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

Operator
Thank you. Our next question comes from the line of James Ricchiuti with Needham & Company. You line is now open. Please proceed with your question.
James Ricchiuti- Needham & Company, LLC
Thank you. Good morning. I wanted to follow-up on the bump up in your margin targets by the year. Is there anything you can say, maybe to either isolate or elaborate on which areas you become maybe a little bit more confident in terms of expanding margins?

Francis Kramer – Chairman
I’ll start, maybe, Mary Jane or Chuck will add to it. Certainly, the Laser Solutions business is the one that’s starting to get better traction certainly this year to business is solid, but our laser dide business is, where we’re getting a little more confidence. And if you said, there is an area, where we’re a little bit less confident, might be in our Photonics area. We did have a – the wider quarter here in the second quarter compared to the first and that’s where we’re focused. Our Performance Products segment right on just about where they’ve been in the performance areas, kind of, modulated with the diversity we have in that segment.
Mary Jane Raymond – Chief Financial Officer
I think that, go ahead
James Ricchiuti- Needham & Company, LLC
Please go ahead
Mary Jane Raymond – Chief Financial Officer
I should just say, I think that’s a perfect summary. I mean, I think, in the first quarter, we have the same consistent story that we, kind of, have this quarter. But particularly in the laser diode, the fiber laser, et cetera, that just very, very good focus on operating efficiencies are causing us to now see after couple of quarters of that, that looks to be, at least, steady. And I think the rest of Fran’s comments are exactly on the mark.
James Ricchiuti – Needham & Company, LLC
And then with respect to the Photonics segment, is there anything we can be looking for the next quarter or two that might signal since some signs of improvement there. I mean, it clearly seems that this is going to be a longer turnaround and you’ve already alluded to that. But are there any things in the next one to two quarters that we might be looking for that could see some changes in that business?
Vincent Mattera – President
Jim, this is Chuck. I would say that, increasing demand will be in the near-term is the most important part of our plan, as we’re working the things that we can control in the operations to improve the operating margin those things are happening every day. We – as I indicated in my comments that we have seen a weaker demand for our optical amplifiers, and we’re faced with some customers were telling us that, their customers have delayed network deployments. So an indication that the market, which was little stronger in Q1 than it was in Q2, it warms up, it’s going to be an important part of our near-term picture.