II-VI Incorporated Reports Record Bookings and Revenues, Exceeds Third-Quarter Earnings...

II-VI Incorporated Reports Record Bookings and Revenues, Exceeds Third-Quarter
Earnings Estimates, Increases Fiscal Year Guidance

PITTSBURGH, April 27, 2010 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI)
today reported results for its third quarter ended March 31, 2010.

On January 4, 2010, the Company completed its acquisition of Photop
Technologies, Inc. (Photop). The initial consideration consisted of cash of
$45.6 million and 1,145,852 shares of II-VI Incorporated common stock. In
addition, the purchase agreement provided up to $12.0 million of additional cash
earn-out opportunities based upon Photop achieving certain agreed-upon financial
targets in calendar years 2010 and 2011. Company results for the three and nine
months ended March 31, 2010 include three months of Photop operating results as
well as acquisition-related expenses.

Bookings from continuing operations for the quarter increased 77% to a record
$109,963,000 compared to $62,252,000 in the third quarter of last fiscal year.
Bookings from continuing operations for the nine months ended March 31, 2010
increased 28% to $261,610,000 from $203,884,000 for the same period last fiscal
year. Included in bookings for the three and nine months ended March 31, 2010
were approximately $26.5 million of bookings attributable to Photop. Bookings
are defined as customer orders received that are expected to be converted into
revenues during the next 12 months.

Revenues from continuing operations for the quarter increased 52% to a record
$97,531,000 from $64,111,000 in the third quarter of last fiscal year. Revenues
from continuing operations for the nine months ended March 31, 2010 increased 3%
to $231,854,000 from $226,155,000 for the same period last fiscal year. Included
in revenues for the three and nine months ended March 31, 2010 were
approximately $20.2 million of revenues attributable to Photop.

Net earnings attributable to II-VI Incorporated for the quarter ended March 31,
2010 were $10,313,000 or $0.33 per share-diluted compared with net earnings
attributable to II-VI Incorporated of $4,810,000 or $0.16 per share-diluted in
the third quarter of last fiscal year. Net earnings attributable to II-VI
Incorporated for the nine months ended March 31, 2010 were $22,600,000 or $0.74
per share-diluted compared with net earnings attributable to II-VI Incorporated
of $30,664,000 or $1.02 per share-diluted for the same period last fiscal year.

Francis J. Kramer, president and chief executive officer said, "We experienced
strong customer demand across almost all our markets during the quarter.
Infrared Optics demand was especially robust as bookings increased 69% from the
same quarter last fiscal year and 17% from the December 31, 2009 quarter. For
the third consecutive quarter total company bookings outpaced revenues. As a
result, our order backlog was $144 million at March 31, 2010; of that amount,
Photop contributed $17 million. Overall, our backlog is up 40% since June 30,
2009."

Kramer continued, "During the quarter, we also completed the acquisition of
Photop, which had a positive contribution to our record bookings and revenues.
Photop's operational and financial results exceeded our expectations for the
quarter and, due to improved strength and visibility in the telecommunications
markets they serve, we have increased our outlook for Photop's revenue
contribution for the quarter ending June 30, 2010. Our Military and Materials
group continues to produce solid revenues and earnings."

Kramer concluded, "Quarterly EBITDA performance and cash flow generation
exceeded our expectations. EBITDA for the quarter was up 65% from the same
quarter last fiscal year and 82% from the December 31, 2009 quarter. Our cash
balance now exceeds the June 30, 2009 level and we expect cash to continue to
increase as we complete the final quarter of fiscal year 2010. Because of
current market strength and visibility, we are confident in increasing our
guidance for the fourth quarter and fiscal year."

Effective July 1, 2009, the Company adopted Noncontrolling Interest in
Consolidated Financial Statements -- an amendment of ARB No.51, which was
retroactively applied to all periods presented. As announced on June 12, 2009,
the Company sold its x-ray and gamma-ray radiation sensor business, eV PRODUCTS,
Inc., which operated as a business within the Compound Semiconductor Group.
Results for the three and nine month periods ended March 31, 2009 reflect the
presentation of eV PRODUCTS as a discontinued operation.

Segment Information from Continuing Operations ($000's)

The following segment information includes segment earnings from continuing
operations (defined as earnings from continuing operations before income taxes,
interest expense and other expense or income, net). Management believes segment
earnings are a useful performance measure because they reflect the results of
segment performance over which management has direct control.

Three Months Ended Nine Months
Ended
March 31, March 31,

%
%
Increase
Increase

2010 2009 (Decrease) 2010 2009
(Decrease)
-------- ------- ---------- -------- --------
----------

Bookings:

Infrared Optics $38,023 $22,530 69% $98,637 $96,184
3%
Near-Infrared Optics 35,097 10,063 249% 59,428 28,059
112%
Military & Materials 23,456 13,617 72% 60,947 38,072
60%
Compound Semiconductor

Group 13,387 16,042 42,598 41,569

-------- ------- (17)% -------- --------
2%

Total Bookings $109,963 $62,252 $261,610 $203,884

======== ======= 77% ======== ========
28%

Revenues:

Infrared Optics $36,139 $27,785 30% $96,492 $105,069
(8)%
Near-Infrared Optics 31,189 9,602 225% 50,370 35,505
42%
Military & Materials 15,847 14,068 13% 46,651 43,068
8%
Compound Semiconductor

Group 14,356 12,656 38,341 42,513

-------- ------- 13% -------- --------
(10)%

Total Revenues $97,531 $64,111 $231,854 $226,155

======== ======= 52% ======== ========
3%

Segment Earnings:

Infrared Optics $6,851 $4,369 57% $16,891 $24,459
(31)%
Near-Infrared Optics 4,081 647 531% 5,189 5,803
(11)%
Military & Materials 1,965 1,224 61% 5,723 5,111
12%
Compound Semiconductor

Group 1,632 1,281 2,420 3,825

-------- ------- 27% -------- --------
(37)%

Total Segment Earnings $14,529 $7,521 $30,223 $39,198

======== ======= 93% ======== ========
(23)%

Outlook

For the fourth fiscal quarter ending June 30, 2010, the Company currently
forecasts revenues to range from $98.0 million to $102.0 million and earnings
per share attributable to II-VI Incorporated to range from $0.34 to $0.38.
Comparable results for the quarter ended June 30, 2009 were revenues from
continuing operations of $66.1 million and earnings per share from continuing
operations of $0.21. For the fiscal year ending June 30, 2010, the Company
expects revenues to range from $330 million to $334 million and earnings per
share to range from $1.08 to $1.12. Comparable results for the year ended June
30, 2009 were revenues from continuing operations of $292 million and earnings
per share from continuing operations of $1.29. As discussed in more detail
below, actual results may differ from these forecasts due to various factors
including, but not limited to, changes in product demand, competition and
general economic conditions.

Webcast Information

The Company will host a conference call at 9:00 a.m. Eastern Time on Tuesday,
April 27, 2010 to discuss these results. The conference call will be broadcast
live over the internet and can be accessed by all interested parties from the
Company's web site at www.ii-vi.com as well as at http://tinyurl.com/y7xvj9c.
Please allow extra time prior to the call to visit the site and, if needed, to
download the media software required to listen to the internet broadcast. A
replay of the webcast will be available for 2 weeks following the call.

About II-VI Incorporated

II-VI Incorporated, the worldwide leader in crystal growth technology, is a
vertically-integrated manufacturing company that creates and markets products
for a diversified customer base including industrial manufacturing, military and
aerospace, high-power electronics and telecommunications, and thermoelectronics
applications. Headquartered in Saxonburg, Pennsylvania, with manufacturing,
sales, and distribution facilities worldwide, the Company produces numerous
crystalline compounds including zinc selenide for infrared laser optics, silicon
carbide for high-power electronic and microwave applications, and bismuth
telluride for thermoelectric coolers.

In the Company's infrared optics business, II-VI Infrared manufactures optical
and opto-electronic components for industrial laser and thermal imaging systems,
and HIGHYAG Lasertechnologie GmbH (HIGHYAG) manufactures fiber-delivered beam
delivery systems and processing tools for industrial lasers. In the Company's
near-infrared optics business, VLOC manufactures near-infrared and visible light
products for industrial, scientific, military and medical instruments and laser
gain materials and products for solid-state YAG and YLF lasers. Photop
Technologies, Inc. (Photop) manufactures crystal materials, optics, microchip
lasers and opto-electronic modules for use in optical communication networks and
other diverse consumer and commercial applications. In the Company's military &
materials business, Exotic Electro-Optics (EEO) manufactures infrared products
for military applications, and Pacific Rare Specialty Metals & Chemicals (PRM)
produces and refines selenium and tellurium materials. In the Company's Compound
Semiconductor Group, the Wide Bandgap Materials (WBG) group manufactures and
markets single crystal silicon carbide substrates for use in the solid-state
lighting, wireless infrastructure, RF electronics and power switching
industries; Marlow Industries, Inc. (Marlow) designs and manufactures
thermoelectric cooling and power generation solutions for use in defense, space,
photonics, telecommunications, medical, consumer and industrial markets; and the
Worldwide Materials Group (WMG) provides expertise in materials development,
process development and manufacturing scale up.

This press release contains forward-looking statements based on certain
assumptions and contingencies that involve risks and uncertainties. The
forward-looking statements are made pursuant to the safe harbor provisions of
the 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 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, 2009; (iii) the purchasing patterns from 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; and/or (vi) the Company's ability to devise and
execute strategies to respond to market conditions.

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
(000 except per share data)

Three Months
Ended Nine Months Ended
March 31, March 31,

2010 2009 2010 2009
------- ------- -------- --------
Revenues

Net sales:
Domestic $45,321 $35,506 $115,621 $116,676

International 49,387 26,339 109,645 102,431
------- ------- -------- --------
94,708 61,845 225,266 219,107

Contract research and development 2,823 2,266 6,588 7,048
------- ------- -------- --------

Total Revenues 97,531 64,111 231,854 226,155
------- ------- -------- --------

Costs, Expenses, Other Expense
(Income)

Cost of goods sold $58,697 $40,066 $138,340 $129,538
Contract research and development 2,082 1,358 4,486 5,199
Internal research and development 3,238 1,612 7,960 7,919
Selling, general and administrative 18,985 13,554 50,845 44,301
Interest expense 1 68 44 150

Other expense (income), net 82 (1,534) (50) 1,068
------- ------- -------- --------
Total Costs, Expenses, Other Expense
(Income) 83,085 55,124 201,625 188,175
------- ------- -------- --------

Earnings from Continuing Operations
Before Income Taxes 14,446 8,987 30,229 37,980

Income Taxes 4,208 2,177 7,708 5,240
------- ------- -------- --------

Earnings from Continuing Operations 10,238 6,810 22,521 32,740

Loss from Discontinued Operation, Net
of Income Taxes -- (1,926) -- (1,929)
------- ------- -------- --------

Net Earnings 10,238 4,884 22,521 30,811

Less: Net Earnings (Loss) Attributable
to Noncontrolling Interests (75) 74 (79) 147
------- ------- -------- --------

Net Earnings Attributable to II-VI
Incorporated $10,313 $4,810 $22,600 $30,664
======= ======= ======== ========

Net Earnings Attributable to II-VI
Incorporated: Diluted Earnings Per
Share:
Continuing operations $0.33 $0.23 $0.74 $1.08
Discontinued operation $-- $(0.06) $-- $(0.06)
Consolidated $0.33 $0.16 $0.74 $1.02

Net Earnings Attributable to II-VI
Incorporated: Basic Earnings Per
Share:
Continuing operations $0.34 $0.23 $0.76 $1.10
Discontinued operation $-- $(0.07) $-- $(0.06)
Consolidated $0.34 $0.16 $0.76 $1.03

Average Shares Outstanding -- Diluted 31,194 29,700 30,378 30,147
======= ======= ======== ========

Average Shares Outstanding -- Basic 30,666 29,520 29,930 29,714
======= ======= ======== ========

II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)

March
31, June 30,

2010 2009
-------- --------

Assets

Current Assets
Cash and cash equivalents $97,203 $95,930
Accounts receivable 64,367 43,109
Inventories 79,702 76,620
Deferred income taxes 9,559 9,705

Prepaid and other current assets 9,656 4,943
-------- --------
Total Current Assets 260,487 230,307

Property, Plant & Equipment, net 120,259 86,413
Goodwill 62,308 26,141
Other Intangible Assets, net 21,674 12,271
Investments 15,574 9,548

Other Assets 3,138 3,602
-------- --------

Total Assets $483,440 $368,282
======== ========

Liabilities and Shareholders'
Equity

Current Liabilities
Accounts payable $18,997 $9,242
Accruals and other current
liabilities 49,753 22,821
-------- --------
Total Current Liabilities 68,750 32,063

Long-Term Debt 3,224 3,665

Deferred Income Taxes 6,821 1,910

Other Liabilities 15,189 7,773
-------- --------
Total Liabilities 93,984 45,411

Shareholders' Equity
Total II-VI Incorporated
Shareholders' Equity 389,185 322,376

Noncontrolling Interests 271 495
-------- --------

Total Shareholders' Equity 389,456 322,871
-------- --------
Total Liabilities and
Shareholders' Equity $483,440 $368,282
======== ========

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
($000)

Nine Months Ended

March 31,
------------------
2010 2009
Cash Flows from Operating
Activities
Net cash provided by (used in):
Continuing operations $53,526 $35,039

Discontinued operation -- (69)
-------- --------
Net cash provided by operating
activities 53,526 34,970
-------- --------

Cash Flows from Investing
Activities
Purchase of business (45,600) --
Cash acquired from purchased
business due to selling
shareholders 8,344 --
Additions to property, plant and
equipment (9,384) (12,284)
Investment in unconsolidated
businesses (4,752) (4,853)
Payments on deferred purchase
price of businesses (1,141) (913)
Proceeds from sale of property,
plant and equipment 180 72
Redemption of marketable
securities -- 3,000
-------- --------
Net cash used in investing
activities:
Continuing operations (52,353) (14,978)

Discontinued operation -- (229)
-------- --------
Net cash used in investing
activities (52,353) (15,207)
-------- --------

Cash Flows from Financing
Activities
Proceeds on long-term debt -- 7,000
Payments on long-term debt (558) (5,009)
Proceeds from exercise of stock
options 879 1,673
Purchase of treasury stock -- (12,880)
Excess tax benefits from
share-based compensation expense 318 1,252
-------- --------
Net cash provided by (used in)
financing activities 639 (7,964)
-------- --------

Effect of exchange rate changes
on cash and cash equivalents (539) 1,879
-------- --------

Net increase in cash and cash
equivalents 1,273 13,678

Cash and Cash Equivalents at
Beginning of Period 95,930 69,835
-------- --------
Cash and Cash Equivalents at End
of Period $97,203 $83,513
======== ========

II-VI Incorporated and Subsidiaries
Other Selected Financial Information
($000 except per share data)

The following other selected financial information for continuing
operations includes earnings from continuing operations before
interest, income taxes, depreciation and amortization (EBITDA).
Management believes EBITDA from continuing operations is a useful
performance measure because it reflects operating profitability before
certain non-operating expenses and non-cash charges.

Other Selected Financial Information for Continuing Operations

Three Months
Ended Nine Months Ended

March 31, March 31,
---------------- -----------------

2010 2009 2010 2009
------- ------- ------- --------

EBITDA $20,829 $12,588 $44,743 $49,365
Cash paid for capital expenditures $2,693 $3,029 $9,384 $12,284
Net payments (borrowings) on
indebtedness $-- $3,009 $558 $(1,991)
Share-based compensation expense,
pre-tax $2,765 $1,242 $6,868 $3,799
Cash paid for shares repurchased
through the Company's stock
repurchase program $-- $-- $-- $12,880
Shares repurchased through the
Company's stock repurchase
program -- -- -- 500,000

Reconciliation of Segment
Three Months
Earnings and EBITDA to Earnings Ended Nine Months Ended

Before Income Taxes March 31, March 31,
---------------- -----------------

2010 2009 2010 2009
------- ------- ------- --------

Total Segment Earnings $14,529 $7,521 $30,223 $39,198
Interest expense 1 68 44 150

Other (income) expense, net 82 (1,534) (50) 1,068
------- ------- ------- --------

Earnings before income taxes $14,446 $8,987 $30,229 $37,980
======= ======= ======= ========

EBITDA $20,829 $12,588 $44,743 $49,365
Interest expense 1 68 44 150

Depreciation and amortization 6,382 3,533 14,470 11,235
------- ------- ------- --------

Earnings before income taxes $14,446 $8,987 $30,229 $37,980
======= ======= ======= ========

CONTACT: II-VI Incorporated
Craig A. Creaturo, Chief Financial Officer and Treasurer
(724) 352-4455
ccreaturo@ii-vi.com
www.ii-vi.com