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):  May 11, 2020

_______________________________

II-VI Incorporated

(Exact name of registrant as specified in its charter)

_______________________________

Pennsylvania	0-16195	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

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 May 11, 2020, 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.

The management of the Company will be presenting at investor conferences in the near future. The presentation material is attached hereto as Exhibit 99.2 and incorporated herein by reference. This material may also be used at one or more subsequent conferences. The information contained in the attached presentation material is summary information that is intended to be considered in the context of the Company's SEC filings and other public announcements. The Company undertakes no duty or obligation to publicly update or revise this information, although it may do so from time to time.

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 May 11, 2020

Exhibit 99.2  Investor information materials titled "Investor Update May 2020"

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: May 11, 2020	By:	/s/ Mary Jane Raymond
		Mary Jane Raymond
		Chief Financial Officer and Treasurer

EX-99.1

EXHIBIT 99.1

II-VI Incorporated Reports Fiscal 2020 Third Quarter Results Achieves Record Bookings and Backlog

• Record Bookings of $840 million and Record Backlog at $893 million
• Quarterly Revenue of $627.0 million
• Quarterly GAAP Operating Income of $69.0 million
• Quarterly Non-GAAP Operating Income of $86.5 million
• Quarterly GAAP EPS of $0.06
• Quarterly Non-GAAP EPS of $0.47

PITTSBURGH, May 11, 2020 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI) ("II-VI," “We” or the "Company") today reported results for its fiscal 2020 third quarter ended March 31, 2020.

"In this second full quarter of II-VI operations with Finisar included, we successfully continued our integration activities amid the COVID-19 pandemic," said Dr. Vincent D. (Chuck) Mattera, Jr., Chief Executive Officer. "Our mandate and priorities during the pandemic have been clear with respect to our response to this crisis:

• Ensure the safety of the II-VI workforce;
• Ensure the hygiene and security of our worldwide facilities; and
• Maintain full compliance with all government laws, orders and policies that apply to us."

"Our focus on these priorities mitigated the impact of COVID-19 and delivered a great quarter. Despite significant operating challenges, the extraordinary commitment of our employees allowed us to address the steep ramps requested by our customers, and to exceed the high end of our revenue and EPS guidance with record bookings at 22% above our forecast."

"Our global business continuity team supported our operations to deliver these results, and they are a testament to the professionalism and dedication of our global workforce of over 22,000 employees. Our substantial progress at integrating the Finisar acquisition after only two quarters is a result of our experience in assessing markets and acquiring complementary companies with great technology and potential."

Dr. Mattera continued, "Demand in the communications market accelerated considerably throughout the quarter. It was strong across all aspects of our telecom and datacom offerings driven by the acceleration of the build out of the 5G deployments and network infrastructure upgrades. This was most evident in our Transceiver business where bookings far exceeded our expectations during the quarter and customer enthusiasm remained high. We had a second consecutive quarter of record 3D sensing shipments from our Warren, NJ and Easton, PA, operations. We also successfully completed the qualification of our Sherman, TX facility as planned, and we have begun to ship production units as we continue our manufacturing ramp. We look forward to completing the year on a strong note."

Table 1
Financial Metrics
$ Millions, except per share amounts and %
(Unaudited)	Three Months Ended							Nine Months Ended
	Mar 31,		Dec 31,			Mar 31,		Mar 31,			Mar 31,
	2020		2019			2019		2020			2019
Revenues	$	627.0	$	666.3		$	342.4	$	1,633.8		$	999.7
GAAP Gross Profit (1)	$	245.9	$	148.3		$	127.3	$	517.4		$	382.7
Non-GAAP Gross Profit (2)	$	240.4	$	241.3		$	128.2	$	605.8		$	385.1
GAAP Operating Income (Loss) (1)	$	69.0	$	(78.5	)	$	31.1	$	(28.0	)	$	108.0
Non-GAAP Operating Income (2)	$	86.5	$	73.6		$	47.3	$	209.2		$	152.8
GAAP Net Earnings (Loss)	$	5.9	$	(98.2	)	$	24.6	$	(118.3	)	$	79.5
Non-GAAP Net Earnings (2)	$	44.1	$	37.2		$	39.7	$	116.9		$	124.6
GAAP Diluted Earnings (Loss) Per Share	$	0.06	$	(1.08	)	$	0.38	$	(1.43	)	$	1.21
Non-GAAP Diluted Earnings Per Share (2)	$	0.47	$	0.40		$	0.60	$	1.38		$	1.89
Other Selected Financial Metrics
GAAP Gross margin	39.2%		22.3%			37.2%		31.7%			38.3%
Non-GAAP gross margin (2)	38.3%		36.2%			37.4%		37.1%			38.5%
GAAP Operating margin	11.0%		-11.8%			9.1%		-1.7%			10.8%
Non-GAAP operating margin (2)	13.8%		11.0%			13.8%		12.8%			15.3%
GAAP Return on sales	0.9%		-14.7%			7.2%		-7.2%			8.0%
Non-GAAP return on sales (2)	7.0%		5.6%			11.6%		7.2%			12.5%

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 fourth fiscal quarter ending June 30, 2020 is revenue of $650.0 million to $700.0 million and earnings per diluted share on a non-GAAP basis of $0.50 to $0.70. This is at today’s exchange rate and today’s estimated tax impact of negative 12%. Both of these are subject to variability. The non-GAAP earnings per share include the pre-tax amounts of $20.1 million in amortization, $16.4 million in share-based compensation, and $8.2 million in other costs, including costs to facilitate the integration. 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 4:30 p.m. Eastern Time on Monday, May 11, 2020 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/IIVIQ3FY20Earnings. 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# 8589772, 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 Friday, May 15, 2020, 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# 8589772. 

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, U.S.A., 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, 2019 and in the Company’s other reports filed with the Securities and Exchange Commission; (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 assimilate recently acquired businesses, and risks, costs and uncertainties associated with such acquisitions; (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 Statements of Earnings (Loss) (Unaudited)
($000 except per share data)
	Three Months Ended
	March 31,		December 31,			March 31,
	2020		2019			2019
Revenues	$	627,041	$	666,331		$	342,496
Costs, Expenses & Other Expense (Income)
Cost of goods sold	381,108		517,991			215,212
Internal research and development	94,764		107,700			36,026
Selling, general and administrative	82,133		119,218			60,128
Interest expense	28,530		28,390			5,647
Other expense (income), net	7,168		487			(1,532		)
Total Costs, Expenses, & Other Expense (Income)	593,703		773,786			315,481
Earnings (Loss) Before Income Taxes	33,338		(107,455		)	27,015
Income Taxes	27,417		(9,242		)	2,377
Net Earnings (Loss)	$	5,921	$	(98,213	)	$	24,638
Diluted Earnings (Loss) Per Share	$	0.06	$	(1.08	)	$	0.38
Basic Earnings (Loss) Per Share	$	0.07	$	(1.08	)	$	0.39
Average Shares Outstanding  - Diluted	93,435		90,886			65,701
Average Shares Outstanding  - Basic	91,081		90,886			63,612

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Loss) (Unaudited)
($000 except per share data)
	Nine Months Ended
	March 31,			March 31,
	2020			2019
Revenues	$	1,633,781		$	999,768
Costs, Expenses & Other Expense (Income)
Cost of goods sold	1,116,368			617,071
Internal research and development	238,584			102,961
Selling, general and administrative	306,846			171,787
Interest expense	63,888			16,811
Other expense (income), net	12,734			(2,946		)
Total Costs, Expenses, & Other Expense (Income)	1,738,420			905,684
Earnings (Loss) Before Income Taxes	(104,639		)	94,084
Income Taxes	13,651			14,595
Net Earnings (Loss)	$	(118,290	)	$	79,489
Diluted Earnings (Loss) Per Share	$	(1.43	)	$	1.21
Basic Earnings (Loss) Per Share	$	(1.43	)	$	1.25
Average Shares Outstanding  - Diluted	82,615			65,844
Average Shares Outstanding  - Basic	82,615			63,539

II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
	March 31,		June 30,
	2020		2019
Assets
Current Assets
Cash and cash equivalents	$	388,107	$	204,872
Accounts receivable	496,427		269,642
Inventories	628,028		296,282
Prepaid and refundable income taxes	8,324		11,778
Prepaid and other current assets	70,202		30,337
Total Current Assets	1,591,088		812,911
Property, plant & equipment, net	1,247,167		582,790
Goodwill	1,281,762		319,778
Other intangible assets, net	763,456		139,324
Investments	73,618		76,208
Deferred income taxes	19,855		8,524
Other assets	129,877		14,238
Total Assets	$	5,106,823	$	1,953,773
Liabilities and Shareholders’ Equity
Current Liabilities
Current portion of long-term debt	$	69,250	$	23,834
Accounts payable	208,623		104,462
Operating lease current liabilities	22,433		—
Accruals and other current liabilities	268,865		142,267
Total Current Liabilities	569,171		270,563
Long-term debt	2,213,175		443,163
Deferred income taxes	54,699		23,913
Operating lease liabilities	91,771		—
Other liabilities	160,100		82,925
Total Liabilities	3,088,916		820,564
Total Shareholders' Equity	2,017,907		1,133,209
Total Liabilities and Shareholders’ Equity	$	5,106,823	$	1,953,773

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)	Nine Months Ended
	March 31,
	2020			2019
Cash Flows from Operating Activities
Net cash provided by operating activities	$	120,492		$	114,392
Cash Flows from Investing Activities
Additions to property, plant & equipment	(107,975		)	(108,170		)
Purchases of businesses, net of cash acquired	(1,036,609		)	(83,867		)
Purchases of equity investment	—			(4,480		)
Other investing activities	(3,042		)	118
Net cash used in investing activities	(1,147,626		)	(196,399		)
Cash Flows from Financing Activities
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			150,000
Payments on Finisar Notes	(560,112		)	—
Payments on borrowings under prior Term Loan, Credit Facility and other loans	(176,596		)	(90,000		)
Payments on borrowings under Term A Facility	(31,026		)	—
Payments on borrowings under Term B Facility	(3,600		)	—
Payments on borrowings under Revolving Credit Facility	(70,000		)	—
Debt issuance costs	(63,510		)	—
Proceeds from exercises of stock options	5,056			7,507
Common stock repurchase	(1,625		)	—
Payments in satisfaction of employees' minimum tax obligations	(15,680		)	(7,100		)
Other financing activities	(2,010		)	(3,540		)
Net cash provided by financing activities	1,211,897			56,867
Effect of exchange rate changes on cash and cash equivalents	(1,528		)	(688		)
Net increase (decrease) in cash and cash equivalents	183,235			(25,828		)
Cash and Cash Equivalents at Beginning of Period	204,872			247,038
Cash and Cash Equivalents at End of Period	$	388,107		$	221,210

Table 2
Segment Revenues, GAAP Operating Income (Loss) & Margins, and
Non-GAAP Operating Income (Loss) & Margins*
$ Millions, except %
(Unaudited)	Three Months Ended									Nine Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2020			2019			2019			2020			2019
Revenues:
Photonic Solutions	$	417.7		$	460.4		$	166.5		$	1,019.5		$	461.3
Compound Semiconductors	209.3			205.9			175.9			592.2			538.4
Unallocated and Other	—			—			—			22.1			—
Consolidated	$	627.0		$	666.3		$	342.4		$	1,633.8		$	999.7
GAAP Operating Income (Loss):
Photonic Solutions	$	48.7		$	(60.9	)	$	20.7		$	0.8		$	59.7
Compound Semiconductors	24.9			(8.8		)	14.3			42.6			59.3
Unallocated and Other	(4.6		)	(8.8		)	(3.9		)	(71.4		)	(11.0		)
Consolidated	$	69.0		$	(78.5	)	$	31.1		$	(28.0	)	$	108.0
Non-GAAP Operating Income (Loss):
Photonic Solutions	$	55.9		$	63.5		$	27.0		$	137.5		$	78.4
Compound Semiconductors	30.6			10.1			20.3			71.9			74.4
Unallocated and Other	—			—			—			(0.2		)	—
Consolidated	$	86.5		$	73.6		$	47.3		$	209.2		$	152.8
GAAP Operating Margin:
Photonic Solutions	11.7%			-13.2%			12.4%			0.1%			12.9%
Compound Semiconductors	11.9%			-4.3%			8.1%			7.2%			11.0%
Unallocated and Other	NA			NA			NA			NA			NA
Consolidated	11.0%			-11.8%			9.1%			-1.7%			10.8%
Non-GAAP Operating Margin:
Photonic Solutions	13.4%			13.8%			16.2%			13.5%			17.0%
Compound Semiconductors	14.6%			4.9%			11.5%			12.1%			13.8%
Unallocated and Other	NA			NA			NA			NA			NA
Consolidated	13.8%			11.0%			13.8%			12.8%			15.3%

* During the three months ended March 31, 2020 and December 31, 2019, “Unallocated and Other” primarily includes continuing transaction costs related to the Finisar acquisition.  Finisar results have been consolidated into the Photonic Solutions and Compound Semiconductors segments during the three months ended March 31, 2020 and December 31, 2019.   See Table 3 for the reconciliation of segment non-GAAP operating income (loss) to segment GAAP operating income (loss).

Table 3
Reconciliation of Segment Non-GAAP Operating Income (Loss) to
GAAP Segment Operating Income (Loss)
$ Millions
(Unaudited)	Three Months Ended									Nine Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2020			2019			2019			2020			2019
Non-GAAP Photonic Solutions Operating Income	$	55.9		$	63.5		$	27.0		$	137.5		$	78.4
Measurement period adjustment on long-lived assets	8.5			(8.2		)	—			—			—
Share-based compensation	(9.6		)	(12.8		)	(3.8		)	(25.1		)	(8.4		)
Amortization of acquired intangibles	(6.1		)	(29.2		)	(2.5		)	(37.4		)	(6.9		)
Preliminary fair value adjustment on acquired inventory	—			(74.2		)	—			(74.2		)	—
Transaction expenses related to acquisitions	—			—			—			—			(3.4		)
Photonic Solutions GAAP Operating Income (Loss)	$	48.7		$	(60.9	)	$	20.7		$	0.8		$	59.7
Non-GAAP Compound Semiconductors Operating Income	$	30.6		$	10.1		$	20.3		$	71.9		$	74.4
Share-based compensation	(4.8		)	(6.5		)	(4.1		)	(14.0		)	(9.8		)
Amortization of acquired intangibles	0.4			(4.4		)	(1.7		)	(6.0		)	(5.1		)
Restructuring and related expenses	(1.3		)	(1.6		)	—			(2.9		)	—
Preliminary fair value adjustment on acquired inventory	—			(6.4		)	—			(6.4		)	—
Compound Semiconductors GAAP Operating Income (Loss)	$	24.9		$	(8.8	)	$	14.3		$	42.6		$	59.3
Non-GAAP Unallocated and Other Operating Income (Loss)	$	—		$	—		$	—		$	(0.2	)	$	—
Finisar results	—			—			—			1.9			—
Transaction expenses related to acquisitions	(2.9		)	(8.0		)	(3.9		)	(16.5		)	(11.0		)
Severance and related - Share-based compensation	—			—			—			(10.7		)	—
Severance and related - Other compensation	(1.7		)	(0.8		)	—			(10.0		)	—
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)	$	(4.6	)	$	(8.8	)	$	(3.9	)	$	(71.4	)	$	(11.0	)
Total GAAP Operating Income (Loss)	$	69.0		$	(78.5	)	$	31.1		$	(28.0	)	$	108.0
Non-GAAP Operating Income	$	86.5		$	73.6		$	47.3		$	209.2		$	152.8

*Amounts may not recalculate due to rounding.

Table 4
Reconciliation of GAAP Measures to non-GAAP Measures
$ Millions
(Unaudited)	Three Months Ended									Nine Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2020			2019			2019			2020			2019
Gross profit on GAAP basis	$	245.9		$	148.3		$	127.3		$	517.4		$	382.7
Finisar results (5)	—			—			—			(6.5		)	—
Share-based compensation	3.0			4.2			0.9			7.2			2.4
Preliminary fair value adjustment on acquired inventory (1)	—			80.6			—			87.7			—
Measurement period adjustment on long-lived assets (6) (8)	(8.5		)	8.2			—			—			—
Gross profit on non-GAAP basis	$	240.4		$	241.3		$	128.2		$	605.8		$	385.1
Internal research and development on GAAP basis	$	94.8		$	107.7		$	36.0		$	238.6		$	103.0
Share-based compensation (2)	(4.2		)	(5.3		)	—			(10.1		)	—
Internal research and development on non-GAAP basis	$	90.6		$	102.4		$	36.0		$	228.5		$	103.0
Selling, general and administrative on GAAP basis	$	82.1		$	119.2		$	60.1		$	306.8		$	171.8
Share-based compensation (2)	(7.2		)	(9.8		)	(7.0		)	(21.8		)	(15.8		)
Transaction expenses related to acquisitions (3)	(2.9		)	(8.0		)	(4.1		)	(43.1		)	(14.6		)
Severance, restructuring and related costs (4)	(3.0		)	(2.4		)	—			(23.6		)	—
Amortization of acquired intangibles	(5.7		)	(33.6		)	(4.2		)	(45.4		)	(12.0		)
Selling, general and administrative on non-GAAP basis	$	63.4		$	65.4		$	44.8		$	173.0		$	129.4
Operating income (loss) on GAAP basis	$	69.0		$	(78.6	)	$	31.1		$	(28.0	)	$	108.0
Finisar results (5)	—			—			—			(1.9		)	—
Share-based compensation (2)	14.4			19.3			7.9			39.1			18.2
Preliminary fair value adjustment on acquired inventory (1)	—			80.6			—			87.7			—
Amortization of acquired intangibles	5.7			33.6			4.2			45.4			12.0
Measurement period adjustment on long-lived assets (6) (8)	(8.5		)	8.2			—			—			—
Severance, restructuring and related costs (4)	3.0			2.4			—			23.6			—
Transaction expenses related to acquisitions (3)	2.9			8.0			4.1			43.1			14.6
Operating income on non-GAAP basis	$	86.5		$	73.5		$	47.3		$	209.0		$	152.8

Table 4
Reconciliation of GAAP Measures to non-GAAP Measures (Continued)
$ Millions
(Unaudited)	Three Months Ended									Nine Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2020			2019			2019			2020			2019
Interest and other (income) expense, net on GAAP basis	$	35.7		$	28.9		$	4.1		$	76.6		$	13.9
Finisar results (5)	—			—			—			0.3			—
Foreign currency exchange (gains) losses, net (8)	(3.5		)	(3.4		)	0.9			(8.1		)	(0.8		)
Additional interest expense related to Finisar acquisition (5)	—			—			—			(1.7		)	—
Impairment of investment (7)	(5.0		)	—			—			(5.0		)	—
Debt extinguishment expense (5)	—			—			—			(3.9		)	—
Interest and other (income) expense, net on non-GAAP basis	$	27.2		$	25.5		$	5.0		$	58.2		$	13.1
Income taxes (benefit) on GAAP basis	$	27.4		$	(9.2	)	$	2.4		$	13.7		$	14.6
Tax impact of non-GAAP measures (8)	(3.2		)	13.4			0.2			20.7			0.5
Tax impact of fair value adjustments (8) (9)	(9.0		)	6.7			—			—			—
Income taxes on non-GAAP basis	$	15.2		$	10.9		$	2.6		$	34.4		$	15.1
Net earnings (loss) on GAAP basis	$	5.9		$	(98.2	)	$	24.6		$	(118.4	)	$	79.5
Finisar results (5)	—			—			—			(1.6		)	—
Share-based compensation (2)	14.4			19.3			7.9			39.1			18.2
Preliminary fair value adjustment on acquired inventory (1)	—			80.6			—			87.7			—
Amortization of acquired intangibles	5.7			33.6			4.2			45.4			12.0
Measurement period adjustment on long-lived assets (6) (8)	(8.5		)	8.2			—			—			—
Transaction expenses related to acquisitions (3)	2.9			8.0			4.1			43.1			14.6
Severance, restructuring and related costs (4)	3.0			2.4			—			23.6			—
Foreign currency exchange (gains) losses, net (8)	3.5			3.4			(0.9		)	8.1			0.8
Additional interest expense related to Finisar acquisition (6)	—			—			—			1.7			—
Impairment of investment (7)	5.0			—			—			5.0			—
Debt extinguishment expense (5)	—			—			—			3.9			—
Tax impact of non-GAAP measures and fair value adjustments (8) (9)	12.2			(20.1		)	(0.2		)	(20.7		)	(0.5		)
Net earnings on non-GAAP basis	$	44.1		$	37.2		$	39.7		$	116.9		$	124.6
Per share data:
Net earnings (loss) on GAAP basis
Diluted Earnings (Loss) Per Share	$	0.06		$	(1.08	)	$	0.38		$	(1.43	)	$	1.21
Basic Earnings (Loss) Per Share	$	0.07		$	(1.08	)	$	0.39		$	(1.43	)	$	1.25
Net earnings on non-GAAP basis
Diluted Earnings Per Share (10)	$	0.47		$	0.40		$	0.60		$	1.38		$	1.89
Basic Earnings Per Share	$	0.48		$	0.41		$	0.62		$	1.41		$	1.96

*Amounts may not recalculate due to rounding.

1. The preliminary fair value adjustment of $87.7 million represents the preliminary step up value adjustment of acquired inventory from the Finisar acquisition.
2. Total share-based compensation expense for the nine months ended March 31, 2020 was $49.8 million, of which $10.7 million was incurred in relation to severance related expenses as described below in note 4.
3. Transaction costs primarily represent acquisition and integration costs related to the Finisar acquisition.
4. In connection with the acquisition of Finisar, the Company recorded $20.7 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.  Additionally, $1.5 million of incremental COVID-19 payroll related costs are included in this amount.  Restructuring and related costs include $2.9 million of ongoing expenses to achieve the Company’s cost synergy strategy.
5. “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 Photonic Solutions and Compound Semiconductors segments during the three months ended March 31, 2020 and December 31, 2019.
6. Represents the depreciation impact of measurement period adjustments to the fair value of long-lived assets acquired in the Finisar acquisition.
7. Represents an impairment charge of an investment for which the carrying value was determined to be unrecoverable as of March 31, 2020.
8. The non-GAAP financial measures for the three and nine months ended March 31, 2019 and the three months ended December 31, 2019 have been adjusted to conform to the current period presentation.
9. Includes the tax impact of measurement period adjustments to the fair value of long-lived and intangible assets acquired in the Finisar acquisition.
10. Diluted shares used to calculate Diluted Earnings Per Share on a non-GAAP basis for the three months ended December 31, 2019 are 93,008.  Diluted shares used to calculate Diluted Earnings Per Share on a non-GAAP basis for the nine months ended March 31, 2020 are 84,669.

Table 5
Reconciliation of GAAP Net Income (Loss), EBITDA and Adjusted EBITDA
$ Millions
(Unaudited)	Three Months Ended									Nine Months Ended
	Mar 31,			Dec 31,			Mar 31,			Mar 31,			Mar 31,
	2020			2019			2019			2020			2019
Net earnings (loss) on GAAP basis	$	5.9		$	(98.2	)	$	24.6		$	(118.4	)	$	79.5
Income taxes (benefit)	27.5			(9.2		)	2.4			13.7			14.6
Depreciation and amortization	38.0			82.2			23.1			147.1			67.6
Interest expense	28.6			28.4			5.6			63.9			16.8
EBITDA (1)	$	100.0		$	3.2		$	55.7		$	106.3		$	178.5
EBITDA margin	15.9		%	0.5		%	16.3		%	6.5		%	17.9		%
Preliminary fair value adjustment on acquired inventory	—			80.6			—			87.7			—
Share-based compensation	14.4			19.3			7.9			39.1			18.2
Transaction expenses related to other acquisitions	2.9			8.0			4.1			43.1			14.6
Foreign currency exchange (gains) losses, net	3.5			3.4			(0.9		)	8.1			0.8
Severance, restructuring and related costs	4.6			2.4			—			23.6			—
Impairment of investment	5.0			—			—			5.0			—
Special items - Other income (expense), net	—			—			—			4.3			—
Adjusted EBITDA (2)	$	130.4		$	116.9		$	66.8		$	317.2		$	212.1
Adjusted EBITDA margin	20.8		%	17.5		%	19.5		%	19.4		%	21.2		%

*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, investment impairment charge and the impact of foreign currency exchange gains and losses.

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. May 2020 Investor Update

Page 2 Copyright 2020, II - VI Incorporated. All rights reserved. Safe Harbor Statement This document contains forward - looking statements relating to future events and expectations that are based on certain assumptio ns and contingencies. The forward - looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Lit igation Reform Act of 1995 and relate to the Company’s performance on a going - forward basis. The forward - looking statements in this pres s release involve risks and uncertainties, which could cause actual results, performance or trends to differ materially from th ose 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 pro ve to be correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ ma ter ially 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 Facto rs” discussed in the Company’s Annual Report on Form 10 - K for the fiscal year ended June 30, 2019 and in the Company’s other reports filed wit h the Securities and Exchange Commission; (iii) the purchasing patterns of customers and end - users; (iv) the timely release of new pro ducts, and acceptance of such new products by the market; (v) the introduction of new products by competitors and other competitive resp ons es; (vi) the Company’s ability to assimilate recently acquired businesses, and risks, costs and uncertainties associated with such acq uis itions; (vii) the Company’s ability to devise and execute strategies to respond to market conditions; and/or (viii) the risks of business a nd economic disruption related to the currently ongoing Coronavirus 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 re sult of new information, future events or developments, or otherwise.

Page 3 Copyright 2020, II - VI Incorporated. All rights reserved. Q3 FY2020 Overview 18 Countries 69 Locations 22,000+ Employees $388M Cash and Equivalents $627M Revenue $120M YTD Cash Flow from Operations 11% 68% Revenue by End Markets 5% Semi. Cap. Equip. 2% Life Science 6% Consumer Electronics 1% Other 7% Military Revenue by Regions 49% 21% 20% 8% 3% “TWO SIX” Refers to groups II and VI of the Periodic Table of Elements Core Competency : ENGINEERED MATERIALS

Page 4 Copyright 2020, II - VI Incorporated. All rights reserved. Sampling of representative customers based on approvals for public release Thousands of Customers Across Diverse Markets

Page 5 Copyright 2020, II - VI Incorporated. All rights reserved. Core Strategy 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

Page 6 Copyright 2020, II - VI Incorporated. All rights reserved. $333 $487 $516 $551 $683 $742 $827 $972 $1,158 $1,362 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 NASDAQ S&P 500 10 Years of continuous revenue growth 4 Transformative Acquisitions Stock charts represent relative growth in value since 1987 Optical Network & China Market InP Technology Platform Vertical Integration & Scale GaAs Technology Platform 2010 2013 2016 2019 Revenue Growth & Transformative Acquisitions 5G

Page 7 Copyright 2020, II - VI Incorporated. All rights reserved. Semiconductor Lasers Oclaro Semiconductor Laser Optical Amplifiers Oclaro Optical Amplifier Advanced Coatings Oclaro Optical Coatings Aerospace & Defense Optical Systems LightWorks Optics Precision Ceramics M Cubed Technologies Optical Channel Monitors Aegis Lightwave Conformal Patterning Max Levy Autograph InP Platform Finisar High Energy Lasers Redstone Aerospace Optonicus Wavelength Selective Switch CoAdna Compound Semiconductor Wafer Fab Kaiam Laser Limited(U.K. Fab) Faraday Rotator Integrated Photonics Direct Diode Lasers Direct Photonics GaAs & GaN - SiC Platform Anadigics Epitaxial Wafers Epiworks Micro - optics Photop Technologies Laser Processing Heads Highyag Selenium Refinery Pacific Rare Metals Thermo - electrics Marlow Industries Ultraviolet Filters Laser Power Corp Silicon Carbide Substrates Litton SIC Group ZnSe Platform Laser Power Corp Micro - optics Lighting Optical Micro - optics Virgo Optics 1995 - 2010 2011 - 2015 2016 - 2019 20+ Years of Tremendous Value Creation by Integration of Acquisitions

Page 8 Copyright 2020, II - VI Incorporated. All rights reserved. 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 $2.6B 15% SiC | GaN / SiC | Diamond Addressing Multiple Strong and Growing Markets Source : Morgan Stanley, Forbes, Yole , IDC Source : Yole , Strategy Analytics, LightCounting (includes devices) Source : Internal estimates Updated on 4/9/2020

Page 9 Copyright 2020, II - VI Incorporated. All rights reserved. #1 in Optical Communications* Telecom Datacom Long Haul, Metro, and Datacenter Interconnects A highly complementary and complete portfolio of leading - edge products Subsea ROADMs Transmission * Ovum

Page 10 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 II - VI Finisar Growth Opportunities in 5G Mobile Infrastructure

Page 11 Copyright 2020, II - VI Incorporated. All rights reserved. Indium Phosphide Target Markets 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 ▪ The right mix of components and high speed modules will increase gross margins MARKET STRATEGY Hyperscale Datacenters 5G Optical Infrastructure Coherent Transmission

Page 12 Copyright 2020, II - VI Incorporated. All rights reserved. CO2 LASER OPTICS FUSED SILICA LASER OPTICS SAPPHIRE LASER OPTICS DEFORMABLE MIRORS LASER MODULES LASER BARS DIRECT DIODE LASERS LASER LIGHT CABLES CUTTING HEADS WELDING HEADS 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

Page 13 Copyright 2020, II - VI Incorporated. All rights reserved. Aerospace & Defense Significant new opportunities ahead 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

Page 14 Copyright 2020, II - VI Incorporated. All rights reserved. 3D Sensing & LiDAR ▪ Market drivers • Face biometrics, augmented reality, automotive in - cabin & LiDAR, machine vision • Revenue tripled year - over - year in Q3 FY2020 ▪ The only in - house 150 mm GaAs VCSEL platform in the U.S. • Warren, NJ & Easton, PA : FY20Q3 - Another quarter of record shipments • Sherman, TX : Completed qualification and begun shipping • Vertically integrated : epitaxial growth, device fabrication and automated testing • In - house : Most competitive and long term viable cost structure in the industry • Broad portfolio of products: lasers, optics & integrated circuits DUAL PASS BAND FILTERS WIDE INCIDENCE ANGLE MIRROR GaAs VCSEL ARRAYS 940 GaAs EDGE - EMITTING LASERS 1550 InP EDGE - EMITTING LASERS

Page 15 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 Enabling Electrification & Mobility EV/HEV GREEN ENERGY Solar & Wind Energy Smart Grid Power Switching Ramping silicon carbide substrate capacity 3 - 5x over the next 3 years ▪ 100, 150 mm diameter conductive substrates ▪ 2015: World’s first 200 mm conductive substrates ▪ For SiC MOSFETs power devices ▪ About 10% more driving distance on the same charge POWER ELECTRONICS FOR ELECTRIC VEHICLES ▪ 100, 150 mm diameter semi - insulating substrates ▪ 2019: Word’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

Financial Update

Page 17 Copyright 2020, II - VI Incorporated. All rights reserved. Summary of Q1FY20 Main Points Key Statistics for Modeling FY20 on II - VI Consolidated Item Preliminary Amount Estimated for FY20 Comments Depreciation Amortization Inventory Step Up $174M of Depreciation $84M of Amortization $88M of Inventory Step Up Preliminary Purchase Accounting: • $672M: PP&E • $440M: Inventory (step up, $88M, $7M Q1, $81M Q2) • $964M: Assigned to goodwill • $670M: Assigned to amortizing intangibles Synergies $150M run rate synergies by Year 3 Targets: Year 1: $35M, Year 2: +$50M, Year 3: +$65M Cap Ex $135 - 150M Stock Compensation $65M Interest $85 - 90M Tax Rate 9 - 12% Shares Outstanding 95M

Page 18 Copyright 2020, II - VI Incorporated. All rights reserved. Significant Value Creation Potential from Synergies Annual Est Synergies Within 36 month s Yr 1 Annual Run Rate Synergies Achieved 50% through Yr 1 Cost of Goods Sold ▪ Supply chain management - Procurement ▪ Infeed - Internal supply of enabling materials and components ~$85 M ~$28 M Research & Development ▪ More efficient R&D with scale ▪ Complementary engineering and design teams ~$65 M ~$15 M General & Administration ▪ Consolidation of overlapping corporate costs ▪ Optimization of operating model Sales & Marketing ▪ Savings from scale TOTAL ~$150 M ~$43 M Annual Run Rate refers to total savings achieved in full 12 month period.

Updates by End Market

Page 20 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Full Year FY19 Revenue Reported Segments FY19 Revenue FYY19 Op Margin – GAAP / Non - GAAP FY19/FY18 Revenue Growth Industrial (Automotive) Fiber O ptic & Wireless Comm. Military Semi Cap Life Science, Consumer, Other Photonic Solutions $639M 13% / 17% 31% 9% 82% 0% 3% 6% Compound Semiconductors $723M 11% / 14% 8% 42% (3%) 13% 21% 13% 11% II - VI Consolidated $1,362M 11% / 15% 18% 27% (2%) 45% 11% 8% 9% II - VI Segment Revenue by End Markets for Full Year FY19

Page 21 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Q3FY20 QTD Revenue Reported Segments Q3FY19 Revenue Q3FY20 Revenue Q3FY20 Op Margin – GAAP / Non - GAAP Q3FY20/ Q3FY19 Revenue Growth Pro Forma* Revenue Change FY20 Q3/ FY19 Q3 Industrial (Automotive) Fiber O ptic & Wireless Comm. Military Semi Cap Life Science, Consumer, Other Photonic Solutions $166M $418M 11.7% / 13.4% 152% 3% 94% 0% 0% 3% Compound Semiconductors $176M $209M 11.9% / 14.6% 19% 29% (1%) 15% 21% 13% 22% II - VI Consolidated $342M $627M 11.0% / 13.8% 83% - 6% 11% (0%) 68% 7% 5% 9% II - VI Segment Revenue by End Markets for Q3FY20 QTD * Pro Forma on page 12 of Form 10 - Q filed on May 11, 2020

Appendix

Page 23 Copyright 2020, II - VI Incorporated. All rights reserved. II - VI Historical Non - GAAP Adjustments and Impact to Diluted EPS II - VI Consolidated (In USD Millions, expect per share data) Q3 FY18 (1) Q4 FY18 (1) Q1 FY19 (1) Q2 FY19 (1) Q3 FY19 (1) Q4 FY19 (1) Q1 FY20 (2) Q2 FY20 (2) Q3 FY20 Amortization $ 3.6 $ 3.6 $ 3.7 $ 4.1 $ 4.2 $ 4.6 $ 6.1 $ 33.6 $ 5.7 Share - based Compensation 3.6 4.4 5.3 5.0 7.9 6.8 5.4 19.3 14.4 Fair value step up of inventory - - - - - - 7.1 80.6 - Investment impairment - - - - - - - - 5.0 Severance, restructuring and related expenses - - - - - - 18.2 2.4 3.0 Other adjustments 0.4 0.1 1.4 0.3 (0.9) 2.3 5.5 11.6 (5.0) M&A transaction related expenses - - 1.9 8.6 4.1 4.8 32.2 8.0 2.9 Total Non - GAAP Adjustments 7.6 8.1 12.3 18.0 15.3 18.5 74.5 155.5 26.0 Tax Impact on non - GAAP Adjustments (0.1) (0.2) - (0.1) (0.2) (0.4) (12.8) (20.1) 12.2 Impact of the “Tax Cuts and Jobs Act” and Company Actions (6.5) (1.3) - - - - - - - Non - GAAP Adjustments After Tax 1.0 6.6 12.3 17.9 15.1 18.1 61.7 135.4 38.2 Average Outstanding Shares - Diluted 72.4 65.1 66.2 65.7 65.7 65.7 65.9 93.0 93.4 Impact of Non - GAAP Adjustments Per Diluted Share $ 0.01 $ 0.10 $ 0.19 $ 0.27 $ 0.23 $ 0.27 $ 0.94 $ 1.46 $ 0.41 (1) Q3 FY18 through Q2 FY20 have been adjusted to conform to the current period presentation to include the effects of foreign cu rre ncy exchange gains and losses in the caption “Other adjustments.” (2) Q1 FY20 and Q2 FY20 have been adjusted to conform to the current period presentation for the fair value step up of inventory, se verance, restructuring and related expenses, M&A transaction related expenses, and other adjustments.

Page 24 Copyright 2020, II - VI Incorporated. All rights reserved. II - VI Segment Reconciliation: GAAP Operating Income to Non - GAAP Operating Income $ Millions (Unaudited) Mar 31, Dec 31, Mar 31, Mar 31, Mar 31, 2020 2019 2019 2020 2019 Non-GAAP Photonic Solutions Operating Income (Loss) $ 55.9 $ 63.5 $ 27.0 $ 137.5 $ 78.4 Measurement period adjustment on long-lived assets 8.5 (8.2) - - - Stock based compensation (9.6) (12.8) (3.8) (25.1) (8.4) Amortization of acquired intangibles (6.1) (29.2) (2.5) (37.4) (6.9) Preliminary fair value adjustment on acquired inventory - (74.2) - (74.2) - Transaction expenses related to acquisitions - - - - (3.4) Photonic Solutions GAAP Operating Income (Loss) $ 48.7 $ (60.9) $ 20.7 $ 0.8 $ 59.7 Non-GAAP Compound Semiconductors Operating Income $ 30.6 $ 10.1 $ 20.3 $ 71.9 $ 74.4 Stock based compensation (4.8) (6.5) (4.1) (14.0) (9.8) Amortization of acquired intangibles 0.4 (4.4) (1.7) (6.0) (5.1) Restructuring and related expenses (1.3) (1.6) - (2.9) - Transaction expenses related to acquisitions - - (0.2) - (0.2) Preliminary fair value adjustment on acquired inventory - (6.4) - (6.4) - Compound Semiconductors GAAP Operating Income $ 24.9 $ (8.8) $ 14.3 $ 42.6 $ 59.3 Non-GAAP Unallocated and Other Operating Income $ - $ - $ - $ (0.2) $ - Finisar results - - - 1.9 - Transaction expenses related to acquisitions (2.9) (8.0) (3.9) (16.5) (11.0) Severance and related - Stock based compensation - - - (10.7) - Severance and related - Other compensation (1.7) (0.8) - (10.0) - 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) $ (4.6) $ (8.8) $ (3.9) $ (71.4) $ (11.0) Total GAAP Operating Income (Loss) $ 69.0 $ (78.5) $ 31.1 $ (28.0) $ 108.0 Non-GAAP Operating Income (Loss) $ 86.5 $ 73.6 $ 47.3 $ 209.2 $ 152.8 Three Months Ended Reconciliation of Segment Non-GAAP Operating Income (Loss) to GAAP Segment Operating Income (Loss) Nine Months Ended

XML

Cover	May 11, 2020
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 11, 2020
Entity File Number	0-16195
Entity Registrant Name	II-VI Incorporated
Entity Central Index Key	0000820318
Entity Tax Identification Number	25-1214948
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	375 Saxonburg Boulevard
Entity Address, City or Town	Saxonburg
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	16056
City Area Code	724
Local Phone Number	352-4455
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	IIVI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false