UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
May 4,
2005
Date
of Report (Date of earliest event reported)
EMCORE
CORPORATION
Exact
name of registrant as specified in its charter
|
New Jersey |
0-22175 |
22-2746503 |
|
State of Incorporation |
Commission File Number |
IRS Employer Identification No. |
145
Belmont Drive, Somerset, New Jersey, 08873
Address
of principal executive offices, including Zip Code
(732)
271-9090
Registrant's
telephone number, including area code
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
2.02. Results
of Operations and Financial Condition.
On May
4, 2005, EMCORE Corporation (the “Registrant”) issued a press release disclosing
its second quarter earnings for fiscal year 2005. A copy of this press
release is attached as Exhibit 99.1 to this Current Report.
The
information in this Current Report, including Exhibit 99.1 hereto, shall not be
incorporated by reference into any filing of the Registrant, whether made before
or after the date hereof, regardless of any general incorporation language in
such filing, unless expressly incorporated by specific reference to such
filing. Furthermore, the
information in this Current Report, including Exhibit 99.1 hereto, shall not be
deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise be subject to the liabilities of that section
or Sections 11 and 12(a)(2) of the Securities Act of 1933, as
amended.
The
information set forth above is intended to be furnished under this Item 2.02,
“Results of Operations and Financial Condition,” and under Item 7.01,
“Regulation FD Disclosure.”
Item
7.01. Regulation
FD Disclosure.
See
Item
2.02, “Results of Operations and Financial Condition,” above.
Item
9.01. Financial
Statements and Exhibits.
(c)
Exhibits
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| EMCORE CORPORATION | |
|
By: /s/
Thomas G. Werthan
Thomas
G. Werthan
Chief
Financial Officer |
Dated: May 4, 2005
EXHIBIT
INDEX
|
Exhibit No. |
Description |
| Press Release of EMCORE Corporation, dated May 4, 2005. |
EX-99.1
Press
Release
EMCORE
Corporation Reports Fiscal 2005 Second Quarter and Six-Month
Results
-
Revenues increase 31% from a year ago and 13% sequentially to $30.4 million;
-
Company achieves positive EBITDA;
-
Spin-off of GaN power electronics technology raises $6.0 million for new company
SOMERSET, New
Jersey, May 4, 2005 -- EMCORE Corporation
(NASDAQ: EMKR), a leading provider of compound semiconductor-based components
and subsystems for the broadband, fiber optic, satellite, and wireless
communications markets, today announced its financial results for the fiscal
2005 second quarter ended March 31, 2005.
Revenues for the
second quarter of fiscal 2005 were $30.4 million, an increase of 31% from the
$23.2 million reported in the second quarter of fiscal 2004, and an increase of
$3.4 million, or 13%, from the $27.0 million in the previous quarter. All three
of the Company’s operating segments, Fiber Optics, Photovoltaics and Electronic
Materials and Devices, posted revenue increases both year over year and
sequentially. Gross profit for the quarter was $5.5 million or 18%, an increase
of 104% from $2.7 million a year earlier. The gross margin of 18% represents an
increase of 10 percentage points from the 8% gross margins recorded in the
previous quarter. For the six-months ended March 31, 2005, revenues totaled
$57.4 million, an increase of 24% or $11.1 million as compared to the $46.3
million recorded for the six months ended March 31, 2004.
Operating expenses
of $9.2 million represented a decrease of $2.2 million or 19% from the same
quarter last year and were down $1.4 million, or 13% sequentially. For the
six-month period, operating expenses fell $2.9 million, or 13% from the same
year ago period. Included in operating expenses were severance charges of
$177,000 and $649,000 for the three and six months ended March 31, 2005,
respectively. No severance charges were incurred for the three or six month
periods ending March 31, 2004. The continuing decline in operating expenses is
the result of ongoing cost cutting and increasing efficiencies. The Company
expects additional decreases in operating expenses throughout the remainder of
Fiscal 2005.
EMCORE reported a
loss from continuing operations for the quarter of $4.9 million, or $0.10 per
basic and diluted share. Not including the $12.3 million gain from debt
extinguishment, this compares to a loss from continuing operations of $10.2
million or $0.24 per basic and diluted share for the same quarter a year ago.
Sequentially, the loss from continuing operations decreased $4.2 million
or $0.09 per basic and diluted share.
EMCORE reported net
income for the quarter of $7.6 million, or $0.16 per basic and diluted share,
the result of receiving a $13.2 million payment as part of the earn-out from the
sale of the capital equipment division in November 2003. This compares to net
income of $1.8 million or $0.04 per basic and diluted share for the same quarter
a year ago.
Cash, cash
equivalents and marketable securities at March 31, 2005 totaled approximately
$44.5 million. Income before interest, taxes, depreciation, amortization and
other non-cash items (adjusted EBITDA) was approximately $133,000, an
improvement of $4.7 million from the previous quarter.
In April, the
Company spun-off product technology focused on gallium nitride based power
electronic devices for the power device industry. The new company, named Velox
Semiconductor Corporation (Velox) will initially commercialize fast, high
voltage diodes which will address problems of size and efficiency in the power
supply industry. Velox raised $6.0 million from three venture capital
partnerships including DCM-Doll Capital Management, SAS Investors and DFJ New
England. EMCORE contributed intellectual property and equipment receiving an
approximate 20% stake in Velox. Five employees also became full time Velox
personnel. Velox named Tom Hierl as Chief Executive Officer. Mr. Hierl founded
Quantum Epitaxial Designs, Inc. and served as its CEO until 1999 when he merged
it with a British company and then as CEO took the successor company public.
EMCORE named Dr. Richard A. Stall, Chief Technology Officer, as EMCORE’s
designee to serve on Velox’s new Board of Directors. EMCORE management estimates
that its operating expenses will be reduced approximately $1.2 million annually
through the formation and spin-off of Velox.
Management Discussion and Outlook
“Our second quarter was extremely strong as all three operating
segments reported increases in revenues. Manufacturing efficiencies and improved
yields generated gross margins of 18%, a 10% point increase from last quarter.
Most importantly, we achieved EBITDA positive results one quarter ahead of
schedule,” commented Mr. Reuben F. Richards Jr., President & CEO. “The
formation of Velox Semiconductor will further reduce operating expenses by $1.2
million a year and will allow EMCORE to benefit from the technology by holding a
20% equity stake in the new company,” added Mr. Richards. Looking ahead to the
third quarter, Mr. Richards stated, “We expect revenue of $30-32 million for the
fiscal third quarter. We see continued strength in Fiber Optics, Electronic
Materials and Devices and Photovoltaics with the newly announced products from
last quarter driving growth.”
Company/Industry Highlights
EMCORE announced the first earn-out of $13.2 Million from the Sale
of Equipment Division to Veeco in 2003. Net sales of TurboDisc products
for the twelve months ended December 31, 2004 amounted to $66.3 million
resulting in an earn-out of $13.2 million for year one of the two-year earn-out
agreement. EMCORE received a cash payment from Veeco on March 31, 2005. After
offsetting this receipt against expenses related to the discontinued operation,
EMCORE recorded a net gain from the disposal of discontinued operations of $12.5
million. EMCORE will receive, in either cash or stock, 50% of all calendar year
2005 revenues from the TurboDisc capital equipment business that exceeds $40.0
million, to a maximum second year earn-out payment of $6.8 million.
In April 2005, Emcore announced the establishment of a modern
solar panel manufacturing facility as part of its Albuquerque, NM solar cell
fabrication operations. This new operation will provide solar cell assemblies
and solar panels for the satellite and terrestrial markets. By consolidating
operations into a single location, EMCORE PhotoVoltaics expects to realize
annual cost savings in fiscal 2006 and beyond of approximately $3 million, which
will enable it to better compete in the terrestrial and space power markets.
Production operations at the current City of Industry, CA solar panel operation
are expected to be discontinued during the fourth quarter of fiscal 2005, and
the facility closed during the first quarter of fiscal 2006.
EMCORE will discuss the results further on a conference call to be held tomorrow, Thursday, May 5, 2005 at 9:00 a.m. ET. To participate in the call, U.S. callers should dial (toll free) 800-683-1525 and international callers should dial 973-935-2100. A replay of the call will be available beginning May 5, 2005 at 11:15 a.m. ET until May 12, 2005 at 11:59 p.m. ET. The replay call-in number for U.S. callers is 877-519-4471, for international callers it is 973-341-3080, and the access code is 5994074#. The call also will be web cast via the Company's web site at http://www.emcore.com. Please go to the site beforehand to download any necessary software.
About EMCORE
EMCORE Corporation
offers a broad portfolio of compound semiconductor-based components and
subsystems for the broadband, fiber optic, satellite, and wireless
communications markets. EMCORE has three operating segments: Fiber Optics,
Photovoltaics, and Electronic Materials and Devices. The company's
integrated solutions philosophy embodies state-of-the-art technology, material
science expertise, and a shared vision of our customer's goals and objectives to
be leaders in the transport of voice, data, and video over copper, hybrid
fiber/coax (HFC), fiber, satellite, and wireless networks. EMCORE's solutions
include: optical components and subsystems for fiber-to-the-premise, cable
television, and high speed data and telecommunications networks; solar cells,
solar panels, and fiber optic ground station links for global satellite
communications; and electronic materials for high bandwidth wireless
communications systems, such as Wi-Fi Internet access and cell phones. Through
its joint venture participation in GELcore, LLC, EMCORE plays a vital role in
developing and commercializing next-generation High-Brightness LED technology
for use in the general and specialty illumination markets. For further
information about EMCORE, visit http://www.emcore.com.
Disclaimer
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 Securities
Exchange Act of 1934 relating to future events that involve risks and
uncertainties. Words such as "expects," "anticipates," "intends," "plans,"
believes," and "estimates," and variations of these words and similar
expressions, identify these forward-looking statements. These forward-looking
statements include, without limitation, (a) any statements or implications
regarding EMCORE’s ability to remain competitive and a leader in its industry,
and the future growth of EMCORE, or the industry and the economy in general; (b)
statements regarding the expected level and timing of benefits to EMCORE from
its current cost reduction efforts, including (i) expected cost reductions and
their impact on EMCORE’s financial performance, (ii) EMCORE’s continued
leadership in technology and manufacturing in its markets, and (iii) the belief
that the cost reduction efforts will not impact product development or
manufacturing execution; (c) any statement or implication that the products
described in this press release (i) will be successfully introduced or marketed,
(ii) will be qualified and purchased by our customers, or (iii) will perform to
any particular specifications or performance or reliability standards; (d) any
and all guidance provided by EMCORE regarding its expected financial performance
in current or future periods, including, without limitation, with respect to
anticipated revenues for the third quarter of fiscal 2005. 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) EMCORE’s cost reduction efforts may not be successful in
achieving their expected benefits, or may negatively impact EMCORE’s operations;
(b) reduced revenues resulting from the TurboDisc sale; (c) the failure of the
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 and (d) other risks and uncertainties described in
EMCORE's filings with the Securities and Exchange Commission such as
cancellations, rescheduling or delays in product shipments; manufacturing
capacity constraints; lengthy sales and qualification cycles; difficulties in
the production process; changes in semiconductor industry growth; increased
competition; delays in developing and commercializing new products; and other
factors. The forward-looking statements contained in this news release are made
as of the date hereof and EMCORE does not assume any obligation to update the
reasons why actual results could differ materially from those projected in the
forward-looking statements.
EMCORE
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the
three and six months ended March 31, 2005 and 2004
(in
thousands, except income (loss) per share)
(unaudited)
|
Three
Months Ended March 31, |
Six
Months Ended March 31, |
||||||||||||
|
2005 |
2004 |
2005 |
2004 |
||||||||||
|
Revenue |
$ |
30,430 |
$ |
23,180 |
$ |
57,394 |
$ |
46,305 |
|||||
|
Cost
of revenue |
24,901 |
20,499 |
49,790 |
40,444 |
|||||||||
|
Gross
profit |
5,529 |
2,681 |
7,604 |
5,861 |
|||||||||
|
Operating
expenses: |
|||||||||||||
|
Selling,
general and administrative |
4,950 |
5,644 |
10,038 |
10,951 |
|||||||||
|
Research
and development |
4,069 |
5,714 |
9,128 |
11,760 |
|||||||||
|
Severance
charges |
177 |
- |
649 |
- |
|||||||||
|
Total
operating expenses |
9,196 |
11,358 |
19,815 |
22,711 |
|||||||||
|
Operating
loss |
(3,667 |
) |
(8,677 |
) |
(12,211 |
) |
(16,850 |
) | |||||
|
Other
(income) expenses: |
|||||||||||||
|
Interest
income |
(249 |
) |
(199 |
) |
(482 |
) |
(357 |
) | |||||
|
Interest
expense |
1,202 |
1,685 |
2,404 |
3,710 |
|||||||||
|
Gain
from debt extinguishment |
- |
(12,312 |
) |
- |
(12,312 |
) | |||||||
|
Equity
in net loss (income) of GELcore |
297 |
51 |
(75 |
) |
(216 |
) | |||||||
|
Total
other expenses (income) |
1,250 |
(10,775 |
) |
1,847 |
(9,175 |
) | |||||||
|
(Loss)
income from continuing operations |
(4,917 |
) |
2,098 |
(14,058 |
) |
(7,675 |
) | ||||||
|
Discontinued
operations: |
|||||||||||||
|
Loss
from discontinued operations |
- |
(348 |
) |
- |
(2,045 |
) | |||||||
|
Gain
on disposal of discontinued operations |
12,476 |
- |
12,476 |
19,584 |
|||||||||
|
Income
(loss) from discontinued operations |
12,476 |
(348 |
) |
12,476 |
17,539 |
||||||||
|
Net
income (loss) |
$ |
7,559 |
$ |
1,750 |
$ |
(1,582 |
) |
$ |
9,864 |
||||
|
Per
Share Data: |
|||||||||||||
|
Basic
per share data: |
|||||||||||||
| (Loss) income from continuing operations | $ | (0.10 | ) | $ | 0.05 | $ | (0.30 | ) | $ | (0.19 | ) | ||
| Income (loss) from discontinued operations | 0.26 | (0.01 | ) | 0.27 | 0.44 | ||||||||
|
Net
income (loss) |
$ | 0.16 | $ | 0.04 | $ | (0.03 | ) | $ | 0.25 | ||||
|
Diluted
per share data: |
|||||||||||||
|
(Loss)
income from continuing operations |
$ |
(0.10 |
) |
$ |
0.05 |
$ |
(0.30 |
) |
$ |
(0.19 |
) | ||
|
Income
(loss) from discontinued operations |
|
0.26 |
|
(0.01 |
) |
|
0.27 |
|
0.44 |
||||
|
Net
income (loss) |
$ |
0.16 |
$ |
0.04 |
$ |
(0.03 |
) |
$ |
0.25 |
||||
|
Weighted
average basic shares outstanding used in per
basic share calculations |
47,265 |
41,904 |
47,128 |
39,872 |
|||||||||
|
Weighted
average diluted shares outstanding used in per diluted share
calculations |
47,265 |
43,725 |
47,128 |
39,872 |
|||||||||
EMCORE
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
As of March
31, 2005 and September 30, 2004
(in
thousands)
(unaudited)
|
|
As
of March 31, 2005 |
As
of September 30, 2004 |
|||||
|
ASSETS |
|||||||
|
Current
assets: |
|||||||
|
Cash
and cash equivalents |
$ |
24,049 |
$ |
19,422 |
|||
|
Marketable
securities |
20,450 |
32,150 |
|||||
|
Accounts
receivable, net |
24,906 |
20,775 |
|||||
|
Receivables,
related parties |
3,867 |
215 |
|||||
|
Inventories,
net |
16,399 |
14,839 |
|||||
|
Prepaid
expenses and other current assets |
2,361 |
2,496 |
|||||
|
Total
current assets |
92,032 |
89,897 |
|||||
|
Receivables,
related parties |
169 |
3,754 |
|||||
|
Property,
plant and equipment, net |
61,450 |
65,354 |
|||||
|
Goodwill |
33,969 |
33,584 |
|||||
|
Intangible
assets, net |
4,425 |
5,177 |
|||||
|
Investments
in GELcore |
10,078 |
10,003 |
|||||
|
Other
assets, net |
6,241 |
5,474 |
|||||
|
Total
assets |
$ |
208,364 |
$ |
213,243 |
|||
|
LIABILITIES
and SHAREHOLDERS’ EQUITY |
|||||||
|
Current
liabilities: |
|||||||
|
Accounts
payable |
$ |
13,658 |
$ |
16,064 |
|||
|
Accrued
expenses |
13,282 |
15,292 |
|||||
|
Total
current liabilities |
26,940 |
31,356 |
|||||
|
Convertible
subordinated notes |
96,051 |
96,051 |
|||||
|
Other
liabilities |
13 |
27 |
|||||
|
Total
liabilities |
123,004 |
127,434 |
|||||
|
Commitments
and contingencies |
|||||||
|
|
|||||||
|
Shareholders’
equity: |
|||||||
|
Preferred
stock, $0.0001 par, 5,882 shares authorized, no shares
outstanding |
- |
- |
|||||
|
Common
stock, no par value, 100,000 shares authorized, 47,339 shares issued and
47,319 outstanding at March 31, 2005; 46,951 shares issued and 46,931
outstanding at September 30, 2004 |
390,738 |
389,750 |
|||||
|
Accumulated
deficit |
(304,446 |
) |
(302,864 |
) | |||
|
Accumulated
other comprehensive loss |
- |
(111 |
) | ||||
|
Shareholders’
notes receivable |
- |
(34 |
) | ||||
|
Treasury
stock, at cost; 20 shares |
(932 |
) |
(932 |
) | |||
|
Total
shareholders’ equity |
85,360 |
85,809 |
|||||
|
Total
liabilities and shareholders’ equity |
$ |
208,364 |
$ |
213,243 |
|||
In
accordance with applicable regulations, a non-GAAP reconciliation is provided
below, which allows investors to reconcile the non-GAAP measures discussed above
to GAAP. A non-GAAP financial measure is a numerical measure of a
company's performance that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable measure calculated
and presented in accordance with GAAP. EMCORE believes that the additional
non-GAAP measures are useful to investors for financial analysis.
Management also uses these measures internally to evaluate the company's
operating performance, and the measures are used for planning and forecasting of
future periods. However, non-GAAP measures are not in accordance with, nor
are they a substitute for, GAAP measures.
EMCORE
CORPORATION
RECONCILIATION
OF NON-GAAP NET LOSS (INCOME) FROM CONTINUING OPERATIONS
AND
NET LOSS (INCOME) FROM CONTINUING OPERATIONS PER SHARE
(in
thousands, except loss per share)
(unaudited)
|
Three
Months Ended March 31, |
|||||||
|
2005 |
2004 |
||||||
|
GAAP
(loss) income from continuing operations |
$ |
(4,917 |
) |
$ |
2,098 |
||
|
Adjustment: |
|||||||
|
Gain
from debt extinguishment |
- |
(12,312 |
) | ||||
|
Non-GAAP
loss from continuing operations |
$ |
(4,917 |
) |
$ |
(10,214 |
) | |
|
Non-GAAP
loss from continuing operations per basic and diluted
share |
$ |
(0.10 |
) |
$ |
(0.24 |
) | |
EMCORE
CORPORATION
RECONCILIATION
OF NET (LOSS) INCOME AND ADJUSTED EBITDA
FOR THE
THREE MONTHS ENDED MARCH 31, 2005 AND DECEMBER 31, 2004
(in
thousands)
(unaudited)
|
March
2005 |
December
2004 |
||||||
|
Net
income (loss) |
$ |
7,559 |
$ |
(9,141 |
) | ||
| Adjustments: | |||||||
|
Depreciation and
amortization |
3,675 |
3,600 |
|||||
|
Gain on disposal of discontinued
operations |
(12,476 |
) |
- |
||||
|
Interest
expense, net |
953 | 969 | |||||
|
Equity in net loss (income) of
GELcore |
297 |
(372 |
) | ||||
|
Compensatory
stock issuances |
180 |
181 |
|||||
|
Reduction
of note receivable due for services received |
130 |
130 |
|||||
|
Forgiveness
of shareholders’ notes receivable |
- |
34 |
|||||
|
Provision
for doubtful accounts |
(185 |
) |
15 |
||||
|
Total
adjustments to net income (loss) |
(7,426 |
) |
4,557 |
||||
|
Adjusted
EBITDA |
$ |
133 |
$ |
(4,584 |
) | ||
CONTACT
EMCORE
Corporation
Tom Werthan - Chief
Financial Officer
(732)
271-9090
info@emcore.com
or
TTC
Group
Victor Allgeier
(212) 227-0997
info@ttcominc.com