Company Quick10K Filing
II-VI
Price36.31 EPS1
Shares66 P/E43
MCap2,395 P/FCF37
Net Debt1,938 EBIT106
TEV4,333 TEV/EBIT41
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-11
10-Q 2019-12-31 Filed 2020-02-10
10-Q 2019-09-30 Filed 2019-11-12
10-K 2019-06-30 Filed 2019-08-16
10-Q 2019-03-31 Filed 2019-05-09
10-Q 2018-12-31 Filed 2019-02-08
10-Q 2018-09-30 Filed 2018-11-08
10-K 2018-06-30 Filed 2018-08-28
10-Q 2018-03-31 Filed 2018-05-09
10-Q 2017-12-31 Filed 2018-02-08
10-Q 2017-09-30 Filed 2017-11-08
10-K 2017-06-30 Filed 2017-08-21
10-Q 2017-03-31 Filed 2017-05-02
10-Q 2016-12-31 Filed 2017-02-01
10-Q 2016-09-30 Filed 2016-11-08
10-K 2016-06-30 Filed 2016-08-26
10-Q 2016-03-31 Filed 2016-05-09
10-Q 2015-12-31 Filed 2016-02-08
10-Q 2015-09-30 Filed 2015-11-06
10-K 2015-06-30 Filed 2015-08-28
10-Q 2015-03-31 Filed 2015-05-08
10-Q 2014-12-31 Filed 2015-02-06
10-Q 2014-09-30 Filed 2014-11-07
10-K 2014-06-30 Filed 2014-08-28
10-Q 2014-03-31 Filed 2014-05-12
10-Q 2013-12-31 Filed 2014-02-07
10-Q 2013-09-30 Filed 2013-11-08
10-K 2013-06-30 Filed 2013-08-28
10-Q 2013-03-31 Filed 2013-05-09
10-Q 2012-12-31 Filed 2013-02-08
10-K 2012-06-30 Filed 2012-08-28
10-Q 2012-03-31 Filed 2012-05-09
10-Q 2011-12-31 Filed 2012-02-08
10-Q 2011-09-30 Filed 2011-11-08
10-K 2011-06-30 Filed 2011-08-26
10-Q 2011-03-31 Filed 2011-05-09
10-Q 2010-12-31 Filed 2011-02-08
10-Q 2010-09-30 Filed 2010-11-08
10-K 2010-06-30 Filed 2010-08-27
10-Q 2010-03-31 Filed 2010-05-07
10-Q 2009-12-31 Filed 2010-02-08
8-K 2020-07-01 Shareholder Rights, Amend Bylaw, Other Events, Exhibits
8-K 2020-06-30 Regulation FD, Other Events, Exhibits
8-K 2020-06-29 Other Events, Exhibits
8-K 2020-06-29 Other Events, Exhibits
8-K 2020-06-29 Other Events, Exhibits
8-K 2020-05-29
8-K 2020-05-29
8-K 2020-05-18
8-K 2020-05-11
8-K 2020-02-10
8-K 2020-01-29
8-K 2019-12-23
8-K 2019-12-03
8-K 2019-11-12
8-K 2019-11-12
8-K 2019-11-12
8-K 2019-10-23
8-K 2019-09-24
8-K 2019-09-24
8-K 2019-09-20
8-K 2019-09-18
8-K 2019-08-22
8-K 2019-08-16
8-K 2019-08-15
8-K 2019-08-14
8-K 2019-08-13
8-K 2019-08-13
8-K 2019-08-01
8-K 2019-07-25
8-K 2019-07-05
8-K 2019-06-27
8-K 2019-05-24
8-K 2019-05-21
8-K 2019-05-20
8-K 2019-05-01
8-K 2019-05-01
8-K 2019-03-26
8-K 2019-03-11
8-K 2019-03-06
8-K 2019-03-01
8-K 2019-02-01
8-K 2019-01-31
8-K 2018-12-27
8-K 2018-12-03
8-K 2018-11-13
8-K 2018-11-09
8-K 2018-11-09
8-K 2018-11-09
8-K 2018-11-09
8-K 2018-11-01
8-K 2018-11-01
8-K 2018-09-04
8-K 2018-08-08
8-K 2018-08-07
8-K 2018-07-09
8-K 2018-05-11
8-K 2018-05-01
8-K 2018-05-01
8-K 2018-03-26
8-K 2018-03-13
8-K 2018-02-02
8-K 2018-02-01

IIVI 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1. Basis of Presentation
Note 2. Recently Issued Financial Accounting Standards
Note 3. Finisar Acquisition
Note 4. Revenue From Contracts with Customers
Note 5. Leases
Note 6. Other Investments
Note 7. Inventories
Note 8. Property, Plant and Equipment
Note 9. Goodwill and Other Intangible Assets
Note 10. Debt
Note 11. Income Taxes
Note 12. Earnings per Share
Note 13. Segment Reporting
Note 14. Share - Based Compensation
Note 15. Fair Value of Financial Instruments
Note 16. Share Repurchase Programs
Note 17. Accumulated Other Comprehensive Income (Loss)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Issuer Purchases of Equity Securities
Item 6. Exhibits
EX-31.01 iivi-20191231xexx31011.htm
EX-31.02 iivi-20191231xexx31021.htm
EX-32.01 iivi-20191231xexx32011.htm
EX-32.02 iivi-20191231xexx32021.htm

II-VI Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
10.08.06.04.02.00.02012201420172020
Assets, Equity
0.40.30.20.10.0-0.12012201420172020
Rev, G Profit, Net Income
1.40.90.4-0.1-0.6-1.12012201420172020
Ops, Inv, Fin

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________________
FORM 10-Q
________________________________________________________________
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2020
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from                      to                     .
Commission File Number: 0-16195
________________________________________________________________
II-VI INCORPORATED
(Exact name of registrant as specified in its charter)
________________________________________________________________
PENNSYLVANIA25-1214948
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
375 Saxonburg Boulevard16056
Saxonburg,PA(Zip Code)
(Address of principal executive offices)
Registrant’s telephone number, including area code: 724-352-4455
N/A
(Former name, former address and former fiscal year, if changed since last report)
________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par valueIIVINasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer
Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act       
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
At May 6, 2020, 91,252,259 shares of Common Stock, no par value, of the registrant were outstanding.


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II-VI INCORPORATED
INDEX
Page No.
Condensed Consolidated Balance Sheets March 31, 2020 and June 30, 2019 (Unaudited)
Condensed Consolidated Statements of Earnings (Loss) – Three and nine months ended March 31, 2020 and 2019 (Unaudited)
Condensed Consolidated Statements of Comprehensive Income (Loss)Three and nine months ended March 31, 2020 and 2019 (Unaudited)
Condensed Consolidated Statements of Cash Flows – Nine months ended March 31, 2020 and 2019 (Unaudited)
Condensed Consolidated Statements of Shareholders’ Equity – Three and nine months ended March 31, 2020 and 2019 (Unaudited)

2

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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
II-VI Incorporated and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
($000)
March 31,
2020
June 30,
2019
Assets
Current Assets
Cash and cash equivalents
$388,107  $204,872  
Accounts receivable - less allowance for doubtful accounts of $2,013 at March 31, 2020
and $1,292 at June 30, 2019
496,427  269,642  
Inventories
628,028  296,282  
Prepaid and refundable income taxes
8,324  11,778  
Prepaid and other current assets
70,202  30,337  
Total Current Assets
1,591,088  812,911  
Property, plant & equipment, net
1,247,167  582,790  
Goodwill
1,281,762  319,778  
Other intangible assets, net
763,456  139,324  
Investments
73,618  76,208  
Deferred income taxes
19,855  8,524  
Other assets
129,877  14,238  
Total Assets
$5,106,823  $1,953,773  
Liabilities and Shareholders' Equity
Current Liabilities
Current portion of long-term debt
$69,250  $23,834  
Accounts payable
208,623  104,462  
Accrued compensation and benefits
94,459  71,847  
Operating lease current liabilities
22,433  —  
Accrued income taxes payable
53,958  20,476  
Other accrued liabilities
120,448  49,944  
Total Current Liabilities
569,171  270,563  
Long-term debt
2,213,175  443,163  
Deferred income taxes
54,699  23,913  
Operating lease liabilities
91,771  —  
Other liabilities
160,100  82,925  
Total Liabilities
3,088,916  820,564  
Shareholders' Equity
Preferred stock, no par value; authorized - 5,000,000 shares; none issued
    
Common stock, no par value; authorized - 300,000,000 shares; issued - 104,278,333 shares at March 31, 2020; 76,315,337 shares at June 30, 2019
1,459,354  382,423  
Accumulated other comprehensive loss
(80,444) (24,221) 
Retained earnings
825,291  943,581  
2,204,201  1,301,783  
Treasury stock, at cost - 13,102,618 shares at March 31, 2020 and 12,603,781 shares at June 30, 2019
(186,294) (168,574) 
Total Shareholders' Equity
2,017,907  1,133,209  
Total Liabilities and Shareholders' Equity
$5,106,823  $1,953,773  
- See notes to condensed consolidated financial statements.
3

Table of Contents
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Unaudited)
($000 except per share data)
Three Months Ended
March 31,
20202019
Revenues$627,041  $342,496  
Costs, Expenses, and Other Expense (Income)
Cost of goods sold381,108  215,212  
Internal research and development94,764  36,026  
Selling, general and administrative82,133  60,128  
Interest expense28,530  5,647  
Other expense (income), net7,168  (1,532) 
Total Costs, Expenses, & Other Expense (Income)593,703  315,481  
Earnings Before Income Taxes33,338  27,015  
Income Taxes27,417  2,377  
Net Earnings$5,921  $24,638  
Basic Earnings Per Share$0.07  $0.39  
Diluted Earnings Per Share$0.06  $0.38  
- See notes to condensed consolidated financial statements.
4

Table of Contents
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Earnings (Loss) (Unaudited)
($000 except per share data)
Nine Months Ended
March 31,
20202019
Revenues$1,633,781  $999,768  
Costs, Expenses, and Other Expense (Income)
Cost of goods sold1,116,368  617,071  
Internal research and development238,584  102,961  
Selling, general and administrative306,846  171,787  
Interest expense63,888  16,811  
Other expense (income), net12,734  (2,946) 
Total Costs, Expenses, & Other Expense (Income)1,738,420  905,684  
Earnings (Loss) Before Income Taxes(104,639) 94,084  
Income Taxes13,651  14,595  
Net Earnings (Loss)$(118,290) $79,489  
Basic Earnings (Loss) Per Share$(1.43) $1.25  
Diluted Earnings (Loss) Per Share$(1.43) $1.21  
- See notes to condensed consolidated financial statements.
5

Table of Contents
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
($000)
Three Months Ended
March 31,
Nine Months Ended
March 31,
2020201920202019
Net earnings (loss)$5,921  $24,638  $(118,290) $79,489  
Other comprehensive income (loss):
Foreign currency translation adjustments$(39,829) $8,680  $(28,258) $(6,425) 
Change in fair value of interest rate swap, net of taxes of ($8,475) and ($7,486) for the three and nine months ended March 31, 2020, respectively
$(31,407) $  $(27,798) $  
Pension adjustment, net of taxes of ($46) for the nine months ended March 31, 2020, and $8 and ($1) for the three and nine months ended March 31, 2019, respectively
$  $29  $(167) $(4) 
Comprehensive income (loss)$(65,315) $33,347  $(174,513) $73,060  
- See notes to condensed consolidated financial statements.
6

Table of Contents
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
($000)
Nine Months Ended
March 31,
20202019
Cash Flows from Operating Activities
Net earnings (loss)$(118,290) $79,489  
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation101,755  55,616  
Amortization45,369  12,011  
Share-based compensation expense48,916  15,780  
Amortization of discount on convertible debt and debt issuance costs15,920  9,641  
Debt extinguishment costs3,960    
Losses on foreign currency remeasurements and transactions8,149  820  
Earnings from equity investments(1,777) (2,778) 
Deferred income taxes(32,698) (5,895) 
Impairment of investment4,980    
Increase (decrease) in cash from changes in (net of effect of acquisitions):
Accounts receivable16,750  (30,936) 
Inventories95,598  (50,100) 
Accounts payable(8,480) 14,706  
Income taxes(11,178) (972) 
Accrued compensation and benefits(12,330) (7,802) 
Other operating net assets (liabilities)(36,152) 24,812  
Net cash provided by operating activities120,492  114,392  
Cash Flows from Investing Activities
Additions to property, plant & equipment(107,975) (108,170) 
Purchases of businesses, net of cash acquired(1,036,609) (83,867) 
Purchases of equity investment  (4,480) 
Other investing activities(3,042) 118  
Net cash used in investing activities(1,147,626) (196,399) 
Cash Flows from Financing Activities
Proceeds from borrowings of Term A Facility1,241,000    
Proceeds from borrowings of Term B Facility720,000    
Proceeds from borrowings of Revolving Credit Facility160,000    
Proceeds from borrowings under prior Credit Facility10,000  150,000  
Payments on Finisar Notes(560,112)   
Payments on borrowings under prior Term Loan, Credit Facility and other loans(176,596) (90,000) 
Payments on borrowings under Term A Facility(31,026)   
Payments on borrowings under Term B Facility(3,600)   
Payments on borrowings under Revolving Credit Facility(70,000)   
Debt issuance costs(63,510)   
Proceeds from exercises of stock options5,056  7,507  
Common stock repurchase(1,625)   
Payments in satisfaction of employees' minimum tax obligations(15,680) (7,100) 
Other financing activities(2,010) (3,540) 
Net cash provided by financing activities1,211,897  56,867  
Effect of exchange rate changes on cash and cash equivalents(1,528) (688) 
Net increase (decrease) in cash and cash equivalents183,235  (25,828) 
Cash and Cash Equivalents at Beginning of Period204,872  247,038  
Cash and Cash Equivalents at End of Period$388,107  $221,210  
Cash paid for interest$46,430  $6,708  
Cash paid for income taxes$34,144  $20,340  
Additions to property, plant & equipment included in accounts payable$16,254  $4,552  
- See notes to condensed consolidated financial statements.
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Table of Contents
II-VI Incorporated and Subsidiaries
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)
(000)
Common StockAccumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury StockTotal
Three Months Ended March 31, 2020SharesAmountSharesAmount
Balance - December 31, 2019104,043  $1,441,180  $(9,208) $819,370  (13,080) $(185,645) $2,065,697  
Share-based and deferred compensation activities235  18,174  —  —  (23) (649) 17,525  
Net earnings—  —  —  5,921  —  —  5,921  
Foreign currency translation adjustments—  —  (39,829) —  —  —  (39,829) 
Change in fair value of interest rate swap, net of taxes of ($8,475)
—  —  (31,407) —  —  —  (31,407) 
Balance - March 31, 2020104,278  $1,459,354  $(80,444) $825,291  (13,103) $(186,294) $2,017,907  

Common StockAccumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury StockTotal
Three Months Ended March 31, 2019SharesAmountSharesAmount
Balance - December 31, 201876,124  $367,195  $(18,918) $890,915  (12,538) $(166,019) $1,073,173  
Share-based and deferred compensation activities104  8,000  —  —  (23) (962) 7,038  
Net earnings—  —  —  24,638  —  —  24,638  
Foreign currency translation adjustments—  —  8,680  —  —  —  8,680  
Pension adjustment, net of taxes of $8
—  —  29  —  —  —  29  
Balance - March 31, 201976,228  $375,195  $(10,209) $915,553  (12,561) $(166,981) $1,113,558  

Common StockAccumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury StockTotal
Nine Months Ended March 31, 2020SharesAmountSharesAmount
Balance - June 30, 201976,315  $382,423  $(24,221) $943,581  (12,604) $(168,574) $1,133,209  
Share-based and deferred compensation activities1,250  89,224  —  —  (449) (16,095) 73,129  
Common stock repurchase—  —  —  —  (50) (1,625) (1,625) 
Shares issued related to Finisar acquisition26,713  987,707  —  —  —  —  987,707  
Net loss—  —  —  (118,290) —  —  (118,290) 
Foreign currency translation adjustments—  —  (28,258) —  —  —  (28,258) 
Change in fair value of interest rate swap, net of taxes of ($7,486)
—  —  (27,798) —  —  —  (27,798) 
Pension adjustment, net of taxes of ($46)
—  —  (167) —  —  —  (167) 
Balance - March 31, 2020104,278  $1,459,354  $(80,444) $825,291  (13,103) $(186,294) $2,017,907  

Common StockAccumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury StockTotal
Nine Months Ended March 31, 2019SharesAmountSharesAmount
Balance - June 30, 201875,693  $351,761  $(3,780) $836,064  (12,396) $(159,734) $1,024,311  
Share-based and deferred compensation activities535  23,434  —  —  (165) (7,247) 16,187  
Net earnings—  —  —  79,489  —  —  79,489  
Foreign currency translation adjustments—  —  (6,425) —  —  —  (6,425) 
Pension adjustment, net of taxes of ($1)
—  —  (4) —  —  —  (4) 
Balance - March 31, 2019$76,228  $375,195  $(10,209) $915,553  $(12,561) $(166,981) $1,113,558  
- See notes to condensed consolidated financial statements.
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Table of Contents
II-VI Incorporated and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1. Basis of Presentation
The condensed consolidated financial statements of II-VI Incorporated (“II-VI”, the “Company”, “we”, “us” or “our”) for the three and nine months ended March 31, 2020 and 2019 are unaudited. In the opinion of management, all adjustments considered necessary for a fair presentation for the periods presented have been included. All adjustments are of a normal recurring nature unless disclosed otherwise. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K dated August 16, 2019. The condensed consolidated results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year. The Condensed Consolidated Balance Sheet information as of June 30, 2019 was derived from the Company’s audited consolidated financial statements.
Effective July 1, 2019, the Company has realigned its organizational structure into two reporting segments for the purpose of making operational decisions and assessing financial performance: (i) Compound Semiconductors and (ii) Photonic Solutions.
On September 24, 2019, the Company completed the acquisition of Finisar Corporation (“Finisar”). The Company’s condensed consolidated financial statements include the operating results of Finisar from the date of acquisition. Refer to Note 3 for further discussion of the acquisition.
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the United States and world. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business including the impact to our suppliers and customers as well as the impact to the countries and markets in which we operate. At the onset of the COVID-19 outbreak, we began focusing intensely on mitigating the adverse impacts of COVID-19 on our foreign and domestic operations starting by protecting our employees, suppliers and customers.
Note 2. Recently Issued Financial Accounting Standards
Leases
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842). This ASU modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company adopted this standard on July 1, 2019.  The Company has elected to utilize the optional transition method. See Note 5.
Derivatives and Hedging
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which more closely aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.  The Company adopted this standard on July 1, 2019.  The adoption of this standard did not have a material effect on the condensed consolidated financial statements.
Pronouncements Currently Under Evaluation
In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which among other things, requires the measurement of all expected credit losses of financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward looking information to better inform their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company is in the process of evaluating the impact of ASU 2016-13; however, the pronouncement is not expected to have a material impact to the condensed consolidated financial statements.
In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes (“ASU 2018-16”), which permits the use of the OIS rate based on SOFR as a U.S. benchmark interest rate eligible for hedge accounting purposes.  For public business entities that already have adopted the amendments in ASU 2017-12, the amendments
9


in ASU 2018-16 are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.  Early adoption is permitted in any interim period upon issuance of this update if an entity already has adopted ASU 2017-12.  The Company is in the process of evaluating the impact of the pronouncement.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients to ease the potential burden of accounting for the effects of reference rate reform as it pertains to contract modifications of debt and lease contracts and derivative contracts identified in a hedging relationship. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is in the process of evaluating the impact of the pronouncement.
Note 3. Finisar Acquisition
On September 24, 2019 (the “Closing Date”), the Company completed its acquisition of Finisar, a global technology leader for subsystems and components for fiber optic communications.
Pursuant to the terms of the Agreement and Plan of Merger, dated as of November 8, 2018 (the “Merger Agreement”), Mutation Merger Sub Inc., a wholly owned subsidiary of the Company (“Merger Sub”), merged with and into Finisar (the “Merger”), with Finisar surviving the Merger. Each issued and outstanding share of Finisar’s common stock was automatically cancelled and converted into the right to receive the following consideration (collectively, the “Merger Consideration”), at the election of the holder of the share of Finisar’s common stock:
$26.00 in cash, without interest (the “Cash Consideration”),
0.5546 of a share of the Company’s common stock (the “Stock Consideration”), or
a combination of $15.60 in cash, without interest, and 0.2218 of a share of the Company’s common stock (the “Mixed Consideration”).

The per share Cash Consideration and Stock Consideration were subject to adjustment pursuant to the terms of the Merger Agreement such that the aggregate Merger Consideration consisted of approximately 60.0% cash and approximately 40.0% shares of the Company’s common stock (assuming a per share price of the Company’s common stock equal to the closing price as of November 8, 2018, which was $46.88 per share) across all shares of Finisar’s common stock (the “Proration Adjustment”).  Following the Proration Adjustment, the resulting consideration for Cash Consideration was adjusted to $15.94 in cash and 0.2146 shares of the Company’s Common Stock. No adjustment was made to the Stock Consideration and Mixed Consideration.
The preliminary total fair value of consideration paid in connection with the acquisition of Finisar consisted of the following (in $000):
SharesPer ShareTotal Consideration