II-VI, Inc. (IIVI) Tops Q4 EPS by 41c, Revenues Beat; Offers 1Q Revnue Mid-Point Guidance Above Consensus, 1Q EPS Guidance Below Consensus

II-VI, Inc. (NASDAQ: IIVI) reported Q4 EPS of $1.18, $0.41 better than the analyst estimate of $0.77. Revenue for the quarter came in at $746.2 million versus the consensus estimate of $715.66 million.

• Achieves Record Quarterly Revenues of $746.2M and Backlog of $957M
• Quarterly GAAP Operating Income of $67.4M and Non-GAAP Operating Income of $124.6M
• Quarterly GAAP EPS of $0.53 and Non-GAAP EPS of $1.18
• Record Full Year Cash Flow from Operations of $297.3M
• Record Full Year Free Cash1 Flow of $160.4M
• The Company’s early July FY21 equity raise improved its net debt leverage ratio2 from 3.8 to 2.0

“In the fourth quarter, we remained and continue to remain vigilant and steadfast in ensuring the health and safety of our global workforce while striving to meet our customers' growing expectations despite the continuation and acceleration of COVID-19. We also made great progress against our key business initiatives. The power of our vertically integrated and geographically diverse footprint and business model, allowed our employees to deliver exceptional results, including record revenues and backlog,” said Dr. Vincent D. (Chuck) Mattera, Jr. “I am very pleased with the Finisar integration which continues ahead of expectations, as we accelerated our component strategy and are on track to exceed our first year synergy cost savings goals. Demand in the 3D-Sensing and communications market remains strong as the digital transformation continues, led by continued growth of 5G deployment and network infrastructure upgrades.”

Dr. Mattera continued, “Our financial fundamentals are strong. We achieved record cash flow from operations, undertook a very successful equity raise and delivered free cash flow at about $150M above the acquisition business case. Our cash balance now stands at $493M, an increase of $105M from the previous quarter, and our post-equity raise leverage ratio2 is approximately 2.0, down from 3.8 at March 31, 2020. Our backlog of just under $1.0B provides us with significant momentum as we enter fiscal year 2021.”

GUIDANCE:

II-VI, Inc. sees Q1 2021 EPS of $0.45-$0.60, versus the consensus of $0.67. II-VI, Inc. sees Q1 2021 revenue of $700-750 million, versus the consensus of $716.99 million.

The outlook for the first fiscal 2021 quarter ending September 30, 2020 is revenue of $700 million to $750 million and earnings per diluted share on a non-GAAP basis of $0.45 to $0.60. These are at today’s exchange rate and today’s estimated tax impact of 25%, both of which are subject to variability. The non-GAAP earnings per share include the pre-tax amounts of $20.6 million in amortization, $20.3 million in share-based compensation, $23.6 million in debt extinguishment costs related to our July 2020 equity raise, and $5.0 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.

For earnings history and earnings-related data on II-VI, Inc. (IIVI) click here.

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