8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 9, 2021

_______________________________

II-VI INCORPORATED

(Exact name of registrant as specified in its charter)

_______________________________

Pennsylvania	001-39375	25-1214948
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

375 Saxonburg Boulevard

Saxonburg, Pennsylvania 16056

(Address of Principal Executive Offices) (Zip Code)

(724) 352-4455

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	IIVI	Nasdaq Global Select Market
Series A Mandatory Convertible Preferred Stock, no par value	IIVIP	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On February 9, 2021, II-VI Incorporated (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

A slide presentation to be used by senior management of the Company in connection with its discussions with investors regarding the Company's financial results for our quarter ended December 31, 2020 is included in Exhibit 99.2 to this report and is being furnished in accordance with Regulation FD of the Securities and Exchange Commission.

The information in this Current Report on Form 8-K, including the exhibits furnished pursuant to Item 9.01, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibits furnished pursuant to Item 9.01 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated February 9, 2021

Exhibit 99.2. Investor Presentation

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	II-VI Incorporated
Date: February 9, 2021	By:	/s/ Mary Jane Raymond
		Mary Jane Raymond
		Chief Financial Officer and Treasurer

EX-99.1

EXHIBIT 99.1

II-VI Incorporated Reports Fiscal 2021 Second Quarter Results

• Record Quarterly Revenue of $786.6 million
• Record Backlog of $1.08 billion
• Record Cash from Operations of $221 million and Record Free Cash Flow $175.8 million¹
• Quarterly GAAP Operating Income of $118.7 million and GAAP EPS of $0.73
• Quarterly Non-GAAP Operating Income of $173.0 million and Non-GAAP EPS of $1.08
• December 31, 2020 net debt leverage ratio of 0.9x, reduced from 1.3x at September 30, 2020²

PITTSBURGH, Feb. 09, 2021 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) ("II-VI," “We” or the "Company") today reported results for its fiscal 2021 second quarter ended December 31, 2020.

“This quarter’s record results are a prime example of the successful execution of our strategy. Our book to bill ratio was 1.17 for the quarter and was 1.12 on a rolling twelve-month basis. Our revenue growth in Q2 FY21 was 18% over Q2 FY20. We continued to gain share in 3D sensing, growing our revenue over 200% compared to last year and over 140% sequentially. We increased our volume shipments into multiple end customers and applications, in front facing as well as world facing configurations,” said Dr. Vincent D. (Chuck) Mattera, Jr.

Dr. Mattera continued, “We are well ahead of our plan to achieve our 3-year, $150M total synergy target from the Finisar acquisition.  Our run rate synergies already exceed $100M as a result of our integration work over the past 15 months. We are now on track to achieve our $150M total synergy target in 24 months, 12 months ahead of schedule, and we are now increasing our 3-year total synergy target to $200M. This work is contributing to our strengthening margins and strong cash flow. Our cash flow from operations in Q2 was an all-time record at $221 million and our net debt leverage ratio reduced to 0.9x. With all of our target markets strengthening, we look forward to the exciting opportunities ahead of us in the second half of the FY21 and beyond.”

_________________

¹ Free cash flow of $175.8M is defined as cash flow from operations of $221.3M less capital expenditures of $45.5M for the three months ended December 31, 2020.
² The net debt leverage ratio is calculated in accordance with the terms of the Credit Agreement.

Table 1
Financial Metrics
$ Millions, except per share amounts and %
(Unaudited)	Three Months Ended							Six Months Ended
	Dec 31,		Sept 30,		Dec 31,			Dec 31,		Dec 31,
	2020		2020		2019			2020		2019
Revenues	$	786.6	$	728.1	$	666.3		$	1,514.6	$	1,006.7
GAAP Gross Profit	$	322.5	$	286.6	$	148.3		$	609.0	$	271.5
Non-GAAP Gross Profit (2)	$	330.6	$	288.4	$	241.3		$	618.9	$	365.4
GAAP Operating Income (Loss) (1)	$	118.7	$	101.1	$	(78.6	)	$	219.9	$	(97.1	)
Non-GAAP Operating Income (2)	$	173.0	$	138.9	$	73.6		$	311.9	$	122.7
GAAP Net Earnings (Loss)	$	87.9	$	46.3	$	(98.2	)	$	134.2	$	(124.2	)
Non-GAAP Net Earnings (2)	$	131.2	$	100.4	$	37.2		$	231.6	$	73.0
GAAP Diluted Earnings (Loss) Per Share	$	0.73	$	0.38	$	(1.08	)	$	1.12	$	(1.58	)
Non-GAAP Diluted Earnings Per Share (2)	$	1.08	$	0.84	$	0.40		$	1.94	$	0.91
Other Selected Financial Metrics
GAAP Gross margin	41.0%		39.4%		22.3%			40.2%		27.0%
Non-GAAP gross margin (2)	42.0%		39.6%		36.2%			40.9%		36.3%
GAAP Operating margin	15.1%		13.9%		(11.8)%			14.5%		(9.6)%
Non-GAAP operating margin (2)	22.0%		19.1%		11.0%			20.6%		12.2%
GAAP Return on sales	11.2%		6.4%		(14.7)%			8.9%		(12.3)%
Non-GAAP return on sales (2)	16.7%		13.8%		5.6%			15.3%		7.3%

(1)	GAAP Operating income (loss) is defined as earnings (loss) before income taxes, interest expense and other expense or income, net.
(2)	All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, certain one-time transaction expenses, fair value measurement period adjustments, and restructuring and related items. See Table 4 for the Reconciliation of GAAP measures to non-GAAP measures.

Outlook

The outlook for the third fiscal quarter ending March 30, 2021 is revenue of $760 million to $780 million and earnings per diluted share on a non-GAAP basis of $0.81 to $0.91. This is at today’s exchange rate and today’s estimated tax impact of 19%. Both of these are subject to variability. For the non-GAAP earnings per share, we added back to the GAAP earnings pre-tax amounts of $21 million in amortization, $22 million in share-based compensation, and $2 million in transaction costs. Non-GAAP adjustments are by their nature highly volatile and we have low visibility as to the range that may be incurred in the future.

Conference Call & Webcast Information

The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday, February 9, 2021 to discuss these results. Individuals wishing to participate in the webcast can access the event at the Company’s web site by visiting www.ii-vi.com or via https://tinyurl.com/II-VIEarningsCallQ2FY21. If you wish to participate in the conference call, please dial +1 (877) 316-5288 for calls from the U.S. and +1 (734) 385-4977 for calls from outside the U.S. To join the conference call, please enter ID# 2356795, then provide your name and company affiliation.

The conference call will be recorded, and a replay will be available to interested parties who are unable to attend the live call. This service will be available until 11:59 p.m. Eastern Time on Saturday, February 13, 2021, by dialing +1 (855) 859-2056 for calls from the U.S. and +1 (404) 537-3406 for calls from outside the U.S., and entering ID# 2356795.

About II-VI Incorporated

II-VI Incorporated, a global leader in engineered materials and optoelectronic components, is a vertically integrated manufacturing company that develops innovative products for diversified applications in communications, materials processing, aerospace & defense, semiconductor capital equipment, life sciences, consumer electronics, and automotive markets. Headquartered in Saxonburg, Pennsylvania, the Company has research and development, manufacturing, sales, service, and distribution facilities worldwide. The Company produces a wide variety of application-specific photonic and electronic materials and components, and deploys them in various forms, including integrated with advanced software to support our customers. For more information, please visit us at www.ii-vi.com.

Forward-looking Statements

This press release contains forward-looking statements relating to future events and expectations that are based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The forward-looking statements in this press release involve risks and uncertainties, which could cause actual results, performance or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures.

The Company believes that all forward-looking statements made by it in this release have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements in this press release include, but are not limited to: (i) the failure of any one or more of the assumptions stated above to prove to be correct; (ii) the risks relating to forward-looking statements and other “Risk Factors” discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020; (iii) the purchasing patterns of customers and end-users; (iv) the timely release of new products, and acceptance of such new products by the market; (v) the introduction of new products by competitors and other competitive responses; (vi) the Company’s ability to integrate recently acquired businesses and realize synergies, cost savings and opportunities for growth in connection therewith, together with the risks, costs and uncertainties associated with such acquisitions and integration efforts; (vii) the Company’s ability to devise and execute strategies to respond to market conditions; and/or (viii) the risks of business and economic disruption related to the currently ongoing COVID-19 outbreak and any other worldwide health epidemics and outbreaks that may arise. The Company disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or developments, or otherwise.

Use of Non-GAAP Financial Measures

The Company has disclosed financial measurements in this press release that present financial information considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although the Company's management uses these measurements as an aid in monitoring the Company's on-going financial performance. The non-GAAP net earnings, the non-GAAP earnings per share, the non-GAAP operating income, the non-GAAP gross profit, the non-GAAP internal research and development, the non-GAAP selling, general and administration, the non-GAAP interest and other (income) expense, and the non-GAAP income tax (benefit), measure earnings and operating income (loss), respectively, excluding non-recurring or unusual items that are considered by management to be outside the Company’s standard operation and excluding certain non-cash items. EBITDA is an adjusted non-GAAP financial measurement that is considered by management to be useful in measuring the profitability between companies within the industry by reflecting operating results of the Company excluding non-operating factors. There are limitations associated with the use of non-GAAP financial measures, including that such measures may not be entirely comparable to similarly titled measures used by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance whether (i) items excluded from the non-GAAP financial measures will occur in the future or (ii) there will be cash costs associated with items excluded from the non-GAAP financial measures. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statement of Earnings (Loss) (Unaudited)
($000 except per share data)
	Three Months Ended
	Dec 31,			Sept 30,		Dec 31,
	2020			2020		2019
Revenues	$	786,569		$	728,084	$	666,331
Costs, Expenses & Other Expense (Income)
Cost of goods sold	464,103			441,520		517,991
Internal research and development	84,858			78,248		107,700
Selling, general and administrative	118,893			107,186		119,218
Interest expense	15,585			17,214		28,390
Other expense (income), net	(3,153		)	24,339		487
Total Costs, Expenses, & Other Expense (Income)	680,286			668,507		773,786
Earnings (Loss) Before Income Taxes	106,283			59,577		(107,455		)
Income Taxes	18,383			13,311		(9,242		)
Net Earnings (Loss)	$	87,900		$	46,266	$	(98,213	)
Series A Mandatory Convertible Preferred Stock Dividends	6,900			6,440		—
Net Earnings (Loss) available to the Common Shareholders	81,000			39,826		(98,213		)
Basic Earnings (Loss) Per Share	$	0.78		$	0.39	$	(1.08	)
Diluted Earnings (Loss) Per Share	$	0.73		$	0.38	$	(1.08	)
Average Shares Outstanding - Basic	104,092			102,809		90,886
Average Shares Outstanding - Diluted	115,053			105,247		90,886

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statement of Earnings (Loss) (Unaudited)
($000 except per share data)
	Six Months Ended
	December 31,		December 31,
	2020		2019
Revenues	$	1,514,653	$	1,006,740
Costs, Expenses & Other Expense (Income)
Cost of goods sold	905,623		735,260
Internal research and development	163,106		143,820
Selling, general and administrative	226,079		224,713
Interest expense	32,799		35,358
Other expense (income), net	21,186		5,566
Total Costs, Expenses, & Other Expense (Income)	1,348,793		1,144,717
Earnings (Loss) Before Income Taxes	165,860		(137,977		)
Income Taxes	31,694		(13,766		)
Net Earnings (Loss)	134,166		(124,211		)
Series A Mandatory Convertible Preferred Stock Dividends	13,340		—
Net Earnings (Loss) available to the Common Shareholders	120,826		(124,211		)
Basic Earnings (Loss) Per Share	$	1.17	$	(1.58	)
Diluted Earnings (Loss) Per Share	$	1.12	$	(1.58	)
Average Shares Outstanding - Basic	103,450		78,428
Average Shares Outstanding - Diluted	113,784		78,428

II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
	December 31,		June 30,
	2020		2020
Assets
Current Assets
Cash and cash equivalents	$	834,540	$	493,046
Accounts receivable	570,985		598,124
Inventories	656,993		619,810
Prepaid and refundable income taxes	12,122		12,279
Prepaid and other current assets	63,083		65,710
Total Current Assets	2,137,723		1,788,969
Property, plant & equipment, net	1,250,480		1,214,772
Goodwill	1,292,384		1,239,009
Other intangible assets, net	761,195		758,368
Deferred income taxes	34,061		22,938
Other assets	170,720		210,658
Total Assets	$	5,646,563	$	5,234,714
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	62,050	$	69,250
Accounts payable	250,740		268,773
Operating lease current liabilities	24,998		24,634
Accruals and other current liabilities	326,686		310,236
Total Current Liabilities	664,474		672,893
Long-term debt	1,408,790		2,186,092
Deferred income taxes	64,313		45,551
Operating lease liabilities	108,594		94,701
Other liabilities	163,579		158,674
Total Liabilities	2,409,750		3,157,911
Total Shareholders' Equity	3,236,813		2,076,803
Total Liabilities and Shareholders’ Equity	$	5,646,563	$	5,234,714

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
	Six Months Ended
	December 31,
	2020			2019
Cash Flows from Operating Activities
Net cash provided by operating activities	$	355,699		$	56,260
Cash Flows from Investing Activities
Additions to property, plant & equipment	(79,329		)	(80,288		)
Purchases of businesses, net of cash acquired	(34,431		)	(1,036,609		)
Other investing activities	—			(1,102		)
Net cash used in investing activities	(113,760		)	(1,117,999		)
Cash Flows from Financing Activities
Proceeds from issuance of common shares	460,000			—
Proceeds from issuance of preferred shares	460,000			—
Proceeds from borrowings of Term A Facility	—			1,241,000
Proceeds from borrowings of Term B Facility	—			720,000
Proceeds from borrowings of Revolving Credit Facility	—			160,000
Proceeds from borrowings under prior Credit Facility	—			10,000
Payments on borrowings under prior Term Loan, Credit Facility and other loans	—			(176,596		)
Payments on Finisar Notes	—			(560,112		)
Payments on borrowings under Term A Facility	(31,025		)	(15,513		)
Payments on borrowings under Term B Facility	(714,600		)	(1,800		)
Payments on borrowings under Revolving Credit Facility	(74,000		)	(66,000		)
Debt issuance costs	—			(63,510		)
Equity issuance costs	(36,092		)	—
Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan	22,355			3,077
Payments in satisfaction of employees' minimum tax obligations	(6,941		)	(15,031		)
Payment of dividends	(6,519		)	—
Common stock repurchase	—			(1,626		)
Other financing activities	(366		)	(1,839		)
Net cash provided by financing activities	72,812			1,232,050
Effect of exchange rate changes on cash and cash equivalents	26,743			1,657
Net increase in cash and cash equivalents	341,494			171,968
Cash and Cash Equivalents at Beginning of Period	493,046			204,872
Cash and Cash Equivalents at End of Period	$	834,540		$	376,840

Table 2
Segment Revenues, GAAP Operating Income (Loss) & Margins, and
Non-GAAP Operating Income (Loss) & Margins*
$ Millions, except %
(Unaudited)	Three Months Ended							Six Months Ended
	Dec 31,		Sept 30,		Dec 31,			Dec 31,		Dec 31,
	2020		2020		2019			2020		2019
Revenues:
Photonic Solutions	$	482.9	$	497.7	$	460.4		$	980.6	$	601.8
Compound Semiconductors	303.6		230.4		205.9			534.0		382.9
Unallocated and Other	—		—		—			—		22.1
Consolidated	$	786.6	$	728.1	$	666.3		$	1,514.6	$	1,006.7
GAAP Operating Income (Loss):
Photonic Solutions	$	48.5	$	50.4	$	(60.9	)	$	98.9	$	(47.9	)
Compound Semiconductors	70.3		50.7		(8.8		)	121.0		17.7
Unallocated and Other	—		—		(8.8		)	—		(66.8		)
Consolidated	$	118.7	$	101.1	$	(78.6	)	$	219.9	$	(97.1	)
Non-GAAP Operating Income (Loss):
Photonic Solutions	$	84.1	$	78.2	$	63.5		$	162.3	$	81.6
Compound Semiconductors	88.9		60.7		10.1			149.6		41.3
Unallocated and Other	—		—		—			—		(0.2		)
Consolidated	$	173.0	$	138.9	$	73.6		$	311.9	$	122.7
GAAP Operating Margin:
Photonic Solutions	10.0%		10.1%		-13.2%			10.1%		-8.0%
Compound Semiconductors	23.2%		22.0%		-4.3%			22.7%		4.6%
Unallocated and Other	NA		NA		NA			NA		NA
Consolidated	15.1%		13.9%		-11.8%			14.5%		-9.6%
Non-GAAP Operating Margin:
Photonic Solutions	17.4%		15.7%		13.8%			16.5%		13.6%
Compound Semiconductors	29.3%		26.4%		4.9%			28.0%		10.8%
Unallocated and Other	NA		NA		NA			NA		NA
Consolidated	22.0%		19.1%		11.0%			20.6%		12.2%

Table 3
Reconciliation of Segment Non-GAAP Operating Income (Loss) to
GAAP Segment Operating Income (Loss)
$ Millions
(Unaudited)	Three Months Ended									Six Months Ended
	Dec 31,			Sept 30,			Dec 31,			Dec 31,			Dec 31,
	2020			2020			2019			2020			2019
Non-GAAP Photonic Solutions Operating Income	$	84.1		$	78.2		$	63.5		$	162.3		$	81.6
Measurement period adjustment on long-lived assets	—			—			(8.2		)	—			(8.5		)
Share-based compensation	(12.1		)	(10.5		)	(12.8		)	(22.6		)	(15.5		)
Amortization of acquired intangibles	(17.3		)	(17.3		)	(29.2		)	(34.6		)	(31.3		)
Fair value adjustment on acquired inventory	—			—			(74.2		)	—			(74.2		)
Transaction expenses related to acquisitions	(6.2		)	—			—			(6.2		)	—
Photonic Solutions GAAP Operating Income (Loss)	$	48.5		$	50.4		$	(60.9	)	$	98.9		$	(47.9	)
Non-GAAP Compound Semiconductors Operating Income	$	88.9		$	60.7		$	10.1		$	149.6		$	41.3
Share-based compensation	(16.0		)	(5.0		)	(6.5		)	(21.0		)	(9.2		)
Amortization of acquired intangibles	(3.3		)	(2.9		)	(4.4		)	(6.2		)	(6.4		)
Restructuring and related expenses	—			—			(1.6		)	—			(1.6		)
Transaction expenses related to acquisitions	0.7			(2.1		)	—			(1.4		)	—
Preliminary fair value adjustment on acquired inventory	—			—			(6.4		)	—			(6.4		)
Compound Semiconductors GAAP Operating Income (Loss)	$	70.3		$	50.7		$	(8.8	)	$	121.0		$	17.7
Non-GAAP Unallocated and Other Operating Income (Loss)	$	—		$	—		$	—		$	—		$	(0.2	)
Finisar results	—			—			—			—			1.9
Transaction expenses related to acquisitions	—			—			(8.0		)	—			(13.6		)
Severance and related - Share-based compensation	—			—			—			—			(10.7		)
Severance and related - Other compensation	—			—			(0.8		)	—			(8.3		)
Amortization of acquired intangibles	—			—			—			—			(2.0		)
Preliminary fair value adjustment on acquired inventory	—			—			—			—			(7.1		)
One-time costs related to the Finisar acquisition	—			—			—			—			(26.8		)
Unallocated and Other GAAP Operating Income (Loss)	$	—		$	—		$	(8.8	)	$	—		$	(66.8	)
Total GAAP Operating Income (Loss)	$	118.7		$	101.1		$	(78.6	)	$	219.9		$	(97.1	)
Non-GAAP Operating Income	$	173.0		$	138.9		$	73.6		$	311.9		$	122.7

*Amounts may not recalculate due to rounding.

Table 4
Reconciliation of GAAP Measures to non-GAAP Measures
$ Millions
(Unaudited)	Three Months Ended									Six Months Ended
	Dec 31,			Sept 30,			Dec 31,			Dec 31,			Dec 31,
	2020			2020			2019 (8)			2020			2019
Gross profit on GAAP basis	$	322.5		$	286.6		$	148.3		$	609.0		$	271.5
Finisar results (1)	—			—			—			—			(6.5		)
Share-based compensation	3.9			1.8			4.2			5.7			4.2
Fair value adjustment on acquired inventory(2)	—			—			80.6			—			87.7
Measurement period adjustment on long-lived assets (3)	—			—			8.2			—			8.5
Transaction expenses related to acquisitions	4.2									4.2
Gross profit on non-GAAP basis	$	330.6		$	288.4		$	241.3		$	618.9		$	365.4
Internal research and development on GAAP basis	$	84.9		$	78.2		$	107.7		$	163.1		$	143.8
Share-based compensation (4)	(5.4		)	(2.6		)	(5.3		)	(8.0		)	(5.9		)
Internal research and development on non-GAAP basis	$	79.5		$	75.6		$	102.4		$	155.1		$	137.9
Selling, general and administrative on GAAP basis	$	118.9		$	107.2		$	119.2		$	226.1		$	224.7
Share-based compensation (4)	(18.8		)	(11.1		)	(9.8		)	(29.9		)	(14.6		)
Transaction expenses related to acquisitions (3)	(1.3		)	(2.1		)	(8.0		)	(3.4		)	(40.4		)
Severance, restructuring and related costs (5)	—			—			(2.4		)	—			(20.6		)
Amortization of acquired intangibles	(20.6		)	(20.2		)	(33.6		)	(40.8		)	(39.7		)
Selling, general and administrative on non-GAAP basis	$	78.2		$	73.8		$	65.4		$	152.0		$	109.4
Operating income (loss) on GAAP basis	$	118.7		$	101.1		$	(78.6	)	$	219.9		$	(97.1	)
Finisar results (1)	—			—			—			—			(1.9		)
Share-based compensation (4)	28.1			15.5			19.3			43.6			24.7
Fair value adjustment on acquired inventory (2)	—			—			80.6			—			87.7
Amortization of acquired intangibles	20.6			20.2			33.6			40.8			39.7
Measurement period adjustment on long-lived assets (3)	—			—			8.2			—			8.5
Severance, restructuring and related costs (5)	—			—			2.4			—			20.6
Transaction expenses related to acquisitions (6)	5.5			2.1			8.0			7.6			40.4
Operating income on non-GAAP basis	$	173.0		$	138.9		$	73.5		$	311.9		$	122.6

Table 4
Reconciliation of GAAP Measures to non-GAAP Measures (Continued)
$ Millions
(Unaudited)	Three Months Ended									Six Months Ended
	Dec 31,			Sept 30,			Dec 31,			Dec 31,			Dec 31,
	2020			2020			2019 (8)			2020			2019 (8)
Interest and other (income) expense, net on GAAP basis	$	12.4		$	41.5		$	28.9		$	54.0		$	40.9
Finisar results (1)	—			—			—			—			0.3
Foreign currency exchange gains (losses), net	(7.5		)	(4.7		)	(3.4		)	(12.2		)	(4.6		)
Additional interest expense related to Finisar acquisition (1)	—			—			—			—			(1.7		)
Gain on investment	7.0			—			—			7.0			—
Debt extinguishment expense (5) (7)	—			(24.7		)	—			(24.7		)	(3.9		)
Interest and other (income) expense, net on non-GAAP basis	$	11.9		$	12.1		$	25.5		$	24.1		$	31.0
Income taxes (benefit) on GAAP basis	$	18.4		$	13.3		$	(9.2	)	$	31.7		$	(13.8	)
Tax impact of non-GAAP measures(8)	11.4			13.1			13.4			24.5			23.9
Tax impact of fair value adjustments	—			—			6.7			—			9.0
Income taxes (benefit) on non-GAAP basis	$	29.8		$	26.4		$	10.9		$	56.2		$	19.1
Net earnings (loss) on GAAP basis	$	87.9		$	46.3		$	(98.2	)	$	134.2		$	(124.2	)
Finisar results (1)	—			—			—			—			(1.6		)
Share-based compensation (4)	28.1			15.5			19.3			43.6			24.7
Fair value adjustment on acquired inventory (2)	—			—			80.6			—			87.7
Amortization of acquired intangibles	20.6			20.2			33.6			40.8			39.7
Measurement period adjustment on long-lived assets (3)	—			—			8.2			—			8.5
Transaction expenses related to acquisitions (6)	5.5			2.1			8.0			7.6			40.4
Severance, restructuring and related costs (5)	—			—			2.4			—			20.6
Foreign currency exchange (gains) losses, net	7.5			4.7			3.4			12.2			4.6
Additional interest expense related to Finisar acquisition	—			—			—			—			1.7
Gain on investment	(7.0		)	—			—			(7.0		)	—
Debt extinguishment expense (7)	—			24.7			—			24.7			3.9
Tax impact of non-GAAP measures and fair value adjustments(8)	(11.4		)	(13.1		)	(20.1		)	(24.5		)	(32.9		)
Net earnings on non-GAAP basis	$	131.2		$	100.4		$	37.2		$	231.6		$	73.0
Per share data:
Net earnings (loss) on GAAP basis
Basic Earnings (Loss) Per Share	$	0.78		$	0.39		$	(1.08	)	$	1.17		$	(1.58	)
Diluted Earnings (Loss) Per Share	$	0.73		$	0.38		$	(1.08	)	$	1.12		$	(1.58	)
Net earnings on non-GAAP basis
Basic Earnings Per Share	$	1.19		$	0.91		$	0.41		$	2.11		$	0.93
Diluted Earnings Per Share	$	1.08		$	0.84		$	0.40		$	1.94		$	0.91

*Amounts may not recalculate due to rounding.

(1)	“Finisar results” includes the consolidated Finisar operations for the period between the acquisition date of September 24, 2019 and September 30, 2019, which includes additional interest expense and debt extinguishment expense as a result of the acquisition financing. Finisar results have been consolidated into the Photonics Solutions and Compound Semiconductors segments in periods subsequent to the three months ended September 30, 2019.
(2)	The fair value adjustment represents the step up value adjustment of acquired inventory from the Finisar acquisition.
(3)	Represents the depreciation impact of measurement period adjustments to the fair value of long-lived assets acquired in the Finisar acquisition.
(4)	Total share-based compensation expense for the six months ended December 31, 2019 is $35.4 million, of which $10.7 million was incurred in relation to severance related expenses as described below in note 5.
(5)	In connection with the acquisition of Finisar, the Company recorded $19.0 million of compensation in the condensed consolidated statement of earnings (loss), of which $18.1 million was associated with Finisar’s executive severance and retention agreements. Included in this amount is $10.7 million of share-based compensation.
(6)	During fiscal year 2020, transaction costs primarily represent acquisition and integration costs related to the Finisar acquisition. During fiscal year 2021, transaction costs primarily represent acquisition and integration costs related to the Ascatron and Innovion acquisitions, as well as customer settlements from acquired liabilities of previous acquisitions.
(7)	The Company recorded debt extinguishment expense of $24.7 million in connection with the extinguishment of the Term B Loan Facility during the three months ended September 30, 2020.
(8)	The non-GAAP financial measures for the three and six months ended December 30, 2019 have been adjusted to conform to the current period presentation.

Table 5
Reconciliation of GAAP Net Income (Loss), EBITDA and Adjusted EBITDA
$ Millions
(Unaudited)	Three Months Ended									Six Months Ended
	Dec 31,			Sept 30,			Dec 31,			Dec 31,			Dec 31,
	2020			2020			2019			2020			2019
Net earnings (loss) on GAAP basis	$	87.9		$	46.3		$	(98.2	)	$	134.2		$	(124.2	)
Income taxes (benefit)	18.4			13.3			(9.2		)	31.7			(13.8		)
Depreciation and amortization	67.2			64.7			82.2			131.9			109.1
Interest expense	15.6			17.2			28.3			32.8			35.3
EBITDA (1)	$	189.1		$	141.5		$	3.1		$	330.6		$	6.4
EBITDA margin	24.0		%	19.4		%	0.5		%	21.8		%	0.6		%
Fair value adjustment on acquired inventory	—			—			80.6			—			87.7
Share-based compensation	28.1			15.5			19.3			43.6			24.7
Transaction expenses related to other acquisitions	5.5			2.1			8.0			7.6			40.4
Foreign currency exchange (gains) losses, net	7.5			4.7			3.4			12.2			4.6
Severance, restructuring and related costs	—			—			2.4			—			20.6
Debt extinguishment expense	—			24.7			—			24.7			3.9
Gain on investment	(7.0		)	—			—			(7.0		)	—
Adjusted EBITDA (2)	$	223.1		$	188.5		$	116.8		$	411.7		$	188.3
Adjusted EBITDA margin	28.4		%	25.9		%	17.5		%	27.2		%	18.7		%

*Amounts may not recalculate due to rounding.

(1)	EBITDA is defined as earnings before interest, income taxes, depreciation and amortization.
(2)	Adjusted EBITDA excludes non-GAAP adjustments for share-based compensation, acquired intangibles amortization expense, certain one-time transaction expense, the impact of restructuring and related items, debt extinguishment charge and the impact of foreign currency exchange gains and losses.

Table 6
GAAP Earnings Per Share Calculation
$ Millions
(Unaudited)	Three Months Ended									Six Months Ended
	Dec 31,			Sept 30,			Dec 31,			Dec 31,			Dec 31,
	2020			2020			2019			2020			2019
Numerator
Net earnings (loss)	$	87.9		$	46.3		$	(98.2	)	$	134.2		$	(124.2	)
Series A Mandatory Convertible Preferred Stock dividends	(6.9		)	(6.4		)	—			(13.3		)	—
Basic earnings available to common shareholders	$	81.0		$	39.8		$	(98.2	)	$	120.8		$	(124.2	)
Effect of dilutive securities:
Add back interest on Convertible Senior Notes Due 2022	$	3.1		$	—		$	—		$	6.1		$	—
Diluted earnings available to common shareholders	$	84.1		$	39.8		$	(98.2	)	$	127.0		$	(124.2	)
Denominator
Weighted average shares		104.1		102.8				90.9			103.5			78.4
Effect of dilutive securities:
Common stock equivalents		3.6		2.4			—			3.0			—
0.25% Convertible Senior Notes due 2022	7.3			—			—			7.3			—
Diluted weighted average common shares		115.1		105.2			90.9				113.8			78.4
Basic earnings (loss) per common share	$	0.78		$	0.39		$	(1.08	)	$	1.17		$	(1.58	)
Diluted earnings (loss) per common share	$	0.73		$	0.38		$	(1.08	)	$	1.12		$	(1.58	)

*Amounts may not recalculate due to rounding.

Table 7
Non-GAAP Earnings Per Share Calculation
$ Millions
(Unaudited)	Three Months Ended								Six Months Ended
	Dec 31,			Sept 30,			Dec 31,		Dec 31,			Dec 31,
	2020			2020			2019		2020			2019
Numerator
Net earnings on non-GAAP basis	$	131.2		$	100.4		$	37.2	$	231.6		$	37.2
Series A Mandatory Convertible Preferred Stock dividends	(6.9		)	(6.4		)	—		(13.3		)	—
Basic earnings available to common shareholders	$	124.3		$	94.0		$	37.2	$	218.3		$	73.0
Effect of dilutive securities:
Add back interest on Convertible Senior Notes Due 2022	$	3.1		$	3.1		$	—	$	6.2		$	—
Add back Series A preferred stock dividends	6.9			6.4			—		13.3			—
Diluted earnings available to common shareholders	$	134.2		$	103.5		$	37.2	$	237.7		$	73.0
Denominator
Weighted average shares		104.1			102.8			90.9		103.5			78.4
Effect of dilutive securities:
Common stock equivalents		3.6		2.4			2.1		3.0			1.9
0.25% Convertible Senior Notes due 2022		7.3			7.3		—		7.3			—
Series A Mandatory Convertible Preferred Stock		8.9		10.4			—		8.9			—
Diluted weighted average common shares		124.0		123.0			93.0		122.7			80.3
Basic earnings (loss) per common share on non-GAAP basis	$	1.19		$	0.91		$	0.41	$	2.11		$	0.93
Diluted earnings (loss) per common share on non-GAAP basis	$	1.08		$	0.84		$	0.40	$	1.94		$	0.91

*Amounts may not recalculate due to rounding.

(1)  Non-GAAP earnings per share for the three and six months ended December 31, 2019 has been revised to include the tax impact from Finisar purchase accounting adjustments, and conform with current period presentation.

CONTACT:        

Mary Jane Raymond
Treasurer and Chief Financial Officer

investor.relations@ii-vi.com
www.ii-vi.com/contact-us 

EX-99.2 3 exh_992.htm EXHIBIT 99.2

EXHIBIT 99.2

Copyright 2020, II - VI Incorporated. All rights reserved. February 2021 Investor Presentation

Page 2 Copyright 2020, II - VI Incorporated. All rights reserved. Safe Harbor Statement This presentation contains forward - looking statements relating to future events and expectations that are based on certain assum ptions and contingencies. The forward - looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and relate to the Company’s perfor man ce on a going - forward basis. The forward - looking statements in this press release involve risks and uncertainties, which could cause actual results, performance or trends to differ materially from those expr ess ed in the forward - looking statements herein or in previous disclosures. The Company believes that all forward - looking statements made by it in this release have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward - looking statements will actually occur or prove to be correct. In addition to general industry and global economi c conditions, factors that could cause actual results to differ materially from those discussed in the forward - looking statements in this press release include, but are not limited to: ( i ) the failure of any one or more of the assumptions stated above to prove to be correct; (ii) the risks relating to forward - looking statements and other “Risk Factors” discussed in the Company’s Annual Report on Form 10 - K for the fiscal year en ded June 30, 2020 ; (iii) the purchasing patterns of customers and end - users; (iv) the timely release of new products, and acceptance of such new products by the market; (v) the introduction of new produ cts by competitors and other competitive responses; (vi) the Company’s ability to integrate recently acquired businesses and realize synergies, cost savings and opportunities for growth in connection therewi th, together with the risks, costs and uncertainties associated with such acquisitions and integration efforts; (vii) the Company’s ability to devise and execute strategies to respond to market conditions; and/or (v iii) the risks of business and economic disruption related to the currently ongoing COVID - 19 outbreak and any other worldwide health epidemics and outbreaks that may arise. The Company disclaims any obligation t o update information contained in these forward - looking statements whether as a result of new information, future events or developments, or otherwise. This presentation contains non - GAAP financial measures and key metrics relating to the Company's past performance. These non - GAA P financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations relate d t o the use of these non - GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non - GAAP financial measures differently or may use other measures to eva luate their performance, all of which could reduce the usefulness of our non - GAAP financial measures as tools for comparison. As required by Regulation G, we have provided reconciliations of those meas ures to the most directly comparable GAAP measures, which are available in the Appendix.

Company Overview

Page 4 Copyright 2020, II - VI Incorporated. All rights reserved. II - VI at a Glance As of 6/30/2020 FY20 Revenue (1) $2.6B Cash & Equivalents $493M FY20 Free Cash Flow (2) $160M Vertically Integrated Model “TWO SIX” Refers to groups II and VI of the Periodic Table of Elements 18 Countries 75 Locations 22,000+ Employees Core Competency Engineered Materials 1971 Year Founded 1. Includes FY20 Q1 Pro forma: Three Months Ended 09/30/2019 for II - VI and Three Months Ended 10/28/2019 for Finisar 2. Free cash flow is defined as cash flow from operations of $297M less capital expenditures of $137M for the twelve months ende d J une 30, 2020

Page 5 Copyright 2020, II - VI Incorporated. All rights reserved. Megatrends A world transformed through innovative materials vital to a better life today and the sustainability of future generations Adoption of 3D Sensing Increased Data and Video Consumption Deployment of 5G Wireless Growth in Electric & Autonomous Vehicles Intelligent Mobile Electric Proliferation of Cloud Services

Page 6 Copyright 2020, II - VI Incorporated. All rights reserved. Diversified per Platform Capital Intensive Markets ▪ A Leader in engineered materials and optoelectronic devices ▪ Differentiated lasers, optics, and integrated circuits ▪ Enabling the convergence of communications, computing, and sensing Infrastructure Core Competency Innovation Strategy Engineered Materials Differentiation Valued By Customers Performance Process Intensive Products Core Strategy

Page 7 Copyright 2020, II - VI Incorporated. All rights reserved. $487 $516 $551 $683 $742 $827 $972 $1,159 $1,362 $2,380 $2,638 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY20PF 10 Years of continuous revenue growth (1) 4 Transformative Acquisitions Optical Network & China Market InP Technology Platform Epitaxial Wafer and SiC Electronic Device Platform GaAs Technology Platform 2010 2013 2016 2019 History of Insightful Targeting and Successful Integration of Strategic Acquisitions 5G (1) Figures prior to FY2019 do not reflect the adoption of ASC 606. (2) Includes FY20 Q1 Pro forma: Three Months Ended 09/30/2019 for II - VI and Three Months Ended 10/28/2019 for Finisar. (2) CAGR: 19%

Page 8 Copyright 2020, II - VI Incorporated. All rights reserved. Sampling of representative customers based on approvals for public release Thousands of Market Leading Customers Across Diverse Markets

Page 9 Copyright 2020, II - VI Incorporated. All rights reserved. $728 $787 $760 $780 Q121 Q221 Q321EL Q321EH Q2 FY21 Overview EL: Estimated – Low end of range EH: Estimated – High end of range Revenue by Quarter ($M) 15% 62% Revenue by End Market 3% Semiconductor Capital Equipment 3% Life Sciences 6% Aerospace & Defense 9% Industrial 54% 18% 18% 7% 3% Q2 FY21 Revenue $787M Revenue by Region Q3 Guidance Range 1% Automotive

Page 10 Copyright 2020, II - VI Incorporated. All rights reserved. $827 $972 $1,159 $1,362 FY2016 FY2017 FY2018 FY2019 Rapid Revenue Growth at Scale Strong Revenue Growth (1) (Pre - Finisar Acquisition) Q2FY21 Increased Efficiencies 11% 18% 19% 18% Note: Dollars in millions. (1) Figures prior to FY2019 do not reflect the adoption of ASC 606. (2) Prepared in accordance to ASC 805. Pro Forma includes the revenue of Finisar in Q1FY20 prior to the acquisition date of 9/2 4/2 0 (3) Estimated range for FY21. See Appendix for reconciliation to most comparable GAAP measures Finisar Acquisition Bolstered Scale Growth PF (2) Q1 FY20 Q2 FY21 $1,362 $2,638 FY2019 PF (2) FY2020 Q2FY21 OpEx as % of Revenue Without amortization and stock - based compensation, and transaction costs 26% 20% 31% 42 % Q2FY21 Non - GAAP Gross Margins 38 - 42% (3) 20 - 23% (3) - 600 bps +1100 bps

Page 11 Copyright 2020, II - VI Incorporated. All rights reserved. Addressing Multiple and Strong Growing Markets Aerospace & Defense RF and Power Electronics Optical Communications 3D Sensing & LiDAR $7.5B CY25 Market For 3D sensing in consumer electronics & LiDAR in automotive For terrestrial, undersea, wireless optical infrastructure and datacenters 14% CY20 - 25 CAGR $6.2B For electric vehicles, smart power grids and 4G/5G RF antennas 24% For F35, contested space, directed energy and hypersonics $22B 24% GaAs | InP | LCoS GaAs | InP GaAs | Sapphire Source : Ovum, LightCounting, Cignal AI, Internal Estimates $14B 13% SiC | GaN/SiC | Diamond Source : Morgan Stanley, Forbes, Yole, IDC Source : Yole, Strategy Analytics, LightCounting (includes devices) Source : Internal estimates

Page 12 Copyright 2020, II - VI Incorporated. All rights reserved. Remote Radio Head Beam - forming Antenna 5G WIRELESS 4G WIRELESS Bi - Directional Converter/ Inverter/ Electric Motor DC - DC Converter Electric Charger / HV Battery EV/HEV GREEN ENERGY Solar & Wind Energy Smart Grid Power Switching Enabling Mobility & Electrification Ramping silicon carbide substrate capacity 5 - 10x including 200mm as well as qualifying a SiC epitaxial platform over the next 5 years ▪ 100 and 150 mm diameter conductive substrates ▪ 2015: Believed to be world’s first 200 mm conductive substrates ▪ For SiC MOSFET and other power devices ▪ About 10% more driving distance on the same charge POWER ELECTRONICS FOR ELECTRIC VEHICLES ▪ 100 and 150 mm diameter semi - insulating substrates ▪ 2019: Believed to be world’s first 200 mm semi - insulating substrates ▪ For SiC - based GaN HEMT devices ▪ GaN/SiC enables high - bandwidth 5G bands RF ELECTRONICS FOR WIRELESS BASE STATIONS AND RADAR

Page 13 Copyright 2020, II - VI Incorporated. All rights reserved. Advantages of Large Diameter Substrates ▪ Large diameter substrate fabrication cost (per unit area) is reduced significantly ▪ Large diameter wafer availability has helped move SiC - based devices from niche to mainstream ▪ Existing 200 mm silicon wafer fab lines can be used for SiC devices manufacturing 2’’ Wafer Manufacturing 3’’ Wafer Manufacturing 100 mm Wafer Demonstrated High Quality Wafer Manufacturing 150 mm Wafer Demonstrated Manufacturing 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 World’s First 200 mm Wafer Demonstrated 4H n - Type 6H SI Major Capacity Expansion Two Decades of SiC Materials Innovation

Page 14 Copyright 2020, II - VI Incorporated. All rights reserved. New Ventures & Wide - Bandgap Electronics Technology SiC Modules GE Technology SiC Epiwafers Ascatron SiC Chips GE Technology Ascatron INNOViON SiC Devices GE Technology Ascatron Vertical Integration SiC Substrates Legacy II - VI Significant SiC Market Opportunity (1) ($bn) (1) Internal company estimates. Includes module and device TAM. $0.5 $30+ 2020 2030 A vertically integrated SiC power electronics technology organization Announced on October 3, 2020:

Page 15 Copyright 2020, II - VI Incorporated. All rights reserved. 5G RADIO ACCESS 5G OPTICAL ACCESS Backbone Network Front - & Backhaul Network Base Stations Handsets Photonic Solutions Segment Compound Semiconductors Segments GaAs RF GaN/SiC RF Line Cards Amplifiers OCM/OTDR LPC WSS Subsystems Bidi DWDM TRx 100G BH TRx 25G FH TRx HPC WSS Coherent TRx DWDM Filters Growth Opportunities in 5G Mobile Infrastructure Mobile subscribers quickly migrating to 5G Carriers rearchitecting their networks for 5G Accelerated need to deploy new 5G infrastructure worldwide

Page 16 Copyright 2020, II - VI Incorporated. All rights reserved. Datacom Components Telecom Components ▪ 25G and 50G DFB Lasers ▪ 50G and 100G EML ▪ Lasers for Silicon Photonics Externally Modulated Laser (EML) Externally Modulated Tunable Laser ▪ 10G and 25G Tunable Lasers ▪ InP IQ Modulators ▪ Dual High - Speed Coherent Detectors ▪ Leveraging our existing sales channels in the transceiver market to drive InP component revenue ▪ Leveraging our proven ability to successfully market both components and modules ▪ Target the right mix of components and high speed modules to enhance gross margins MARKET STRATEGY Hyperscale Datacenters 5G Optical Infrastructure Coherent Transmission Indium Phosphide Devices: Upside to TAM Gross Margins

Page 17 Copyright 2020, II - VI Incorporated. All rights reserved. ▪ Market drivers • Face biometrics, auto - focus, augmented reality, automotive in - cabin & LiDAR, machine vision ▪ GaAs compound semiconductors technology platform on 6 - inch • Warren, NJ: Shipped hundreds of millions of 3D sensing VSCEL arrays since 2017 • Sherman, TX : Shipping 3D Sensing VCSEL arrays in high volume since early 2020 • Zurich, Switzerland : Edge emitters on 6 - inch in volume production in 2020 • Vertically integrated : Epitaxial growth, device fabrication and automated wafer testing ▪ Broad portfolio of products: Lasers, detectors, optics & integrated circuits • Integration and miniaturization capabilities WIDE INCIDENCE ANGLE MIRRORS GaAs VCSEL ARRAYS 940 GaAs EDGE - EMITTING LASERS 3D Sensing & LiDAR DIFFRACTIVE OPTICAL ELEMENTS (DOE) DIFFRACTIVE OPTICS - FLAT LENSES DIFFRACTIVE OPTICS - DIFFUSERS

Page 18 Copyright 2020, II - VI Incorporated. All rights reserved. Lasers for Materials Processing & EUV Strong demand for laser processing heads and EUV lithography ELECTRIC VEHICLE BATTERY MANUFACTURING Remote laser welding heads assisted by machine vision software AUTOMATION Laser processes adapted to most joining tasks on the cell, module, pack, and frame levels FULL LINE SUPPLIER OF MATERIALS, COMPONENTS AND SUBSYSTEMS FOR HIGH POWER LASERS CO2 LASER OPTICS FUSED SILICA LASER OPTICS SAPPHIRE LASER OPTICS DEFORMABLE MIRORS L ASER BARS LASER LIGHT CABLES CUTTING HEADS WELDING HEADS

Page 19 Copyright 2020, II - VI Incorporated. All rights reserved. Significant new opportunities ahead with strong channels to the market STRONG ABILITY TO DIFFERENTIATE THE END SOLUTION Advanced Materials Semiconductor Lasers Electro - Optic Subsystems MARKETS PRODUCTS DIFFERENTIATORS Intelligence Surveillance & Reconnaissance ▪ IR sensors ▪ Windows and lenses ▪ Sapphire enclosures Dedicated vertically integrated facilities Contested Space ▪ Telescopes ▪ Imaging lenses 30+ year of design, fabrication, and launch of products Directed Energy ▪ Laser subsystems ▪ Beam directors ▪ Fiber amplifiers Supplier of key laser weapons components and subsystems Hypersonics ▪ Nose cones ▪ Seeker optics Qualified proprietary coatings and patterning Phased Array Laser Optics Aerospace & Defense

Page 20 Copyright 2020, II - VI Incorporated. All rights reserved. Life Sciences and Healthcare ▪ Gene Sequencing and Testing ▪ Optical Coherence Tomography ▪ Next Generation Biosensors Photonics plays an important role in Polymerase Chain Reaction (PCR) Instruments that can determine the outcome of patient testing for COVID - 19 .

Page 21 Copyright 2020, II - VI Incorporated. All rights reserved. COVID - 19 Has Accelerated II - VI’s Secular Tailwinds Driving Increasing Demand for Connectivity and High - Performance Infrastructure Video Conferencing Life Sciences / Diagnostics Content Streaming 5G Smart Power Energy Efficiency Work - From - Home II - VI is enabling the convergence of communications, computing, and sensing

Financial Overview

Page 23 Copyright 2020, II - VI Incorporated. All rights reserved. Attractive and Increasing Gross and Operating Margins (1) All non - GAAP amounts exclude certain adjustments for share - based compensation, acquired intangible amortization expense, certain one - time transaction expenses, debt extinguishment expense, fair value measurement period adjustments and restructuring and related items. See Appendix for reconciliation to most comparable GAAP measures (2) II - VI figures are for the three months ended September 30, 2019 and Finisar figures are for the three months ended July 28, 2019 . Strong Execution and Synergy Realization Post Finisar Transaction Close Driving Margins Non - GAAP Gross Margin (1) Non - GAAP Operating Margin (1) 38% 31% 38% 42% 40% 42% IIVI(2) FNSR(2) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 16% 9% 13% 17% 19% 22% IIVI(2) FNSR(2) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Last Quarter Before Close (2) Last Quarter Before Close (2)

Page 24 Copyright 2020, II - VI Incorporated. All rights reserved. Significant Value Creation Potential from Synergies Original Est. Synergies Within 36 months Annual Run Rate* Synergies on 12/31/2020 Cost of Goods Sold ▪ Supply chain management - Procurement ▪ Infeed - Internal supply of enabling materials and components ~$85 M ~$65 M Research & Development ▪ More efficient R&D with scale ▪ Complementary engineering and design teams ~$65 M ~$45 M General & Administration ▪ Consolidation of overlapping corporate costs ▪ Optimization of operating model Sales & Marketing ▪ Savings from scale TOTAL ~$150 M ~$110 M *Annual Run Rate refers to total savings achieved in full 12 month period. Total estimated synergies of $150M now projected in 24 months instead of 36 months, and increasing 3 - year total synergies target to $200M.

Page 25 Copyright 2020, II - VI Incorporated. All rights reserved. Key Takeaways One of the Largest Photonics and Compound Semiconductor Companies 1 Materials Expertise Drives Differentiation in Multiple Growing Markets 2 Vertically Integrated, Diverse Global Manufacturing Footprint 3 History of Insightful Targeting and Successful Integration of Strategic Acquisitions 4 Strong Execution: Integration and Synergies Ahead of Plan; Resilient Growth 5

Appendix

Page 27 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Q1FY21 QTD Revenue Reported Segments Q1FY20 Revenue Q1FY21 Revenue Q1FY21 Op Margin – GAAP / Non - GAAP Q1FY21/ Q1FY20 Revenue Growth Pro Forma* Revenue Change FY21 Q1/ FY20 Q1 Industrial (Automotive) Fiber O ptic & Wireless Comm. Aerospace & Defense Semi Cap Life Science, Consumer, Other Photonic Solutions $163M (1) $498M 10% / 16% 205% 2% 95% 0% 0% 3% Compound Semiconductors $177M $230M 22% / 26% 30% 23% (1%) 23% 21% 11% 21% II - VI Consolidated $340M $728M 14% / 19% 114% 22% 9% (0%) 70% 7% 4% 10% II - VI Segment Revenue by End Markets for Q1FY21 QTD * Pro Forma calculation in accordance with ASC 805. 1: Includes the revenue presented in “Finisar and Other” for the prior period of approximately $22M.

Page 28 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Q2FY21 QTD Revenue Reported Segments Q2FY20 Revenue Q2FY21 Revenue Q2FY21 Op Margin – GAAP / Non - GAAP Q2FY21/ Q2FY20 Revenue Growth Industrial (Automotive) Fiber O ptic & Wireless Comm. Aerospace & Defense Semi Cap Life Science, Consumer, Other Photonic Solutions $460M $483M 10% / 17% 5% 2% 94% 0% 1% 3% Compound Semiconductors $206M $304M 23% / 29% 47% 20% (1%) 11% 15% 8% 45% II - VI Consolidated $666M $787M 15% / 22% 18% 9% (1%) 62% 6% 3% 19% II - VI Segment Revenue by End Markets for Q2FY21 QTD

Page 29 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of H1FY21 YTD Revenue Reported Segments H1FY20 Revenue H1FY21 Revenue H1FY21 Op Margin – GAAP / Non - GAAP H1FY21/ H1FY20 Revenue Growth Pro Forma* Revenue Change FY21 H1/ FY20 H1 Industrial (Automotive) Fiber O ptic & Wireless Comm. Aerospace & Defense Semi Cap Life Science, Consumer, Other Photonic Solutions $624M (1) $981M 10% / 16% 57% 2% 95% 0% 0% 3% Compound Semiconductors $383M $534M 23% / 28% 39% 22% (1%) 13% 18% 9% 37% II - VI Consolidated $1,007M $1,515M 14% / 21% 50% 17% 9% (0%) 66% 6% 4% 15% II - VI Segment Revenue by End Markets for First Half (H1) of FY21 YTD * Pro Forma calculation in accordance with ASC 805. 1: Includes the revenue presented in “Finisar and Other” for the prior period of approximately $22M.

Page 30 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Full Year FY20 Revenue Reported Segments FY20 Revenue FYY20 Op Margin – GAAP / Non - GAAP FY20/FY19 Revenue Growth Industrial (Automotive) Fiber O ptic & Wireless Comm. Aerospace & Defense Semi Cap Life Science, Consumer, Other Photonic Solutions $1,537M 3% / 15% 141% 3% 94% 0% 1% 2% Compound Semiconductors $821M 8% / 12% 13% 29% (1%) 15% 21% 12% 23% Unallocated $22.1M N/A N/A 98% 2% II - VI Consolidated $2,380M 2% / 14% 75% 12% (0%) 67% 7% 5% 9% II - VI Segment Revenue by End Markets for Full Year FY20

Page 31 Copyright 2020, II - VI Incorporated. All rights reserved. Note: Dollars in millions. Q1 FY20 represents quarter ending October July 28, 2019. Reconciliation of GAAP Measures to Non - GAAP Measures Three Months Ended 7/28/19 (Last Finisar Stand Alone Report) Finisar Q1 FY20 Revenue 285.0$ GAAP Gross Profit 85.3$ Amortizationof required technology 0.5$ Stock compensation 2.9$ Impairment of long-lived/intangible assets 1.7$ Write off discontinued product inventory (1.8)$ Non-GAAP Gross Profit 88.6$ Non-GAAP Gross Margin 31% GAAP Operating Income (Loss) (9.5)$ Total cost of revenue adjustment 3.4$ Reduction in force costs and other restructuring 0.1$ Stock compensation 12.8$ Acquisition related costs 1.1$ Amortization of purchased intangibles 0.2$ Startup costs 17.1$ Non-GAAP Operating Income 25.1$ Non-GAAP Operating Margin 9%

Page 32 Copyright 2020, II - VI Incorporated. All rights reserved. Reconciliation of GAAP Measures to Non - GAAP Measures

Page 33 Copyright 2020, II - VI Incorporated. All rights reserved. Reconciliation of GAAP Measures to Non - GAAP Measures

Page 34 Copyright 2020, II - VI Incorporated. All rights reserved. Note: Dollars in millions. Reconciliation of GAAP Measures to Non - GAAP Measures

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