Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
PENNSYLVANIA | |||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Zip Code) | |||||||||||
(Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page No. | |||||||||||
Condensed Consolidated Balance Sheets – December 31, 2020 and June 30, 2020 (Unaudited) | |||||||||||
Condensed Consolidated Statements of Earnings (Loss) – Three and six months ended December 31, 2020 and 2019 (Unaudited) | |||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and six months ended December 31, 2020 and 2019 (Unaudited) | |||||||||||
Condensed Consolidated Statements of Cash Flows – Six months ended December 31, 2020 and 2019 (Unaudited) | |||||||||||
Condensed Consolidated Statements of Shareholders’ Equity – Three and six months ended December 31, 2020 and 2019 | |||||||||||
December 31, 2020 | June 30, 2020 | ||||||||||
Assets | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable - less allowance for doubtful accounts of $ and $ | |||||||||||
Inventories | |||||||||||
Prepaid and refundable income taxes | |||||||||||
Prepaid and other current assets | |||||||||||
Total Current Assets | |||||||||||
Property, plant & equipment, net | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Deferred income taxes | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Shareholders' Equity | |||||||||||
Current Liabilities | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued compensation and benefits | |||||||||||
Operating lease current liabilities | |||||||||||
Accrued income taxes payable | |||||||||||
Other accrued liabilities | |||||||||||
Total Current Liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred income taxes | |||||||||||
Operating lease liabilities | |||||||||||
Other liabilities | |||||||||||
Total Liabilities | |||||||||||
Shareholders' Equity | |||||||||||
Preferred stock, | |||||||||||
Common stock, | |||||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Total Shareholders' Equity | |||||||||||
Total Liabilities and Shareholders' Equity | $ | $ |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Revenues | $ | $ | |||||||||
Costs, Expenses, and Other Expense (Income) | |||||||||||
Cost of goods sold | |||||||||||
Internal research and development | |||||||||||
Selling, general and administrative | |||||||||||
Interest expense | |||||||||||
Other expense (income), net | ( | ||||||||||
Total Costs, Expenses, & Other Expense (Income) | |||||||||||
Earnings (Loss) Before Income Taxes | ( | ||||||||||
Income Tax Expense (Benefit) | ( | ||||||||||
Net Earnings (Loss) | $ | $ | ( | ||||||||
Series A Mandatory Convertible Preferred Stock Dividends | |||||||||||
Net Earnings (Loss) available to the Common Shareholders | $ | $ | ( | ||||||||
Basic Earnings (Loss) Per Share | $ | $ | ( | ||||||||
Diluted Earnings (Loss) Per Share | $ | $ | ( |
Six Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Revenues | $ | $ | |||||||||
Costs, Expenses, and Other Expense (Income) | |||||||||||
Cost of goods sold | |||||||||||
Internal research and development | |||||||||||
Selling, general and administrative | |||||||||||
Interest expense | |||||||||||
Other expense (income), net | |||||||||||
Total Costs, Expenses, & Other Expense (Income) | |||||||||||
Earnings (Loss) Before Income Taxes | ( | ||||||||||
Income Tax Expense (Benefit) | ( | ||||||||||
Net Earnings (Loss) | $ | $ | ( | ||||||||
Series A Mandatory Convertible Preferred Stock Dividends | |||||||||||
Net Earnings (Loss) available to the Common Shareholders | $ | $ | ( | ||||||||
Basic Earnings (Loss) Per Share | $ | $ | ( | ||||||||
Diluted Earnings (Loss) Per Share | $ | $ | ( |
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net earnings (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustments | |||||||||||||||||||||||
Change in fair value of interest rate swap, net of taxes of $ | |||||||||||||||||||||||
Pension adjustment, net of taxes of ($ | ( | ( | |||||||||||||||||||||
Comprehensive income (loss) | $ | $ | ( | $ | $ | ( |
Six Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash Flows from Operating Activities | |||||||||||
Net earnings (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Share-based compensation expense | |||||||||||
Amortization of discount on convertible debt and debt issuance costs | |||||||||||
Debt extinguishment costs | |||||||||||
Losses on foreign currency remeasurements and transactions | |||||||||||
Earnings from equity investments | ( | ( | |||||||||
Deferred income taxes | ( | ||||||||||
Increase (decrease) in cash from changes in (net of effect of acquisitions): | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Income taxes | ( | ||||||||||
Accrued compensation and benefits | ( | ( | |||||||||
Other operating net assets (liabilities) | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash Flows from Investing Activities | |||||||||||
Additions to property, plant & equipment | ( | ( | |||||||||
Purchases of businesses, net of cash acquired | ( | ( | |||||||||
Other investing activities | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows from Financing Activities | |||||||||||
Proceeds from issuance of common shares | |||||||||||
Proceeds from issuance of preferred shares | |||||||||||
Proceeds from borrowings of Term A Facility | |||||||||||
Proceeds from borrowings of Term B Facility | |||||||||||
Proceeds from borrowings of Revolving Credit Facility | |||||||||||
Proceeds from borrowings under prior Credit Facility | |||||||||||
Payments on Finisar Notes | ( | ||||||||||
Payments on borrowings under prior Term Loan, Credit Facility and other loans | ( | ||||||||||
Payments on borrowings under Term A Facility | ( | ( | |||||||||
Payments on borrowings under Term B Facility | ( | ( | |||||||||
Payments on borrowings under Revolving Credit Facility | ( | ( | |||||||||
Debt issuance costs | ( | ||||||||||
Equity issuance costs | ( | ||||||||||
Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan | |||||||||||
Common stock repurchase | ( | ||||||||||
Payments in satisfaction of employees' minimum tax obligations | ( | ( | |||||||||
Payment of dividends | ( | ||||||||||
Other financing activities | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | |||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and Cash Equivalents at Beginning of Period | |||||||||||
Cash and Cash Equivalents at End of Period | $ | $ | |||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Additions to property, plant & equipment included in accounts payable | $ | $ |
Common Stock | Preferred Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2020 | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Share-based and deferred compensation activities | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap, net of taxes of $ | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
Common Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2019 | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2019 | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Share-based and deferred compensation activities | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Common Stock Repurchase | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap, net of taxes of $ | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Pension adjustment, net of taxes of ($ | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance - December 31, 2019 | $ | $ | ( | $ | ( | $ | ( | $ |
Common Stock | Preferred Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended December 31, 2020 | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based and deferred compensation activities | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in July 2020 underwritten public offering | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap, net of taxes of $ | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||
Six Months Ended December 31, 2019 | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2019 | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Share-based and deferred compensation activities | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Common Stock Repurchase | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Shares issued and related to Finisar acquisition | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap, net of taxes of $ | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Pension adjustment, net of taxes of ($ | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance - December 31, 2019 | $ | $ | ( | $ | ( | $ | ( | $ |
Previously Reported September 30, 2020 | Measurement Period Adjustments (a) | As Adjusted (preliminary) | |||||||||||||||
Assets | |||||||||||||||||
Developed technology | $ | $ | ( | $ | |||||||||||||
Goodwill | |||||||||||||||||
Other assets | |||||||||||||||||
Total assets acquired | $ | $ | ( | $ | |||||||||||||
Liabilities | |||||||||||||||||
Non-interest bearing liabilities | $ | ( | $ | ( | $ | ( | |||||||||||
Deferred tax liability | ( | ( | |||||||||||||||
Total liabilities assumed | ( | ( | |||||||||||||||
Net assets acquired | $ | $ | $ |
Assets | |||||
Developed technology | $ | ||||
Customer lists | |||||
Goodwill | |||||
Property, plant, & equipment | |||||
Right of use asset | |||||
Other assets | |||||
Total assets acquired | $ | ||||
Liabilities | |||||
Non-interest bearing liabilities | $ | ( | |||
Interest bearing liabilities | ( | ||||
Deferred tax liabilities | ( | ||||
Total liabilities assumed | ( | ||||
Net assets acquired | $ |
Three Months Ended December 31, 2020 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Direct Ship Parts | $ | $ | $ | $ | |||||||||||||||||||
Services | |||||||||||||||||||||||
U.S. Government | |||||||||||||||||||||||
Direct Ship Parts | |||||||||||||||||||||||
Services | |||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
Three Months Ended December 31, 2019 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Direct Ship Parts | $ | $ | $ | $ | |||||||||||||||||||
Services | |||||||||||||||||||||||
U.S. Government | |||||||||||||||||||||||
Direct Ship Parts | |||||||||||||||||||||||
Services | |||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
Six Months Ended December 31, 2020 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Direct Ship Parts | $ | $ | $ | $ | |||||||||||||||||||
Services | |||||||||||||||||||||||
U.S. Government | |||||||||||||||||||||||
Direct Ship Parts | |||||||||||||||||||||||
Services | |||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
Six Months Ended December 31, 2019 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Direct Ship Parts | $ | $ | $ | $ | |||||||||||||||||||
Services | |||||||||||||||||||||||
U.S. Government | |||||||||||||||||||||||
Direct Ship Parts | |||||||||||||||||||||||
Services | |||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ |
December 31, 2020 | June 30, 2020 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in progress | |||||||||||
Finished goods | |||||||||||
$ | $ |
December 31, 2020 | June 30, 2020 | ||||||||||
Land and improvements | $ | $ | |||||||||
Buildings and improvements | |||||||||||
Machinery and equipment | |||||||||||
Construction in progress | |||||||||||
Finance lease right-of-use asset | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
$ | $ |
Six Months Ended December 31, 2020 | |||||||||||||||||
Photonic Solutions | Compound Semiconductors | Total | |||||||||||||||
Balance-beginning of period | $ | $ | $ | ||||||||||||||
Goodwill acquired | |||||||||||||||||
Finisar measurement period adjustments | ( | ( | |||||||||||||||
Foreign currency translation | |||||||||||||||||
Balance-end of period | $ | $ | $ |
December 31, 2020 | June 30, 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||
Technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Trade Names | ( | ( | |||||||||||||||||||||||||||||||||
Customer Lists | ( | ( | |||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
December 31, 2020 | June 30, 2020 | ||||||||||
Term A Facility, interest at LIBOR, as defined, plus | $ | $ | |||||||||
Revolving Credit Facility, interest at LIBOR, as defined, plus | |||||||||||
Debt issuance costs, Term A Facility and Revolving Credit Facility | ( | ( | |||||||||
Term B Facility, interest at LIBOR, as defined, plus | |||||||||||
Debt issuance costs, Term B Facility | ( | ||||||||||
( | ( | ||||||||||
Total debt | |||||||||||
Current portion of long-term debt | ( | ( | |||||||||
Long-term debt, less current portion | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Amortization of debt discount and debt issuance costs including initial purchaser discount | ||||||||||||||||||||||||||
Interest expense | $ | $ | $ | |||||||||||||||||||||||
Three Months Ended December 31, 2020 | Six Months Ended December 31, 2020 | ||||||||||
Finance Lease Cost | |||||||||||
Amortization of right-of-use assets | $ | $ | |||||||||
Interest on lease liabilities | |||||||||||
Total finance lease cost | $ | $ | |||||||||
Operating lease cost | |||||||||||
Sublease income | |||||||||||
Total lease cost | $ | $ | |||||||||
Cash Paid for Amounts Included in the Measurement of Lease Liabilities | |||||||||||
Operating cash flows from finance leases | $ | $ | |||||||||
Operating cash flows from operating leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
Weighted-Average Remaining Lease Term (in Years) | |||||||||||
Finance leases | |||||||||||
Operating leases | |||||||||||
Weighted-Average Discount Rate | |||||||||||
Finance leases | % | ||||||||||
Operating leases | % |
Three Months Ended December 31, 2019 | Six Months Ended December 31, 2019 | ||||||||||
Finance Lease Cost | |||||||||||
Amortization of right-of-use assets | $ | $ | |||||||||
Interest on lease liabilities | |||||||||||
Total finance lease cost | |||||||||||
Operating lease cost | |||||||||||
Total lease cost | $ | $ | |||||||||
Cash Paid for Amounts Included in the Measurement of Lease Liabilities | |||||||||||
Operating cash flows from finance leases | $ | $ | |||||||||
Operating cash flows from operating leases | |||||||||||
Financing cash flows from finance leases |
Three Months Ended December 31, 2020 | Six Months Ended December 31, 2020 | ||||||||||
Dividends per share | $ | $ | |||||||||
Series A Mandatory Convertible Preferred Stock dividends ($000) | $ | $ |
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net earnings (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Series A Mandatory Convertible Preferred Stock dividends | ( | ( | |||||||||||||||||||||
Basic earnings (loss) available to common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Add back interest on Convertible Senior Notes Due 2022 | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings (loss) available to common shareholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted average shares | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Common stock equivalents | |||||||||||||||||||||||
Diluted weighted average common shares | |||||||||||||||||||||||
Basic earnings (loss) per common share | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Diluted earnings (loss) per common share | $ | $ | ( | $ | $ | ( |
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Series A Mandatory Convertible Preferred Stock | |||||||||||||||||||||||
Common stock equivalents | |||||||||||||||||||||||
Total anti-dilutive shares |
Three Months Ended December 31, 2020 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Inter-segment revenues | ( | ||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Interest expense | ( | ||||||||||||||||||||||
Other income, net | |||||||||||||||||||||||
Income taxes | ( | ||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Expenditures for property, plant & equipment | |||||||||||||||||||||||
Segment assets | |||||||||||||||||||||||
Goodwill |
Three Months Ended December 31, 2019 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Inter-segment revenues | ( | ||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Interest expense | ( | ||||||||||||||||||||||
Other expense, net | ( | ||||||||||||||||||||||
Income taxes | |||||||||||||||||||||||
Net loss | ( | ||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Expenditures for property, plant & equipment |
Six Months Ended December 31, 2020 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Inter-segment revenues | ( | ||||||||||||||||||||||
Operating income (loss) | |||||||||||||||||||||||
Interest expense | ( | ||||||||||||||||||||||
Other expense, net | ( | ||||||||||||||||||||||
Income taxes | ( | ||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Expenditures for property, plant & equipment |
Six Months Ended December 31, 2019 | |||||||||||||||||||||||
Photonic Solutions | Compound Semiconductors | Unallocated & Other | Total | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Inter-segment revenues | ( | ||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | ||||||||||||||||||||
Interest expense | ( | ||||||||||||||||||||||
Other expense, net | ( | ||||||||||||||||||||||
Income taxes | |||||||||||||||||||||||
Net loss | ( | ||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Expenditures for property, plant & equipment |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
December 31, | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Stock options and cash-based stock appreciation rights | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted share awards and cash-based restricted share unit awards | ||||||||||||||||||||||||||
Performance share awards and cash-based performance share unit awards | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Fair Value | Carrying Value | ||||||||||
II-VI Notes | $ | $ | |||||||||
Finisar Notes |
Foreign Currency Translation Adjustment | Interest Rate Swap | Defined Benefit Pension Plan | Total Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
AOCI - June 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from AOCI | |||||||||||||||||||||||
Net current-period other comprehensive income | |||||||||||||||||||||||
AOCI - December 31, 2020 | $ | $ | ( | $ | ( | $ |
Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | ||||||||||||||||||||||
% of Revenues | % of Revenues | ||||||||||||||||||||||
Total revenues | $ | 786.6 | 100.0 | % | $ | 666.3 | 100.0 | % | |||||||||||||||
Cost of goods sold | 464.1 | 59.0 | 518.0 | 77.7 | |||||||||||||||||||
Gross margin | 322.5 | 41.0 | 148.3 | 22.3 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Internal research and development | 84.9 | 10.8 | 107.7 | 16.2 | |||||||||||||||||||
Selling, general and administrative | 118.9 | 15.1 | 119.2 | 17.9 | |||||||||||||||||||
Interest and other, net | 12.4 | 1.6 | 28.9 | 4.3 | |||||||||||||||||||
Earnings (loss) before income taxes | 106.3 | 13.5 | (107.5) | (16.1) | |||||||||||||||||||
Income taxes | 18.4 | 2.3 | (9.2) | (1.4) | |||||||||||||||||||
Net earnings (loss) | $ | 87.9 | 11.2 | % | $ | (98.2) | (14.7) | % | |||||||||||||||
Diluted earnings (loss) per share | $ | 0.73 | $ | (1.08) |
Six Months Ended December 31, 2020 | Six Months Ended December 31, 2019 | ||||||||||||||||||||||
% of Revenues | % of Revenues | ||||||||||||||||||||||
Total revenues | $ | 1,514.7 | 100.0 | % | $ | 1,006.7 | 100.0 | % | |||||||||||||||
Cost of goods sold | 905.6 | 59.8 | 735.3 | 73.0 | |||||||||||||||||||
Gross margin | 609.1 | 40.2 | 271.4 | 27.0 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Internal research and development | 163.1 | 10.8 | 143.8 | 14.3 | |||||||||||||||||||
Selling, general and administrative | 226.1 | 14.9 | 224.7 | 22.3 | |||||||||||||||||||
Interest and other, net | 54.0 | 3.6 | 40.9 | 4.1 | |||||||||||||||||||
Earnings (loss) before income taxes | 165.9 | 11.0 | (138.0) | (13.7) | |||||||||||||||||||
Income taxes | 31.7 | 2.1 | (13.8) | (1.4) | |||||||||||||||||||
Net earnings (loss) | $ | 134.2 | 8.9 | % | $ | (124.2) | (12.3) | % | |||||||||||||||
Diluted earnings (loss) per share | $ | 1.12 | $ | (1.58) |
Three Months Ended December 31, | % Increase | Six Months Ended December 31, | % Increase | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Revenues | $ | 482.9 | $ | 460.4 | 5% | $ | 980.6 | $ | 601.7 | 63% | |||||||||||||||||||||||||
Operating income (loss) | $ | 48.4 | $ | (60.9) | 179% | $ | 98.9 | $ | (47.9) | 306% |
Three Months Ended December 31, | % Increase | Six Months Ended December 31, | % Increase | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Revenues | $ | 303.7 | $ | 205.9 | 47% | $ | 534.0 | $ | 382.9 | 39% | |||||||||||||||||||||||||
Operating income (loss) | $ | 70.3 | $ | (8.8) | 895% | $ | 121.0 | $ | 17.7 | 584% |
Six Months Ended Dec 31, | |||||||||||
2020 | 2019 | ||||||||||
Net cash provided by operating activities | $ | 355.7 | $ | 56.3 | |||||||
Net proceeds from equity issuance | 883.9 | — | |||||||||
Effect of exchange rate changes on cash and cash equivalents and other items | 26.3 | 1.7 | |||||||||
Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan | 22.4 | 3.1 | |||||||||
Proceeds on long-term borrowings | — | 2,131.0 | |||||||||
Payments on Finisar Notes | — | (560.1) | |||||||||
Debt issuance costs | — | (63.5) | |||||||||
Common stock repurchases | — | (1.6) | |||||||||
Payments under prior term loan and credit facility | — | (176.6) | |||||||||
Payments under new long-term borrowings and credit facility | (819.6) | (83.3) | |||||||||
Additions to property, plant & equipment | (79.3) | (80.3) | |||||||||
Purchases of businesses, net of cash acquired | (34.4) | (1,036.6) | |||||||||
Payments in satisfaction of employees' minimum tax obligations | (6.9) | (15.0) | |||||||||
Payment of dividends | (6.5) | — | |||||||||
Other items | (0.2) | (3.0) |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Dollar Value of Shares That May Yet be Purchased Under the Plan or Program | ||||||||||||||||||||||
October 1, 2020 to October 31, 2020 | 2,841 | $ | 44.11 | — | $ | 27,658,759 | ||||||||||||||||||||
November 1, 2020 to November 30, 2020 | 2,949 | (1) | $ | 61.67 | — | $ | 27,658,759 | |||||||||||||||||||
December 1, 2020 to December 31, 2020 | 9,032 | (1) | $ | 70.33 | — | $ | 27,658,759 | |||||||||||||||||||
Total | 14,822 | $ | 63.58 | — |
Exhibit Number | Description of Exhibit | Reference | ||||||||||||
31.01 | Filed herewith. | |||||||||||||
31.02 | Filed herewith. | |||||||||||||
32.01 | Furnished herewith. | |||||||||||||
32.02 | Furnished herewith. | |||||||||||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document | |||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
II-VI INCORPORATED | ||||||||
(Registrant) | ||||||||
Date: February 9, 2021 | By: | /s/ Vincent D. Mattera, Jr. | ||||||
Vincent D. Mattera, Jr Chief Executive Officer | ||||||||
Date: February 9, 2021 | By: | /s/ Mary Jane Raymond | ||||||
Mary Jane Raymond Chief Financial Officer and Treasurer |
Date: February 9, 2021 | By: | /s/ Vincent D. Mattera, Jr. | ||||||
Vincent D. Mattera, Jr. Chief Executive Officer |
Date: February 9, 2021 | By: | /s/ Mary Jane Raymond | ||||||
Mary Jane Raymond Chief Financial Officer and Treasurer |
Date: February 9, 2021 | By: | /s/ Vincent D. Mattera, Jr. | ||||||
Vincent D. Mattera, Jr. Chief Executive Officer |
Date: February 9, 2021 | By: | /s/ Mary Jane Raymond | ||||||
Mary Jane Raymond Chief Financial Officer and Treasurer |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Jun. 30, 2020 |
|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,248 | $ 1,698 |
Preferred stock, par value (in usd per share) | $ 0 | |
Preferred stock, dividend rate, percentage | 6.00% | |
Preferred stock, shares authorized (in shares) | 5,000,000 | |
Preferred stock, shares issued (in shares) | 2,300,000 | |
Common stock, par value (in usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 118,043,133 | 105,916,068 |
Treasury stock (in shares) | 13,486,364 | 13,356,447 |
Condensed Consolidated Statements of Earnings (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Statement [Abstract] | ||||
Revenues | $ 786,569 | $ 666,331 | $ 1,514,653 | $ 1,006,740 |
Costs, Expenses, and Other Expense (Income) | ||||
Cost of goods sold | 464,103 | 517,991 | 905,623 | 735,260 |
Internal research and development | 84,858 | 107,700 | 163,106 | 143,820 |
Selling, general and administrative | 118,893 | 119,218 | 226,079 | 224,713 |
Interest expense | 15,585 | 28,390 | 32,799 | 35,358 |
Other expense (income), net | (3,153) | 487 | 21,186 | 5,566 |
Total Costs, Expenses, & Other Expense (Income) | 680,286 | 773,786 | 1,348,793 | 1,144,717 |
Earnings (Loss) Before Income Taxes | 106,283 | (107,455) | 165,860 | (137,977) |
Income Tax Expense (Benefit) | 18,383 | (9,242) | 31,694 | (13,766) |
Net Earnings (Loss) | 87,900 | (98,213) | 134,166 | (124,211) |
Series A Mandatory Convertible Preferred Stock Dividends | 6,900 | 0 | 13,340 | 0 |
Net Earnings (Loss) available to the Common Shareholders | $ 81,000 | $ (98,213) | $ 120,826 | $ (124,211) |
Basic Earning (Loss) Per Share (in usd per share) | $ 0.78 | $ (1.08) | $ 1.17 | $ (1.58) |
Diluted Earnings (Loss) Per Share (in usd per share) | $ 0.73 | $ (1.08) | $ 1.12 | $ (1.58) |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ 87,900 | $ (98,213) | $ 134,166 | $ (124,211) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 64,067 | 24,590 | 99,591 | 11,571 |
Change in fair value of interest rate swap, net of taxes of $782 and $630 for the three and six months ended December 31, 2020, respectively, and $989 for both the three and six months ended December 31, 2019 | 2,854 | 3,609 | 2,299 | 3,609 |
Pension adjustment, net of taxes of ($92) and ($69) for the three and six months ended December 31, 2019 | 0 | (251) | 0 | (167) |
Comprehensive income (loss) | $ 154,821 | $ (70,265) | $ 236,056 | $ (109,198) |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Change in fair value of interest rate swap, taxes | $ 782 | $ 989 | $ 630 | $ 989 |
Pension adjustment tax | $ 92 | $ 69 |
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||||||
Change in fair value of interest rate swap, taxes | $ 782 | $ 989 | $ 630 | $ 989 | ||||
Pension adjustment tax | 92 | 69 | ||||||
Stockholders' Equity Attributable to Parent | $ 3,236,813 | $ 2,065,697 | $ 3,236,813 | $ 2,065,697 | $ 3,046,677 | $ 2,076,803 | $ 2,131,194 | $ 1,133,209 |
Basis of Presentation |
6 Months Ended |
---|---|
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe condensed consolidated financial statements of II-VI Incorporated (“II-VI”, the “Company”, “we”, “us” or “our”) for the three and six months ended December 31, 2020 and 2019 are unaudited. In the opinion of management, all adjustments considered necessary for a fair presentation for the periods presented have been included. All adjustments are of a normal recurring nature unless disclosed otherwise. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K dated August 26, 2020. The condensed consolidated results of operations for the three and six months ended December 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year. The Condensed Consolidated Balance Sheet information as of June 30, 2020 was derived from the Company’s audited consolidated financial statements.In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the United States and world. The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of our business including the impact to our suppliers and customers as well as the impact to the countries and markets in which II-VI operates. At the onset of the COVID-19 outbreak, the Company began focusing intensely on mitigating the adverse impacts of COVID-19 on foreign and domestic operations starting by protecting its employees, suppliers and customers. |
Recently Issued Financial Accounting Standards |
6 Months Ended |
---|---|
Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326), which modifies the measurement of expected credit losses on certain types of financial instruments, including trade receivables. The Company adopted this standard on July 1, 2020. The adoption did not have a material impact on the Company's condensed consolidated financial statements.
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Acquisitions and Investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Investments | Acquisitions and Investments Acquisition of Ascatron AB On August 20, 2020, the Company acquired all of the outstanding shares of Ascatron AB, located in Sweden. The acquisition will add essential elements to the Company's vertically integrated silicon carbide technology platform. Purchase price consideration totaled $36.7 million. Due to the timing of the acquisition, the Company is in the process of measuring the fair value of assets acquired and liabilities assumed, including tangible and intangible assets and related deferred income taxes. The following table presents a preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition ($000):
(a) The Company recorded measurement period adjustments to its preliminary acquisition date fair values due to the refinement of its valuation models, assumptions and inputs. The measurement period adjustments were based upon information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the measurement of the amounts recognized at that date. The goodwill is recorded in the Compound Semiconductors segment and is attributed to the workforce acquired as part of the transaction. The goodwill is non-deductible for income tax purposes. Transaction expenses related to the acquisition totaled $2.0 million for six months ended December 31, 2020 and are included in Selling, General and Administrative expenses in the Condensed Consolidated Statements of Earnings. Technology is being amortized with a weighted average remaining life of approximately 17 years. The amount of revenues and net earnings from the acquisition included in the Company’s Condensed Consolidated Statements of Earnings for the three and six months ended December 31, 2020 were insignificant. Purchase of Equity Investment in INNOViON Corporation On October 1, 2020, II-VI acquired the remaining 6.1% interest in INNOViON Corporation ("Innovion") for $4.4 million. Innovion is a provider of ion implantation services supporting unique capabilities in semiconductor materials processing. This acquisition will add essential elements to the Company's vertically integrated silicon carbide technology platform. Through the period ended September 30, 2020, the Company held a 93.9% investment in Innovion which was accounted for as an equity method investment. The Company accounted for the acquisition of the remaining equity of Innovion as a step acquisition, which required remeasurement of the Company's previous ownership interest to fair value prior to completing purchase accounting. Using step acquisition accounting the Company increased the value of its previously held equity investment to its fair value of $66.6 million, which resulted in a gain of approximately $7.0 million, recorded in other expense (income), net in the Condensed Consolidated Statement of Operations. The Company utilized widely accepted income-based, market-based, and cost-based valuation approaches to perform the preliminary purchase price allocation and determine the fair value of the previously held equity method investment. Income-based valuation approaches included the use of the multi-period excess earnings and relief-from-royalty methods for certain acquired intangible assets. Due to the timing of the acquisition, the Company is in the process of measuring the fair value of assets acquired and liabilities assumed, including tangible and intangible assets and related deferred income taxes. The following table presents a preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition ($000):
The goodwill is recorded in the Compound Semiconductor segment and is attributed to the workforce acquired as part of the transaction. The goodwill is non-deductible for income tax purposes. Technology is being amortized with a weighted average remaining life of approximately 16 years. Customer lists are being amortized with a weighted average remaining life of approximately 14 years. Transaction expenses for the six months ended December 31, 2020 were insignificant.
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Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following tables summarize disaggregated revenue by revenue market and product for the three and six months ended December 31, 2020 and 2019 ($000):
Contracts with the United States (“U.S.”) government disclosed above are through its prime contractors. Contract Liabilities Payments received from customers are based on invoices or billing schedules as established in contracts with customers. Contract liabilities relate to billings in advance of performance under the contract. Contract liabilities are recognized as revenue when the performance obligation has been performed. During the six months ended December 31, 2020, the Company recognized revenue of $9.7 million related to customer payments that were included as contract liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2020. The Company had $44.6 million of contract liabilities recorded in the Condensed Consolidated Balance Sheets as of December 31, 2020.
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Inventories |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The components of inventories were as follows ($000):
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consists of the following ($000):
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible AssetsChanges in the carrying amount of goodwill were as follows ($000):
The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill as of December 31, 2020 and June 30, 2020 were as follows ($000):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The components of debt as of the dates indicated were as follows ($000):
Senior Credit Facilities The Company currently has Senior Credit Facilities with Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders party thereto. The Credit Agreement provides for senior secured financing of $2.425 billion in the aggregate, consisting of (i)Aggregate principal amount of $1,255 million for a -year senior secured first-lien term A loan facility (the “Term A Facility”), (ii)Aggregate principal amount of $720 million for a -year senior secured term B loan facility (the “Term B Facility” and together with the Term A Facility, the “Term Loan Facilities”), which was repaid in full during the quarter ended September 30, 2020, and (iii)Aggregate principal amount of $450 million for a -year senior secured first-lien revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan Facilities, the “Senior Credit Facilities”). The Credit Agreement also provides for a letter of credit sub-facility not to exceed $25.0 million and a swing loan sub-facility initially not to exceed $20.0 million. The Term B Facility was repaid in full by the Company subsequent to the public offerings that closed on July 7, 2020. In conjunction with the repayment, the Company paid $0.6 million in associated interest and expensed $24.7 million of debt issuance costs related to the Term B Facility. The Company is obligated to repay the outstanding principal amount of the Term A Facility in quarterly installments equal to 1.25% of the initial aggregate principal amount of the Term A Facility, with the remaining outstanding balance due and payable on the fifth anniversary of the Closing Date. The Company’s obligations under the Senior Credit Facilities are guaranteed by each of the Company’s existing or future direct and indirect domestic subsidiaries, including Finisar Corporation ("Finisar") and its domestic subsidiaries (collectively, the “Guarantors”). Borrowings under the Senior Credit Facilities are collateralized by a first priority lien in substantially all of the assets of the Company and the Guarantors, except that no real property is collateral under the Senior Credit Facilities. All amounts outstanding under the Senior Credit Facilities will become due and payable 120 days prior to the maturity of the Company’s currently outstanding 0.25% Convertible Senior Notes due 2022 (the “II-VI Notes”) if (i) the II-VI Notes remain outstanding, and (ii) the Company has insufficient cash and borrowing availability to repay the principal amount of the II-VI Notes. Amounts outstanding under the Senior Credit Facilities will bear interest at a rate per annum equal to an applicable margin over a eurocurrency rate or an applicable margin over a base rate determined by reference to the highest of (a) the federal funds rate plus 0.50%, (b) Bank of America, N.A.’s prime rate and (c) a eurocurrency rate plus 1.00%, in each case as calculated in accordance with the terms of the Credit Agreement. The applicable interest rate would increase under certain circumstances relating to events of default. The Company has entered into an interest rate swap contract to hedge its exposure to interest rate risk on its variable rate borrowings under the Senior Credit Facilities. Refer to Note 15 for further information regarding this interest rate swap. The Credit Agreement contains customary affirmative and negative covenants with respect to the Senior Credit Facilities, including limitations with respect to liens, investments, indebtedness, dividends, mergers and acquisitions, dispositions of assets and transactions with affiliates. The Company will be obligated to maintain a consolidated interest coverage ratio (as calculated in accordance with the terms of the Credit Agreement) as of the end of each fiscal quarter of not less than 3.00 to 1.00. The Company will be obligated to maintain a consolidated total net leverage ratio (as calculated in accordance with the terms of the Credit Agreement) of not greater than (i) 5.00 to 1.00 for the first four fiscal quarters after the Closing Date, commencing with the first full fiscal quarter after the Closing Date, (ii) 4.50 to 1.00 for the fifth fiscal quarter through and including the eighth fiscal quarter after the Closing Date, and (iii) 4.00 to 1.00 for each subsequent fiscal quarter. As of December 31, 2020, the Company was in compliance with all financial covenants under the Credit Agreement. 0.50% Finisar Convertible Notes Finisar’s outstanding 0.50% Convertible Senior Notes due 2036 (the “Finisar Notes”) may be redeemed at any time on or after December 22, 2021 in whole or in part at the option of the Company at a redemption price equal to one hundred percent (100)% of the principal amount of such Finisar Notes plus accrued and unpaid interest. Each holder of Finisar Notes also may require Finisar to repurchase all or any portion of such holder’s outstanding Finisar Notes for cash on December 15, 2021, December 15, 2026 and December 15, 2031 at a repurchase price equal to one hundred percent (100%) of the principal amount of such Finisar Notes plus accrued and unpaid interest. The Finisar Notes will mature on December 15, 2036. Interest on the Finisar Notes accrues at 0.50% per annum, paid semi-annually, in arrears, on June 15 and December 15 of each year. In connection with the acquisition of Finisar, the Company, Finisar and the trustee entered into a First Supplemental Indenture, dated as of September 24, 2019 (the “First Supplemental Indenture”). The First Supplemental Indenture supplements the base indenture (as supplemented, the “Finisar Indenture”), which governs the Finisar Notes. Pursuant to the terms of the First Supplemental Indenture, the Company has fully and unconditionally guaranteed, on a senior unsecured basis, the due and punctual payment and performance of all obligations of Finisar to the holders of the Finisar Notes. The First Supplemental Indenture also provides that the right of holders of Finisar Notes to convert Finisar Notes into cash and/or shares of Finisar’s common stock, is changed to a right to convert Finisar Notes into cash and/or shares of the Company’s common stock, subject to the terms of the Finisar Indenture. Under the terms of the Finisar Indenture, the consummation and effectiveness of the Merger on the Closing Date constituted a Fundamental Change (as defined in the Finisar Indenture) and a Make-Whole Fundamental Change (as defined in the Finisar Indenture). Accordingly, in accordance with the terms of the Finisar Indenture, each holder of Finisar Notes had the right to (i) convert its Finisar Notes into cash and/or shares of Company Common Stock, at Finisar’s option, or (ii) require that Finisar repurchase such holder’s Finisar Notes for an amount in cash equal to one hundred percent (100)% of the principal amount of such Finisar Notes plus accrued and unpaid interest. Holders of approximately $560.1 million in aggregate principal amount of Finisar Notes exercised the repurchase right. The Company repurchased those Finisar Notes on October 23, 2019 for an aggregate consideration of approximately $561.1 million in cash, including accrued interest. No holders of Finisar Notes exercised the related conversion right. The Company borrowed $561.0 million under a delayed draw on its Term Loan A to fund the payment to the holders of Finisar Notes that exercised the repurchase right. As of December 31, 2020, approximately $14.9 million in aggregate principal amount of Finisar Notes remain outstanding. 0.25% Convertible Senior Notes In August 2017, the Company issued and sold $345 million aggregate principal amount of the II-VI Notes in a private placement to qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended. As a result of the cash conversion option, the Company separately accounted for the value of the embedded conversion option as a debt discount. The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature, which was determined using an expected present value technique (income approach) to estimate the fair value of similar nonconvertible debt; the debt discount is being amortized as additional non-cash interest expense over the term of the II-VI Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The initial conversion rate is 21.25 shares of common stock per $1,000 principal amount of II-VI Notes, which is equivalent to an initial conversion price of $47.06 per share of common stock. Throughout the term of the II-VI Notes, the conversion rate may be adjusted upon the occurrence of certain events. The if-converted value of the II-VI Notes amounted to $556.9 million as of December 31, 2020 and $346.2 million as of June 30, 2020 (based on the Company’s closing stock price on the last trading day of the fiscal periods then ended). Prior to the close of business on the business day immediately preceding June 1, 2022, the Notes will be convertible only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on December 31, 2017 (and only during such fiscal quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the business day period immediately after any consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; or (iii) upon the occurrence of certain specified corporate events. On or after June 1, 2022 until the close of business on the business day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election Because the last reported sale price of the Company’s common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the calendar quarter ended December 31, 2020 was equal to or greater than 130% of the applicable conversion price on each applicable trading day, the II-VI Notes are convertible at the option of the holders thereof during the fiscal quarter ending March 31, 2021. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. Holders of the II-VI Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a II-VI Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than cancelled, extinguished or forfeited. The following tables set forth total interest expense recognized related to the II-VI Notes for the three and six months ended December 31, 2020 and December 31, 2019 ($000):
The effective interest rate on the liability component for both periods presented was 4.5%. The unamortized discount amounted to $20.8 million as of December 31, 2020 and is being amortized over three years. Aggregate Availability The Company had aggregate availability of $448.6 million under its line of credit as of December 31, 2020. Weighted Average Interest Rate The weighted average interest rate of total borrowings was 1.7% and 3.8% for the six months ended December 31, 2020 and 2019, respectively.
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Income Taxes |
6 Months Ended |
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Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s year-to-date effective income tax rate at December 31, 2020 was 19.1% compared to an effective tax benefit of 10.0% for the same period in 2019. The variations between the Company’s effective tax rate and the U.S. statutory rate of 21% were primarily due to the impact of the U.S. enacted tax legislation partially offset by research and development incentives in certain jurisdictions and foreign tax credits. U.S. GAAP prescribes the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements which includes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2020 and June 30, 2020, the Company’s gross unrecognized income tax benefit, excluding interest and penalties, was $42.3 million and $42.8 million, respectively. The Company has classified $7.4 million of uncertain tax positions as current income tax liabilities and the remaining uncertain tax positions of $34.9 million as noncurrent income tax liabilities, as the amounts are not expected to be paid within one year. If recognized, $38.2 million of the gross unrecognized tax benefits at December 31, 2020 would impact the effective tax rate. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision in the Condensed Consolidated Statements of Earnings (Loss). The amount of accrued interest and penalties included in the gross unrecognized income tax benefit was $4.0 million and $3.8 million at December 31, 2020 and June 30, 2020, respectively. Fiscal years 2017 to 2021 remain open to examination by the U.S. Internal Revenue Service, fiscal years 2015 to 2021 remain open to examination by certain state jurisdictions, and fiscal years 2010 to 2021 remain open to examination by certain foreign taxing jurisdictions. The Company is currently under examination for certain subsidiary companies in the Philippines for the year 2017; Germany for the years 2012 through 2015; Australia for the years 2011 through 2014; and India for the year 2016. The Company believes its income tax reserves for these tax matters are adequate.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LeasesThe Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and includes it in the initial measurement of leased assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that II-VI will exercise that option. The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Leased assets are tested for impairment in the same manner as long-lived assets used in operations. The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):
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Leases | LeasesThe Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and includes it in the initial measurement of leased assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that II-VI will exercise that option. The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Leased assets are tested for impairment in the same manner as long-lived assets used in operations. The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):
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Equity |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Mandatory Convertible Preferred Stock On July 2, 2020, II-VI announced the pricing of an underwritten public offering of 2,000,000 shares of 6.00% Series A Mandatory Convertible Preferred, no par value per share (“Mandatory Convertible Preferred Stock”), resulting in gross proceeds to II-VI from the offering of $400 million, before deducting the underwriting discounts and commissions and offering expenses payable by the Company (the "Preferred Stock Offering"). In addition, the underwriters had a 30-day option to purchase up to an additional 300,000 shares of Series A Mandatory Convertible Preferred Stock at the applicable public offering price, less underwriting discounts and commissions and solely to cover over-allotments with respect to the preferred stock offering. On July 2, 2020, the underwriters exercised the option in full, raising an additional approximately $60 million in gross proceeds. On July 7, 2020, the Company closed the Preferred Stock Offering, including the issuance and sale of 2.3 million shares of Mandatory Convertible Preferred Stock. Upon conversion on the mandatory conversion date, as determined in accordance with the terms of the Mandatory Convertible Preferred Stock, each outstanding share of the Mandatory Convertible Preferred Stock, unless previously converted, will automatically convert into a number of shares of the Company's common stock equal to not more than 4.6512 shares of common stock and not less than 3.8760 shares of common stock (the “Minimum Conversion Rate”), depending on the applicable market value of the common stock, determined in accordance with the terms of the Mandatory Convertible Preferred Stock and subject to certain anti-dilution adjustments. Other than in the event of one of certain fundamental changes, a holder of Mandatory Convertible Preferred Stock may, at any time prior to July 1, 2023, elect to convert such holder’s shares of Mandatory Convertible Preferred Stock, in whole or in part (but in no event less than one share of Mandatory Convertible Preferred Stock), at the Minimum Conversion Rate per share of Mandatory Convertible Preferred Stock, subject to certain anti-dilution adjustments. If one of certain fundamental changes occurs on or prior to July 1, 2023, holders of the Mandatory Convertible Preferred Stock will have the right to convert their shares of Mandatory Convertible Preferred Stock, in whole or in part (but in no event less than one share of the Mandatory Convertible Preferred Stock), into shares of the Company's common stock at the conversion rate determined in accordance with the terms of the Mandatory Convertible Preferred Stock during the period beginning on, and including, the effective date of such change and ending on, and including, the date that is 20 calendar days after the effective date of such fundamental change (or, if later, the fundamental date that is 20 calendar days after holders receive notice of such fundamental change, but in no event later than July 1, 2023). Holders who convert their shares of the Mandatory Convertible Preferred Stock during that period will also receive a dividend make-whole amount and, to the extent there is any, the accumulated dividend amount, in each case as calculated in accordance with the terms of the Mandatory Convertible Preferred Stock. The Company recognized $6.9 million of accrued preferred stock dividends during the second quarter of fiscal year 2021, which were presented as other accrued liabilities on the Condensed Consolidated Balance Sheet as of December 31, 2020. The following table presents dividends per share and dividends recognized for the three and six months ended December 31, 2020:
Common Stock Offering On July 2, 2020, II-VI announced the pricing of an underwritten public offering of 9,302,235 shares of its common stock at a public offering price of $43.00 per share, resulting in gross proceeds to II-VI from the offering of approximately $400 million, before deducting the underwriting discounts and commissions and offering expenses payable by II-VI (the “Common Stock Offering”). In addition, the underwriters had a 30-day option to purchase up to an additional 1,395,335 shares of its common stock at the applicable public offering price, less underwriting discounts and commissions. On July 2, 2020, the underwriters exercised the option in full, raising an additional approximately $60 million in gross proceeds. On July 7, 2020, the Company closed the Common Stock Offering, including the issuance and sale of approximately 10.7 million shares of Common Stock.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing the diluted earnings (loss) available to common shareholders by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. For the three and six months ended December 31, 2020, diluted shares outstanding include the dilutive effect of the potential shares of the Company's common stock issuable from stock options, performance and restricted shares, as well as the shares of the Company's common stock issuable upon conversion of outstanding convertible debt. Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted earnings (loss) per common share. For the three and six months ended December 31, 2020, diluted earnings (loss) per share excluded the potentially dilutive effect of the Mandatory Convertible Preferred Stock (under the If-Converted method), as its effect was anti-dilutive. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations for the periods presented ($000):
The following table presents potential shares of the Company's common stock excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive (000):
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment 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 financial performance. The Company reports its financial results in the following two segments: (i) Compound Semiconductors, and (ii) Photonic Solutions, 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 segments are managed separately due to the market, production requirements and facilities unique to each segment. Both the acquisitions of Ascatron and Innovion are presented within the Compound Semiconductors segment since the dates of their acquisitions. The accounting policies are consistent across each segment. To the extent possible, the Company’s corporate expenses and assets are allocated to the segments. Unallocated and Other includes eliminating inter-segment sales and transfers, the results of Finisar since the acquisition date through September 30, 2019, and transaction costs related to the Finisar transaction. The following tables summarize selected financial information of the Company’s operations by segment ($000):
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Share-Based Compensation |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based CompensationThe Company’s Board of Directors adopted the II-VI Incorporated 2018 Omnibus Incentive Plan (the “Plan”), which was approved by the Company’s shareholders. The Plan provides for the grant of performance-based cash incentive awards, non-qualified stock options, stock appreciation rights, restricted share awards, restricted share units, deferred share awards, performance share awards and performance share units to employees, officers and directors of the Company. The maximum number of shares of the Company’s Common Stock authorized for issuance under the Plan is limited to 3,550,000 shares of Common Stock, not including any remaining shares forfeited under the predecessor plans that may be rolled into the Plan. The Company records share-based compensation expense for these awards in accordance with U.S. GAAP, which requires the recognition of grant-date fair value of share-based compensation in net earnings (loss) and over the requisite service period of the individual grantees, which generally equals the vesting period. The Company accounts for cash-based stock appreciation rights, cash-based restricted share unit awards and cash-based performance share unit awards as liability awards, in accordance with applicable accounting standards. Share-based compensation expense for the periods indicated was as follows ($000):
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Fair Value of Financial Instruments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The FASB defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous markets for the asset and liability in an orderly transaction between market participants at the measurement date. The Company estimates fair value of its financial instruments utilizing an established three-level hierarchy in accordance with U.S. GAAP. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows: •Level 1 –Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets. •Level 2 –Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. •Level 3 –Valuation is based upon other unobservable inputs that are significant to the fair value measurements. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The Company entered into an interest rate swap with a notional amount of $1,075 million to limit the exposure to its variable interest rate debt by effectively converting it to a fixed interest rate. The Company receives payments based on the one-month LIBOR and makes payments based on a fixed rate of 1.52%. The Company receives payments with a floor of 0.00%. The interest rate swap agreement has an effective date of November 24, 2019, with an expiration date of September 24, 2024. The initial notional amount of the interest rate swap is scheduled to decrease to $825 million in June 2022 and will remain at that amount through the expiration date. The Company designated this instrument as a cash flow hedge and deemed the hedge relationship effective at inception of the contract. The fair value of the interest rate swap of $41.8 million is recognized in the Condensed Consolidated Balance Sheet within other liabilities as of December 31, 2020. Changes in fair value are recorded within accumulated other comprehensive income (loss) on the Condensed Consolidated Balance Sheet and reclassified into the Condensed Consolidated Statement of Earnings (Loss) as interest expense in the period in which the underlying transaction affects earnings. Cash flows from hedging activities are reported in the Condensed Consolidated Statements of Cash Flows in the same classification as the hedged item, generally as a component of cash flows from operations. The fair value of the interest rate swap is determined using widely accepted valuation techniques and reflects the contractual terms of the interest rate swap including the period to maturity, and while there are no quoted prices in active markets, it uses observable market-based inputs, including interest rate curves. The fair value analysis also considers a credit valuation adjustment to reflect nonperformance risk of both the Company and the single counterparty. The interest rate swap is classified as a Level 2 item within the fair value hierarchy. The Company estimated the fair value of the II-VI Notes and Finisar Notes based on quoted market prices as of the last trading day prior to December 31, 2020; however, the II-VI Notes and Finisar Notes have only a limited trading volume and as such this fair value estimate is not necessarily the value at which the II-VI Notes and Finisar Notes could be retired or transferred. The Company concluded that this fair value measurement should be categorized within Level 2. The carrying value of the II-VI Notes and Finisar Notes is net of unamortized discount and issuance costs. See Note 8. Debt for details on the Company’s debt facilities. The fair value and carrying value of the II-VI Notes and Finisar Notes were as follows at December 31, 2020 ($000):
The fair values of cash and cash equivalents are considered Level 1 among the fair value hierarchy and approximate fair value because of the short-term maturity of those instruments. The Company’s borrowings including its lease obligations, excluding the 0.25% Convertible Notes and the 0.50% Finisar convertible notes are considered Level 2 among the fair value hierarchy and their principal amounts approximate fair value.
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Share Repurchase Programs |
6 Months Ended |
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Dec. 31, 2020 | |
Equity [Abstract] | |
Share Repurchase Programs | Share Repurchase ProgramsIn August 2014, the Company’s Board of Directors authorized the Company to purchase up to $50 million of its Common Stock through a share repurchase program (the “Program”) that calls for shares to be purchased in the open market or in private transactions from time to time. The Program has no expiration and may be suspended or discontinued at any time. Shares purchased by the Company are retained as treasury stock and available for general corporate purposes. The Company did not repurchase any shares pursuant to this Program during the quarter ended December 31, 2020. Through December 31, 2020, the Company has cumulatively purchased 1,416,587 shares of its Common Stock pursuant to the Program for approximately $22.3 million. |
Accumulated Other Comprehensive Income (Loss) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) (“AOCI”) by component, net of tax, for the six months ended December 31, 2020 were as follows ($000):
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Recently Issued Financial Accounting Standards (Policies) |
6 Months Ended |
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Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Financial Accounting Standards | Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326), which modifies the measurement of expected credit losses on certain types of financial instruments, including trade receivables. The Company adopted this standard on July 1, 2020. The adoption did not have a material impact on the Company's condensed consolidated financial statements.
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Acquisitions and Investments (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Preliminary Purchase Price Allocation of Assets Acquired and Liabilities Assumed | The following table presents a preliminary allocation of the purchase price of the assets acquired and liabilities assumed at the date of acquisition ($000):
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Revenue from Contracts with Customers (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Disaggregated Revenue by Market and Product | The following tables summarize disaggregated revenue by revenue market and product for the three and six months ended December 31, 2020 and 2019 ($000):
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventories | The components of inventories were as follows ($000):
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Property, Plant and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, plant and equipment consists of the following ($000):
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows ($000):
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Gross Carrying Amount and Accumulated Amortization of Intangible Assets Other Than Goodwill | The gross carrying amount and accumulated amortization of the Company’s intangible assets other than goodwill as of December 31, 2020 and June 30, 2020 were as follows ($000):
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Debt (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Debt | The components of debt as of the dates indicated were as follows ($000):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Interest Expense Recognized | The following tables set forth total interest expense recognized related to the II-VI Notes for the three and six months ended December 31, 2020 and December 31, 2019 ($000):
|
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Costs, Including Short-Term Leases, Lease Term, and Discount Rates | The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):
|
Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends |
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Earnings Per Share | The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations for the periods presented ($000):
|
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Schedule of Potential Shares of Common Stock Excluded from the Calculation of Diluted Net Income Per Share | The following table presents potential shares of the Company's common stock excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive (000):
|
Segment Reporting (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information of Company's Operation by Segment | The following tables summarize selected financial information of the Company’s operations by segment ($000):
|
Share-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Expense by Award Type | Share-based compensation expense for the periods indicated was as follows ($000):
|
Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value and Carrying Value of II-VI Notes and Finisar Notes | The fair value and carrying value of the II-VI Notes and Finisar Notes were as follows at December 31, 2020 ($000):
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) ("AOCI") by Component, Net of Tax | The changes in accumulated other comprehensive income (loss) (“AOCI”) by component, net of tax, for the six months ended December 31, 2020 were as follows ($000):
|
Acquisitions and Investments - Ascatron AB Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
|
Assets | |||
Goodwill | $ 1,292,384 | $ 1,239,009 | |
Ascatron AB | |||
Assets | |||
Developed technology | 16,378 | $ 20,000 | |
Goodwill | 21,738 | 18,922 | |
Other assets | 2,543 | 2,511 | |
Total assets acquired | 40,659 | 41,433 | |
Liabilities | |||
Non-interest bearing liabilities | (450) | (203) | |
Deferred tax liability | (3,505) | (4,526) | |
Total liabilities assumed | (3,955) | (4,729) | |
Net assets acquired | 36,704 | $ 36,704 | |
Assets | |||
Intangibles assets | (3,622) | ||
Goodwill | 2,815 | ||
Other assets | 33 | ||
Total assets acquired | (774) | ||
Liabilities | |||
Non-interest bearing liabilities | (247) | ||
Deferred tax liability | 1,021 | ||
Total liabilities assumed | 774 | ||
Net assets acquired | $ 0 |
Acquisitions and Investments -INNOViON Preliminary Allocation of Purchase Price (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Oct. 01, 2020 |
Jun. 30, 2020 |
---|---|---|---|
Assets | |||
Goodwill | $ 1,292,384 | $ 1,239,009 | |
INNOViON Corporation | |||
Assets | |||
Goodwill | $ 29,478 | ||
Property, plant, & equipment | 16,556 | ||
Right of use asset | 10,644 | ||
Other assets | 12,450 | ||
Total assets acquired | 94,128 | ||
Liabilities | |||
Non-interest bearing liabilities | (14,050) | ||
Interest bearing liabilities | (3,430) | ||
Deferred tax liability | (5,743) | ||
Total liabilities assumed | (23,223) | ||
Net assets acquired | 70,905 | ||
INNOViON Corporation | Developed technology | |||
Assets | |||
Intangibles assets | 15,000 | ||
INNOViON Corporation | Customer lists | |||
Assets | |||
Intangibles assets | $ 10,000 |
Revenue from Contracts with Customers - Additional Information (Detail) $ in Millions |
6 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized related to customer payments | $ 9.7 |
Contract liabilities | $ 44.6 |
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Jun. 30, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 195,550 | $ 190,237 |
Work in progress | 326,653 | 298,577 |
Finished goods | 134,790 | 130,996 |
Inventories, Total | $ 656,993 | $ 619,810 |
Property Plant and Equipment (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Jun. 30, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Finance lease right-of-use asset | $ 25,000 | $ 25,000 |
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation | 2,003,293 | 1,853,361 |
Less accumulated depreciation | (752,813) | (638,589) |
Property, plant, and equipment, net | 1,250,480 | 1,214,772 |
Land and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 20,381 | 18,396 |
Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 412,958 | 345,736 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,432,604 | 1,352,835 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 112,350 | $ 111,394 |
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) $ in Thousands |
6 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Balance-beginning of period | $ 1,239,009 |
Goodwill acquired | 51,216 |
Finisar measurement period adjustments | (4,901) |
Foreign currency translation | 7,060 |
Balance-end of period | 1,292,384 |
Compound Semiconductors | |
Goodwill [Roll Forward] | |
Balance-beginning of period | 1,052,494 |
Goodwill acquired | 0 |
Finisar measurement period adjustments | (4,901) |
Foreign currency translation | 4,239 |
Balance-end of period | 1,051,832 |
Photonic Solutions | |
Goodwill [Roll Forward] | |
Balance-beginning of period | 186,515 |
Goodwill acquired | 51,216 |
Finisar measurement period adjustments | 0 |
Foreign currency translation | 2,821 |
Balance-end of period | $ 240,552 |
Debt - Summary of Total Interest Expense Recognized (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | ||||
Amortization of debt discount and debt issuance costs including initial purchaser discount | $ 10,376 | $ 9,639 | ||
0.25% Convertible Senior Notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 0.25% | 0.25% | 0.25% | 0.25% |
0.25% contractual coupon | $ 220 | $ 221 | $ 441 | $ 441 |
Amortization of debt discount and debt issuance costs including initial purchaser discount | 3,446 | 3,291 | 6,852 | 6,546 |
Interest expense | $ 3,666 | $ 3,512 | $ 7,293 | $ 6,987 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Effective income tax rate, percent | 19.10% | 10.00% | |
U.S. statutory rate | 21.00% | ||
Unrecognized tax benefits | $ 42.3 | $ 42.8 | |
Liability for uncertainty in income taxes, current | 7.4 | ||
Liability for uncertain tax positions, noncurrent | 34.9 | ||
Unrecognized tax benefits that would impact effective tax rate | 38.2 | ||
Interest and penalties accrued | $ 4.0 | $ 3.8 |
Leases - Schedule of Lease Costs, Including Short-Term Leases, Lease Term, and Discount Rates (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Finance Lease Cost | ||||
Amortization of right-of-use assets | $ 417 | $ 417 | $ 833 | $ 833 |
Interest on lease liabilities | 319 | 334 | 642 | 671 |
Total finance lease cost | 736 | 751 | 1,475 | 1,504 |
Operating lease cost | 9,547 | 11,073 | 18,600 | 17,180 |
Sublease income | 368 | 735 | ||
Total lease cost | 9,915 | 11,824 | 19,340 | 18,684 |
Cash Paid for Amounts Included in the Measurement of Lease Liabilities | ||||
Operating cash flows from finance leases | 319 | 334 | 642 | 671 |
Operating cash flows from operating leases | 9,229 | 10,731 | 17,692 | 16,671 |
Financing cash flows from finance leases | $ 278 | $ 247 | $ 551 | $ 490 |
Weighted-Average Remaining Lease Term (in Years) | ||||
Finance leases | 11 years | 11 years | ||
Operating leases | 7 years 2 months 12 days | 7 years 2 months 12 days | ||
Weighted-Average Discount Rate | ||||
Finance Leases | 5.60% | 5.60% | ||
Operating Leases | 6.70% | 6.70% |
Equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Class of Stock [Line Items] | ||||
Series A Mandatory Convertible Preferred Stock Dividends | $ 6,900 | $ 0 | $ 13,340 | $ 0 |
Series A Mandatory Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Dividends per share (in usd per share) | $ 3.00 | $ 5.80 | ||
Series A Mandatory Convertible Preferred Stock Dividends | $ 6,900 | $ 13,340 |
Segment Reporting - Additional Information (Detail) |
6 Months Ended |
---|---|
Dec. 31, 2020
Segment
| |
Segment Reporting [Abstract] | |
Number of reporting segments | 2 |
Share-Based Compensation - Additional Information (Detail) |
Dec. 31, 2020
shares
|
---|---|
Omnibus Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock authorized for issuance under the Plan (in shares) | 3,550,000 |
Share-Based Compensation - Expense by Award Type (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | $ 28,079 | $ 19,260 | $ 43,581 | $ 35,420 |
Stock options and cash-based stock appreciation rights | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | 5,414 | 2,989 | 7,334 | 4,659 |
Restricted share awards and cash-based restricted share unit awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | 15,773 | 12,871 | 25,883 | 25,602 |
Performance share awards and cash-based performance share unit awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | $ 6,892 | $ 3,400 | $ 10,364 | $ 5,159 |
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) |
Jul. 31, 2022 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Nov. 24, 2019 |
---|---|---|---|---|
0.25% Convertible Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, interest rate | 0.25% | 0.25% | ||
0.50% Finisar Convertible Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, interest rate | 0.50% | |||
Interest Rate Swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notional amount | $ 1,075,000,000 | |||
Fixed interest rate | 1.52% | |||
Floor Interest rate | 0.00% | |||
Derivative liability | $ (41,800,000) | |||
Interest Rate Swap | Scenario Forecast | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notional amount | $ 825,000,000 |
Fair Value of Financial Instruments - Summary of Fair Value and Carrying Value of II-VI Notes and Finisar Notes (Detail) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
0.25% Convertible Senior Notes due 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Convertible notes fair value | $ 575,481 |
Convertible notes carrying value | 321,165 |
Finisar Notes | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Convertible notes fair value | 14,665 |
Convertible notes carrying value | $ 14,888 |
Share Repurchase Programs (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | 77 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2019 |
Dec. 31, 2020 |
Aug. 31, 2014 |
|
Equity [Abstract] | |||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||
Purchase of common stock, shares (in shares) | 0 | 1,416,587 | |||
Common stock repurchased | $ 1,625,000 | $ 1,625,000 | $ 22,300,000 |
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