Document
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
 
December 5, 2017
Date of Report (Date of earliest event reported)

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EMCORE CORPORATION
Exact Name of Registrant as Specified in its Charter


New Jersey
001-36632
22-2746503
State of Incorporation
Commission File Number
IRS Employer Identification Number
 

2015 W. Chestnut Street, Alhambra, California, 91803
Address of principal executive offices, including zip code
 

(626) 293-3400
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)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ¨





Item 2.02
Results of Operations and Financial Condition.

On December 5, 2017, EMCORE Corporation (the “Registrant”) issued a press release disclosing its financial results for its fourth quarter and fiscal year ended September 30, 2017.  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.

Item 9.01     Financial Statements and Exhibits.
(d) Exhibits
 
 
 
Exhibit Number
 
Exhibit Description
 
 
 
 



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
 Dated:
December 5, 2017
 
By: /s/ Jikun Kim
 
Name: Jikun Kim
Title: Chief Financial Officer



Exhibit




EXHIBIT 99.1
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PRESS RELEASE

EMCORE Corporation Announces Financial Results for Fourth Quarter and Fiscal Year Ended September 30, 2017

Consolidated Q4 revenue of $29.2 million
Consolidated Q4 GAAP operating income of $1.7 million and Non-GAAP operating income of $3.3 million
GAAP EPS from continuing operations of $0.08 and Non-GAAP pre-tax EPS from continuing operations of $0.12

ALHAMBRA, California, December 5, 2017 - EMCORE Corporation (NASDAQ: EMKR - News), a leading provider of advanced Mixed-Signal Optics products that provide the foundation for today's high-speed communications network infrastructures and leading-edge defense systems, today announced financial results for its fourth quarter ended September 30, 2017.

Jeffrey Rittichier, EMCORE's President and CEO commented, “EMCORE completed an outstanding fiscal year 2017 with a 34% growth in revenue and 182% growth in profits over the last year. We did this with 38% lower headcount and a smaller fixed cost base in production.” Rittichier continued by saying “EMCORE now has the foundation to increase our non-CATV revenue to 30% for the next year as well as improve non-GAAP operating margins to 15% as we exit fiscal year 2018.”

Financial Highlights - Fourth Quarter Ended September 30, 2017

Financial Highlights
 
For the Three Months Ended
(in thousands)
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
Revenue
 
$
29,176

 
$
30,952

 
$
25,600

GAAP Gross Profit
 
$
10,611

 
$
10,842

 
$
9,119

Non-GAAP Gross Profit
 
$
10,769

 
$
10,972

 
$
9,222

GAAP Operating income
 
$
1,709

 
$
2,009

 
$
1,764

Non-GAAP Operating Income
 
$
3,331

 
$
3,565

 
$
2,545

GAAP pre-tax income from continuing operations

 
$
2,196

 
$
2,455

 
$
1,729

Non-GAAP pre-tax income from continuing operations
 
$
3,430

 
$
3,642

 
$
2,593

GAAP pre-tax EPS from continuing operations - per diluted share
 
$
0.08

 
$
0.09

 
$
0.06

Non-GAAP pre-tax EPS from continuing operations - per diluted share

 
$
0.12

 
$
0.13

 
$
0.10







Financial Statement Highlights for the Fourth Quarter of Fiscal 2017:
Consolidated revenue was $29.2 million, representing a 5.7% decrease from the prior quarter
Consolidated GAAP gross margin was 36.4%, representing an increase from the 35.0% gross margin reported in the prior quarter
Consolidated Non-GAAP gross margin was 36.9%, representing an increase from 35.4% reported in the prior quarter
Consolidated GAAP operating margin was 5.9%, representing a decrease from 6.5% in the prior quarter
Consolidated Non-GAAP operating margin was 11.4%, representing a decrease from 11.5% in the prior quarter
GAAP diluted pre-tax EPS from continuing operations of $0.08, representing a decrease from $0.09 in the prior quarter
Non-GAAP diluted pre-tax EPS from continuing operations of $0.12, representing a decrease from $0.13 in the prior quarter
Cash and cash equivalents was $68.3 million at the end of the quarter

Financial Highlights - Fiscal Year Ended September 30, 2017

Financial Highlights
 
For the Fiscal Years Ended September 30,
(in thousands)
 
2017
 
2016
Revenue
 
$
122,895

 
$
91,998

GAAP Gross Profit
 
$
42,534

 
$
30,954

Non-GAAP Gross Profit
 
$
43,096

 
$
31,365

GAAP Operating income
 
$
7,741

 
$
2,939

Non-GAAP Operating Income
 
$
14,075

 
$
4,988

GAAP pre-tax income from continuing operations
 
8,384

 
$
2,633

Non-GAAP pre-tax income from continuing operations

 
$
14,320

 
$
5,076

GAAP pre-tax EPS from continuing operations - per diluted share
 
$
0.30

 
$
0.10

Non-GAAP pre-tax EPS from continuing operations - per diluted share

 
$
0.52

 
$
0.19


Financial Statement Highlights for the Fiscal Year Ended September 30, 2017:
Consolidated revenue was $122.9 million, representing a 33.6% increase from the prior year
Consolidated GAAP gross margin was 34.6%, representing an increase from the 33.6% gross margin reported in the prior year
Consolidated Non-GAAP gross margin was 35.1%, representing an increase from 34.1% reported in the prior year
Consolidated GAAP operating margin was 6.3%, representing an increase from 3.2% in the prior year
Consolidated Non-GAAP operating margin was 11.5%, representing an increase from 5.4% in the prior year
GAAP diluted pre-tax EPS from continuing operations of $0.30, representing an increase from $0.10 in the prior year
Non-GAAP diluted pre-tax EPS from continuing operations of $0.52, representing an increase from $0.19 in the prior year
Cash and cash equivalents was $68.3 million at the end of the year, an increase of $4.4 million when compared to the prior year

Business Outlook
EMCORE anticipates increasing our non-CATV revenue to 30% for the next year as well as improve non-GAAP operating margins to 15% as we exit fiscal year 2018.

Conference Call
The Company will discuss its fiscal year 2017 financial results, fiscal year 2018 outlook and guidance for Q1 fiscal year 2018 on December 5, 2017 at 8:00 a.m. EST (5:00 a.m PST). The call will be available, live, to interested parties by dialing 888-349-9582. For international callers, please dial +1 719-457-2683. The conference passcode number is 7450331. The call will be webcast live via the Company's website at http://investor.emcore.com/events.cfm. A webcast will be available for replay beginning Tuesday, December 5, 2017 for at least 90 days following the conclusion of the call on the Company's website.






About EMCORE
EMCORE Corporation is a leading provider of advanced Mixed-Signal Optics products that provide the foundation for today’s high-speed communication network infrastructures and leading-edge defense systems. Our optical chips, components, subsystems and systems enable broadband and wireless providers to continually enhance their network capacity, speed and coverage to advance the free flow of information that empowers the lives of millions of people daily. The Mixed-Signal Optics technology at the heart of our broadband transmission products is shared with our fiber optic gyros and military communications links to provide the aerospace and defense markets state-of-the-art systems that keep us safe in an increasingly unpredictable world. EMCORE’s performance-leading optical components and systems serve a broad array of applications including cable television, fiber-to-the-premise networks, telecommunications, wireless infrastructure, satellite RF fiber links, navigation systems and military communications. EMCORE has fully vertically-integrated manufacturing capability through its world-class Indium Phosphide (InP) wafer fabrication facility at our headquarters in Alhambra, California and is ISO 9001 certified in Alhambra, and at our facilities in Warminster, Pennsylvania and China. For further information about EMCORE, visit http://www.emcore.com.

Use of Non-GAAP Financial Measures
We disclose non-GAAP gross profit, gross margin percentage, operating income, operating margin percentage, pre-tax EPS and income from continuing operations as a supplemental measure to U.S. GAAP income from continuing operations regarding our operational performance. These financial measures exclude 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 pre-tax income from continuing operations to GAAP income from continuing operations, which identifies the items excluded from the non-GAAP measures, are provided in the table below titled "Reconciliation of GAAP to Non-GAAP Financial Measures".

We believe that these additional non-GAAP financial measures are useful to investors in assessing our operating performance. We also use these financial measures 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 measures. We also believe that it is in the best interests of our investors to provide this non-GAAP information.

While we believe that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. Our non-GAAP financial measures 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 these non-GAAP financial measures as a supplement to U.S. GAAP and by providing a reconciliation of our non-GAAP financial measures to its most comparable U.S. GAAP financial measures.

Non-GAAP financial measures are not in accordance with or an alternative for U.S. GAAP. Our non-GAAP financial measures are 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 Securities 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, 2016, as updated by our subsequent periodic reports.

Forward-looking statements are based on certain assumptions and analysis made in light of our experience and perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate under the circumstances. While these statements represent our judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results. 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 Securities and Exchange Commission (“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 Twelve Months Ended
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
Revenue
 
$
29,176

 
$
30,952

 
$
25,600

 
$
122,895

 
$
91,998

Cost of revenue
 
18,565

 
20,110

 
16,481

 
80,361

 
61,044

Gross profit
 
10,611

 
10,842

 
9,119

 
42,534

 
30,954

Operating expense:
 
 
 
 
 
 
 
 
 
 
Selling, general, and administrative
 
5,181

 
5,815

 
4,963

 
22,246

 
20,734

Research and development
 
3,862

 
3,340

 
2,392

 
12,542

 
9,921

Impairments
 
38

 

 

 
506

 

Recovery of previously incurred litigation related fees and expenses from arbitration award
 

 

 

 

 
(2,599
)
Gain from change in estimate on ARO obligation
 
(45
)
 

 

 
(45
)
 

Gain on sale of assets
 
(134
)
 
(322
)
 

 
(456
)
 
(41
)
Total operating expense
 
8,902

 
8,833

 
7,355

 
34,793

 
28,015

Operating income
 
1,709

 
2,009

 
1,764

 
7,741

 
2,939

Other income (expense):
 
 
 
 
 
 
 
 
 
 
Interest income, net
 
99

 
77

 
48

 
245

 
88

Foreign exchange gain (loss)
 
388

 
53

 
(83
)
 
82

 
(394
)
Other income
 

 
316

 

 
316

 

Total other income (expense)
 
487

 
446

 
(35
)
 
643

 
(306
)
Income from continuing operations before income tax (expense) benefit
 
2,196

 
2,455

 
1,729

 
8,384

 
2,633

Income tax (expense) benefit
 
(32
)
 
(19
)
 
8

 
(163
)
 
(14
)
Income from continuing operations
 
2,164

 
2,436

 
1,737

 
8,221

 
2,619

Income (loss) from discontinued operations, net of tax
 
41

 
(11
)
 
259

 
14

 
5,647

Net income
 
$
2,205

 
$
2,425

 
$
1,996

 
$
8,235

 
$
8,266

Per share data:
 
 
 
 
 
 
 
 
 
 
Net income (loss) per basic share:
 
 
 
 
 
 
 
 
 
 
   Continuing operations
 
$
0.08

 
$
0.09

 
$
0.07

 
$
0.31

 
$
0.10

   Discontinued operations
 
0.00

 
(0.00
)
 
0.01

 
0.00

 
0.22

Net income per basic share
 
$
0.08

 
$
0.09

 
$
0.08

 
$
0.31

 
$
0.32

 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per diluted share:
 
 
 
 
 
 
 
 
 
 
   Continuing operations
 
$
0.08

 
$
0.09

 
$
0.06

 
$
0.30

 
$
0.10

   Discontinued operations
 
0.00

 
(0.00
)
 
0.01

 
0.00

 
0.21

Net income per diluted share
 
$
0.08

 
$
0.09

 
$
0.07

 
$
0.30

 
$
0.31

 
 
 
 
 
 
 
 
 
 
 
Weighted-average number of basic shares outstanding
 
26,904

 
26,833

 
26,177

 
26,659

 
25,979

Weighted-average number of diluted shares outstanding
 
27,768

 
27,816

 
26,674

 
27,544

 
26,518







EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
As of
 
As of
 
September 30,
2017
 
September 30,
2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
68,333

 
$
63,905

Restricted cash
421

 
965

Accounts receivable, net
22,265

 
18,432

Inventory
25,139

 
24,150

Prepaid expenses and other current assets
8,527

 
3,764

Total current assets
124,685

 
111,216

Property, plant, and equipment, net
16,635

 
12,213

Non-current inventory
2,686

 
3,531

Other non-current assets, net
78

 
251

Total assets
$
144,084

 
$
127,211

LIABILITIES and SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
11,818

 
$
10,575

Accrued expenses and other current liabilities
9,825

 
7,684

Total current liabilities
21,643

 
18,259

Asset retirement obligations
1,638

 
1,573

Other long-term liabilities
29

 
62

Total liabilities
23,310

 
19,894

Shareholders’ equity:
 
 
 
Common stock
730,906

 
725,880

Treasury stock
(47,721
)
 
(47,721
)
Accumulated other comprehensive income
561

 
579

Accumulated deficit
(562,972
)
 
(571,421
)
Total shareholders’ equity
120,774

 
107,317

Total liabilities and shareholders’ equity
$
144,084

 
$
127,211









We have provided a reconciliation of our non-GAAP pre-tax income 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 Twelve Months Ended
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
US GAAP net income
 
$
2,205

 
$
2,425

 
$
1,996

 
$
8,235

 
$
8,266

US GAAP net (income) loss from discontinued operations
 
(41
)
 
11

 
(259
)
 
(14
)
 
(5,647
)
US GAAP net income from Continuing Operations
 
2,164

 
2,436

 
1,737

 
8,221

 
2,619

 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit)
 
32

 
19

 
(8
)
 
163

 
14

Other income
 

 
(316
)
 

 
(316
)
 

Currency exchange (gain) loss
 
(388
)
 
(53
)
 
83

 
(82
)
 
394

Total other income & tax related adjustments
 
(356
)
 
(350
)
 
75

 
(235
)
 
408

 
 
 
 
 
 
 
 
 
 
 
Stock based compensation expense - R&D
 
143

 
143

 
95

 
505

 
372

Stock based compensation expense - SG&A
 
648

 
824

 
282

 
2,605

 
1,445

Litigation related expenses
 
422

 
7

 
301

 
783

 
1,783

Severance charges
 
392

 
774

 

 
1,874

 
678

Impairments
 
38

 

 

 
506

 

Recovery of previously incurred litigation related fees and expenses associated with arbitration award
 

 

 

 

 
(2,599
)
Gain from change in estimate on ARO obligation
 
(45
)
 

 

 
(45
)
 

Gain on sale of assets
 
(134
)
 
(322
)
 

 
(456
)
 
(41
)
Total operating expense adjustments
 
1,464

 
1,426

 
678

 
5,772

 
1,638

 
 
 
 
 
 
 
 
 
 
 
ARO accretion
 
19

 
17

 
21

 
70

 
66

Stock based compensation expense - COGS
 
139

 
113

 
82

 
492

 
345

Total COGS adjustments
 
158

 
130

 
103

 
562

 
411

Non-GAAP pre-tax income from continuing operations
 
$
3,430

 
$
3,642

 
$
2,593

 
$
14,320

 
$
5,076

 
 
 
 
 
 
 
 
 
 
 
GAAP EPS from continuing operations - per diluted share
 
$
0.08

 
$
0.09

 
$
0.06

 
$
0.30

 
$
0.10

Other income and tax related adjustments
 
(0.01
)
 
(0.01
)
 
0.00

 
(0.01
)
 
0.02

Operating expense adjustments
 
0.05

 
0.05

 
0.03

 
0.21

 
0.05

COGS adjustments
 
0.00

 
0.00

 
0.01

 
0.02

 
0.02

Non-GAAP pre-tax EPS from continuing operations - per diluted share
 
$
0.12

 
$
0.13

 
$
0.10

 
$
0.52

 
$
0.19

GAAP Gross Margin Percentage
 
36.4
%
 
35.0
%
 
35.6
%
 
34.6
%
 
33.6
%
Non GAAP Gross Margin Percentage
 
36.9
%
 
35.4
%
 
36.0
%
 
35.1
%
 
34.1
%
GAAP Operating Margin Percentage
 
5.9
%
 
6.5
%
 
6.9
%
 
6.3
%
 
3.2
%
Non GAAP Operating Margin Percentage
 
11.4
%
 
11.5
%
 
9.9
%
 
11.5
%
 
5.4
%






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 Twelve Months Ended
(in thousands)
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
Cost of revenue
$
139

 
$
113

 
$
82

 
$
492

 
$
345

Selling, general, and administrative
648

 
824

 
282

 
2,605

 
1,445

Research and development
143

 
143

 
95

 
505

 
372

Total stock-based compensation expense
$
930

 
$
1,080

 
$
459

 
$
3,602

 
$
2,162



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


_________________________