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
 
August 2, 2018
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 August 2, 2018, EMCORE Corporation (the “Registrant”) issued a press release disclosing its financial results for its third quarter ended June 30, 2018.  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:
August 2, 2018
 
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 Fiscal Third Quarter Ended June 30, 2018

Consolidated Q3 revenue of $17.7 million
Consolidated Q3 GAAP operating loss of $8.0 million and Non-GAAP operating loss of $6.9 million
GAAP pre-tax EPS from continuing operations of $(0.31) and Non-GAAP pre-tax EPS from continuing operations of $(0.26)

ALHAMBRA, California, August 2, 2018 - 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 fiscal third quarter ended June 30, 2018.

Jeffrey Rittichier, EMCORE's President and CEO commented, “Several factors represented significant headwinds in the quarter. The trough in CATV orders hurt us on the top line while a poor product margin mix exerted additional pressure on margins. When coupled with higher factory costs due to weak absorption and higher E&O charges, our net income fell well below expectations.” Rittichier went on to say “Despite these challenges, our cash balance remained roughly unchanged in the quarter. Looking forward, we see stronger ordering patterns in Cable Television, especially with our LEML products, and a return toward more consistent manufacturing costs.”

Financial Highlights - Fiscal Third Quarter Ended June 30, 2018

Financial Highlights
 
For the Three Months Ended
(in thousands)
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
Revenue
 
$
17,717

 
$
18,623

 
$
30,952

GAAP Gross Profit
 
$
1,198

 
$
4,947

 
$
10,842

Non-GAAP Gross Profit
 
$
1,298

 
$
5,078

 
$
10,972

GAAP Operating (loss) income
 
$
(7,954
)
 
$
(3,929
)
 
$
2,009

Non-GAAP Operating (loss) income
 
$
(6,926
)
 
$
(2,235
)
 
$
3,565

GAAP pre-tax (loss) income from continuing operations
 
$
(8,414
)
 
$
(3,240
)
 
$
2,455

Non-GAAP pre-tax (loss) income from continuing operations
 
$
(6,710
)
 
$
(2,072
)
 
$
3,642

GAAP pre-tax EPS from continuing operations - per diluted share
 
$
(0.31
)
 
$
(0.12
)
 
$
0.09

Non-GAAP pre-tax EPS from continuing operations - per diluted share
 
$
(0.26
)
 
$
(0.08
)
 
$
0.13


Financial Statement Highlights for the Third Quarter of Fiscal 2018:
Consolidated revenue was $17.7 million, representing a 4.9% decrease from the prior quarter
Consolidated GAAP gross margin was 6.8%, representing a decrease from the 26.6% gross margin in the prior quarter





Consolidated Non-GAAP gross margin was 7.3%, representing a decrease from 27.3% in the prior quarter
Consolidated GAAP operating margin was (44.9)%, representing a decrease from (21.1)% in the prior quarter
Consolidated Non-GAAP operating margin was (39.1)%, representing a decrease from (12.0)% in the prior quarter
GAAP diluted pre-tax EPS from continuing operations was $(0.31), representing a decrease from $(0.12) in the prior quarter
Non-GAAP diluted pre-tax EPS from continuing operations was $(0.26), representing a decrease from $(0.08) in the prior quarter
Cash and cash equivalents was $65.3 million at the end of the quarter, a decrease of $0.2 million when compared to the end of the prior quarter

Business Outlook
The Company expects revenue for the fiscal fourth quarter ending September 30, 2018 to be in the range of $21 to $23 million.

Conference Call
The Company will discuss its financial results on August 2, 2018 at 8:00 a.m. EDT (5:00 a.m PDT). The call will be available by dialing 877-260-1479. For international callers, please dial +1 334-323-0522. The conference passcode number is 3752015. 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 Thursday, August 2, 2018 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, data centers, 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 facility in Beijing, 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 (loss), operating margin percentage, pre-tax EPS from continuing operations and pre-tax income (loss) from continuing operations as a supplemental measure to U.S. GAAP gross profit, gross margin percentage, operating income (loss), operating margin percentage, pre-tax EPS from continuing operations and pre-tax income (loss) 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, they have 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 they 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 the 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 our disclosures





of these measures 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, 2017, 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 Nine Months Ended
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Revenue
 
$
17,717

 
$
18,623

 
$
30,952

 
$
60,376

 
$
93,719

Cost of revenue
 
16,519

 
13,676

 
20,110

 
46,317

 
61,796

Gross profit
 
1,198

 
4,947

 
10,842

 
14,059

 
31,923

Operating expense:
 
 
 
 
 
 
 
 
 
 
Selling, general, and administrative
 
5,237

 
5,644

 
5,815

 
15,700

 
17,065

Research and development
 
3,915

 
3,300

 
3,340

 
11,015

 
8,680

Impairments
 

 

 

 

 
468

(Gain) loss on sale of assets
 

 
(68
)
 
(322
)
 
39

 
(322
)
Total operating expense
 
9,152

 
8,876

 
8,833

 
26,754

 
25,891

Operating (loss) income
 
(7,954
)
 
(3,929
)
 
2,009

 
(12,695
)
 
6,032

Other income (expense):
 
 
 
 
 
 
 
 
 
 
Interest income, net
 
216

 
163

 
77

 
490

 
146

Foreign exchange (loss) gain
 
(676
)
 
526

 
53

 
136

 
(306
)
Other income
 

 

 
316

 

 
316

Total other (expense) income
 
(460
)
 
689

 
446

 
626

 
156

(Loss) income from continuing operations before income tax benefit (expense)
 
(8,414
)
 
(3,240
)
 
2,455

 
(12,069
)
 
6,188

Income tax benefit (expense)
 

 
169

 
(19
)
 
502

 
(131
)
(Loss) income from continuing operations
 
(8,414
)
 
(3,071
)
 
2,436

 
(11,567
)
 
6,057

Loss from discontinued operations, net of tax
 

 

 
(11
)
 

 
(27
)
Net (loss) income
 
$
(8,414
)
 
$
(3,071
)
 
$
2,425

 
$
(11,567
)
 
$
6,030

Per share data:
 
 
 
 
 
 
 
 
 
 
Net (loss) income per basic share:
 
 
 
 
 
 
 
 
 
 
   Continuing operations
 
$
(0.31
)
 
$
(0.11
)
 
$
0.09

 
$
(0.43
)
 
$
0.23

   Discontinued operations
 

 

 
(0.00
)
 

 
(0.00
)
Net (loss) income per basic share
 
$
(0.31
)
 
$
(0.11
)
 
$
0.09

 
$
(0.43
)
 
$
0.23

 
 
 
 
 
 
 
 
 
 
 
Net (loss) income per diluted share:
 
 
 
 
 
 
 
 
 
 
   Continuing operations
 
$
(0.31
)
 
$
(0.11
)
 
$
0.09

 
$
(0.43
)
 
$
0.22

   Discontinued operations
 

 

 
(0.00
)
 

 
(0.00
)
Net (loss) income per diluted share
 
$
(0.31
)
 
$
(0.11
)
 
$
0.09

 
$
(0.43
)
 
$
0.22

 
 
 
 
 
 
 
 
 
 
 
Weighted-average number of basic shares outstanding
 
27,387

 
27,197

 
26,833

 
27,204

 
26,577

Weighted-average number of diluted shares outstanding
 
27,387

 
27,197

 
27,816

 
27,204

 
27,548







EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
 As of June 30, 2018
 
As of September 30, 2017
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
65,312

 
$
68,333

Restricted cash
193

 
421

Accounts receivable, net
14,870

 
22,265

Inventory
24,152

 
25,139

Prepaid expenses and other current assets
11,553

 
8,527

Total current assets
116,080

 
124,685

Property, plant, and equipment, net
17,577

 
16,635

Non-current inventory
2,092

 
2,686

Other non-current assets, net
245

 
78

Total assets
$
135,994

 
$
144,084

LIABILITIES and SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
11,519

 
$
11,818

Accrued expenses and other current liabilities
11,332

 
9,825

Total current liabilities
22,851

 
21,643

Asset retirement obligations
1,648

 
1,638

Other long-term liabilities
68

 
29

Total liabilities
24,567

 
23,310

Shareholders’ equity:
 
 
 
Common stock
732,806

 
730,906

Treasury stock
(47,721
)
 
(47,721
)
Accumulated other comprehensive income
881

 
561

Accumulated deficit
(574,539
)
 
(562,972
)
Total shareholders’ equity
111,427

 
120,774

Total liabilities and shareholders’ equity
$
135,994

 
$
144,084









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
(Loss) Income from Continuing Operations
(in thousands, except per share data)
(unaudited)
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
US GAAP net (loss) income
 
$
(8,414
)
 
$
(3,071
)
 
$
2,425

 
$
(11,567
)
 
$
6,030

US GAAP net loss from discontinued operations
 

 

 
11

 

 
27

US GAAP (loss) income from Continuing Operations
 
(8,414
)
 
(3,071
)
 
2,436

 
(11,567
)
 
6,057

 
 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
 

 
(169
)
 
19

 
(502
)
 
131

Other income
 

 

 
(316
)
 

 
(316
)
Currency exchange loss (gain)
 
676

 
(526
)
 
(53
)
 
(136
)
 
306

Total other income & tax related adjustments
 
676

 
(695
)
 
(350
)
 
(638
)
 
121

 
 
 
 
 
 
 
 
 
 
 
Stock based compensation expense - R&D
 
157

 
166

 
143

 
461

 
362

Stock based compensation expense - SG&A
 
625

 
652

 
824

 
1,915

 
1,957

Litigation related expenses
 
127

 
174

 
7

 
593

 
361

Severance and restructuring charges
 
19

 
639

 
774

 
747

 
1,482

Impairments
 

 

 

 

 
468

(Gain) loss on sale of assets
 

 
(68
)
 
(322
)
 
39

 
(322
)
Total operating expense adjustments
 
928

 
1,563

 
1,426

 
3,755

 
4,308

 
 
 
 
 
 
 
 
 
 
 
ARO accretion
 
17

 
16

 
17

 
50

 
51

Stock based compensation expense - COGS
 
83

 
115

 
113

 
337

 
353

Total COGS adjustments
 
100

 
131

 
130

 
387

 
404

Non-GAAP pre-tax (loss) income from continuing operations
 
$
(6,710
)
 
$
(2,072
)
 
$
3,642

 
$
(8,063
)
 
$
10,890

 
 
 
 
 
 
 
 
 
 
 
GAAP EPS from continuing operations - per diluted share
 
$
(0.31
)
 
$
(0.11
)
 
$
0.09

 
$
(0.43
)
 
$
0.22

Other income and tax related adjustments
 
0.02

 
(0.03
)
 
(0.01
)
 
(0.02
)
 
0.00

Operating expense adjustments
 
0.03

 
0.06

 
0.05

 
0.14

 
0.16

COGS adjustments
 
0.00

 
0.00

 
0.00

 
0.01

 
0.01

Non-GAAP pre-tax EPS from continuing operations - per diluted share
 
$
(0.26
)
 
$
(0.08
)
 
$
0.13

 
$
(0.30
)
 
$
0.39

GAAP Gross Margin Percentage
 
6.8
 %
 
26.6
 %
 
35.0
%
 
23.3
 %
 
34.1
%
Non GAAP Gross Margin Percentage
 
7.3
 %
 
27.3
 %
 
35.4
%
 
23.9
 %
 
34.5
%
GAAP Operating Margin Percentage
 
(44.9
)%
 
(21.1
)%
 
6.5
%
 
(21.0
)%
 
6.4
%
Non GAAP Operating Margin Percentage
 
(39.1
)%
 
(12.0
)%
 
11.5
%
 
(14.2
)%
 
11.5
%






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, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Cost of revenue
$
83

 
$
115

 
$
113

 
$
337

 
$
353

Selling, general, and administrative
625

 
652

 
824

 
1,915

 
1,957

Research and development
157

 
166

 
143

 
461

 
362

Total stock-based compensation expense
$
865

 
$
933

 
$
1,080

 
$
2,713

 
$
2,672



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


_________________________