| Table 6 | ||||||||||||||||||||||||||
| Reconciliation of Selected Non-GAAP Financial Measurements | ||||||||||||||||||||||||||
| ($ Millions, except per share amounts) | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| Dec 31, | Sept 30, | Dec 31, | Dec 31, | Dec 31, | ||||||||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||
| Reported Net Earnings (Loss) | $ | (98.2 | ) | $ | (26.0 | ) | $ | 28.7 | $ | (124.2 | ) | $ | 54.9 | |||||||||||||
| Add back adjusting items: | ||||||||||||||||||||||||||
| Preliminary fair value adjustment on acquired inventory - COGS (1) | 80.6 | 7.1 | - | 87.7 | - | |||||||||||||||||||||
| Amortization of acquired intangibles | 33.6 | 6.2 | 4.1 | 39.8 | 7.8 | |||||||||||||||||||||
| Stock-based compensation expense - COGS (2) | 4.2 | - | 0.5 | 4.2 | 1.5 | |||||||||||||||||||||
| Stock-based compensation expense - SG&A (2) | 15.1 | 5.4 | 4.5 | 20.5 | 8.8 | |||||||||||||||||||||
| Transaction expenses related to acquisitions (3) | 8.0 | 5.6 | 8.6 | 13.6 | 10.5 | |||||||||||||||||||||
| Restructuring and related expenses (4) | 1.6 | - | - | 1.6 | - | |||||||||||||||||||||
| Severance and related (5) | 0.6 | 18.4 | - | 19.0 | - | |||||||||||||||||||||
| One-time costs related to the Finisar acquisition (6) | - | 32.4 | - | 32.4 | - | |||||||||||||||||||||
| Finisar results (7) | - | (1.6 | ) | - | (1.6 | ) | - | |||||||||||||||||||
| Income tax impact | (12.3 | ) | (10.5 | ) | - | (22.8 | ) | (0.3 | ) | |||||||||||||||||
| II-VI Adjusted Net Earnings | $ | 33.2 | $ | 37.0 | $ | 46.4 | $ | 70.2 | $ | 83.2 | ||||||||||||||||
| Per share data: | ||||||||||||||||||||||||||
| Reported Earnings (Loss): | ||||||||||||||||||||||||||
| Earnings (Loss) - Diluted Earnings (Loss) Per Share | $ | (1.08 | ) | $ | (0.39 | ) | $ | 0.44 | $ | (1.55 | ) | $ | 0.83 | |||||||||||||
| Earnings (Loss) - Basic Earnings (Loss) Per Share | $ | (1.08 | ) | $ | (0.39 | ) | $ | 0.45 | $ | (1.58 | ) | $ | 0.86 | |||||||||||||
| Adjusted Earnings: | ||||||||||||||||||||||||||
| Adjusted Earnings - Diluted Earnings Per Share | $ | 0.36 | $ | 0.56 | $ | 0.71 | $ | 0.87 | $ | 1.26 | ||||||||||||||||
| Adjusted Earnings - Basic Earnings Per Share | $ | 0.36 | $ | 0.56 | $ | 0.73 | $ | 0.89 | $ | 1.31 | ||||||||||||||||
- The preliminary fair value adjustment of $87.7 million represents the preliminary step up value adjustment of acquired inventory from the Finisar acquisition.
- Total share-based compensation expense for the six months ended December 31, 2019 is $35.4 million, of which $10.7 million was incurred in relation to severance related expenses as described below in note (5).
- Transaction costs represent acquisition costs related to the Finisar acquisition.
- Restructuring and related expenses represent ongoing expenses to achieve the Company’s cost synergy strategy.
- In connection with the acquisition of Finisar, the Company recorded $19.0 million of compensation in the condensed consolidated statement of earnings (loss), of which $18.1 million was associated with Finisar’s executive severance and retention agreements. Included in this amount is $10.7 million of share-based compensation.
- For the six months ended December 31, 2019, one-time costs related to the Finisar acquisition include $35.9 million of acquisition fees, $1.7 million in additional interest related to the new credit facilities entered into as part of the Finisar acquisition, and $3.9 million of other expenses related to debt extinguishment costs of former debt.
- “Finisar results” includes the consolidated Finisar operations for the period between the acquisition date of September 24, 2019 and September 30, 2019. Finisar results have been consolidated into the Photonic Solutions and Compound Semiconductors segments during the three months ended December 31, 2019.
