II-VI Incorporated Reports Fiscal First Quarter Earnings; Receives Regulatory Approval for the Acquisition of Oclaro's Fiber

II-VI Incorporated Reports Fiscal First Quarter Earnings; Receives Regulatory
Approval for the Acquisition of Oclaro's Fiber Amplifier and Micro-Optics
Business

PITTSBURGH, Oct. 29, 2013 (GLOBE NEWSWIRE) -- II-VI Incorporated (Nasdaq:IIVI)
today reported results for its first fiscal quarter ended September 30, 2013.

On September 12, 2013, the Company acquired the Switzerland-based
semiconductor laser business (the "Business") of Oclaro, Inc. (Nasdaq:OCLR).
The Business, renamed II-VI Laser Enterprise, has been included in the
Company's newly created Active Optical Products segment. The results for the
quarter ended September 30, 2013 include the operating performance of the
Business only since the date of its acquisition. Transaction-related expenses
associated with the acquisition of the Business, which are included in
selling, general and administrative expenses, were $3.3 million, or $0.05 per
share-diluted, for the quarter ended September 30, 2013.

Bookings for the quarter increased 25% to $143.5 million, compared to $114.4
million in the first quarter of last fiscal year. 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 14% to $151.2 million from $132.3 million
in the first quarter of last fiscal year.

Net earnings for the quarter were $9.7 million, or $0.15 per share-diluted,
compared to net earnings of $12.7 million, or $0.20 per share-diluted, in the
first quarter of last fiscal year. As noted above, transaction-related
expenses for the quarter ended September 30, 2013 were $0.05 per
share-diluted. See the reconciliation of reported net earnings to non-GAAP net
earnings on the last page of this earnings release.

Francis J. Kramer, president and chief executive officer said, "We are
reporting solid operating results for the quarter while we continue to
integrate recent acquisitions. We believe these results validate our strategy
of investing in vertically-integrated worldwide manufacturing operations. All
four of our established business segments contributed positive earnings for
the quarter led by Infrared Optics. In our Military & Materials segment, we
have begun to realize the benefits of restructuring activities at Pacific Rare
Specialty Metals & Chemicals and, for the first time since September 2011,
that business achieved positive net earnings. M-Cubed, a business we acquired
one year ago, made significant contributions to bookings, revenues and
earnings in the Advanced Products Group."

Kramer continued, "We are making good progress on integrating II-VI Laser
Enterprise, our newly-acquired Switzerland-based semiconductor laser business,
and are investing substantial resources to build on its history of
technological innovation in the laser industry. We recently announced an
agreement to purchase Oclaro, Inc.'s fiber amplifier and micro-optics
business; since these assets complement our existing technologies, they will
enable us to introduce new products across multiple applications and markets.
In addition, the considerable assets purchased from Oclaro add strategic value
through vertical integration, an infusion of new products for sale through
existing channels, substantial expansion of our fiber laser product portfolio,
manufacturing synergies with Photop, and intellectual property resources of
more than 400 patents and license agreements."

Kramer concluded, "Our financial fundamentals remain solid. We continue to
generate strong cash flows from operations while existing cash reserves and
borrowing capacity enable us to execute our strategy of global leadership in
engineered materials and opto-electronic components. While our December 2013
quarter will continue to be impacted by transaction-related and purchase
accounting expenses from our recent acquisition activities, the second half of
fiscal year 2014 appears promising."

As discussed below under "Use of Non-GAAP Financial Measures," the Company is
presenting Non-GAAP financial measures in this release. Investors should
consider adjusted measures in addition to, and not as a substitute for, or
superior to, financial performance measures prepared in accordance with
generally accepted accounting principles ("GAAP"). Please refer to the
attached reconciliation between GAAP and adjusted financial measures prepared
in accordance with GAAP and the Non-GAAP adjusted financial measures.

                             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.

The Company completed the following recent acquisitions; the results are
included in segment information as follows:

  *M Cubed Technologies, Inc. in the Advanced Products Group on November 1,
    2012,
  *The thin-film filter business and interleaver product line of Oclaro, Inc.
    with Photop Technologies in the Near-Infrared Optics segment on December
    3, 2012, 
  *LightWorks Optics, Inc. (LightWorks) in the Military & Materials segment
    on December 21, 2012, and
  *Semiconductor laser business of Oclaro, Inc. in the newly created Active
    Optical Products segment on September 12, 2013.

                        
                        Three Months Ended
                        September 30,
                                         %
$ Millions, except %     2013    2012    Increase
                                         (Decrease)
                                      
Bookings:                              
Infrared Optics          $ 47.4  $ 47.5  --%
Near-Infrared Optics     40.8    35.1    16%
Military & Materials     21.8    17.8    23%
Advanced Products Group  30.0    14.0    114%
Active Optical Products  3.5     --      --%
Total Bookings           $ 143.5 $ 114.4 25%
                                      
Revenues:                              
Infrared Optics          $ 52.6  $ 51.6  2%
Near-Infrared Optics     39.9    40.6    (2)%
Military & Materials     27.4    23.9    15%
Advanced Products Group  26.5    16.2    64%
Active Optical Products  4.8     --      --%
Total Revenues           $ 151.2 $ 132.3 14%
                                      
Segment Earnings (Loss):               
Infrared Optics          $ 10.8  $ 11.8  (8)%
Near-Infrared Optics     3.1     7.7     (60)%
Military & Materials     3.4     (2.1)   262%
Advanced Products Group  0.3     (0.8)   138%
Active Optical Products  (4.1)   --      --%
Total Segment Earnings   $ 13.5  $ 16.6  (19)%

                     Other Selected Financial Information

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

                                                           Three Months Ended
                                                           September 30,
$ Millions, except share information                        2013      2012
                                                                    
EBITDA                                                      $ 25.2    $ 26.4
Cash paid for capital expenditures                          $ 6.6     $ 5.9
Net borrowings on indebtedness                              $ 97.0   $ 5.0
Share-based compensation expense, pre-tax                   $4.1     $ 3.5
Cash paid for shares repurchased through the Company's      $ --      $ 5.9
share repurchase program
Shares repurchased through the Company's share repurchase   --        317,042
program

    Update on Acquisition of Oclaro, Inc. Fiber Amplifier and Micro-Optics
                                   Business

It was previously announced on October 10, 2013 that the Company had signed an
asset purchase agreement to acquire the fiber amplifier and micro-optics
business of Oclaro, Inc., the closing of which was dependent on the
satisfaction of certain conditions, including receipt of various regulatory
approvals.The Company announced today that it has received all of the
necessary regulatory approvals required to complete the acquisition of the
business, and as such, the currently expected closing date for the transaction
is November 1, 2013.At closing, the Company will pay $79.6 million in cash to
Oclaro, $4 million of cash will be held back by the Company until December 31,
2014, and the remaining $5 million was previously paid to Oclaro on September
12, 2013 as an option to purchase the fiber amplifier and micro-optics
business for a total transaction value of $88.6 million.

                                   Outlook

For the second fiscal quarter ending December 31, 2013, the Company currently
forecasts revenues to range from $170 million to $178 million and earnings per
share to range from $0.12 to $0.15. Comparable results for the quarter ended
December 31, 2012 were revenues of $125.9 million and earnings per share of
$0.19. For the fiscal year ending June 30, 2014, the Company currently expects
revenues to range from $730 million to $740 million and earnings per share to
range from $0.75 to $0.82. Comparable results for the year ended June 30, 2013
were revenues of $558.4 million and earnings per share of $0.80. The forecasts
for the quarter ending December 31, 2013 and the fiscal year ending June 30,
2014 assume that the fiber amplifier and micro-optics business transaction
closes effective November 1, 2013. 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,
October 29, 2013 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/muop8bc.A replay of the webcast will be available for 2
weeks following the call.

                      Use of Non-GAAP Financial Measures

The Company has disclosed adjusted financial measurements in this press
release that present financial information that is not in accordance with
GAAP. These measurements are not a substitute for GAAP measurements, although
the Company's management uses these measurements as an aid in monitoring the
Company's on-going financial performance. The adjusted Non-GAAP net earnings
attributable to II-VI Incorporated and adjusted Non-GAAP earnings per share
measure the earnings of the Company excluding unusual items that are
considered by management to be outside of the normal on-going operations of
the Company. There are limitations with the use of Non-GAAP financial
measures, including that Non-GAAP financial measures used by the Company may
be calculated differently from, and therefore may not be comparable to,
similarly titled measures used by other companies, that there can be no
assurance that excluded items in the Non-GAAP financial measures will not
occur in the future and that there could be cash costs associated with items
excluded in the Non-GAAP financial measures.The Company compensates for these
limitations by using these Non-GAAP financial measures as supplements to GAAP
financial measures and by providing the reconciliations of the Non-GAAP
financial measures to their most comparable GAAP financial measures. Investors
should consider adjusted measures in addition to, and not as a substitute for,
or superior to, financial performance measures prepared in accordance with
GAAP.

                           About II-VI Incorporated

II-VI Incorporated, a global leader in engineered materials and
opto-electronic components, is a vertically-integrated manufacturing company
that creates and markets products for diversified markets including industrial
manufacturing, optical communications, military and aerospace, high-power
electronics, semiconductor laser 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 laser and thermal imaging
systems 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, 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. Photop Aegis, Inc. (Aegis)
manufactures tunable optical devices required for high speed optical networks
that provide the bandwidth expansion necessary for increasing internet
traffic. Through its Australian subsidiary, Photop AOFR Pty Limited, Aegis
also manufactures fused fiber components, including those required for fiber
lasers for material processing applications, as well as optical couplers used
primarily in the optical communication industry.

In the Company's military & materials business, LightWorks Optical Systems,
Inc. (formerly Exotic Electro-Optics and LightWorks Optics, Inc.) manufactures
products for military applications and precision optical systems, and
components for defense, aerospace, industrial and life science applications.
Pacific Rare Specialty Metals & Chemicals (PRM) produces and refines a rare
earth element and selenium, 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. VLOC
manufactures near-infrared and visible light products for military
applications and laser gain materials and products for solid-state YAG and YLF
lasers.

In the Company's advanced products group, the Wide Bandgap Materials (WBG)
group manufactures and markets single crystal silicon carbide substrates for
use in the solid-state lighting, 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. Worldwide Materials Group (WMG) provides expertise in
materials development, process development and manufacturing scale up. M Cubed
Technologies, Inc. (M Cubed) develops and markets advanced composite materials
serving the semiconductor, display, industrial and defense markets.

In the Company's active optical products segment, II-VI Laser Enterprise GmbH
is an industry-leading manufacturer of high-power semiconductor laser
components enabling fiber and direct diode laser systems for material
processing, medical, consumer and printing applications. In addition, II-VI
Laser Enterprise manufactures pump lasers for optical amplifiers for both
terrestrial and submarine applications and vertical cavity surface emitting
lasers (VCSELS) for optical navigation, optical interconnects and optical
sensing applications.

                          Forward-looking Statements

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, 2013; (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; (vi) the Company's ability to assimilate
recently acquired businesses, and risks, costs and uncertainties associated
with such acquisitions; and/or (vii) the Company's ability to devise and
execute strategies to respond to market conditions. The Company disclaims any
obligation to update information contained in these forward-looking statements
whether as a result of new information, future events or developments, or
otherwise.

                                                                   
                                                                   
II-VI Incorporated and Subsidiaries                                 
Condensed Consolidated Statements of Earnings (Unaudited)           
($000 except per share data)                                        
                                                                   
                                                          Three Months Ended
                                                          September 30,
                                                          2013      2012
Revenues                                                            
Net sales:                                                          
Domestic                                                   $ 63,690  $ 52,283
International                                              87,482    80,009
Total Revenues                                             151,172   132,292
                                                                   
                                                                   
Costs, Expenses & Other Expense (Income)                            
Cost of goods sold                                         94,826    83,457
Internal research and development                          7,747     5,585
Selling, general and administrative                        35,112    26,656
Interest expense                                           483       36
Other expense (income), net                                67       (761)
Total Costs, Expenses, and Other Expense (Income)          138,235   114,973
                                                                   
Earnings Before Income Taxes                               12,937    17,319
                                                                   
Income Taxes                                               3,243     4,187
                                                                   
Net Earnings                                               9,694     13,132
Less:Net Earnings Attributable to Noncontrolling          --        414
Interests
Net Earnings Attributable to II-VI Incorporated            $ 9,694   $ 12,718
Net Earnings Attributable to II-VI Incorporated Diluted    $ 0.15    $ 0.20
Earnings Per Share:
Net Earnings Attributable to II-VI Incorporated Basic      $ 0.16    $ 0.20
Earnings Per Share:
                                                                   
Average Shares Outstanding- Diluted                       63,947    64,199
Average Shares Outstanding- Basic                         62,379    62,786

                                                              
                                                              
II-VI Incorporated and Subsidiaries                            
Condensed Consolidated Balance Sheets (Unaudited)              
($000)                                                         
                                                 September 30, June 30,
                                                 2013          2013
Assets                                                         
Current Assets                                                 
Cash and cash equivalents                         $ 195,207     $ 185,433
Accounts receivable                               102,782       107,173
Inventories                                       167,563       141,859
Deferred income taxes                             10,472        10,794
Prepaid and refundable income taxes               4,037         4,543
Prepaid and other current assets                  12,716        11,342
Total Current Assets                              492,777       461,144
Property, plant & equipment, net                  195,911       170,672
Goodwill                                          162,051       123,352
Other intangible assets, net                      117,180       86,701
Investment                                        11,461        11,203
Deferred income taxes                             6,060         2,696
Other assets                                      14,078        8,034
Total Assets                                      $ 999,518     $ 863,802
                                                              
Liabilities and Shareholders' Equity                           
Current Liabilities                                            
Current portion of long-term debt                 $ 20,000      $ --
Accounts payable                                  27,472        23,617
Accruals and other current liabilities            59,076        70,817
Total Current Liabilities                         106,548       94,434
Long-term debt                                    191,072       114,036
Deferred income taxes                             17,192        4,095
Other liabilities                                 30,498        15,129
Total Liabilities                                 345,310       227,694
Total Shareholders' Equity                        654,208       636,108
Total Liabilities and Shareholders' Equity        $ 999,518     $ 863,802
                                                              

                                                                   
II-VI Incorporated and Subsidiaries                                 
Condensed Consolidated Statements of Cash Flows                     
(Unaudited)
($000)                                                     
                                                          Three Months Ended
                                                          September 30,
                                                          2013     2012
Net cash provided by operating activities                  $ 24,387  $ 23,185
                                                                   
Cash Flows from Investing Activities                                
Additions to property, plant and equipment                 (6,573)   (5,929)
Purchase of business, net of cash acquired                 (90,601)  --
Payment of option to acquire business                      (5,000)   --
Other investing activities                                 --        42
Net cash used in investing activities                      (102,174) (5,887)
                                                                   
Cash Flows from Financing Activities                                

Proceeds from borrowings                                   103,000   6,000
Payments on borrowings                                     (6,000)   (1,000)
Payment on earn-out arrangement                            (2,200)   --
Payment of redeemable noncontrolling interest              (8,789)   --
Proceeds from exercises of stock options                   2,498     1,083
Purchases of treasury stock                                --        (5,899)
Payment of deferred financing costs                        (950)     --
Minimum tax withholding requirements                       (718)     (137)
Excess tax benefits from share-based compensation expense  361       387
Net cash provided by financing activities                  87,202    434
                                                                   
Effect of exchange rate changes on cash and cash           359       (65)
equivalents
                                                                   
Net increase in cash and cash equivalents                  9,774     17,667
                                                                   
Cash and Cash Equivalents at Beginning of Period           185,433   134,944
Cash and Cash Equivalents at End of Period                 $ 195,207 $ 152,611

                                                                   
                                                                   
II-VI Incorporated and Subsidiaries                                 
Reconciliation of Selected Non-GAAP Financial Measurements          
($million except per share amounts)                                 
                                                                   
Reconciliation of Reported Net Earnings to Non-GAAP Net             
Earnings
(Unaudited)                                                         
                                                                   
                                                          Three Months Ended
                                                          September 30,
                                                          2013      2012
                                                                   
Reported Net Earnings Attributable to II-VI Incorporated   $ 9.7     $ 12.7
                                                                   
Add back:                                                           
Write-downs of tellurium and selenium inventory            0.7       0.5
Acquisition transaction expenses                           3.5       --
                                                          (0.2)    --
Income tax impact on unusual items

Adjusted Non-GAAP Net Earnings Attributable to II-VI       $ 13.7    $ 13.2
Incorporated
                                                                   
Per share data:                                                     
Net Earnings Attributable to II-VI Incorporated:                    
Net Earnings Attributable to II-VI Incorporated Diluted    $ 0.15    $ 0.20
Earnings Per Share:
Net Earnings Attributable to II-VI Incorporated Basic      $ 0.16    $ 0.20
Earnings Per Share:
                                                                   
Per share, After-Tax Impact of Unusual Items on:                    
Net Earnings Attributable to II-VI Incorporated Diluted    $ 0.06    $ 0.01
Earnings Per Share:
Net Earnings Attributable to II-VI Incorporated Basic      $ 0.06    $ 0.01
Earnings Per Share:
                                                                   
Adjusted Non-GAAP Net Earnings Attributable to II-VI                
Incorporated:
Adjusted Non-GAAP Net Earnings Diluted Earnings Per Share: $ 0.21    $ 0.21
Adjusted Non-GAAP Net Earnings Basic Earnings Per Share:  $ 0.22    $0.21

Below is a reconciliation of the Segment Earnings and EBITDA reported in this
press release to reported Net Earnings.

Reconciliation of Segment           Three Months Ended
Earnings and EBITDA to Net Earnings September 30,
                                   2013      2012
                                            
Total Segment Earnings              $ 13.5    $ 16.6
Interest expense                    0.5       0.1
Other expense (income), net         0.1       (0.8)
Income taxes                        3.2       4.2
Net earnings                        $ 9.7     $ 13.1
                                            
EBITDA                              $ 25.2    $ 26.4
Interest expense                    0.5       0.1
Depreciation and amortization       11.8      9.0
Income taxes                        3.2       4.2
Net earnings                        $ 9.7     $ 13.1

CONTACT: II-VI Incorporated
         Craig A. Creaturo, Chief Financial Officer and Treasurer
         (724) 352-4455
         ccreaturo@ii-vi.com