II-VI Incorporated (NASDAQ:IIVI) Q4 2020 Earnings Conference Call - Final Transcript

Aug 13, 2020 • 09:00 am ET


II-VI Incorporated (NASDAQ:IIVI) Q4 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the II-VI Incorporated Fiscal Year '20 Fourth Quarter Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference to your speaker today, Mary Jane Raymond, Chief Financial Officer. Please go ahead, ma'am.

Mary Jane Raymond

Thank you, Joelle, and good morning. I'm Mary Jane Raymond, the Chief Financial Officer here at II-VI Incorporated. Welcome to our earnings call today for the fourth quarter and the year-end for fiscal year 2020. With me today on the call are Dr. Chuck Mattera, our Chief Executive Officer; and Dr. Giovanni Barbarossa, our Chief Strategy Officer and the President of the Compound Semiconductors segment. This call is being recorded on Thursday, August 13, 2020.

Our press release and our updated investor presentation are available on the Investor Relations tab of the website, ii-vi.com. Just as a reminder, any forward-looking statements we may make today during this teleconference are given in the context of today only. They contain risk factors that are subject to change, possibly materially. We do not undertake any obligation to update these statements to reflect events subsequent to today, except as required by law. A list of our risk factors can be found in our Form 10-K for the year ended June 30, 2019, as well as in the Form S-3 filed with the SEC on June 30, 2020.

We will also present some non-GAAP measures for which the reconciliations to GAAP are found at the end of each document that includes those measures such as the press release or the investor presentation.

With that, let me turn the call over to Dr. Chuck Mattera. Chuck?

Vincent D. Mattera

Thank you, Mary Jane, and good morning, everyone. What a year. Our employees came together and really accomplished a lot in a short time, including coping with the pandemic. I am very pleased with our performance and our progress on a number of fronts. On a consolidated basis for fiscal year 2020, we delivered revenue of $2.4 billion, with a non-GAAP return on sales of 11% and record cash flow from operations of $297 million and record free cash flow of $160 million.

When we received approval to complete the Finisar transaction, we hit the ground running and leveraged the best that Finisar and II-VI had to offer. As One II-VI, we began serving our end markets and customers with great results. Among our many achievements in a short period of time, we enhanced our $1 billion datacom transceiver business and delivered strong operating performance underscored by improved margins. We began shipping the indium phosphide based devices to the OEM market a year ahead of schedule. We are on track to deliver double our announced cost synergies by the end of our first 12 months. We strengthened our long-term market position in silicon carbide devices by continuing to ramp our capacity for silicon carbide substrates and by pursuing strategic partnerships that enable our vertically integrated technology platforms. Our sales and procurement organizations drove profound improvements