Francis Kramer – Chairman
Thank you, Mary Jane, and thank you, everyone, for joining us. We delivered another solid quarter. Revenues of $176.8 million grew 3% over the second quarter of last year and we’re down 5% on seasonality from the first quarter of this year as we normally experience between the first and second fiscal quarters.EPS was $0.24 without the $0.11 impact of a settlement agreement. This $0.24 includes $0.04of tax benefit for the extension of the R&D tax credit right at the end of the year. The second quarter is typically our lowest quarter due to the holiday season in the U.S. and Europe. We continued making good progress on achieving our key financial metric goals that I have been communicating over the last several earnings calls.
Our Book to Bill ratio was 1.0 or greater in all our segments, contributing to a strong backlog as we enter the second-half of the company’s fiscal year.The Laser Solutions segment revenues of $67.7 million or 38% of the company’s revenues. The operating margin of 18% is consistent with the first quarter and above last year’s first quarter operating margin of 6%. The Photonics segment revenues are $60.9 million or 35% of the company’s revenues. The operating margin declined to 1% compared to the first quarter’s margin of 3%. Photonics’ margins continue to be an area of considerable focus.
The Performance Products segment revenues were $48.2 million or 27% of the company’s revenues. The operating margin of 8.1% is lower than the first quarter that was 8.9% and the year-ago quarter of 11.9%. The largest driver of this change is the reduction in the military business and the cost to move part of the Florida operations into California. We still expect to incur some cost in the second-half of the year to complete this consolidation. We are pleased with the progress we are making and we realize we need to continue. We are revising our margin guidance for the gross margin, EBITDA margin and operating margin to a minimum of 250 basis points for the full fiscal year 2015 over the full-year fiscal year 2014. This represents an improvement of our – above our prior indication.We previously indicated a minimum of 200 basis points exit rate in the fourth quarter FY 2015 over the third quarter FY 2014. Between these same two periods, we now expect a 300 basis point to 400 basis point exit rate improvement. This translates to a minimum of 250 basis points improvement for the full-year. I will now turn the call over to Chuck to discuss our operating highlights. Chuck?
Vincent Mattera- President
Thanks, Fran. In the II-VI Laser Solutions segment, Q2 bookings of $67.5 million were up 9% over last year’s second quarter and down 4% sequentially, while Q2 revenues of $67.7 million were up 6% from last year’s same quarter and down 7% sequentially.
The revenue decrease quarter-over-quarter is typical of Q2 which has been historically Laser Solution’s lowest quarter. Laser utilization in the North American market driven by a steadier U.S. economy was strong during the quarter. We exited the quarter with strong bookings from both the OEMs and the aftermarket.We have also seen an increase in demand for fiber laser wielding heads to auto-assembly plants. The overall demand for our industry leading high-power products for automotive and EUV applications, as well as to our low power products resulted in a 20% increase in North American shipments over Q1 and 30% increase compared to Q2 of FY 2014. As it’s typical in Europe, bookings and revenue were seasonally lower in Q2 compared to Q1 due to the expected slowdown over the holidays.
Our EUV shipments in the region were at record levels and our customer continues to take as much product as we can currently produce. Although at the end of the quarter we saw no unusual signs of slowing demand in the near-term, we are concerned about Europe. Experts point to early warning signs that the economy is slowing as well as the uncertainty around euro currency evaluations and the impact of Swiss monetary policies on our business. Mary Jane will discuss this later in her overview.Turning to Asia, the material processing market continues to be a growth area for us in Japan, Korea and in China. China is moving more rapidly towards adoption of fiber laser technology than any other country. Our low cost fiber laser cutting head is getting strong interesting this market and we continue to field inquiries around related low-cost and low-power objects. We are experiencing strong pricing competition and see many players buying for position in the China market. We are adding resources in the region to better service our customers by enhancing executive relationships and providing quick responses to RFQs and RFIs. Laser diode shipments continue to be strong for both our high power laser diode assemblies as well as our high volume components. Several next generation laser diode products are in qualification that target growth opportunities.
