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EMCORE Reports Fiscal 2023 Fourth Quarter Results
For 4Q23, EMCORE’s consolidated revenue was
“The EMCORE team continued to step up to meet the challenges of transforming the Company into a pure play Inertial Navigation business. In 4Q23, Inertial Navigation revenue grew for the sixth consecutive quarter, producing GAAP and non-GAAP gross margins of 26% and 31%, respectively,” said
Consolidated Results
Three Months Ended | |||
+increase/ | |||
4Q23 | 3Q23 | -decrease | |
Revenue | |||
Gross margin | 26% | 27% | -1% |
Operating expenses (a) | |||
Operating margin (a) | (108%) | (11%) | -97% |
Net loss on continuing operations (a) | ( |
( |
- |
Net loss on continuing operations per share basic and diluted (a) | ( |
( |
- |
Net loss on discontinued operations | ( |
( |
- |
Net loss (a) | ( |
( |
- |
Net loss per share basic and diluted (a) | ( |
( |
- |
Non-GAAP gross margin (b) | 31% | 30% | +1% |
Non-GAAP operating expenses (b) | |||
Non-GAAP operating margin (b) | (7%) | (7%) | —% |
Non-GAAP net loss on continuing operations (b) | ( |
( |
- |
Non-GAAP net loss on continuing operations per share diluted (b) | ( |
( |
|
Adjusted EBITDA | ( |
( |
|
Ending cash and cash equivalents | |||
Line of credit and loan payable | - |
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(a) Includes (b) Please refer to the schedules at the end of this press release for GAAP to non-GAAP reconciliations and other information related to non-GAAP financial measures. |
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Business Outlook
The Company expects revenue for the fiscal first quarter (1Q24) ending
Conference Call
The Company will host a conference call to discuss its financial results on
About EMCORE
Use of Non-GAAP Financial Measures
The Company conforms to
Management believes these supplemental non-GAAP measures reflect the Company’s core ongoing operating performance and facilitates comparisons across reporting periods. The Company uses these measures when evaluating its financial results and for planning and forecasting of future periods. We believe that these supplemental non-GAAP measures are also useful to investors in assessing our operating performance. While we believe in the usefulness of these supplemental non-GAAP measures, there are limitations. Our non-GAAP measures may not be reported by other companies in our industry and/or 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 measures as a supplement to GAAP and by providing the reconciliations to the most comparable GAAP measure.
The schedules at the end of this press release reconcile the Company’s non-GAAP measures to the most directly comparable GAAP measure. The adjustments share one or more of the following characteristics: (a) they are unusual and the Company does not expect them to recur in the ordinary course of its business, (b) they do not involve the expenditure of cash, (c) they are unrelated to the ongoing operation of the business in the ordinary course, or (d) their magnitude and timing is largely outside of the Company’s control. Reconciliation provided for 4Q23 included an impairment expense, litigation-related expense, stock-based compensation expense, amortization of intangible assets, and transition/M&A-related expense. All of these items meet one or more of the characteristics listed above. The criteria that must be met for litigation-related expense to qualify as a non-GAAP measure is that it must be directly connected to active litigation that the Company infrequently encounters and is unrelated to the ongoing operations of the business in the ordinary course. In 3Q23, this included receipt of one-time non-recurring litigation proceeds (offset against litigation expense) of approximately
Non-GAAP measures are not in accordance with or an alternative to GAAP, nor are they meant to be considered in isolation or as a substitute for comparable GAAP measures. Our disclosures of these measures should be read only in conjunction with our financial statements prepared in accordance with GAAP. Non-GAAP measures should not be viewed as a substitute for the Company’s GAAP results.
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 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, business outlook, including expected revenue for 1Q24, our strategy and focus, expectations regarding the sale of our indium phosphide wafer fabrication assets, including the timing thereof, and statements about our future results of operations and financial position, 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, future growth, 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) risks related to our ability to obtain capital; (b) disruptions to our operations as a result of our restructuring activities; (c) costs and expenses incurred in connection with restructuring activities and anticipated operational cost savings arising from the restructuring actions; (d) the effects of personnel losses; (e) risks related to the sale of our Broadband and defense optoelectronics businesses, including without limitation (i) the failure to fully realize the anticipated benefits of such transaction, (ii) third party costs incurred by the Company related to any such transaction, (iii) risks associated with liabilities related to the transaction that were retained by the Company, and (iv) risks and uncertainties related to the transfer to the buyer of our manufacturing support and engineering center in
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
Condensed Consolidated Balance Sheets
(in thousands) | 2023 | 2022 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 26,211 | $ | 25,099 | |||
Restricted cash | 495 | 520 | |||||
Accounts receivable, net of credit loss of |
15,575 | 13,823 | |||||
Contract assets | 8,402 | 6,089 | |||||
Inventory | 28,905 | 26,282 | |||||
Prepaid expenses | 4,612 | 4,061 | |||||
Other current assets | 556 | 1,335 | |||||
Assets held for sale - current | 6,210 | — | |||||
Total current assets | 90,966 | 77,209 | |||||
Property, plant, and equipment, net | 15,517 | 24,576 | |||||
— | 15,608 | ||||||
Operating lease right-of-use assets | 21,564 | 23,144 | |||||
Other intangible assets, net | 12,245 | 14,790 | |||||
Other non-current assets | 2,567 | 2,351 | |||||
Assets held for sale - non-current | — | 31,404 | |||||
Total assets | $ | 142,859 | $ | 189,082 | |||
LIABILITIES and SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,683 | $ | 10,379 | |||
Accrued expenses and other current liabilities | 9,525 | 6,697 | |||||
Contract Liabilities | 1,630 | 5,271 | |||||
Loan payable - current | 852 | 852 | |||||
Financing payable - current | 460 | — | |||||
Operating lease liabilities - current | 3,033 | 2,171 | |||||
Liabilities held for sale - current | 3,608 | — | |||||
Total current liabilities | 28,791 | 25,370 | |||||
Line of credit | 6,418 | 9,599 | |||||
Loan payable - non-current | 3,330 | 5,042 | |||||
Operating lease liabilities - non-current | 20,882 | 21,568 | |||||
Asset retirement obligations | 4,194 | 4,664 | |||||
Other long-term liabilities | 8 | 106 | |||||
Liabilities held for sale - non-current | — | 4,765 | |||||
Total liabilities | 63,623 | 71,114 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock, no par value, 100,000 shares authorized; 84,014 shares issued and 77,108 shares outstanding as of |
825,119 | 787,347 | |||||
(47,721 | ) | (47,721 | ) | ||||
Accumulated other comprehensive income | 350 | 441 | |||||
Accumulated deficit | (698,512 | ) | (622,099 | ) | |||
Total shareholders’ equity | 79,236 | 117,968 | |||||
Total liabilities and shareholders’ equity | $ | 142,859 | $ | 189,082 | |||
EMCORE CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Loss
Three Months Ended |
Twelve Months Ended |
||||||||||
(in thousands, except for per share data) | 2023 | 2023 | 2022 | ||||||||
Revenue | $ | 26,769 | $ | 97,716 | $ | 45,318 | |||||
Cost of revenue | 19,876 | 74,323 | 41,252 | ||||||||
Gross profit | 6,893 | 23,393 | 4,066 | ||||||||
Operating expense: | |||||||||||
Selling, general, and administrative | 8,638 | 32,731 | 28,224 | ||||||||
Research and development | 4,468 | 17,910 | 13,782 | ||||||||
Impairment | 22,612 | 22,612 | 2,956 | ||||||||
Severance | — | 27 | 140 | ||||||||
Gain on sale of assets | — | (1,147 | ) | — | |||||||
Total operating expense | 35,718 | 72,133 | 45,102 | ||||||||
Operating loss | (28,825 | ) | (48,740 | ) | (41,036 | ) | |||||
Other expense: | |||||||||||
Interest (expense) income, net | (147 | ) | (751 | ) | (35 | ) | |||||
Foreign exchange (loss) gain | — | (1 | ) | — | |||||||
Other (expense) income | (9 | ) | 121 | 171 | |||||||
Total other expense | (156 | ) | (631 | ) | 136 | ||||||
Loss from continuing operations before income tax benefit (expense) | (28,981 | ) | (49,371 | ) | (40,900 | ) | |||||
Income tax benefit (expense) from continuing operations | 135 | (42 | ) | 139 | |||||||
Net loss from continuing operations | $ | (28,846 | ) | $ | (49,413 | ) | $ | (40,761 | ) | ||
Loss from discontinued operations including loss on disposal of |
$ | (13,788 | ) | $ | (27,000 | ) | $ | 16,428 | |||
Net loss | $ | (42,634 | ) | $ | (76,413 | ) | $ | (24,333 | ) | ||
Foreign exchange translation adjustment from discontinued operations | — | — | — | ||||||||
Pension Adjustment | (91 | ) | (91 | ) | 441 | ||||||
Comprehensive loss | $ | (42,725 | ) | $ | (76,504 | ) | $ | (23,892 | ) | ||
Per share data: | |||||||||||
Net loss from continuing operations per basic and diluted share | $ | (0.42 | ) | $ | (0.96 | ) | $ | (1.09 | ) | ||
Net loss from discontinued operations per basic and diluted share | $ | (0.20 | ) | $ | (0.52 | ) | $ | 0.44 | |||
Net loss per basic and diluted share | $ | (0.62 | ) | $ | (1.48 | ) | $ | (0.65 | ) | ||
Weighted-average number of basic and diluted shares outstanding | 69,209 | 51,510 | 37,269 | ||||||||
EMCORE CORPORATION
Reconciliations of GAAP to Non-GAAP Financial Measures
(unaudited)
Three Months Ended | |||||||
(in thousands, except for percentages) | 4Q23 | 3Q23 | |||||
Gross profit | $ | 6,893 | $ | 7,260 | |||
Gross margin | 26 | % | 27 | % | |||
Stock-based compensation expense | 352 | 337 | |||||
Asset retirement obligation | 51 | 51 | |||||
Amortization of intangible assets | 924 | 353 | |||||
Non-GAAP gross profit | $ | 8,220 | $ | 8,001 | |||
Non-GAAP gross margin | 31 | % | 30 | % |
Three Months Ended | |||||||
(in thousands) | 4Q23 | 3Q23 | |||||
Operating expense | $ | 35,718 | $ | 10,070 | |||
Stock-based compensation expense | (978 | ) | (1,032 | ) | |||
Impairment expense | (22,612 | ) | — | ||||
Severance expense | — | (11 | ) | ||||
Transition/M&A-related expense | (661 | ) | (323 | ) | |||
Litigation-related (expense) proceeds | (1,346 | ) | 1,086 | ||||
Non-GAAP operating expense | $ | 10,121 | $ | 9,790 |
Three Months Ended | |||||||
(in thousands, except for percentages) | 4Q23 | 3Q23 | |||||
Operating loss | $ | (28,825 | ) | $ | (2,809 | ) | |
Operating margin | (108 | %) | (11 | %) | |||
Stock-based compensation expense | 1,330 | 1,369 | |||||
Asset retirement obligation accretion | 51 | 51 | |||||
Amortization of acquired intangibles | 924 | 353 | |||||
Impairment expense | 22,612 | — | |||||
Severance expense | — | 11 | |||||
Transition/M&A-related expense | 661 | 323 | |||||
Litigation-related expense (proceeds) | 1,346 | (1,086 | ) | ||||
Non-GAAP operating loss | $ | (1,901 | ) | $ | (1,788 | ) | |
Non-GAAP operating margin | (7 | %) | (7 | %) | |||
Depreciation expense | 994 | 728 | |||||
Adjusted EBITDA | $ | (907 | ) | $ | (1,060 | ) | |
Adjusted EBITDA % | (3 | %) | (4 | %) |
Three Months Ended | |||||||
(in thousands, except for per share data and percentages) | 4Q23 | 3Q23 | |||||
Net loss from continuing operations | $ | (28,846 | ) | $ | (3,028 | ) | |
Net loss from continuing operations per share basic and diluted | $ | (0.42 | ) | $ | (0.06 | ) | |
Stock-based compensation expense | 1,330 | 1,369 | |||||
Asset retirement obligation accretion | 51 | 51 | |||||
Amortization of intangible assets | 924 | 353 | |||||
Impairment expense | 22,612 | — | |||||
Severance expense | — | 11 | |||||
Transition/M&A-related expense | 661 | 323 | |||||
Litigation-related expense (proceeds) | 1,346 | (1,086 | ) | ||||
Other expense (income) | 9 | (4 | ) | ||||
Income tax (benefit) expense | (135 | ) | 29 | ||||
Non-GAAP net loss from continuing operations | $ | (2,048 | ) | $ | (1,982 | ) | |
Non-GAAP net loss from continuing operations per share basic and diluted | $ | (0.03 | ) | $ | (0.04 | ) | |
Interest expense, net | 147 | 194 | |||||
Depreciation expense | 994 | 728 | |||||
Adjusted EBITDA | $ | (907 | ) | $ | (1,060 | ) | |
Adjusted EBITDA % | (3 | %) | (4 | %) | |||
Contact:
(626) 293-3400
investor@emcore.com
Source: EMCORE Corporation