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
 
May 8, 2019
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 May 8, 2019, EMCORE Corporation (the “Registrant”) issued a press release disclosing its financial results for its second quarter ended March 31, 2019.  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:
May 8, 2019
 
By: /s/ Mark A. Gordon 
 
Name: Mark A. Gordon
Title: Interim Principal Financial and Accounting Officer



Exhibit




EXHIBIT 99.1
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PRESS RELEASE

EMCORE Corporation Announces Financial Results for Fiscal Second Quarter Ended March 31, 2019

Consolidated Q2 revenue of $21.7 million
Consolidated Q2 GAAP operating loss of $5.5 million and Non-GAAP operating loss of $2.2 million
GAAP pre-tax EPS from continuing operations of $(0.18) and Non-GAAP pre-tax EPS from continuing operations of $(0.07)

ALHAMBRA, California, May 8, 2019 - 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 second quarter ended March 31, 2019.

“In the second quarter, we continued to deliver on our revenue diversification initiatives with navigation product revenue doubling year over year”, Jeffrey Rittichier, EMCORE's President and CEO commented. “On the operations front, we eliminated the cost related to the L-EML transition which had been a headwind in prior quarters, resulting in sequential gross margin improvement despite seasonal softness in volumes”.

Financial Highlights - Fiscal Second Quarter Ended March 31, 2019

Financial Highlights
 
For the Three Months Ended
(in thousands)
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
Revenue
 
$
21,745

 
$
24,001

 
$
18,623

GAAP Gross Profit
 
$
5,809

 
$
5,808

 
$
4,947

Non-GAAP Gross Profit
 
$
5,932

 
$
5,933

 
$
5,078

GAAP Operating loss
 
$
(5,507
)
 
$
(5,804
)
 
$
(3,929
)
Non-GAAP Operating (loss) income
 
$
(2,196
)
 
$
(2,637
)
 
$
(2,235
)
GAAP pre-tax loss
 
$
(4,979
)
 
$
(5,523
)
 
$
(3,240
)
Non-GAAP pre-tax (loss) income
 
$
(1,972
)
 
$
(2,370
)
 
$
(2,072
)
GAAP pre-tax EPS - per diluted share
 
$
(0.18
)
 
$
(0.20
)
 
$
(0.12
)
Non-GAAP pre-tax EPS - per diluted share
 
$
(0.07
)
 
$
(0.09
)
 
$
(0.08
)

Financial Statement Highlights for the Second Quarter of Fiscal 2019:
Consolidated revenue was $21.7 million, representing a 9.4% decrease from the prior quarter
Consolidated GAAP gross margin was 26.7%, representing an increase from 24.2% in the prior quarter
Consolidated Non-GAAP gross margin was 27.3%, representing an increase from 24.7% in the prior quarter
Consolidated GAAP operating margin was (25.3)%, representing a decrease from (24.2)% in the prior quarter
Consolidated Non-GAAP operating margin was (10.1)%, representing an increase from (11.0)% in the prior quarter
GAAP diluted pre-tax EPS was $(0.18), representing an increase from $(0.20) in the prior quarter
Non-GAAP diluted pre-tax EPS was $(0.07), representing an increase from $(0.09) in the prior quarter
Cash and cash equivalents were $50.6 million at the end of the quarter, a decrease of $6.7 million when compared to the end of the prior quarter

Business Outlook
The Company expects revenue for the fiscal third quarter ending June 30, 2019 to be in the range of $21 to $23 million.






Conference Call
The Company will discuss its financial results on May 8, 2019 at 8:00 a.m. ET (5:00 a.m. PT). The call will be available by dialing 877-260-1479. For international callers, please dial +1 334-323-0522. The conference passcode number is 8369763. 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 Wednesday, May 8, 2019 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 and pre-tax income (loss) as a supplemental measure to U.S. GAAP gross profit, gross margin percentage, operating income (loss), operating margin percentage, pre-tax EPS and pre-tax income (loss) 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 (loss) to GAAP income (loss), 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 (“Exchange Act”). 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, 2018, 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
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
Revenue
 
$
21,745

 
$
24,001

 
$
18,623

Cost of revenue
 
15,936

 
18,193

 
13,676

Gross profit
 
5,809

 
5,808

 
4,947

Operating expense:
 
 
 
 
 
 
Selling, general, and administrative
 
6,996

 
7,593

 
5,644

Research and development
 
4,360

 
4,019

 
3,300

Loss from change in estimate on ARO obligation
 
(40
)
 

 

(Gain) loss on sale of assets
 

 

 
(68
)
Total operating expense
 
11,316

 
11,612

 
8,876

Operating loss
 
(5,507
)
 
(5,804
)
 
(3,929
)
Other income (expense):
 
 
 
 
 
 
Interest income, net
 
224

 
267

 
163

Foreign exchange gain (loss)
 
304

 
14

 
526

Other income
 

 

 

Total other income (expense)
 
528

 
281

 
689

Loss before income tax (expense) benefit
 
(4,979
)
 
(5,523
)
 
(3,240
)
Income tax (expense) benefit
 
(15
)
 
(15
)
 
169

Net (loss) income
 
$
(4,994
)
 
$
(5,538
)
 
$
(3,071
)
Per share data:
 
 
 
 
 
 
Net loss per basic and diluted share
 
$
(0.18
)
 
$
(0.20
)
 
$
(0.11
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average number of basic and diluted shares outstanding
 
27,652

 
27,534

 
27,197







EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
 As of March 31, 2019
 
As of September 30, 2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
50,604

 
$
63,117

Restricted cash
33

 
78

Accounts receivable, net
20,131

 
19,275

Inventory
20,672

 
20,850

Prepaid expenses and other current assets
16,392

 
12,730

Total current assets
107,832

 
116,050

Property, plant, and equipment, net
21,095

 
18,216

Non-current inventory
1,114

 
1,433

Other non-current assets, net
84

 
199

Total assets
$
130,125

 
$
135,898

LIABILITIES and SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
13,321

 
$
12,997

Accrued expenses and other current liabilities
17,381

 
14,205

Total current liabilities
30,702

 
27,202

Asset retirement obligations
1,836

 
1,809

Other long-term liabilities
96

 
82

Total liabilities
32,634

 
29,093

Shareholders’ equity:
 
 
 
Common stock
735,257

 
734,066

Treasury stock
(47,721
)
 
(47,721
)
Accumulated other comprehensive income
912

 
885

Accumulated deficit
(590,957
)
 
(580,425
)
Total shareholders’ equity
97,491

 
106,805

Total liabilities and shareholders’ equity
$
130,125

 
$
135,898








                                                                                                                                                                                                                   
We have provided a reconciliation of our non-GAAP pre-tax income (loss) 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
(in thousands, except per share data)
(unaudited)
 
 
For the Three Months Ended
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
US GAAP net loss
 
$
(4,994
)
 
$
(5,538
)
 
$
(3,071
)
 
 
 
 
 
 
 
Income tax expense (benefit)
 
15

 
15

 
(169
)
Other income
 

 

 

Foreign exchange (gain) loss
 
(304
)
 
(14
)
 
(526
)
Total other income & tax related adjustments
 
(289
)
 
1

 
(695
)
 
 
 
 
 
 
 
Stock based compensation expense - R&D
 
139

 
155

 
166

Stock based compensation expense - SG&A
 
473

 
159

 
652

Litigation and strategic planning related expenses
 
2,635

 
2,671

 
174

Severance and restructuring charges
 
(19
)
 
57

 
639

Loss (gain) from change in estimate on ARO obligation
 
(40
)
 

 

(Gain) loss on sale of assets
 

 

 
(68
)
Total operating expense adjustments
 
3,188

 
3,042

 
1,563

 
 
 
 
 
 
 
ARO accretion
 
14

 
14

 
16

Stock based compensation expense - COGS
 
109

 
111

 
115

Total COGS adjustments
 
123

 
125

 
131

Non-GAAP pre-tax (loss) income
 
$
(1,972
)
 
$
(2,370
)
 
$
(2,072
)
 
 
 
 
 
 
 
GAAP EPS - per diluted share
 
$
(0.18
)
 
$
(0.20
)
 
$
(0.11
)
Other income and tax related adjustments
 
(0.01
)
 
0.00

 
(0.03
)
Operating expense adjustments
 
0.12

 
0.11

 
0.06

COGS adjustments
 
0.00

 
0.00

 
0.00

Non-GAAP pre-tax EPS - per diluted share
 
$
(0.07
)
 
$
(0.09
)
 
$
(0.08
)
GAAP Gross Margin Percentage
 
26.7
 %
 
24.2
 %
 
26.6
 %
Non GAAP Gross Margin Percentage
 
27.3
 %
 
24.7
 %
 
27.3
 %
GAAP Operating Margin Percentage
 
(25.3
)%
 
(24.2
)%
 
(21.1
)%
Non GAAP Operating Margin Percentage
 
(10.1
)%
 
(11.0
)%
 
(12.0
)%






Stock-based compensation expense
The effect of recording stock-based compensation expense was as follows:
Stock-based Compensation Expense
For the Three Months Ended
(in thousands)
March 31, 2019
 
December 31, 2018
 
March 31, 2018
Cost of revenue
$
109

 
$
111

 
$
115

Selling, general, and administrative
473

 
159

 
652

Research and development
139

 
155

 
166

Total stock-based compensation expense
$
721

 
$
425

 
$
933



Contact:
EMCORE Corporation
Mark Gordon
(626) 293-3400
investor@emcore.com

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


_________________________