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Segment Reporting
 9 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]  
Segment Reporting

Note 13.

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 performance.

The Company reports its financial results in the following three segments: (i) II-VI Laser Solutions, (ii) II-VI Photonics, and (iii) II-VI Performance Products, 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.

As discussed in Note 1, the Company realigned the composition of its operating segments. The Company moved Laser Systems Group from II-VI Laser Solutions to II-VI Photonics and moved IPI from II-VI Photonics to II-VI Performance Products.  All applicable segment information has been restated to reflect this change.

In September 2018, November 2018, and March 2019, the Company completed its acquisitions of CoAdna, an additional product line, and Redstone, respectively. See Note 4, Acquisitions.  The operating results of these acquisitions have been reflected in the selected financial information of the Company’s II-VI Photonics segment, with the exclusion of Redstone that is reflected in the II-VI Performance Products Segment, since the date of the acquisitions.

The accounting policies are consistent across each of the segments. To the extent possible, the Company’s corporate expenses and assets are allocated to the segments. The Company evaluates segment performance based upon reported segment operating income, which is defined as earnings before income taxes, interest and other income or expense. Eliminations and Other include eliminating inter-segment sales and transfers as well as transaction costs related to the Finisar transaction. See Note 3 for additional information.

The following tables summarize selected financial information of the Company’s operations by segment ($000):

 

 

 

Three Months Ended March 31, 2019

 

 

 

II-VI

 

 

 

 

 

 

II-VI

 

 

 

 

 

 

 

 

 

 

 

Laser

 

 

II-VI

 

 

Performance

 

 

Eliminations &

 

 

 

 

 

 

 

Solutions

 

 

Photonics

 

 

Products

 

 

Other

 

 

Total

 

Revenues

 

$

97,474

 

 

$

166,473

 

 

$

78,549

 

 

$

-

 

 

$

342,496

 

Inter-segment revenues

 

 

15,301

 

 

 

3,115

 

 

 

5,392

 

 

 

(23,808

)

 

 

-

 

Operating income (expense)

 

 

5,937

 

 

 

20,723

 

 

 

8,377

 

 

 

(3,907

)

 

 

31,130

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,647

)

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,532

 

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,377

)

Net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24,638

 

Depreciation and amortization

 

 

11,189

 

 

 

6,795

 

 

 

5,177

 

 

 

-

 

 

 

23,161

 

Segment assets

 

 

721,234

 

 

 

685,141

 

 

 

535,602

 

 

 

-

 

 

 

1,941,977

 

Expenditures for property, plant & equipment

 

 

17,566

 

 

 

11,177

 

 

 

6,040

 

 

 

-

 

 

 

34,783

 

Investments

 

 

-

 

 

 

-

 

 

 

76,452

 

 

 

-

 

 

 

76,452

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

II-VI

 

 

 

 

 

 

II-VI

 

 

 

 

 

 

 

 

 

 

 

Laser

 

 

II-VI

 

 

Performance

 

 

Eliminations &

 

 

 

 

 

 

 

Solutions

 

 

Photonics

 

 

Products

 

 

Other

 

 

Total

 

Revenues

 

$

104,537

 

 

$

122,037

 

 

$

68,172

 

 

$

-

 

 

$

294,746

 

Inter-segment revenues

 

 

8,268

 

 

 

(175

)

 

 

6,870

 

 

 

(14,963

)

 

 

-

 

Operating income

 

 

11,602

 

 

 

14,024

 

 

 

8,853

 

 

 

-

 

 

 

34,479

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,014

)

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,755

 

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,122

)

Net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

30,098

 

Depreciation and amortization

 

 

10,112

 

 

 

5,843

 

 

 

3,969

 

 

 

-

 

 

 

19,924

 

Expenditures for property, plant & equipment

 

 

16,542

 

 

 

14,754

 

 

 

7,319

 

 

 

-

 

 

 

38,614

 

 

 

 

Nine Months Ended March 31, 2019

 

 

 

II-VI

 

 

 

 

 

 

II-VI

 

 

 

 

 

 

 

 

 

 

 

Laser

 

 

II-VI

 

 

Performance

 

 

Eliminations &

 

 

 

 

 

 

 

Solutions

 

 

Photonics

 

 

Products

 

 

Other

 

 

Total

 

Revenues

 

$

309,226

 

 

$

461,323

 

 

$

229,219

 

 

$

-

 

 

$

999,768

 

Inter-segment revenues

 

 

42,486

 

 

 

8,451

 

 

 

17,113

 

 

 

(68,050

)

 

 

-

 

Operating income (expense)

 

 

30,469

 

 

 

59,722

 

 

 

28,768

 

 

 

(11,010

)

 

 

107,949

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16,811

)

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,946

 

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,595

)

Net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

79,489

 

Depreciation and amortization

 

 

32,629

 

 

 

19,456

 

 

 

15,542

 

 

 

-

 

 

 

67,627

 

Expenditures for property, plant & equipment

 

 

44,460

 

 

 

34,451

 

 

 

29,259

 

 

 

-

 

 

 

108,170

 

 

 

 

Nine Months Ended March 31, 2018

 

 

 

II-VI

 

 

 

 

 

 

II-VI

 

 

 

 

 

 

 

 

 

 

 

Laser

 

 

II-VI

 

 

Performance

 

 

Eliminations &

 

 

 

 

 

 

 

Solutions

 

 

Photonics

 

 

Products

 

 

Other

 

 

Total

 

Revenues

 

$

297,506

 

 

$

353,281

 

 

$

186,932

 

 

$

-

 

 

$

837,719

 

Inter-segment revenues

 

 

22,335

 

 

 

8,185

 

 

 

19,180

 

 

 

(49,700

)

 

 

-

 

Operating income

 

 

23,695

 

 

 

49,687

 

 

 

23,357

 

 

 

-

 

 

 

96,739

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(13,303

)

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,551

 

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(27,152

)

Net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

60,835

 

Depreciation and amortization

 

 

27,165

 

 

 

17,019

 

 

 

13,965

 

 

 

-

 

 

 

58,149

 

Expenditures for property, plant & equipment

 

 

52,724

 

 

 

32,429

 

 

 

30,284

 

 

 

-

 

 

 

115,437