EMCORE Corporation
Dec 8, 2015

EMCORE Corporation Announces Financial Results for Fourth Quarter and Fiscal Year Ended September 30, 2015

ALHAMBRA, Calif., Dec. 08, 2015 (GLOBE NEWSWIRE) -- EMCORE Corporation (NASDAQ:EMKR), a leading provider of Indium Phosphide (InP) optical chips, components, subsystems, and systems for the broadband and specialty fiber optics market, today announced financial results for its fourth quarter and fiscal year ended September 30, 2015.

    
Financial Highlights - Fourth Quarter Ended September 30, 2015
    
Financial HighlightsFor the Three Months Ended
 September 30,June 30,September 30,
(in thousands) 2015  2015  2014 
          
  
Revenue$23,018 $21,194 $14,302 
    
Gross Profit$9,450 $7,683 $4,166 
    
Operating income (loss)$1,214 $866 $(6,091)
Consolidated net income, including   
discontinued operations$1,480 $2,440 $15,488 
Income (loss) from continuing operations   
- Non-GAAP$2,711 $2,030 $(2,468)
          

Financial Statement Highlights for the Fourth Quarter of Fiscal 2015:

  
Financial Highlights - Fiscal Year Ended September 30, 2015 
 
  
Financial HighlightsFor the Fiscal Years Ended
 September 30, September 30,
(in thousands) 2015   2014 
        
Revenue$81,685  $55,514 
        
Gross Profit$28,691  $12,114 
        
Operating loss$(4,522) $(20,331)
Consolidated net income, including       
discontinued operations$63,100  $4,852 
Income (loss) from continuing operations       
- Non-GAAP$4,158  $(13,846)
 

Financial Statement Highlights for the Fiscal Year Ended September 30, 2015:

Other Matters

The Board of Directors continues to evaluate the Company's cash needs. At this time, the Company expects to approve a cash dividend or distribution to shareholders, with the timing and amount to be determined in a few months following completion of the review.

Business Outlook

We expect revenue for the first quarter ended December 31, 2015 to be in the range of $22 to $24 million.

Conference Call

We will discuss our financial results today at 4:30 p.m. ET. The call will be webcast via the Company's website at http:// www.emcore.com. Please go to the site beforehand to download any necessary software. A webcast will be available for replay beginning December 8, 2015 following the conclusion of the call on the Company's website.

About EMCORE

EMCORE Corporation designs and manufactures Indium Phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market. EMCORE was the pioneer in linear fiber optic transmission technology, and today is a leader in optical components, as well as a provider of complete end-to-end solutions for high-speed communications network infrastructures, enabling systems and service providers to meet growing demand for bandwidth and connectivity. EMCORE's advanced optical technologies are designed for cable television (CATV) and fiber-to-the-premise (FTTP) networks, telecommunications and data centers, satellite communications, aerospace and defense, wireless networks, and broadcast and professional audio/video systems. With its world-class InP semiconductor wafer fabrication facility, EMCORE has fully vertically-integrated manufacturing capability and also provides contract design, foundry and component packaging services. EMCORE is headquartered in Alhambra, California with InP wafer fabrication operations in Alhambra, and ISO 9001 certified manufacturing in Alhambra and Langfang, China. For further information about EMCORE, visit http://www.emcore.com.

Use of Non-GAAP Financial Measures

We disclose non-GAAP net income (loss) from continuing operations as a supplemental measure to U.S. GAAP income (loss) from continuing operations regarding our operational performance. This financial measure excludes 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.

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

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

Non-GAAP financial measures are not in accordance with or an alternative for U.S. GAAP. Our non-GAAP financial measure is 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 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, 2014, as updated by our subsequent periodic reports.

Neither management nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. 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 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 Fiscal Years Ended
 September 30, June 30, September 30, September 30, September 30,
  2015   2015   2014   2015   2014 
Revenue$23,018  $21,194  $14,302  $81,685  $55,514 
Cost of revenue 13,568   13,511   10,136   52,994   43,400 
Gross profit 9,450   7,683   4,166   28,691   12,114 
Operating expense (income):                   
Selling, general, and administrative 5,587   4,543   7,891   24,711   23,239 
Research and development 2,649   2,274   2,466   9,119   9,306 
Gain from change in estimate on
ARO obligation
              
Loss (gain) on sale of assets       (100)  228   (100)
Total operating expense 8,236   6,817   10,257   33,213   32,445 
Operating income (loss) 1,214   866   (6,091)  (4,522)  (20,331)
Other income (expense):                   
Interest income (expense), net 36   4   (145)  75   (522)
Foreign exchange gain (loss) (239)  50   (5)  (138)  (7)
Gain on sale of investment             307 
Change in fair value of financial instruments       (5)  122   34 
Other income       51      51 
Total other income (expense) (203)  54   (104)  59   (137)
Income (loss) from continuing operations before income tax (expense) benefit 1,011   920   (6,195)  (4,463)  (20,468)
Income tax benefit (expense) 339   (456)  23,171   2,191   24,550 
Income (loss) from continuing operations 1,350   464   16,976   (2,272)  4,082 
Income from discontinued operations, net of tax 130   1,976   (1,488)  65,372   770 
Net income$1,480  $2,440  $15,488  $63,100  $4,852 
Per share data:                   
Net income (loss) per basic share:                   
Continuing operations$0.05  $0.02  $0.55  $(0.08) $0.13 
Discontinued operations 0.01   0.06   (0.05)  2.18   0.03 
Net income per basic share$0.06  $0.08  $0.50  $2.10  $0.16 
Net income (loss) per diluted share:                   
Continuing operations$0.05  $0.02  $0.55  $(0.08) $0.13 
Discontinued operations 0.01   0.06   (0.05)  2.18   0.03 
Net income per diluted share$0.06  $0.08  $0.50  $2.10  $0.16 
Weighted-average number of basic shares outstanding 25,615   31,203   30,752   30,012   30,453 
Weighted-average number of diluted shares outstanding 25,896   31,432   30,992   30,012   30,777 
                    

 

 
EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
   
 As ofAs of
 September 30,
2015
September 30,
2014
   
ASSETS  
   
Current assets:  
Cash and cash equivalents$111,885 $20,687 
Restricted cash 375  1,482 
Accounts receivable, net 17,319  12,769 
Inventory 17,130  15,644 
Deferred income taxes, net   3,908 
Prepaid expenses and other current assets 4,976  5,336 
Current assets of discontinued operations   44,065 
       
Total current assets 151,685  103,891 
       
Property, plant, and equipment, net 8,925  10,446 
Other intangible assets, net   82 
Deferred income taxes, net   20,172 
Other non-current assets, net 297  512 
Non-current assets of discontinued operations   56,239 
       
Total assets$160,907 $191,342 
       
LIABILITIES and SHAREHOLDERS' EQUITY      
Current liabilities:      
Borrowings from credit facility $ $26,518 
Accounts payable 7,189  6,804 
Deferred gain associated with sale of assets 3,400  3,400 
Warrant liability   122 
Accrued expenses and other current liabilities 13,102  15,209 
Current liabilities of discontinued operations   20,924 
       
Total current liabilities 23,691  72,977 
       
Asset retirement obligations 1,774  4,543 
Other long-term liabilities   755 
Non-current liabilities of discontinued operations   720 
       
Total liabilities 25,465  78,995 
       
Shareholders' equity:      
Common stock 762,003  755,368 
Treasury stock (47,721) (2,071)
Accumulated other comprehensive income 847  1,837 
Accumulated deficit (579,687) (642,787)
       
Total shareholders' equity 135,442  112,347 
       
Total liabilities and shareholders' equity$160,907 $191,342 
       


We have provided a reconciliation of our non-GAAP income (loss) 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 EndedFor the Fiscal Years Ended
 September 30, 2015June 30, 2015September 30, 2014September 30, 2015September 30, 2014
Income (loss) from continuing operations - US GAAP$1,350 $464 $16,976 $(2,272)$4,082 
Adjustments:     
Amortization expense 63  6  6  81  24 
Stock-based compensation expense 411  401  591  3,620  2,987 
Income tax (benefit) expense (339) 456  (23,171) (2,191) (24,550)
Accretion expense 21  22  43  111  171 
Gain from change in estimate on ARO obligation       (845)  
Compensation expense associated with sale of Businesses       2,471   
Specific severance and restructuring charges 118    1,089  1,083  1,786 
Losses on inventory purchase commitments    —  306    306 
Transaction costs     1,782    1,782 
Foreign exchange loss (gain) 239  (50) 5  138  7 
(Gain) loss on sale of assets     (100) 228  (100)
Gain on sale of investment         (307)
Change in fair value of financial instruments     5  (122) (34)
Expenses associated with the legal arbitration 848  731    1,856   
                
Total adjustments 1,361  1,566  (19,444) 6,430  (17,928)
Income (loss) from continuing operations - Non-GAAP$2,711 $2,030 $(2,468)$4,158 $(13,846)
Income (loss) from continuing operations - Non-GAAP per basic share$0.11 $0.07 $(0.08)$0.14 $(0.45)
Income (loss) from continuing operations - Non-GAAP per diluted share$0.10 $0.06 $(0.08)$0.14 $(0.45)
Weighted average number of basic shares outstanding 25,615  31,203  30,752  30,012  30,453 
Weighted average number of diluted shares outstanding 25,896  31,432  30,992  30,012  30,777 
      
Stock-based compensation expense     
The effect of recording stock-based compensation expense was as follows:     
      
      
      
Stock-based Compensation ExpenseFor the Three Months EndedFor the Fiscal Years Ended
(in thousands) September 30, 2015June 30, 2015September 30, 2014September 30, 2015September 30, 2014
                
Cost of revenue$68 $88 $119 $341 $466 
Selling, general, and administrative 238  195  328  2,847  1,912 
Research and development 105  118  144  432  609 
Total stock-based compensation expense$411 $401 $591 $3,620 $2,987 
                
Contact:

EMCORE Corporation
Mark Weinswig 
(626) 293-3400
investor@emcore.com

TTC Group 
Victor Allgeier 
(646) 290-6400 
vic@ttcominc.com