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| 8-K - FORM 8-K - II-VI INC | d59694d8k.htm |
 www.ii-vi.com
NASDAQ: IIVI August
2015 Our Technologies for Tomorrow’s Innovations
A global leader powered by engineered material
solutions that fully satisfy our customers
Exhibit 99.1 |
 www.ii-vi.com I NASDAQ:
IIVI 2
Matters discussed in this presentation may contain forward-looking
statements that are subject to risks and uncertainties. These risks and
uncertainties could cause the forward-looking statements and II-VI
Incorporated’s (the Company’s) actual results to differ
materially. In evaluating these forward-looking statements, you
should specifically consider the “Risk Factors” in the
Company’s most recent Form 10-K and Form 10-Q.
Forward-looking statements are only estimates and actual events or
results may differ materially. II-VI Incorporated disclaims any
obligation to update information contained in any forward-looking
statement. This presentation contains certain non-GAAP financial
measures. Reconciliations of non-GAAP financial measures to
their most comparable GAAP financial measures are presented at the end of
this presentation. Safe Harbor Statement
|
 3 Our Core – Material Excellence |
 Global Leader in Engineered Materials
Headquartered in Saxonburg, PA
~ 8,000 Employees in 14 Countries
FY15: $742M Revenue, 8.7% ROS
2% insider ownership
4 4 CONSECUTIVE DECADES OF PROFITBILITY AND COUNTING Fiscal Year Revenues 40% 31% 12% 5% 7% 5% 2005 $187 $224 $255 $310 $280 $333 $487 $516 $551 $683 2006 2007 2008 2009 2010 2011 2012 2013 2014 About II-VI 2015 $742 63% 37% 35% 39% 26% |
 5 Rev. TAM Share Laser Solutions Segment Leading merchant supplier of CO 2 , Fiber, and Direct Diode industrial laser components Leading supplier of CO 2 optics for an install base of >70,000 high power lasers First to service EUV Lithography CVD Diamond optics demand — — — — — Focused on expanding our fiber and direct diode laser footprint as markets grow $288M $254M $218M $1.5B $900M $555M 19% 28% 39% FY15 FY14 FY13 Ultra-hard Material Processing Laser Source Solutions Semiconductor Laser Chips Cutting Heads Laser Optics |
 6 Laser Solutions Segment Vertical Cavity Surface Emitting Laser (VCSEL) Market CAGR (‘13-’18): 33% Source: BCC Research Laser Processing Heads & Beam Delivery Components Market CAGR (‘14-’19): 22% Source: Strategies Unlimited |
 7 Photonics Segment Worldwide supplier of cutting edge amplification, pump, and transmission products for optical communication networks Leading Supplier of crystals, fiber optics, precision optics, and optical assemblies for multiple applications Leverage vertical integration synergies to enable a cost structure for market penetration and growth Erbium Doped Fiber Amplifiers Undersea & Terrestrial 980nm Pumps Optical Switches Transceivers Rev. TAM Share $261M $217M $141M $3.3B $2.0B $1.5B 8% 11% 9% Industrial Lasers Semiconductor Instrumentation Optical Communication Life Sciences FY15 FY14 FY13 |
 8 Photonics Segment EDFA/Raman Amplifiers Market CAGR (‘14-’19): 30% Source: Ovum 40G/100G Transceivers for Datacom Market CAGR (‘14-’19): 45% Source: Ovum |
 9 Focus on strategic markets where II-VI material expertise and technology enables growth and new functionality Free Standing Diamond Precision Optical Systems High Value Material Reclamation Reaction Bonded SiC Tools Thermal Management Target military platforms and applications with growth potential Identify emerging markets early and enable the underpinning materials and technology Performance Products Segment Rev. TAM Share $193M $213M $192M $2.6B $2.3B $2.1B
7%
10% 9% FY15
FY14 FY13 |
 10 Performance Products Segment Sapphire Material and Optics Market CAGR (‘14-’19): 10% Source: Internal Power Generation Products Market CAGR (‘14-’19): 30% Source: Internal |
 11 Gross Margin (Adj) EBITDA Operating Margin FY15 35% - 38% 15% - 18% 7% - 10% Expectations Margin Performance Profitability and Expectations II-VI growth expectations across the cycle are: Organic Revenue: 2-3x GDP EPS: ~2x revenue growth FY11 FY12 FY13 FY14 FY15 41.6% 39.0% 36.9% 33.2% 36.6% 26.0% 23.9% 21.7% 15.1% 17.3%* 19.6% 15.8% 13.0% 6.8% 10.4% * EBITDA margin in FY15 is Adj EBITDA to exclude the $0.11 positive EPS from acquisition settlement
FY16 36% - 40% 17% - 21% 9% - 12% |
 12 Cash and Liquidity Cash and Equivalents Cash Flow from Operations Long-Term Debt (Including current portion) Shareholders' Equity FY13 $185M $108M $114M $636M FY14 $175M $95M $241M $675M Cash and Liquidity FY15 $174M $129M $176M $729M |
 13 Company Position Positive Profit Outlook Leading Market Positions In Diverse End Markets Investing In Fast Growing Markets Strong Cash Position Global Manufacturing Footprint Growth Via Organic And Acquisitions Ongoing $50M Stock Buyback Program |
 www.ii-vi.com I NASDAQ:
IIVI 14 |
 15 Organization M&A / Integration Tech Management Trade Compliance Operation Metrics Quality SCM Legal Strategic Resources Corporate G&A R&D NPI Photonics Performance Products Laser Solutions |
 16 EBITDA is defined as earnings before interest, taxes, depreciation and amortization. 2011 2012 2013 2014 2015 Reconciliation of Adjusted EBITDA to Net Earnings EBITDA 126.6 123.2 119.4 103.3 128.4 Interest expense 0.1 0.2 1.2 4.5 3.9 Depreciation and amortization 28.3 34.5 40.8 53.2 53.1 Settlement Agreement (7.7) Income taxes 18.5 17.8 18.8 7.3 13.1 Loss (earnings) on discontinued operations, net of taxes (3.3) 9.4 6.8 (0.1) Net earnings 83.0 61.3 51.9 38.4 66.0 Revenues 486.6 516.4 551.1 683.3 742.0 Reconciliation of Adjusted EBITDA Margin to Return on Sales EBITDA margin 26.0% 23.9% 21.7% 15.1% 17.3% As a % of revenues: Interest Expense 0.0% 0.0% 0.2% 0.7% 0.5% Depreciation and amortization 5.8% 6.7% 7.4% 7.8% 7.2% Settlement Agreement - - - - (1.0%) Income taxes 3.8% 3.4% 3.4% 1.1% 1.8% Loss (earnings) on discontinued operations, net of taxes (0.7%) 1.8% 1.2% (0.0%) - Return on Sales 17.1% 11.9% 9.4% 5.6% 8.9% Reconciliation of Operating Income to Net Earnings Operating income 95.2 81.5 71.5 46.5 76.8 Interest expense 0.1 0.2 1.2 4.5 3.9 Other expense (income), net (3.1) (7.2) (7.2) (3.6) (6.2) Income taxes 18.5 17.8 18.8 7.3 13.1 Loss (earnings) on discontinued operations, net of taxes (3.3) 9.4 6.8 (0.1) - Net earnings 83.0 61.3 51.9 38.4 66.0 Revenues 486.6 516.4 551.1 683.3 742.0 Reconciliation of Operating Margin to Return on Sales Operating margin 19.6% 15.8% 13.0% 6.8% 10.4% As a % of revenues: Interest expense 0.0% 0.0% 0.2% 0.7% 0.5% Other expense (income), net (0.6%) (1.4%) (1.3%) (0.5%) (0.8%) Income taxes 3.8% 3.4% 3.4% 1.1% 1.8% Loss (earnings) on discontinued operations, net of taxes (0.7%) 1.8% 1.2% (0.0%) - Return on Sales 17.1% 11.9% 9.4% 5.6% 8.9% ($M's, except %'s; all periods fiscal year) |