PITTSBURGH, Feb. 09, 2021 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) 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.”
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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.
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.
