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
August
2, 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 August
2, 2005, EMCORE Corporation (the “Registrant”) issued a press release disclosing
its third 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:
August
2, 2005
EXHIBIT
INDEX
|
Exhibit No. |
Description |
| Press Release of EMCORE Corporation, dated August 2, 2005. |
EX-99.1
Press
Release
EMCORE
Corporation Reports Fiscal 2005 Third Quarter and Nine-Month
Results
-
Revenues increase 57% from a year ago and 9% sequentially to $33.2 million;
-
Gross margins improve to 20%;
-
Company increases revenue guidance for fourth quarter to $34-$35 million
SOMERSET,
New
Jersey, August 2, 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 third quarter ended June 30,
2005.
Revenues
for the
third quarter of fiscal 2005 were $33.2 million, an increase of 57% from
the
$21.2 million reported in the third quarter of fiscal 2004, and an increase
of
$2.8 million, or 9%, from the $30.4 million in the previous quarter. All
three
of the Company’s operating segments; Fiber Optics, Photovoltaics and Electronic
Materials and Devices, posted revenue increases year over year. Sequentially,
Fiber Optics and Photovoltaics increased, while Electronic Materials and
Devices
decreased marginally by $250,000. Gross profit for the quarter was $6.7 million,
an increase of $6.3 million from the $400,000 gross profit reported a year
earlier. Gross margins of 20% increased 2 percentage points from the 18%
gross
margins recorded in the previous quarter. For the nine-months ended June
30,
2005, revenues totaled $90.6 million, an increase of 34% or $23.1 million,
as
compared to the $67.5 million recorded for the nine months ended June 30,
2004.
Operating
expenses,
excluding $2.4 million of restructuring and severance charges, totaled $10.1
million, a decrease of $2.1 million or 17% from the same quarter last year.
Sequentially, operating expenses, excluding restructuring and severance charges
increased by $1.1 million. For the nine-month period, operating expenses,
excluding restructuring and severance charges totaled $29.3 million, a decrease
of $5.7 million or 16%, as compared to the same period a year ago. During
the
quarter the Company incurred $1.8 million of restructuring charges and $600,000
in severance charges predominantly in connection with the April 2005
announcement of the closing of its City of Industry, CA photovoltaics operation
and relocation to Albuquerque, NM. Additional restructuring charges of
approximately $1.3 million are expected until the relocation is completed
sometime in the fourth quarter of calendar 2005. All severance charges related
to the facility closure have been accrued for in the current
quarter.
EMCORE
reported an
operating loss, excluding the aforementioned restructuring and severance
charges, of $3.4 million, a decrease of $8.4 million as compared to the same
period last year. Sequentially, the operating loss, excluding severance and
restructuring charges, decreased by $100,000. For the nine month period,
the
operating loss, excluding restructuring and severance charges was $14.9 million,
a decrease of $13.7 million from the same period a year ago.
EMCORE
reported a
net loss for the quarter of $7.4 million, or $(0.16) per basic and diluted
share. Excluding restructuring and severance, the net loss amounted to $5.1
million, or ($0.11) per basic and diluted share. This compares to a net loss
of
$12.5 million, or ($0.27) per basic and diluted share for the same quarter
a
year ago.
Cash,
cash
equivalents and marketable securities at June 30, 2005 totaled approximately
$36.5 million. Income before interest, taxes, depreciation, amortization,
other
non-cash items, and prior to the restructuring and severance charges (adjusted
EBITDA) was approximately $541,000, an improvement of $231,000 from the previous
quarter.
Management Discussion and Outlook
“We
are continuing
to improve on our strong second quarter results as revenues increased this
quarter by 9%. Gross margins also improved to 20%, an increase of 16 percentage
points since the beginning of the fiscal year and 2 percentage points higher
than last quarter. For the second consecutive quarter we achieved EBITDA
positive results, net of restructuring and severance charges and other
non-cash
items,” commented Mr. Reuben F. Richards Jr., President & CEO. “The
acquisition of JDS Uniphase’s CATV operation, provides EMCORE with the most
complete CATV product line in the industry and also helps us in the emerging
FTTX marketplace,” added Mr. Richards. Looking ahead, Mr. Richards stated, “We
are increasing revenue guidance for our fourth quarter to approximately
$34-$35
million. Total annual revenues are expected to exceed $120 million for
fiscal
2005 representing a 34% increase over fiscal 2004. Continued strength in
our
Fiber Optics segment, and the emergence of FTTX products are driving growth
and
profitability.”
Company
& Quarterly Highlights
EMCORE
acquired the
assets of JDS Uniphase’s CATV business which had revenues of approximately $20
million over the prior completed four quarters. EMCORE paid JDS Uniphase
$1.5
million at closing and has agreed to purchase between $2.5 million and
$3.5
million of components and parts for use in the manufacture of the acquired
products over the next two years. EMCORE will also assume some open purchase
orders for inventory components, and will pay JDS Uniphase a royalty
on licensed
intellectual property. The acquired businesses will be a part of EMCORE’s fiber
optic operating segment. EMCORE management anticipates that this transaction
will increase the Company’s projected fiscal 2006 revenues by $10 million to $15
million.
EMCORE
will discuss
the results further on a conference call to be held tomorrow, Wednesday,
August
3, 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 August 3, 2005 at 11:15
a.m. ET
until August 10, 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 6224906#. 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 nine months ended June 30, 2005 and 2004
(in
thousands, except income (loss) per share)
(unaudited)
|
Three
Months Ended June 30,
|
Nine
Months Ended June 30,
|
||||||||||||
|
2005
|
2004
|
2005
|
2004
|
||||||||||
|
Revenue
|
$
|
33,234
|
$
|
21,225
|
$
|
90,628
|
$
|
67,530
|
|||||
|
Cost
of revenue
|
26,503
|
20,811
|
76,293
|
61,255
|
|||||||||
|
Gross
profit
|
6,731
|
414
|
14,335
|
6,275
|
|||||||||
|
Operating
expenses:
|
|||||||||||||
|
Selling,
general and administrative
|
6,064
|
5,723
|
16,102
|
16,674
|
|||||||||
|
Research
and development
|
4,061
|
6,535
|
13,189
|
18,295
|
|||||||||
|
Severance
charges
|
559
|
-
|
1,208
|
-
|
|||||||||
|
Restructuring
charges
|
1,759
|
-
|
1,759
|
-
|
|||||||||
|
Total
operating
expenses
|
12,443
|
12,258
|
32,258
|
34,969
|
|||||||||
|
Operating
loss
|
(5,712
|
)
|
(11,844
|
)
|
(17,923
|
)
|
(28,694
|
)
|
|||||
|
Other
(income) expenses:
|
|||||||||||||
|
Interest
income
|
(297
|
)
|
(201
|
)
|
(779
|
)
|
(558
|
)
|
|||||
|
Interest
expense
|
1,202
|
1,205
|
3,606
|
4,915
|
|||||||||
|
Gain
from debt extinguishment
|
-
|
-
|
-
|
(12,312
|
)
|
||||||||
|
Equity
in net loss (income) of GELcore
|
778
|
(341
|
)
|
703
|
(557
|
)
|
|||||||
|
Total
other
expenses (income)
|
1,683
|
663
|
3,530
|
(8,512
|
)
|
||||||||
|
Loss
from continuing operations
|
(7,395
|
)
|
(12,507
|
)
|
(21,453
|
)
|
(20,182
|
)
|
|||||
|
Discontinued
operations:
|
|||||||||||||
|
Loss
from discontinued operations
|
-
|
-
|
-
|
(2,045
|
)
|
||||||||
|
Gain
on disposal of discontinued operations
|
-
|
-
|
12,476
|
19,584
|
|||||||||
|
Income
from discontinued operations
|
-
|
-
|
12,476
|
17,539
|
|||||||||
|
Net
loss
|
$
|
(7,395
|
)
|
$
|
(12,507
|
)
|
$
|
(8,977
|
)
|
$
|
(2,643
|
)
|
|
|
Per
Share Data:
|
|||||||||||||
|
Basic
and diluted per share data:
|
|||||||||||||
|
Loss
from continuing operations
|
$
|
(0.16
|
)
|
$
|
(0.27
|
)
|
$
|
(0.45
|
)
|
$
|
(0.48
|
)
|
|
|
Income
from discontinued operations
|
-
|
-
|
0.26
|
0.42
|
|||||||||
|
Net
loss
|
$
|
(0.16
|
)
|
$
|
(0.27
|
)
|
$
|
(0.19
|
)
|
$
|
(0.06
|
)
|
|
|
Weighted
average shares outstanding used in
per
basic and diluted share calculations
|
47,426
|
46,598
|
47,228
|
42,106
|
|||||||||
EMCORE
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
As
of June
30, 2005 and September 30, 2004
(in
thousands)
(unaudited)
|
As
of
June
30,
|
As
of
September
30,
|
||||||
|
|
2005
|
2004
|
|||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
16,037
|
$
|
19,422
|
|||
|
Marketable
securities
|
20,500
|
32,150
|
|||||
|
Accounts
receivable, net
|
27,273
|
20,775
|
|||||
|
Receivables,
related parties
|
4,117
|
215
|
|||||
|
Inventories,
net
|
21,050
|
14,839
|
|||||
|
Prepaid
expenses and other current assets
|
1,555
|
2,496
|
|||||
|
Total
current assets
|
90,532
|
89,897
|
|||||
|
Property,
plant and equipment, net
|
58,103
|
65,354
|
|||||
|
Goodwill
|
34,167
|
33,584
|
|||||
|
Intangible
assets, net
|
5,917
|
5,177
|
|||||
|
Investments
in unconsolidated affiliates
|
12,364
|
10,003
|
|||||
|
Receivables,
related parties
|
169
|
3,754
|
|||||
|
Other
assets, net
|
6,722
|
5,474
|
|||||
|
Total
assets
|
$
|
207,974
|
$
|
213,243
|
|||
|
LIABILITIES
AND SHAREHOLDERS’
EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
13,994
|
$
|
16,064
|
|||
|
Accrued
expenses
|
18,853
|
15,292
|
|||||
|
Convertible
subordinated note, current portion
|
15,775
|
-
|
|||||
|
Total
current
liabilities
|
48,622
|
31,356
|
|||||
|
Convertible
subordinated note
|
80,276
|
96,051
|
|||||
|
Other
liabilities
|
11
|
27
|
|||||
|
Total
liabilities
|
128,909
|
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,
47,768
shares issued and 47,748 outstanding at June 30,
2005;
46,951
shares issued and 46,931 outstanding at September 30,
2004
|
391,838
|
389,750
|
|||||
|
Accumulated
deficit
|
(311,841
|
)
|
(302,864
|
)
|
|||
|
Accumulated
other comprehensive loss
|
-
|
(111
|
)
|
||||
|
Shareholders’
notes receivable
|
-
|
(34
|
)
|
||||
|
Treasury
stock, at cost; 20 shares
|
(932
|
)
|
(932
|
)
|
|||
|
Total
shareholders’ equity
|
79,065
|
85,809
|
|||||
|
Total
liabilities and shareholders’ equity
|
$
|
207,974
|
$
|
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 AND
NET LOSS PER SHARE
(in
thousands, except loss per share)
(unaudited)
|
Three
Months Ended June 30,
|
|||||||
|
2005
|
2004
|
||||||
|
Net
loss
|
$
|
(7,395
|
)
|
$
|
(12,507
|
)
|
|
|
Adjustments:
|
|
||||||
|
Severance
charges
|
559
|
-
|
|||||
|
Restructuring
charges
|
1,759
|
-
|
|||||
|
Non
GAAP net loss
|
$
|
(5,077
|
)
|
$
|
(12,507
|
)
|
|
|
Non-GAAP
net loss per basic and diluted share
|
$
|
(0.11
|
)
|
$
|
(0.27
|
)
|
|
EMCORE
CORPORATION
RECONCILIATION
OF NET LOSS (INCOME) AND
ADJUSTED EBITDA
(in
thousands)
(unaudited)
|
For
the Three Months Ended
|
|||||||
|
|
June
30,
2005
|
March
31,
2005
|
|||||
|
Net
(loss) income
|
$
|
(7,395
|
)
|
$
|
7,559
|
||
|
Adjustments:
|
|||||||
|
Depreciation
and
amortization
|
3,586
|
3,675
|
|||||
|
Gain
on disposal
of discontinued operations
|
-
|
(12,476
|
)
|
||||
|
Severance
charges
|
559
|
177
|
|||||
|
Restructuring
charges
|
1,759
|
-
|
|||||
|
Interest
expense, net
|
905
|
953
|
|||||
|
Equity
in net
loss (income) of GELcore
|
778
|
297
|
|||||
|
Compensatory
stock issuances
|
218
|
180
|
|||||
|
Reduction
of
note receivable due for services received
|
130
|
130
|
|||||
|
Provision
for
doubtful accounts
|
1
|
(185
|
)
|
||||
|
Total
adjustments to net (loss) income
|
(7,936
|
)
|
(7,249
|
)
|
|||
|
Adjusted
EBITDA
|
$
|
541
|
$
|
310
|
|||
EMCORE
CORPORATION
RECONCILIATION
OF NON-GAAP OPERATING EXPENSES
(in
thousands)
(unaudited)
|
Three
Months Ended June 30,
|
|||||||
|
2005
|
2004
|
||||||
|
Operating
expenses
|
$
|
12,443
|
$
|
12,258
|
|||
|
Adjustments:
|
|
||||||
|
Severance
charges
|
(559
|
)
|
-
|
||||
|
Restructuring
charges
|
(1,759
|
)
|
-
|
||||
|
Non
GAAP operating expenses
|
$
|
10,125
|
$
|
12,258
|
|||
EMCORE
CORPORATION
RECONCILIATION
OF NON-GAAP OPERATING LOSS
(in
thousands)
(unaudited)
|
Three
Months Ended June 30,
|
|||||||
|
2005
|
2004
|
||||||
|
Operating
loss
|
$
|
(5,712
|
)
|
$
|
(11,844
|
)
|
|
|
Adjustments:
|
|
||||||
|
Severance
charges
|
559
|
-
|
|||||
|
Restructuring
charges
|
1,759
|
-
|
|||||
|
Non
GAAP operating loss
|
$
|
(3,394
|
)
|
$
|
(11,844
|
)
|
|
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