PITTSBURGH, Jan. 21 /PRNewswire-FirstCall/ --

                                 FlashResults
                            II-VI Incorporated IIVI
                        (Numbers in Thousands, Except
                               Per Share Data)
             2nd quarter ended           2nd quarter ended
                  12/31/2008         YTD    12/31/2007        YTD
    Sales            $74,278     162,044        72,334     $143,426
    Net Income        $8,359     $25,854       $26,760      $36,382
    Average Shares    29,988      30,344        30,538       30,470
    EPS                $0.28       $0.85         $0.88        $1.19

II-VI Incorporated (Nasdaq: IIVI) today reported results for its second quarter ended December 31, 2008.

As previously announced, the Company intends on selling its x-ray and gamma-ray radiation sensor business, eV PRODUCTS, Inc., which operates as a business within the Compound Semiconductor Group. Results for all periods presented reflect the presentation of eV PRODUCTS as a discontinued operation.

Revenues from continuing operations for the quarter increased 3% to $74,278,000 from $72,334,000 in the second quarter of last fiscal year. Revenues from continuing operations for the six months ended December 31, 2008 increased 13% to $162,044,000 from $143,426,000 for the same period last fiscal year.

Bookings from continuing operations for the quarter decreased 14% to $67,337,000 compared to $78,572,000 in the second quarter of last fiscal year. Bookings from continuing operations for the six months ended December 31, 2008 decreased 11% to $141,632,000 from $159,421,000 for the same period last fiscal year. Bookings from continuing operations are defined as customer orders received that are expected to be converted into revenues during the next 12 months.

Earnings from continuing operations for the quarter were $8,339,000 or $0.28 per share-diluted. These results compare with earnings from continuing operations of $26,999,000 or $0.88 per share-diluted in the second quarter of last fiscal year which included a $15,913,000 or $0.52 per share-diluted after-tax gain on the sale of an equity investment. For the six months ended December 31, 2008, earnings from continuing operations were $25,857,000 or $0.85 per share-diluted. This compares with earnings from continuing operations of $36,989,000 or $1.21 per share-diluted which included a $15,913,000 or $0.52 per share-diluted after-tax gain on the sale of an equity investment.

Francis J. Kramer, president and chief executive officer said, 'In November 2008 we began to experience a drop in demand for the products we sell into non-military markets; this situation continues. As a result, we have taken difficult, but necessary, actions to reduce our operating costs; these actions include layoffs, reductions in overtime and elimination of certain discretionary spending.'

'Despite the downturn in demand, we are increasing yields and productivity. We are reducing capital expenditures originally planned to address growth opportunities; we will implement those cuts during the remainder of this fiscal year and into fiscal year 2010. We have adjusted our guidance for the remainder of fiscal year 2009 to account for changes in market conditions since we issued our last guidance on December 2, 2008.'

Kramer continued, 'Our strong balance sheet and healthy cash position allow us continued flexibility to meet challenges in this difficult market environment. And we continue to invest in internal research and development in those areas that we believe show solid, long-term potential.'

Included as a component of other expense (income), net in the Condensed Consolidated Statements of Earnings is the impact of certain foreign currency gains and losses. During the quarter ended December 31, 2008, the Company recognized approximately $2.9 million of foreign currency losses. These losses primarily were due to (a) the movement for tax and cash planning purposes of U.S. dollar-denominated funds into countries where the functional currency is the local currency, (b) a substantial weakening of the U.S. dollar against the Japanese Yen resulting in losses from the Company's non-speculative foreign currency forward exchange contracts, and (c) the remeasurement of U.S. dollar denominated obligations and receivables of the Company's foreign sales and marketing subsidiaries. During the quarter ended December 31, 2007, the Company recognized approximately $0.5 million in foreign currency gains.

Segment Information from Continuing Operations

The following segment information includes segment earnings from continuing operations (defined as earnings from continuing operations before income taxes, interest expense and other income or expense, net). Management believes segment earnings from continuing operations are a useful performance measure because they reflect the results of segment performance over which management has direct control.