II-VI, Inc. (IIVI)’s Fiscal Year 2015 Second Quarter Earnings Conference Call Transcript

Page 12 of 13

Vincent Mattera – President
I would just make a general comment that it’s a strong growing market. There were entrenched suppliers. We have a number of competencies that we feel real strongly about. We have some leading customers and we are [Technical Difficulty] offer a full line of supply of transceivers for 40G and for 100G. And we’re investing accordingly, some of this is – will be based on uptake of our leading customers and the timing associated with multiple qualifications that are in play.
Ted Morea- Barrington Research Associates, Inc.
Okay. And what, what will be the time frame of release of the new products?
Vincent Mattera – President

Yes, it will depend by customer and it will depend by the qualification cycles. But I’m hoping that we will have the beginning of meaningful orders in the next couple of quarters.
Ted Morea- Barrington Research Associates, Inc.
Okay. Sounds good. And sorry, just to – on this one, one more time. Do you need these products to drive, the new product controls to drive revenue growth?

Vincent Mattera – President
Yes, our plan depends on a combination of improving our cost position and deriving the benefit from our product development investments.
Ted Moreau – Barrington Research Associates, Inc.
Okay. All right. Thank you.
Francis Kramer – Chairman
Sure, thank you, Ted.
Operator
Our next question comes from the line of Zach Rodenbough with Sidoti & Company. Your line is now open. Please proceed with your question.
Mary Jane Raymond – Chief Financial Officer
Hi, Zac.
Operator
Or may – Zac, your phone may be on mute.
Zach Rodenbough – Sidoti & Company, LLC
Sorry about that. Good morning, everyone.
Mary Jane Raymond – Chief Financial Officer
It’s okay.
Zach Rodenbough – Sidoti & Company, LLC

My first question is just about the CO2 business. As compared to last year, are you guys seeing demand in revenue for that kind of dropping off as a portion of the Laser Solutions business or is it kind of holding steady here?
Francis Kramer – Chairman
It’s holding steady, maybe a slight incline up. Certainly it’s just a great business. Install base is very good and when the economy is going the way it is here in North America right now and even Europe it really, it does have some growth to it. Japan is not doing so well, but overall, very good quarter for that group.
Zach Rodenbough – Sidoti & Company, LLC
Okay. And is there a chance for you guys to use kind of pricing power there to, I guess, add to your top line growth as this progresses indemand kind of does start to maybe go throughout this cycle?
Francis Kramer – Chairman
That group always is using whatever tool they can to gain market share and they have such a market share and they’re pretty active with it.
Zach Rodenbough – Sidoti & Company, LLC
Okay. Okay. And then last time I think you mentioned HIGHYAG is the main growth driver and laser solutions, and laser enterprise is starting to come on strong. And just wondering where is that standing now? Are you still seeing that level of growth from HIGHYAG, or is that going to level up, does the transition takes hold?And I guess, where is your enterprise starting to experience that same turn around?
Vincent Mattera – President
Okay, Zach, this is Chuck, I’ll make a couple of comments.
Zach Rodenbough – Sidoti & Company, LLCZ
Okay.
Vincent Mattera – President
First of all, on HIGHYAG, the business is really solid, that’s probably the best way to say it.

Page 12 of 13