<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended, March 31, 1995
[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
------------- -------------
Commission File Number: 0-16195
II-VI INCORPORATED
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1214948
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
375 Saxonburg Boulevard
Saxonburg, PA 16056 16056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 412-352-4455
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
At March 31, 1995, 2,534,582 shares of Common Stock, no par value, of
the registrant were outstanding.
<PAGE>
II-VI INCORPORATED AND SUBSIDIARIES
-----------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Independent Accountants' Report......................................... 3
Condensed Consolidated Balance Sheets - March 31, 1995 and
June 30, 1994........................................................... 4
Condensed Consolidated Statements of Operations -- Three and nine
months ended March 31, 1995 and 1994.................................... 5
Condensed Consolidated Statements of Shareholders' Equity -- Nine
months ended March 31, 1995............................................. 7
Condensed Consolidated Statements of Cash Flows -- Nine months
ended March 31, 1995 and 1994........................................... 8
Notes to Condensed Consolidated Financial Statements.................... 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................... 11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................................ 13
</TABLE>
2
<PAGE>
[LOGO OF ALPERN, ROSENTHAL & COMPANY]
Certified Public Accountants
Warner Centre, Suite 400 . 332 Fifth Avenue . Pittsburgh, Pennsylvania
15222-2413
(412) 281-2501 . Fax (412) 471-1996
Independent Accountants' Report
To the Board of Directors and
Shareholders of II-VI Incorporated
Saxonburg, Pennsylvania
We have reviewed the accompanying condensed consolidated balance sheet of
II-VI Incorporated and Subsidiaries as of March 31, 1995, and the related
condensed consolidated statements of operations, shareholders' equity and cash
flows for the three and nine-month periods ended March 31, 1995 and 1994. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of II-VI Incorporated and Subsidiaries
as of June 30, 1994, and the related consolidated statements of earnings,
shareholders' equity and cash flows for the year then ended (not presented
herein); and in our report dated August 12, 1994, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed balance sheet as of June 30,
1994 is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
/s/ Alpern, Rosenthal & Company
April 18, 1995
A Professional Corporation
- - - - - - -------------------------------------------------------------------------------
Irving P. Rosenthal, CPA Members American and Pennsylvania
Michael H. Levin, CPA Institutes of Certified Public Accountants
Harvey A. Pollack, CPA
Fred J. Morelli, Jr., CPA Accounting Firms Associated, inc.
Edward F. Rockman, CPA Member Firms in Principal Cities
Emanuel V. DiNatale, CPA
Deborah H. Wells, CPA
Fred M. Rock, CPA
Sean M. Brennan, CPA
Alexander Paul, CPA
Michael E. Forgas, CPA
Joel M. Rosenthal, CPA
3
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
- - - - - - --------------------------------------------------------------------------------
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000 except share data)
<TABLE>
<CAPTION>
March 31, June 30,
Assets 1995 1994
--------- ---------
<S> <C> <C>
Current Assets
Cash and equivalents $ 2,422 $ 1,734
Accounts receivable - less allowance for doubtful
accounts of $143 at 3/31/95 and $125 at 6/30/94 5,630 3,683
Inventories 4,012 3,204
Deferred income taxes 218 269
Prepaid and other current assets 387 260
------- -------
Total Current Assets 12,669 9,150
Property, Plant & Equipment, net 9,331 8,093
Other Assets 344 327
------- -------
$22,344 $17,570
======= =======
Liabilities and Shareholders' Equity
Current Liabilities
Notes payable $ 1,521 $ -
Accounts payable - trade 678 444
Accrued salaries, wages and bonuses 1,337 737
Income taxes payable 500 375
Accrued profit sharing contribution 175 70
Other current liablities 1,131 613
Current portion of long-term debt 22 263
------- -------
Total Current Liabilities 5,364 2,502
Long-Term Debt--less current portion 74 -
Deferred Income Taxes 952 831
Commitments & Contingencies - -
Shareholders' Equity
Preferred stock, no par value; authorized -
5,000,000 shares; unissued - -
Common stock, no par value; authorized- 30,000,000 shares;
issued- 3,105,205 shares at 3/31/95 and 3,078,115 at 6/30/94 4,269 4,184
Cumulative translation adjustment (12) 10
Retained earnings 12,827 11,142
------- -------
17,084 15,336
Less treasury stock, at cost - 570,623 shares at
3/31/95; 566,418 at 6/30/94 1,130 1,099
------- -------
15,954 14,237
------- -------
$22,344 $17,570
======= =======
</TABLE>
- - - - - - -See notes to condensed consolidated financial statements.
4
<PAGE>
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
($000 except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
Revenues
Net Sales:
Domestic $ 4,407 $ 2,156
International 3,248 2,351
------------- -------------
7,655 4,507
Contract research and development 373 455
------------- -------------
8,028 4,962
------------- -------------
Costs, Expenses & Other Income
Cost of goods sold 4,663 3,067
Contract research and development 261 279
Internal research and development 85 64
Selling, general and administrative expenses 1,989 1,289
Interest and other expense (income) - net (62) (62)
------------- -------------
6,936 4,637
------------- -------------
Earnings Before Income Taxes 1,092 325
Income Tax Expense 312 122
------------- -------------
Net Earnings $ 780 $ 203
============= =============
Earnings Per Share $ 0.29 $ 0.08
============= =============
</TABLE>
- - - - - - -See notes to condensed consolidated financial statements.
5
<PAGE>
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
($000 except per share data)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
Revenues
Net Sales:
Domestic $ 9,470 $ 6,165
International 9,016 6,186
------------- -------------
18,486 12,351
Contract research and development 892 1,164
------------- -------------
19,378 13,515
------------- -------------
Costs, Expenses & Other Income
Cost of goods sold 11,022 8,337
Contract research and development 712 739
Internal research and development 337 221
Selling, general and administrative expenses 5,059 3,720
Gain on sale of investment - (699)
Interest and other expense (income) - net (66) (27)
------------- -------------
17,064 12,291
------------- -------------
Earnings Before Income Taxes 2,314 1,224
Income Tax Expense 629 420
------------- -------------
Net Earnings $ 1,685 $ 804
============= =============
Earnings Per Share $ 0.65 $ 0.32
============= =============
</TABLE>
- - - - - - -See notes to condensed consolidated financial statements.
6
<PAGE>
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statement of Shareholders' Equity (Unaudited)
(000)
<TABLE>
<CAPTION>
Common Stock Cumulative Treasury Stock
------------------- Translation Retained -------------------
Shares Amount Adjustment Earnings Shares Amount Total
------- ------- ------------ --------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance--June 30, 1994 3,078 $ 4,184 $ 10 $ 11,142 (566) $ (1,099) $ 14,237
Shares issued under stock option plan - 1 - - - - 1
Net earnings for the quarter - - - 396 - - 396
Translation adjustment - - 8 - - - 8
------- ------- --------- --------- ------- --------- --------
Balance--September 30, 1994 3,078 $ 4,185 $ 18 $ 11,538 (566) $ (1,099) $ 14,642
Shares issued under stock option plan 12 39 - - - - 39
Net earnings for the quarter - - - 509 - - 509
Purchase of treasury stock - - - - (3) (18) (18)
Translation adjustment - - (2) - - - (2)
------- ------- --------- --------- ------- --------- --------
Balance--December 31, 1994 3,090 $ 4,224 $ 16 $ 12,047 (569) $ (1,117) $ 15,170
======= ======= ========= ========= ======= ========= ========
Shares issued under stock option plan 15 45 - - - - 45
Net earnings for the quarter - - - 780 - - 780
Purchase of treasury stock - - - - (2) (13) (13)
Translation adjustment - - (28) - - - (28)
------- ------- --------- --------- ------- --------- --------
Balance--March 31, 1995 3,105 $ 4,269 $ (12) $ 12,827 (571) $ (1,130) $ 15,954
======= ======= ========= ========= ======= ========= ========
</TABLE>
- - - - - - -See notes to condensed consolidated financial statements.
7
<PAGE>
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-----------------------------
1995 1994
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities
Net Earnings $ 1,685 $ 804
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 1,519 1,400
Net loss (gain) on disposal of fixed assets 17 (3)
Gain on sale of investment - (699)
Gain on foreign currency transactions (19) (53)
Deferred income taxes 172 134
Increase (decrease) in cash from changes in:
Accounts receivable (1,187) 342
Inventories (219) (228)
Accounts payable 125 (358)
Accrued salaries, wages and bonuses 589 13
Accrued profit sharing contribution 105 23
Income taxes payable 125 121
Other operating net assets 122 (93)
------------ ------------
Net cash provided by operating activities 3,034 1,403
------------ ------------
Cash Flows from Investing Activities
Proceeds from sale of fixed assets - 5
Additions to fixed assets (1,332) (1,432)
Net cash on Purchase of Virgo Optics (2,353) -
Additions to other assets (69) (97)
------------ ------------
Net cash used in investing activities (3,754) (1,524)
------------ ------------
Cash Flows from Financing Activities
Net change in notes payable 1,521 -
Proceeds from long-term borrowings 108 -
Payments on long-term borrowings (275) (530)
Proceeds from sale of common stock 85 22
Purchase of treasury stock (31) (164)
------------ ------------
Net cash provided by (used in) financing activities 1,408 (672)
------------ ------------
Net increase (decrease) in cash and equivalents 688 (793)
Cash and Equivalents at Beginning of Period 1,734 1,862
------------ ------------
Cash and Equivalents at End of Period $ 2,422 $ 1,069
============ ============
</TABLE>
- - - - - - -See notes to condensed consolidated financial statements.
8
<PAGE>
II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note A - Basis of Presentation
---------------------
The condensed consolidated financial statements for the three and nine
month periods ended March 31, 1995 and 1994 are unaudited. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation for the periods presented have been included.
These interim statements should be read in conjunction with the audited
consolidated financial statements and footnotes thereto contained in the
Company's Annual Report as filed as an exhibit to the Company's Form 10-K Annual
Report dated September 23, 1994 filed with the Securities and Exchange
Commission. The consolidated results of operations for the three and nine month
periods ended March 31, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
Note B - Inventories ($000)
-------------------
The components of inventories are as follows:
<TABLE>
<CAPTION>
March 31 June 30
1995 1994
------------- -------------
<S> <C> <C>
Raw Materials $ 1,646 $ 1,753
Work in Progress 1,140 730
Finished Goods 1,226 721
------------- -------------
$ 4,012 $ 3,204
============= =============
</TABLE>
Note C - Property, Plant and Equipment ($000)
-------------------------------------
Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
March 31 June 30
1995 1994
------------- -------------
<S> <C> <C>
Land and land improvements $ 307 $ 307
Buildings and improvements 3,838 3,743
Machinery and equipment 16,894 14,305
------------- -------------
21,039 18,355
Less accumulated depreciation 11,708 10,262
------------- -------------
$ 9,331 $ 8,093
============= =============
</TABLE>
9
<PAGE>
II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note D - Gain on The Sale of Investment
------------------------------
In fiscal 1994, the Company recognized $699,000 of gain resulting from the
sale, in 1993, of its ownership in its former Japanese distributor. The gain had
been deferred in order to match it with the final negotiated costs, if any, of
terminating the agency agreement with the distributor. Final termination of the
agency agreement took place during the first quarter of fiscal 1994.
Note E - Notes Payable
-------------
The Company's Japanese subsidiary borrowed $1.5 million on August 17, 1994
from a Japanese bank. Terms of the agreement call for monthly principal payments
plus interest charged at the rate of .5% above the bank's prevailing prime
lending rate for a five year period. The interest rate at March 31, 1995 was
3.5%. The bank will review the borrowing agreement annually and at that time has
the option of calling the loan. These borrowings are guaranteed by the Parent
Company.
Note F - Acquisition
-----------
On December 29, 1994 the Company acquired the net assets of Virgo Optics.
The acquisition was accounted for as a purchase and included inventory, accounts
receivable, machinery and equipment and certain current liabilities. The
purchase price was allocated as follows:
<TABLE>
<S> <C>
Accounts receivable $ 720,000
Inventory 400,000
Machinery and equipment 1,387,000
Other assets 3,000
------------
2,510,000
Current liabilities (157,000)
------------
Cash purchase price $ 2,353,000
============
</TABLE>
The following pro forma financial information is based upon the historical
financial statements of the Registrant and the Virgo Optics Division of Sandoz
Chemicals Corporation ("Virgo"), adjusted to give effect to the acquisition of
substantially all of the assets and the assumption of certain liabilities of
Virgo and the integration of the activities of the Registrant and Virgo. This
information assumes that such events occurred on the first day of the
Registrant's 1994 fiscal year (July 1, 1993).
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
----------------------
1995 1994
------- -------
<S> <C> <C>
Revenues $21,782 $16,498
Net Earnings $2,023 $777
Earnings Per Share $0.78 $0.31
</TABLE>
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- - - - - - ------ ----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Results of Operations
- - - - - - ---------------------
Net earnings for the third quarter of fiscal 1995, ended March 31,
1995, were $780,000 ($0.29 per share) on revenues of $8,028,000. These results
compare with net earnings of $203,000 ($0.08 per share) on revenues of
$4,962,000 in the third fiscal quarter of last year. For the nine months ended
March 31, 1995 net earnings were $1,685,000 ($0.65 per share) on revenues of
$19,378,000 as compared to net earnings of $804,000 ($0.32 per share) on
revenues of $13,515,000 for the same period last year. Earnings for last year
included a $461,000 ($0.18 per share) after tax gain resulting from the
recognition of a previously deferred gain on the sale of the Company's
investment in its former Japanese distributor.
Order bookings for the third quarter were $8,011,000 compared to
$4,686,000 for the third quarter last fiscal year. Fiscal year-to-date bookings
were $20,709,000 versus $13,426,000 in fiscal 1994. Almost one-half of the
increase in quarterly bookings is attributable to Virgo Optics, which was
acquired on December 29, 1994. The remaining increase reflects the increased
world-wide demand for II-VI products in the Industrial Market. The year-to-date
bookings increase also reflects this higher world-wide demand for II-VI products
and, to a lesser extent, the addition of Virgo Optics. Also, the strengthening
of the Japanese Yen versus the U.S. dollar positively impacted the quarter and
year-to-date bookings.
Manufacturing revenues increased 70% from $4,507,000 for the third
quarter of last year to $7,655,000 for this quarter. Year-to-date manufacturing
revenues of $18,486,000 exceed last fiscal year's nine month total by
$6,135,000. These improvements represent increased shipments in all II-VI
markets, as well as added shipments from Virgo Optics.
Manufacturing gross margin increased to 39% and 40% for the quarter and
year-to-date, respectively, as compared to 32% for last fiscal year's third
quarter and year-to-date. Increased production volume and higher manufacturing
efficiencies from process and yield improvements have driven these increases.
The decrease in gross margin as a percent of revenues from last quarter is due
to the addition of Virgo Optics. Virgo's gross margin percentage has
historically been below that of II-VI's.
Contract research and development revenues for the quarter of $373,000
and year-to-date of $892,000 were below last year's revenues for the same
periods by $82,000 and $272,000, respectively. The reduction in contract
research and development gross margin percentage is mostly attributable to
increased costs due to reclassifications of certain other operating costs.
Internal Research and Development expenses increased $21,000 for the
quarter and $116,000 year-to-date, as compared to last year. The higher expense
is a result of increased crystal growth research.
Selling, General and Administrative expenses of $1,989,000 for the
quarter compared to $1,289,000 for last year's third quarter. Year-to-date
expenses increased to $5,059,000 from $3,720,000. These increases reflect
expenses associated with the Company's world-wide profit driven bonus program,
expenses incurred in the operation of Virgo Optics, and higher sales and
marketing expenses.
The Company's year-to-date effective income tax rate is 27% of pre-tax
earnings as compared to 34% for the same period last year. The lower rate is due
to the mix of earnings from domestic and foreign operations.
Liquidity and Capital Resources
- - - - - - -------------------------------
During the nine months ended March 31, 1995, working capital increased
from $6,648,000 to $7,305,000. This increase is primarily due to increases in
cash, accounts receivable, and inventories, offset by increases in notes
payable, accrued salaries, wages, and bonuses, and other current liabilities.
11
<PAGE>
The increases in accounts receivable and inventories are mostly due to increased
revenues and the effect of the acquisition of Virgo Optics. The increases in
accrued salaries, wages, and bonuses and other current liabilities are primarily
due to the Company's world-wide profit driven bonus program, other payroll
related amounts, and the effect of the acquisition of Virgo Optics. The increase
in notes payable is from a loan secured by the Japanese subsidiary.
The increase in cash is principally due to cash from operations and
notes payable, offset by the purchase of Virgo Optics and additional fixed
assets.
12
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
- - - - - - ------ --------------------------------
(a) Exhibits.
--------
<TABLE>
<S> <C>
15.01 Accountant's acknowledgment letter dated
May 11, 1995....................................Filed herewith.
27.01 Financial Data Schedule (supplied for the information of
the Commission)..................................Filed herewith.
99.01 Press release dated April 20, 1995...............Filed herewith.
</TABLE>
(b) Reports on Form 8-K.
-------------------
On January 13, 1995, the Registrant filed a Report on Form 8-K for
the event dated December 29, 1994, covering Items 2 and 5 thereof. On March 6,
1995, the Registrant filed Amendment No. 1 to such Form 8-K. On March 10, 1995,
the Registrant filed Amendment No. 2 to such Form 8-K, covering Item 7 thereof.
13
<PAGE>
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 thereunto duly authorized.
II-VI INCORPORATED
(Registrant)
Date: May 12, 1995 By: /s/ Carl J. Johnson
-----------------------------------------------
Carl J. Johnson
Chairman and Chief Executive Officer
Date: May 12, 1995 By: /s/ James Martinelli
-----------------------------------------------
James Martinelli
Treasurer and Director of
Finance and Accounting
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No.
- - - - - - -----------
15.01 Accountants' acknowledgment letter dated Filed herewith.
May 11, 1995
27.01 Financial Data Schedule (supplied for the
information of the Commission) Filed herewith.
99.01 Press release dated April 20, 1995 Filed herewith.
<PAGE>
15.01
[LOGO OF ALPERN, ROSENTHAL & COMPANY]
Certified Public Accountants
Warner Centre, Suite 400 . 332 Fifth Avenue . Pittsburgh, Pennsylvania
15222-2413
(412) 281-2501 . Fax (412) 471-1996
To the Board of Directors and
Shareholders of II-VI Incorporated
Saxonburg, Pennsylvania
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of II-VI Incorporated and Subsidiaries for the periods
ended March 31, 1995 and 1994, as indicated in our report dated April 18, 1995;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, is
incorporated by reference in Registration Statements No. 33-19511, No. 33-38019
and No. 33-19510 on Form S-8.
We also are aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Alpern, Rosenthal & Company
May 11, 1995
A Professional Corporation
- - - - - - --------------------------------------------------------------------------------
Members American and Pennsylvania
Institutes of Certified Public Accountants
Accounting Firms Associated, inc.
Member Firms in Principal Cities
Irving P. Rosenthal, CPA Deborah H. Wells, CPA
Michael H. Levin, CPA Fred M. Rock, CPA
Harvey A. Pollack, CPA Sean M. Brennan, CPA
Fred J. Morelli, Jr., CPA Alexander Paul, CPA
Edward F. Rockman, CPA Michael E. Forgas, CPA
Emanuel V. DiNatale, CPA Joel M. Rosenthal, CPA
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,422
<SECURITIES> 0
<RECEIVABLES> 5,773
<ALLOWANCES> 143
<INVENTORY> 4,012
<CURRENT-ASSETS> 12,669
<PP&E> 21,039
<DEPRECIATION> 11,708
<TOTAL-ASSETS> 22,344
<CURRENT-LIABILITIES> 5,364
<BONDS> 74
<COMMON> 4,269
0
0
<OTHER-SE> 11,685
<TOTAL-LIABILITY-AND-EQUITY> 22,344
<SALES> 19,378
<TOTAL-REVENUES> 19,378
<CGS> 11,734
<TOTAL-COSTS> 11,734
<OTHER-EXPENSES> 5,330
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,314
<INCOME-TAX> 629
<INCOME-CONTINUING> 1,685
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,685
<EPS-PRIMARY> .65
<EPS-DILUTED> 0
</TABLE>
<PAGE>
Exhibit 99.01
- - - - - - --------------------------------------------------------------------------------
Press II-VI II-VI Incorporated
Release Incorporated 375 Saxonburg Boulvard
Saxonburg, Pennsylvania 16056
Telephone (412) 352-4455
Telex 469864
Fax (412) 352-4980
- - - - - - --------------------------------------------------------------------------------
Release Date: April 20, 1995 Contact: Jim Martinelli
Treasurer,
Director of Finance
& Accounting
(412) 352-4455
II-VI INCORPORATED ANNOUNCES THIRD QUARTER RESULTS
PITTSBURGH, PA., April 20, 1995--II-VI Incorporated (NASDAQ NMS: IIVI) today
reported results for its third fiscal quarter ended March 31, 1995. Net
earnings for the period were $781,000 ($0.29 per share) on revenues of
$8,028,000. These results compare with net earnings of $203,000 ($0.08 per
share) on revenues of $4,962,000 in the third quarter of last fiscal year. For
the nine months ended March 31, 1995, net earnings were $1,685,000 ($0.65 per
share) on revenues of $19,378,000. This compares with net earnings of $804,000
($0.32 per share) on revenues of $13,515,000 for the same period last fiscal
year. Earnings for last year included a $461,000 ($0.18 per share) after-tax
gain on the sale of an investment.
Third quarter bookings of $8,011,000 increased the year-to-date bookings to
$20,709,000. These results compare with last fiscal year's third quarter and
year-to-date bookings of $4,686,000 and $13,426,000 respectively. Almost one-
half of the 71% increase in the quarterly bookings is attributable to Virgo
Optics, which was acquired on December 29, 1994. The remaining increase in the
quarterly bookings reflects the increased world-wide demand for II-VI products
in the Industrial markets. The year-to-date bookings increase of 54% also
reflects this higher world-wide demand for II-VI products and, to a lesser
extent, the addition of Virgo Optics. The strengthening of the Japanese Yen
versus the U.S. dollar positively impacted the quarter and year-to-date
bookings.
Manufacturing gross margin for the quarter and year-to-date increased to 39% and
40% of revenues respectively from 32% for last fiscal year's third quarter and
year-to-date. Increased production volume and higher manufacturing efficiencies
from process and yield improvements have driven these increases. The decrease
in gross margin as a percent of revenues from the prior quarter is due to the
addition of Virgo Optics. Virgo's gross margin as a percentage of revenues has
historically been below that of II-VI.
(more)
- - - - - - --------------------------------------------------------------------------------
<PAGE>
II-VI Incorporated
April 20, 1995
Page 2
Selling, General and Administrative expenses for the quarter of $1,989,000
compared to $1,289,000 for the same period last fiscal year. Year-to-date
expenses increased to $5,059,000 from $3,720,000. These increases reflect
expenses associated with the company's world-wide profit-driven bonus program,
expenses incurred in the operation of Virgo Optics, and higher sales and
marketing expenses.
In discussing the results for the quarter, Carl J. Johnson, chairman and chief
executive officer said, "The worldwide demand for all our products remains
strong and we continue to meet the challenges of increased production at all
II-VI locations. We expect this demand to continue and our outlook for the
remainder of the year is optimistic." Francis J. Kramer, president and chief
operating officer reported, "We are pleased with the transition of Virgo Optics.
After the first quarter of operating as a II-VI subsidiary we have met all of
our initial challenges."
Headquartered in Saxonburg, Pennsylvania, II-VI Incorporated designs,
manufactures and markets optical and electro-optical components and materials
for precision use in infrared devices. The Company's infrared products are used
in high-power lasers for industrial processing and military sensing systems. In
December 1994, II-VI acquired the Virgo Optics Division of Sandoz Chemicals
Corporation located in Port Richey, Florida. Virgo Optics designs, develops and
manufactures laser materials, optics and coatings for visible and near infrared
laser applications. The products of Virgo Optics are used in medical,
scientific and industrial YAG lasers. Frequency doubling materials produced by
the division are being utilized in the emerging laser-based, blue light field.
II-VI is also currently developing products for the nuclear radiation detection
market through its eV PRODUCTS Division.
(more)
<PAGE>
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
($000 except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1995 1994
------- -------
<S> <C> <C>
Revenues
Net sales $7,655 $4,507
Contract research and development 373 455
------- -------
8,028 4,962
------- -------
Costs, Expenses and Other Income
Cost of goods sold 4,663 3,067
Contract research and development 260 279
Internal research and development 85 64
Selling, general and administrative 1,989 1,289
expenses
Interest and other expense - net (61) (62)
------- -------
6,936 4,637
------- -------
Earnings Before Income Taxes 1,092 325
Income Tax Expense 311 122
------- -------
Net Earnings $ 781 $ 203
======= =======
Earnings Per Share $ 0.29 $ 0.08
======= =======
Average Shares Outstanding 2,661 2,524
</TABLE>
<PAGE>
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
($000 except per share data)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-------------------
1995 1994
-------- --------
<S> <C> <C>
Revenues
Net sales $18,486 $12,351
Contract research and development 892 1,164
-------- --------
19,378 13,515
-------- --------
Costs, Expenses and Other Income
Cost of goods sold 11,022 8,337
Contract research and development 712 739
Internal research and development 337 221
Selling, general and administrative 5,059 3,720
expenses
Gain on sale of investment - (699)
Interest and other expense - net (66) (27)
-------- --------
17,064 12,291
-------- --------
Earnings Before Income Taxes 2,314 1,224
Income Tax Expense 629 420
-------- --------
Net Earnings $ 1,685 $ 804
======== ========
Earnings Per Share $ 0.65 $ 0.32
======== ========
Average Shares Outstanding 2,600 2,546
</TABLE>
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