01—Abstract
Summary
Summary of the 10-K filed August 20, 2021. Cited figures are marked; the original filing is the authoritative source.
This 10-K filing for II-VI Incorporated (now Coherent Corp.) for the fiscal year ended June 30, 2021, highlights a pivotal year marked by significant revenue growth and strategic advancements, most notably the pending acquisition of Coherent, Inc. The company reported a substantial 30% increase in revenue to $3.1 billiona, driven by strong performance across all key end markets, including communications, consumer electronics, and life sciences.
This growth was bolstered by the full year's contribution from the Finisar acquisition and continued demand for advanced optical and semiconductor solutions. The most impactful development is the announced acquisition of Coherent, Inc., a move expected to significantly expand II-VI's product portfolio and market reach, particularly in laser technology. This transformative deal, financed through a combination of debt and equity, was progressing through regulatory approvals with an anticipated closing by early 2022.
The company also secured significant financing commitments and an equity investment from Bain Capital to support the acquisition. Despite the strategic focus on this acquisition and ongoing global economic uncertainties, II-VI demonstrated robust operational performance and a strong commitment to research and development, positioning itself for continued growth.
02—Key points
Key Highlights
- Record revenue of $3.1 billion, a 30% increase year-over-year, driven by broad-based growth across all end markets.
- Significant progress made on the pending acquisition of Coherent, Inc., with shareholder approvals obtained and regulatory reviews underway, targeting completion by early 2022.
- Secured substantial financing commitments of up to $5.1 billion in debt financing and a $2.2 billion equity commitment from Bain Capital for the Coherent acquisition.
- The Photonic Solutions segment saw revenue increase by 33% to $2.04 billion, with strong performance in transceivers and other optical communication products.
- The Compound Semiconductors segment revenue grew by 30% to $1.07 billion, primarily driven by increased VCSEL shipments for 3D sensing and growth in the life sciences business.
- Research and Development expenses remained significant at $330 million, reflecting continued investment in new products and technologies across all business areas.
- The company's bookings increased to approximately $3.3 billion, and backlog stood at approximately $1.25 billion as of June 30, 2021, indicating strong future demand.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Coherent Corp. kept $0.10.
- Revenue$3.11B100.0%
- Cost of revenue−$1.93B62.1%
- Gross profit$1.18B37.9%
- Operating costs−$775.3M25.0%
- Operating income$402.1M12.9%
- Interest, other & tax−$104.6M3.4%
- Net income$297.6M9.6%
Where FY2021 revenue went
$3.11B- Cost of revenue: $1.93B, 62% of revenue
- SG&A: $445.2M, 14% of revenue
- Net income: $297.6M, 9.6% of revenue
- R&D: $330.1M, 11% of revenue
- Interest, other & tax: $104.6M, 3.4% of revenue
Kept 9.6% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 20, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $3.11B$2.38B | +30.5% |
| Cost of Revenue | $1.93B$1.59B | +21.4% |
| Gross Profit | $1.18B$791.18M | +48.8% |
| R&D Expenses | $330.11M$339.07M | −2.6% |
| SG&A Expenses | $445.24M$412.63M | +7.9% |
| Operating Expenses | $2.75B$2.44B | +12.7% |
| Operating Income | $402.12M$39.48M | +918.6% |
| Interest Expense | $59.90M$89.41M | −33.0% |
| Net Income | $297.55M-$67.03M | +543.9% |
| EPS (Basic) | $2.50$-0.79 | +416.5% |
| EPS (Diluted) | $2.37$-0.79 | +400.0% |
| Shares Outstanding (Basic) | 104.15M84.83M | +22.8% |
| Shares Outstanding (Diluted) | 115.03M84.83M | +35.6% |
05—Questions
Frequently Asked Questions
What is the most significant strategic development for II-VI (now Coherent Corp.) as of this filing?
The most significant strategic development is the pending acquisition of Coherent, Inc. This transaction, announced in March 2021 and expected to close in early 2022, is poised to significantly expand the company's technological capabilities and market presence, particularly in laser solutions.
How did the company perform financially in fiscal year 2021?
II-VI reported record revenues of $3.1 billion for fiscal year 2021, a 30% increase compared to the prior year. This growth was broad-based, with strong contributions from its Communications, Consumer Electronics, and Life Sciences markets. The company also achieved improved profitability, with gross margin increasing to 39%.
What is the status of the Coherent acquisition and its financing?
The acquisition of Coherent, Inc. has received unanimous approval from both companies' Boards of Directors and shareholder approval. Regulatory approvals, including from China's State Administration for Market Regulation, were pending. The transaction was financed through a combination of $5.1 billion in debt financing commitments and a $2.2 billion equity commitment from Bain Capital.
How did the Finisar acquisition impact the company's results in FY21?
The Finisar acquisition, completed in September 2019, contributed a full year of revenue in FY21. This integration positively impacted both the Photonic Solutions segment (revenue up 33%) and the Compound Semiconductors segment (revenue up 30%). The absence of acquisition-related purchase accounting adjustments in FY21 compared to FY20 also boosted profitability.
What are the key markets contributing to II-VI's revenue growth?
Key markets driving revenue growth include Communications (up 30%), Consumer Electronics (up 118% driven by 3D sensing products), and Life Sciences (up 65% driven by demand for COVID-19 related instrumentation). The Industrial segment also saw growth of 11%.
06—Continue