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

James Ricchiuti – Needham & Company, LLC
Yes, and just with respected to that, Chuck, are you assuming kind of a similar outlook in the optical communications market in terms of a demand picture over the balance of the year?
Vincent Mattera – President
I would say that what I’m thinking is that the current quarter overall might look similar to the prior quarter. And we’re hoping that by the fourth quarter, we’ll start to see some increases.I mean, we’re well positioned. We want some good allocations based on our negotiations, now allocations is a first of the equation, our customers need to have demand and that will catch some of it into our bucket.
James Ricchiuti- Needham & Company, LLC
Got it. And you also, I’m sorry, go ahead, Francis.
Francis Kramer – Chairman
I just want to add, so what Chuck makes all kind of sense on how we see the business. We are going to make some cost reductions in the Photonics group. That’s the only thing that we are not really – we’re not to quite the cost we want to have with this level of business, but increase in the market pressure will fix this, but we cannot wait for that. We’re continuing to work on all avenues including certainly moving our production around.
James Ricchiuti- Needham & Company, LLC
Got it, thanks, Fran. And one final question if I may, I think you alluded to Europe, European concern and I don’t know if that is more just the headlines that we’re all seeing or if you have begun to see any signs of softening across any of the businesses?
Francis Kramer – Chairman
Like Chuck said in his note, we didn’t – as the quarter ended, we didn’t have any turn down there, but we’re watching every bit of news. And when there’s so much turmoil in a region it would be impossible for it not to have an impact on us in the next six months. Maybe it’s not going to be in this quarter, but we just see too many unfavorable issues there.
James Ricchiuti – Needham & Company, LLC
How were the bookings in Europe as you went through the quarter?
Francis Kramer – Chairman
I think they ran the pattern we were expecting. We had a little bit better in October and November, but December was maybe close to just unpleasant, because those last two weeks are really weak. And you’re wondering we’re going to finish the quarter where we expected because they fell up. We’re about – we’re right on where we expected on Europe overall, just December is always weak for us.
Vincent Mattera – President
Yes, I could add, maybe I could add to that, Fran,because I think it’s consistent with the question Jim is asking. I will turn my attention just to the shipments. I will say that in the last couple of weeks of the second quarter we had a, what would seem to be like a lot more activity than what we were expecting. So we had – we worked real hard between Christmas and New Year, to be able to keep pace. And I would say that, that in the first week or two in January in Europe, you could feel a little bit of a slower start.We’re not reading anything into that, but I would say if you look at the pace in the first couple of weeks of January it’s not at the same pace we had in the last couple of weeks of December.