II‐VI reports improved results for Q4 and full-year 2013

07 Aug 2013

Exits tellurium and selenium businesses; completes purchase of German subsidiary HighYAG.

Diversified optics and materials developer II-VI Inc., Saxonburg, PA, USA, has reported generally positive trading results for its fourth quarter and fiscal year, which ended June 30, 2013. Bookings for the quarter increased 2% to $145.4m compared to $142.0m in the fourth quarter of last fiscal year.

The company also announced its exit from tellurium and selenium businesses, and that it had completed the takeover of of previously partial subsidiary HighYAG, Stahsdorf, Germany.

II-VI’s revenues for the latest quarter increased 13% to $155.0m ($136.9m in Q4 of last year). Revenues for the full year, which ended June 30, 2013, were up 4% to a “record” $558.4m ($534.6m in 2012). Net earnings for the quarter were $10.0m, or $0.16 per share‐diluted (compared to $14.4m and $0.22). And for the latest fiscal year, earnings were $50.8m, and $0.80 per share ($60.3m and $0.94).

Francis Kramer, president and CEO commented, “We are pleased to report record revenues for the fourth quarter and fiscal year 2013. As global industrial customers continued to use and deploy CO₂ lasers, Infrared Optics bookings for the quarter increased 10% on the same quarter last year.

“During this fiscal year, we established a new record for cash flow from operations: $107.6m, 22% over the previous record of 2012. Free cash flow for fiscal 2013 was $82.3m. We are now set to capitalize on the three recent acquisitions and look forward to a successful year in fiscal 2014.”

Quitting tellurium and selenium

“We have made the difficult but necessary decision to refocus our subsidiary Pacific Rare Specialty Metals & Chemicals on processing rare earth material and providing a crucial raw material, selenium metal, for use by II‐VI Infrared Optics. Ceasing the commercial production and sale of tellurium and selenium chemicals substantially reduces our future exposure to volatility of tellurium and selenium index pricing.”

Craig Creaturo, II-VI’s Chief Financial Officer, described some of the financial consequences of the company’s decision to exit the tellurium and selenium chemical businesses: “Of the $4.4m expense we incurred in Q4, 2013, for this activity, $2.6m was a write-off of tellurium inventory, $900,000 was a write-off of fixed assets and improvements, $700,000 was a write-off of selenium inventory and $200,000 was a write-off of supplies and an accrual for disposal costs.

”In fiscal year 2014, once these product lines cease their sales and production activities, the company will present the tellurium and selenium chemicals business as a discontinued operation.”

During the quarter that ended December 31, 2012, II-VI completed three acquisitions: M Cubed Technologies, Inc.; the thin‐film filter business and interleaver product line of Oclaro; and LightWorks Optics. M Cubed has joined II-VI’s Advanced Products Group segment, the Oclaro assets became part of Photop Technologies, and LightWorks joined the Military & Materials segment.

Outlook

For the first fiscal quarter ending September 30, 2013, II-VI forecasts that revenues will range from $140m to $145m and EPS will range from $0.18 to $0.23. And for the fiscal year ending June 30, 2014, the company expects revenues to increase between 6% and 9% and earnings per share to increase between 20% and 30% compared to the fiscal year ended June 30, 2013.

About the Author

Matthew Peach is a contributing editor to optics.org.