 $345,866 
Non-United States
China369,544 108,688 
United Kingdom55,028 60,369 
Malaysia46,162 — 
Switzerland37,129 35,592 
Sweden24,270 — 
Germany18,631 14,857 
Australia12,321 — 
Vietnam11,140 11,656 
Philippines7,607 7,793 
Korea3,438 — 
Hong Kong2,870 5,032 
Other1,965 1,190 
Total Non-United States590,105 245,177 
$1,344,920 $591,043