II-VI Incorporated Reports Record Quarterly Bookings and Revenues; Increases Fiscal...

II-VI Incorporated Reports Record Quarterly Bookings and Revenues; Increases
Fiscal Year 2011 Guidance

PITTSBURGH, Jan. 25, 2011 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI)
today reported results for its second fiscal quarter ended December 31, 2010.

On January 4, 2010, the Company completed its acquisition of Photop
Technologies, Inc. (Photop). Company results include Photop's results for the
three and six months ended December 31, 2010. On December 7, 2010, the Company
completed its acquisition of Max Levy Autograph, Inc. (MLA). Company results for
the quarter and six months ended December 31, 2010 include the operating results
of MLA since the acquisition date.

Bookings for the quarter increased 71% to a record $134,128,000, compared to
$78,311,000 in the second quarter of last fiscal year. Bookings for the six
months ended December 31, 2010 increased 62% to $246,178,000 from $151,647,000
for the same period last fiscal year. Included in bookings for the three and six
months ended December 31, 2010 were $29.6 million and $57.6 million,
respectively, 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 for the quarter increased 76% to a record $120,887,000 from $68,785,000
in the second quarter of last fiscal year. Revenues for the six months ended
December 31, 2010 increased 79% to $241,021,000 from $134,323,000. Included in
revenues for the three and six months ended December 31, 2010 were $31.0 million
and $57.7 million, respectively, of revenues attributable to Photop.

Net earnings attributed to II-VI Incorporated for the quarter were $19,157,000,
or $0.60 per share-diluted, compared with net earnings of $5,981,000, or $0.20
per share-diluted, in the second quarter of last fiscal year. For the six months
ended December 31, 2010, net earnings attributable to II-VI Incorporated were
$37,524,000 or $1.18 per share-diluted compared to net earnings of $12,287,000
or $0.41 per share-diluted in the second quarter of last fiscal year.

Francis J. Kramer, president and chief executive officer said, "During the
quarter we continued to experience strong customer demand across all markets.
Bookings were up 71%, revenues increased 76% and earnings tripled from the
year-ago quarter. Orders in the Infrared Optics and Military & Materials
segments were particularly robust -- up 45% and 60%, respectively, from the
year-ago quarter and 14% and 94%, respectively, from September 30, 2010. As a
result, our order backlog stands at $163.5 million, an increase of 36% from
December 31, 2009 and 10% from September 30, 2010. Company earnings benefited
from operating efficiencies."

Kramer concluded, "We continue to generate significant cash from operations. We
used some of it to finance the MLA acquisition. In addition, we made strategic
capital investments across all businesses to adjust production capacity to meet
increased market demand. After those expenditures, our net cash position
increased more than $6 million during the quarter. Positive market momentum,
strong operating performance and a record order backlog allowed us to increase
our revenue and earnings guidance for the remainder of the fiscal year."

Segment Information

The following segment information includes segment earnings (defined as earnings
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 Six Months Ended

December 31, December 31,

%
%
2010 2009 Increase 2010 2009
Increase
-------- ------- -------- -------- --------
--------

Bookings:

Infrared Optics $47,006 $32,444 45% $88,308 $60,614
46%
Near-Infrared Optics 35,906 11,603 209% 69,722 24,331
187%
Military & Materials 29,600 18,488 60% 44,871 37,491
20%
Compound Semiconductor

Group 21,616 15,776 43,277 29,211

-------- ------- 37% -------- --------
48%

Total Bookings $134,128 $78,311 $246,178 $151,647

======== ======= 71% ======== ========
62%

Revenues:

Infrared Optics $40,642 $31,186 30% $81,868 $60,353
36%
Near-Infrared Optics 41,418 10,280 303% 78,363 19,181
309%
Military & Materials 19,467 15,162 28% 39,602 30,804
29%
Compound Semiconductor

Group 19,360 12,157 41,188 23,985

-------- ------- 59% -------- --------
72%

Total Revenues $120,887 $68,785 $241,021 $134,323

======== ======= 76% ======== ========
79%

Segment Earnings:

Infrared Optics $9,420 $5,164 82% $18,068 $10,040
80%
Near-Infrared Optics 8,068 86 9,281% 14,949 1,108
1,249%
Military & Materials 3,425 1,503 128% 7,146 3,758
90%
Compound Semiconductor

Group 3,775 445 7,186 788

-------- ------- 748% -------- --------
812%
Total Segment

Earnings $24,688 $7,198 $47,349 $15,694

======== ======= 243% ======== ========
202%

Outlook

For the third fiscal quarter ending March 31, 2011, the Company currently
forecasts revenues to range from $115 million to $120 million and earnings per
share to range from $0.48 to $0.53. Comparable results for the quarter ended
March 31, 2010 were revenues of $97.5 million and earnings per share of $0.33.
For the fiscal year ending June 30, 2011, the Company expects revenues to range
from $475 million to $485 million and earnings per share to range from $2.20 to
$2.29. Results for the year ended June 30, 2010 were revenues of $345.1 million
and earnings per share of $1.25. 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,
January 25, 2011 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/65u7sso. 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 diversified markets 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 lasers 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, Pacific Rare Specialty Metals & Chemicals (PRM)
produces and refines selenium and tellurium materials and Max Levy Autograph,
Inc. (MLA) manufactures micro-fine conductive mesh patterns for optical,
mechanical and ceramic components for applications such as circuitry, metrology
standards, targeting calibration and suppression of Electro-Magnetic
Interference. 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 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, 2010; (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 Six Months Ended
December 31, December 31,

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

Revenues
Net sales:
Domestic $46,361 $36,429 $93,540 $70,300

International 72,123 30,518 143,019 60,258
-------- ------- -------- -------
118,484 66,947 236,559 130,558

Contract research and development 2,403 1,838 4,462 3,765
-------------------------------------- -------- ------- -------- -------

Total Revenues 120,887 68,785 241,021 134,323
-------------------------------------- -------- ------- -------- -------

Costs, Expenses & Other Expense
(Income)
Cost of goods sold 68,960 41,254 138,223 79,643
Contract research and development 1,891 1,125 3,526 2,404
Internal research and development 3,357 2,287 7,203 4,722
Selling, general and administrative 21,991 16,921 44,720 31,860
Interest expense 25 19 55 43

Other expense (income), net 460 (205) (1,602) (132)
-------------------------------------- -------- ------- -------- -------

Total Costs, Expenses, and Other
Expense (Income) 96,684 61,401 192,125 118,540
-------------------------------------- -------- ------- -------- -------

Earnings Before Income Taxes 24,203 7,384 48,896 15,783

Income Taxes 4,948 1,400 11,240 3,500
-------------------------------------- -------- ------- -------- -------

Net Earnings 19,255 5,984 37,656 12,283

Less: Net Earnings (Loss) Attributable
to Noncontrolling Interests 98 3 132 (4)
-------------------------------------- -------- ------- -------- -------

Net Earnings Attributable to II-VI
Incorporated $19,157 $5,981 $37,524 $12,287
-------------------------------------- -------- ------- -------- -------

Net Earnings Attributable to II-VI
Incorporated Diluted Earnings Per
Share: $0.60 $0.20 $1.18 $0.41
-------------------------------------- -------- ------- -------- -------
Net Earnings Attributable to II-VI
Incorporated Basic Earnings Per
Share: $0.62 $0.20 $1.21 $0.42

============================================================================
Average Shares Outstanding - Diluted 31,890 30,063 31,745 29,973
Average Shares Outstanding - Basic 31,039 29,576 30,972 29,562

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

December
31, June 30,
2010 2010
-------------------------- -------- --------
Assets
Current Assets
Cash and cash
equivalents $119,274 $108,026
Accounts receivable 85,432 78,624
Inventories 100,953 81,397
Deferred income taxes 6,333 5,382
Prepaid and refundable
income taxes 7,051 4,294

Prepaid and other
current assets 9,921 10,547
-------------------------- -------- --------
Total Current Assets 328,964 288,270
Property, plant &
equipment, net 123,237 117,937
Goodwill 66,135 56,088
Other intangible assets,
net 23,878 24,995
Investments 15,436 15,269
Deferred income taxes 4,307 3,029

Other assets 4,878 3,393
-------------------------- -------- --------

Total Assets $566,835 $508,981
========================== ======== ========

Liabilities and
Shareholders' Equity
Current Liabilities
Accounts payable $20,730 $21,347

Accruals and other
current liabilities 57,196 51,838
-------------------------- -------- --------
Total Current
Liabilities 77,926 73,185
Long-term debt 3,694 3,384
Deferred income taxes 5,724 6,195

Other liabilities 17,500 15,357
-------------------------- -------- --------

Total Liabilities 104,844 98,121
-------------------------- -------- --------

Total II-VI Incorporated
Shareholders' Equity 461,402 410,353

Noncontrolling Interests 589 507
-------------------------- -------- --------

Total Shareholders' Equity 461,991 410,860
========================== ======== ========

Total Liabilities and
Shareholders' Equity $566,835 $508,981
========================== ======== ========

II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash
Flows (Unaudited)
($000)
Six Months Ended
December 31,

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

Net cash provided by operating activities $33,012 $31,250
---------------------------------------------- -------- --------

Cash Flows from Investing Activities
Additions to property, plant and equipment (14,668) (6,691)
Purchase of business, net of cash acquired (12,813) --
Investment in unconsolidated business (1,180) (2,989)
Proceeds from collection of note receivable 2,000 --
Payment on deferred purchase price -- (997)

Other investing activities 240 148
---------------------------------------------- -------- --------

Net cash used in investing activities (26,421) (10,529)
---------------------------------------------- -------- --------

Cash Flows from Financing Activities
Proceeds from exercises of stock options 3,278 536
Excess tax benefits from share-based
compensation expense 1,813 154

Payments on long-term borrowings -- (558)
---------------------------------------------- -------- --------

Net cash provided by financing activities 5,091 132
---------------------------------------------- -------- --------

Effect of exchange rate changes on cash and
cash equivalents (434) (324)

Net increase in cash and cash equivalents 11,248 20,529

Cash and Cash Equivalents at Beginning of
Period 108,026 95,930
---------------------------------------------- -------- --------

Cash and Cash Equivalents at End of Period $119,274 $116,459
============================================== ======== ========

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

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

Other Selected Financial Information
-----------------------------------------------------------------------

Three Months
Ended Six Months Ended
December 31, December 31,
----------------- -----------------

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

EBITDA $31,073 $11,461 $62,630 $23,914
Cash paid for capital
expenditures $9,387 $4,144 $14,668 $6,691
Net payments on indebtedness $-- $-- $-- $558

Share-based compensation expense,
pre-tax $2,242 $1,670 $5,983 $4,103
--------------------------------- -------- ------- -------- -------

Reconciliation of Segment Three Months
Earnings and EBITDA to Net Ended Six Months Ended
Earnings December 31, December 31,
--------------------------------- ----------------- -----------------

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

Total Segment Earnings $24,688 $7,198 $47,349 $15,694
Interest expense 25 19 55 43
Other expense (income), net 460 (205) (1,602) (132)

Income taxes 4,948 1,400 11,240 3,500
-------- ------- -------- -------

Net earnings $19,255 $5,984 $37,656 $12,283
======== ======= ======== =======

EBITDA $31,073 $11,461 $62,630 $23,914
Interest expense 25 19 55 43
Depreciation and amortization 6,845 4,058 13,679 8,088

Income taxes 4,948 1,400 11,240 3,500
-------- ------- -------- -------

Net earnings $19,255 $5,984 $37,656 $12,283
======== ======= ======== =======

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