Quarterly profit dips on record revenues at II-VI

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Despite record-breaking second-quarter revenues, Saxonburg-based infrared laser technology company II-VI did not immediately capitalize off of its most recent acquisitions, according to a company press release.

Second-quarter profit was $7.4 million, or 12 cents per share, down from $12.8 million, or 20 cents per share, for the same period last year.

Revenues jumped 37 percent to $171 million, up from $125.1 million last year.

Expenses related to the acquisition of two companies impacted earnings results by $300,000, or one cent per share, and $3.7 million, six cents per share, respectively. II-VI acquired Oclaro Inc., a Switzerland-based semiconductor laser company, Sept 12. The company acquired Oclaro's fiber amplifier and micro-optics business Nov. 1. The companies were designated as part of II-VI's Active Optical Products segment.

Second-quarter results also reflected that company subsidiary Pacific Rare Specialty Metals and Chemicals discontinued its tellurium product line.

II-VI president and CEO Francis Kramer said quarterly revenues and earnings per share were in line with company guidance but called results from the acquisitions "disappointing" in a press release.

"Orders were lower than we expected because certain customers pulled ahead orders prior to the acquisitions," he said. "In addition, profit contributions were reduced by required purchase-accounting adjustments primarily for valuation of the acquired inventory. These inventory adjustments were fully expensed during the second quarter and will not affect future results."

Mr. Kramer said the company was generating "significant cash" from operations and he was optimistic about how the acquisitions will perform in the future.

"In spite of these short-term challenges we remain positive on the technology and intellectual property that was acquired and the long-term strategic fit of these businesses within II-VI," he said.


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