• Consolidated Q3 revenue of $22.4 million
  
• Consolidated Q3 GAAP net income of $1.3 million after taking into effect income from discontinued operations of $0.1 million
  
• GAAP Q3 income from continuing operations of $1.2 million and Non-GAAP income from continuing operations of $0.6 million
  
• $1.50 per share special dividend paid on July 29, 2016 resulting in approximately $85 million of total cash returned to investors since June 2015
  
• Expected Q4 revenue of $23 to $25 million
  

ALHAMBRA, Calif., Aug. 04, 2016 (GLOBE NEWSWIRE) -- EMCORE Corporation (NASDAQ:EMKR), a leading provider of Indium Phosphide (InP) optical chips, components, subsystems, and systems for the broadband and specialty fiber optics market, today announced financial results for its third quarter ended June 30, 2016.

Financial Highlights - Third Quarter Ended June 30, 2016

Financial Highlights		For the Three Months Ended
(in thousands)		June 30, 2016				March 31, 2016				June 30, 2015
Revenue		$		22,376		$	21,532			$	21,194
Gross Profit		$		7,412		$	7,022			$	7,683
Operating income (loss)		$		1,522		$	(367	)		$	866
Consolidated net income, including discontinued operations		$		1,301		$	3,982			$	2,440
Income (loss) from continuing operations -
GAAP		$		1,178		$	(162	)		$	464
Pre-tax income from continuing operations -
Non-GAAP		$		599		$	599			$	2,030

Financial Statement Highlights for the Third Quarter of Fiscal 2016:

• Consolidated revenue was $22.4 million, representing a 3.9% increase from the immediately preceding quarter
  
• Consolidated gross margin was 33.1%, an increase from the 32.6% gross margin reported in the immediately preceding quarter
  
• GAAP income from continuing operations was $1.2 million, an increase of approximately $1.3 million over the immediately preceding quarter
  
• Consolidated net income of $1.3 million, which includes $2.6 million related to the recovery of fees and expense associated with the SEI arbitration ruling, is a $2.7 million decrease compared to the immediately preceding quarter which included $3.8 million of gains related to the SEI ruling
  
• Consolidated net income per share was $0.05 compared to net income per share of $0.15 in the immediately preceding quarter
  
• Non-GAAP pre-tax income from continuing operations was $0.6 million, consistent with the immediately preceding quarter
  
• Cash and cash equivalents was $105.0 million at the end of the quarter
  
• On July 29, the Company paid a special dividend of $1.50 per share, or a total of $39.2 million, to shareholders of record as of July 18

Business Outlook
The Company expects revenue for the fourth quarter ended September 30, 2016 to be in the range of $23 to $25 million.

Conference Call
The Company will discuss its financial results today at 5:00 p.m. EDT. The call will be webcast at http://investor.emcore.com/events.cfm. A webcast will be available for replay for at least 90 days following the conclusion of the call on the Company's website.

Conferences
Management will participate in the upcoming conferences:

• Jefferies Semiconductors, Hardware and Communications Infrastructure Summit in Chicago, IL on August 30, 2016
  

About EMCORE
EMCORE Corporation designs and manufactures Indium Phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market. EMCORE was the pioneer in linear fiber optic transmission technology, and today is a leader in optical components, as well as a provider of complete end-to-end solutions for high-speed communications network infrastructures, enabling systems and service providers to meet growing demand for bandwidth and connectivity. EMCORE's advanced optical technologies are designed for cable television (CATV) and fiber-to-the-premise (FTTP) networks, telecommunications and data centers, satellite communications, aerospace and defense, wireless networks, and broadcast and professional audio/video systems. With its world-class InP semiconductor wafer fabrication facility, EMCORE has fully vertically-integrated manufacturing capability and also provides contract design, foundry and component packaging services. EMCORE is headquartered in Alhambra, California with InP wafer fabrication operations in Alhambra, and ISO 9001 certified manufacturing in Alhambra and Langfang, China. For further information about EMCORE, visit http://www.emcore.com. 

Use of Non-GAAP Financial Measures
We disclose non-GAAP income from continuing operations as a supplemental measure to U.S. GAAP income from continuing operations regarding our operational performance. This financial measure excludes the impact of certain items that we do not believe are indicative of our core operating results; therefore, it has not been calculated in accordance with U.S. GAAP. A reconciliation of non-GAAP income from continuing operations to GAAP income (loss) from continuing operations, which identifies the items excluded from the non-GAAP measure, is provided in the table below titled "Reconciliation of GAAP to Non-GAAP Financial Measures".

We believe that this additional non-GAAP financial measure is useful to investors in assessing our operating performance. We also use this financial measure internally to evaluate our operating performance and for planning and forecasting of future periods. In addition, financial analysts that follow us may focus on and publish both historical results and future projections based on our non-GAAP financial measure. We also believe that it is in the best interest of our investors to provide this non- GAAP information.

While we believe that this non-GAAP financial measure provides useful supplemental information to investors, there are limitations associated with the use of this non-GAAP financial measure. Our non-GAAP financial measure may not be reported by all of our competitors and it may not be directly comparable to similarly titled measures of other companies due to potential differences in calculation. We compensate for these limitations by using this non-GAAP financial measure as a supplement to U.S. GAAP and by providing a reconciliation of our non-GAAP financial measure to its most comparable U.S. GAAP financial measure.

Non-GAAP financial measures are not in accordance with or an alternative for U.S. GAAP. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable U.S. GAAP financial measures and it should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

Forward-Looking Statements
The information provided herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. These forward-looking statements are largely based on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Such forward-looking statements include, in particular, projections about our future results included in our Exchange Act reports, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate.

These forward-looking statements may be identified by the use of terms and phrases such as "anticipates", "believes", "can", "could", "estimates", "expects", "forecasts", "intends", "may", "plans", "projects", "targets", "will", and similar expressions or variations of these terms and similar phrases. Additionally, statements concerning future matters such as the development of new products, enhancements or technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. We caution that these forward-looking statements relate to future events or our future financial performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of our business or our industry to be materially different from those expressed or implied by any forward-looking statements.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including without limitation, the following: (a) the rapidly evolving markets for the Company's products and uncertainty regarding the development of these markets; (b) the Company's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; (c) delays and other difficulties in commercializing new products; (d) the failure of new products: (i) to perform as expected without material defects, (ii) to be manufactured at acceptable volumes, yields, and cost, (iii) to be qualified and accepted by our customers, and (iv) to successfully compete with products offered by our competitors; (e) uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally; (f) actions by competitors; and (g) other risks and uncertainties discussed under Item 1A - Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, as updated by our subsequent periodic reports.

Neither management nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All forward-looking statements in this press release are made as of the date hereof, based on information available to us as of the date hereof, and subsequent facts or circumstances may contradict, obviate, undermine, or otherwise fail to support or substantiate such statements. We caution you not to rely on these statements without also considering the risks and uncertainties associated with these statements and our business that are addressed in our filings with the SEC that are available on the SEC's web site located at www.sec.gov, including the sections entitled "Risk Factors" in our Annual Report on Form 10- K and our Quarterly Reports on Form 10-Q. Certain information included in this press release may supersede or supplement forward-looking statements in our other Exchange Act reports filed with the SEC. We assume no obligation to update any forward-looking statement to conform such statements to actual results or to changes in our expectations, except as required by applicable law or regulation.

EMCORE CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)
		For the Three Months Ended												For the Nine Months Ended
		June 30, 2016				March 31, 2016				June 30, 2015				June 30, 2016				June 30, 2015
Revenue		$	22,376			$	21,532			$	21,194			$	66,398			$	58,667
Cost of revenue			14,964				14,510				13,511				44,563				39,426
Gross profit			7,412				7,022				7,683				21,835				19,241
Operating expense (income):
Selling, general, and administrative			6,125				4,825				4,543				15,771				19,124
Research and development			2,405				2,564				2,274				7,529				6,470
Recovery of previously incurred litigation related fees and expenses from arbitration award			(2,599	)			—				—				(2,599	)			—
Gain from change in estimate on ARO obligation			—				—				—				—				(845	)
(Gain) loss on sale of assets			(41	)			—				—				(41	)			228
Total operating expense			5,890				7,389				6,817				20,660				24,977
Operating income (loss)			1,522				(367	)			866				1,175				(5,736	)
Other income (expense):
Interest income, net			32				25				4				40				39
Foreign exchange (loss) gain			(201	)			25				50				(311	)			101
Change in fair value of financial instruments			—				—				—				—				122
Total other (expense) income			(169	)			50				54				(271	)			262
Income (loss) from continuing operations before income tax (expense) benefit			1,353				(317	)			920				904				(5,474	)
Income tax (expense) benefit			(175	)			155				(456	)			(22	)			1,852
Income (loss) from continuing operations			1,178				(162	)			464				882				(3,622	)
Income from discontinued operations, net of tax			123				4,144				1,976				5,388				65,242
Net income		$	1,301			$	3,982			$	2,440			$	6,270			$	61,620
Per share data:
Net income (loss) per basic share:
Continuing operations		$	0.05			($	0.01	)		$	0.02			$	0.04			($	0.11	)
Discontinued operations			—				0.16				0.06				0.20				2.07
Net income per basic and diluted share		$	0.05			$	0.15			$	0.08			$	0.24			$	1.96
Net income (loss) per diluted share:
Continuing operations		$	0.05			($	0.01	)		$	0.02			$	0.04			($	0.11	)
Discontinued operations			—				0.16				0.06				0.20				2.07
Net income per diluted share		$	0.05			$	0.15			$	0.08			$	0.24			$	1.96
Weighted-average number of basic shares outstanding			26,103				25,942				31,203				25,913				31,494
Weighted-average number of diluted shares outstanding			26,269				25,942				31,432				26,186				31,494

EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
		As of June 30,  2016				As of September 30,  2015
ASSETS
Current assets:
Cash and cash equivalents		$	105,046			$	111,885
Restricted cash			1,219				375
Accounts receivable, net			21,630				17,319
Inventory			18,976				17,130
Prepaid expenses and other current assets			3,778				4,976
Total current assets			150,649				151,685
Property, plant, and equipment, net			11,001				8,925
Non-current inventory			4,270				—
Other non-current assets, net			319				297
Total assets		$	166,239			$	160,907
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	9,581			$	7,189
Deferred gain associated with sale of assets			—				3,400
Accrued expenses and other current liabilities			11,205				13,102
Total current liabilities			20,786				23,691
Asset retirement obligations			1,589				1,774
Other long-term liabilities			61				—
Total liabilities			22,436				25,465
Shareholders' equity:
Common stock			764,324				762,003
Treasury stock			(47,721	)			(47,721	)
Accumulated other comprehensive income			617				847
Accumulated deficit			(573,417	)			(579,687	)
Total shareholders' equity			143,803				135,442
Total liabilities and shareholders' equity		$	166,239			$	160,907

We have provided a reconciliation of our non-GAAP income (loss) from continuing operations financial measure to its most directly comparable U.S. GAAP financial measure as indicated in the table below:

EMCORE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Income (Loss) from Continuing Operations
(in thousands, except per share data)
(unaudited)
		For the Three Months Ended												For the Nine Months Ended
		June 30, 2016				March 31, 2016				June 30, 2015				June 30, 2016				June 30, 2015
Income (loss) from continuing operations - US GAAP		$	1,178			$	(162	)		$	464			$	882			$	(3,622	)
Adjustments:
Amortization expense			—				—				6				—				18
Stock-based compensation expense			727				613				401				1,703				3,209
Income tax expense (benefit)			175				(155	)			456				22				(1,852	)
Accretion expense			15				15				22				45				90
Gain from change in estimate on ARO obligation			—				—				—				—				(845	)
Compensation expense associated with sale of Businesses			—				—				—				—				2,471
Specific severance and restructuring charges			678				—				—				678				965
Foreign exchange loss (gain)			201				(25	)			(50	)			311				(101	)
(Gain) Loss on sale of assets			(41	)			—				—				(41	)			228
Change in fair value of financial instruments			—				—				—				—				(122	)
Recovery of previously incurred litigation related fees and expenses associated with arbitration award			(2,599	)			—				—				(2,599	)			—
Expenses associated with the legal arbitration and lawsuit			265				313				731				1,482				1,008
Total adjustments			(579	)			761				1,566				1,601				5,069
Pre-tax income from continuing operations - Non-GAAP		$	599			$	599			$	2,030			$	2,483			$	1,447
Pre-tax income from continuing operations - Non-GAAP per basic share		$	0.02			$	0.02			$	0.07			$	0.09			$	0.05
Pre-tax income from continuing operations - Non-GAAP per diluted share		$	0.02			$	0.02			$	0.06			$	0.09			$	0.05
Weighted average number of basic shares outstanding			26,103				25,942				31,203				25,913				31,494
Weighted average number of diluted shares outstanding			26,269				25,942				31,432				26,186				31,494

Stock-based compensation expense

The effect of recording stock-based compensation expense was as follows:

                                                

Stock-based Compensation Expense	For the Three Months Ended												For the Nine Months Ended
(in thousands)	June 30, 2016				March 31, 2016				June 30, 2015				June 30, 2016				June 30, 2015
Cost of revenue	$	81			$	113			$	88			$	263			$	273
Selling, general, and administrative		555				420				195				1,163				2,609
Research and development		91				80				118				277				327
Total stock-based compensation expense	$	727			$	613			$	401			$	1,703			$	3,209

Contact:
EMCORE Corporation
Jikun Kim
(626) 293-3400 
investor@emcore.com

Sapphire Investor Relations, LLC
Erica Mannion or Michael Funari
(617) 542-6180
investor@emcore.com