Press Release
<< Back
EMCORE Reports Fiscal 2023 Second Quarter Results
For 2Q23, EMCORE’s consolidated revenue was
“EMCORE has entered the final phase of its restructuring as a pure play inertial navigation solutions provider to the A&D market. In 2Q23, our inertial navigation revenue grew 21% to
Consolidated Results
Three Months Ended | |||
+increase/ -decrease |
|||
2Q23 | 1Q23 | ||
Revenue | |||
Gross margin | 14% | 12% | +2% |
Operating expenses | |||
Operating margin | (45%) | (46%) | +1% |
Net loss | ( |
( |
- |
Net loss per share diluted | ( |
( |
|
Non-GAAP gross margin (a) | 16% | 15% | +1% |
Non-GAAP operating expenses (a) | |||
Non-GAAP operating margin (a) | (30%) | (32%) | +2% |
Non-GAAP net loss (a) | ( |
( |
- |
Non-GAAP net loss per share diluted (a) | ( |
( |
|
Adjusted EBITDA | ( |
( |
$—M |
Ending cash and cash equivalents | |||
Line of credit and loan payable | - |
||
(a) 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. |
Aerospace and Defense Segment
For 2Q23, A&D’s sequential-quarter revenue increase was driven by inertial navigation, which grew to
Three Months Ended | |||
+increase/ -decrease |
|||
2Q23 | 1Q23 | ||
A&D segment revenue | |||
A&D segment gross margin | 22% | 19% | +3% |
A&D segment R&D expense | |||
A&D segment gross profit less R&D expense | ( |
||
Non-GAAP A&D segment gross margin (a) | 24% | 22% | +2% |
Non-GAAP A&D segment R&D expense (a) | |||
Non-GAAP A&D segment gross profit less R&D expense (a) | |||
(a) 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. |
Broadband Segment
For 2Q23, Broadband’s sequential-quarter revenue decrease was primarily due to lower sales of CATV, wireless, and sensing products, partly offset by higher Chips revenue. Broadband’s gross margin decline was due primarily to the lower revenue. R&D expense decreased sequentially due to lower net expense on Chips development.
Three Months Ended | |||
+increase/ -decrease |
|||
2Q23 | 1Q23 | ||
Broadband segment revenue | - |
||
Broadband segment gross margin | (112%) | (32%) | -80% |
Broadband segment R&D expense | - |
||
Broadband segment gross profit less R&D expense | ( |
( |
- |
Non-GAAP Broadband segment gross margin (a) | (104%) | (27%) | -77% |
Non-GAAP Broadband segment R&D expense (a) | - |
||
Non-GAAP Broadband segment gross profit less R&D expense (a) | ( |
( |
- |
(a) 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. |
Business Outlook
The Company expects revenue for the fiscal third quarter (3Q23) ending
Conference Call
The Company will 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: they are unusual and the Company does not expect them to recur in the ordinary course of its business, they do not involve the expenditure of cash, they are unrelated to the ongoing operation of the business in the ordinary course, or their magnitude and timing is largely outside of the Company’s control. An example of one item that regularly meets one or more of these characteristics is stock-based compensation. There are also, from time-to-time, other examples such as litigation-related expenses (only after a legal matter has turned into active litigation) or acquisition-related costs. For all reporting periods disclosed, the Company has applied consistent rationale, method, and adjustments in reconciling non-GAAP measures to the most directly comparable GAAP measure.
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 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, including expected revenue for 3Q23, 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) any disruptions to our operations as a result of our restructuring activities; (b) risks related to costs and expenses incurred in connection with restructuring activities and anticipated operational costs savings arising from the restructuring actions; (c) risks related to the loss of personnel; (d) risks related to customer and vendor relationships and contractual obligations with respect to the shutdown of the Broadband business segment and the discontinuance of its defense optoelectronics product line; (e) risks and uncertainties related to our current expectations with respect to potential revenues arising from last time buys by our Broadband and Defense Optoelectronics customers; (f) risks related to the closing of the 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
(unaudited)
(in thousands) | 2023 | 2022 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 24,348 | $ | 25,625 | |||
Restricted cash | 495 | 520 | |||||
Accounts receivable, net of credit loss of |
22,579 | 18,073 | |||||
Contract assets | 7,414 | 4,560 | |||||
Inventory | 40,086 | 37,035 | |||||
Prepaid expenses | 3,734 | 4,061 | |||||
Other current assets | 2,074 | 3,063 | |||||
Total current assets | 100,730 | 92,937 | |||||
Property, plant, and equipment, net | 26,325 | 37,867 | |||||
16,422 | 17,894 | ||||||
Operating lease right-of-use assets | 27,239 | 23,243 | |||||
Other intangible assets, net | 14,947 | 14,790 | |||||
Other non-current assets | 2,408 | 2,351 | |||||
Total assets | $ | 188,071 | $ | 189,082 | |||
LIABILITIES and SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 14,141 | $ | 12,729 | |||
Accrued expenses and other current liabilities | 11,877 | 8,124 | |||||
Contract liabilities | 4,247 | 5,300 | |||||
Loan payable - current | 852 | 852 | |||||
Operating lease liabilities - current | 2,647 | 2,213 | |||||
Total current liabilities | 33,764 | 29,218 | |||||
Line of credit | 6,553 | 9,599 | |||||
Loan payable - non-current | 4,616 | 5,042 | |||||
Operating lease liabilities - non-current | 25,434 | 21,625 | |||||
Asset retirement obligations | 4,091 | 4,664 | |||||
Other long-term liabilities | 8 | 106 | |||||
Total liabilities | 74,466 | 70,254 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock, no par value, 100,000 shares authorized; 60,790 shares issued and 53,884 shares outstanding as of |
806,100 | 787,347 | |||||
(47,721 | ) | (47,721 | ) | ||||
Accumulated other comprehensive income | 1,246 | 1,301 | |||||
Accumulated deficit | (646,020 | ) | (622,099 | ) | |||
Total shareholders’ equity | 113,605 | 118,828 | |||||
Total liabilities and shareholders’ equity | $ | 188,071 | $ | 189,082 |
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
Three Months Ended |
Six Months Ended |
||||||||||||||
(in thousands, except for per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Revenue | $ | 26,820 | $ | 32,650 | $ | 51,773 | $ | 74,886 | |||||||
Cost of revenue | 23,109 | 23,633 | 45,003 | 50,072 | |||||||||||
Gross profit | 3,711 | 9,017 | 6,770 | 24,814 | |||||||||||
Operating expense: | |||||||||||||||
Selling, general, and administrative | 9,951 | 7,563 | 19,895 | 14,750 | |||||||||||
Research and development | 5,797 | 4,535 | 11,148 | 9,162 | |||||||||||
Severance | (17 | ) | 20 | 458 | 1,318 | ||||||||||
Loss (gain) on sale of assets | 24 | (788 | ) | (1,147 | ) | (601 | ) | ||||||||
Total operating expense | 15,755 | 11,330 | 30,354 | 24,629 | |||||||||||
Operating (loss) income | (12,044 | ) | (2,313 | ) | (23,584 | ) | 185 | ||||||||
Other (expense) income: | |||||||||||||||
Interest expense, net | (222 | ) | (12 | ) | (463 | ) | (23 | ) | |||||||
Foreign exchange gain (loss) | 46 | (17 | ) | 121 | 25 | ||||||||||
Other income | 46 | — | 153 | — | |||||||||||
Total other (expense) income | (130 | ) | (29 | ) | (189 | ) | 2 | ||||||||
(Loss) income before income tax (expense) benefit | (12,174 | ) | (2,342 | ) | (23,773 | ) | 187 | ||||||||
Income tax (expense) benefit | (54 | ) | 117 | (148 | ) | 2 | |||||||||
Net (loss) income | $ | (12,228 | ) | $ | (2,225 | ) | $ | (23,921 | ) | $ | 189 | ||||
Foreign exchange translation adjustment | 8 | 2 | 55 | 22 | |||||||||||
Comprehensive (loss) income | $ | (12,220 | ) | $ | (2,223 | ) | $ | (23,866 | ) | $ | 211 | ||||
Per share data: | |||||||||||||||
Net (loss) income per basic share | $ | (0.27 | ) | $ | (0.06 | ) | $ | (0.58 | ) | $ | 0.01 | ||||
Weighted-average number of basic shares outstanding | 45,240 | 37,217 | 41,356 | 37,082 | |||||||||||
Net (loss) income per diluted share | $ | (0.27 | ) | $ | (0.06 | ) | $ | (0.58 | ) | $ | 0.01 | ||||
Weighted-average number of diluted shares outstanding | 45,240 | 37,217 | 41,356 | 38,384 |
Reconciliations of GAAP to Non-GAAP Financial Measures
(unaudited)
Three Months Ended | |||||||
(in thousands, except for percentages) | 2Q23 | 1Q23 | |||||
Gross profit | $ | 3,711 | $ | 3,059 | |||
Gross margin | 14 | % | 12 | % | |||
Stock-based compensation expense | 331 | 387 | |||||
Asset retirement obligation accretion | (18 | ) | 51 | ||||
Amortization of intangible assets | 287 | 326 | |||||
Non-GAAP gross profit | $ | 4,311 | $ | 3,823 | |||
Non-GAAP gross margin | 16 | % | 15 | % |
Three Months Ended | |||||||
(in thousands) | 2Q23 | 1Q23 | |||||
Operating expense | $ | 15,755 | $ | 14,599 | |||
Stock-based compensation expense | (1,204 | ) | (1,347 | ) | |||
Severance expense | 17 | (475 | ) | ||||
(Loss) gain on sale of assets | (24 | ) | 1,171 | ||||
Transition-related expense | (1,264 | ) | (2,060 | ) | |||
Litigation-related expense | (884 | ) | (105 | ) | |||
Non-GAAP operating expense | $ | 12,396 | $ | 11,783 |
Three Months Ended | |||||||
(in thousands, except for percentages) | 2Q23 | 1Q23 | |||||
Operating profit | $ | (12,044 | ) | $ | (11,540 | ) | |
Operating margin | (45 | %) | (46 | %) | |||
Stock-based compensation expense | 1,535 | 1,734 | |||||
Asset retirement obligation accretion | (18 | ) | 51 | ||||
Amortization of acquired intangibles | 287 | 326 | |||||
Severance expense | (17 | ) | 475 | ||||
Loss (gain) on sale of assets | 24 | (1,171 | ) | ||||
Transition-related expense | 1,264 | 2,060 | |||||
Litigation-related expense | 884 | 105 | |||||
Non-GAAP operating profit | $ | (8,085 | ) | $ | (7,960 | ) | |
Non-GAAP operating margin | (30 | %) | (32 | %) | |||
Depreciation expense | 1,566 | 1,450 | |||||
Adjusted EBITDA | $ | (6,519 | ) | $ | (6,510 | ) | |
Adjusted EBITDA % | (24 | %) | (26 | %) |
Three Months Ended | |||||||
(in thousands, except for per share data and percentages) | 2Q23 | 1Q23 | |||||
Net loss | $ | (12,228 | ) | $ | (11,693 | ) | |
Net loss per share basic and diluted | $ | (0.27 | ) | $ | (0.31 | ) | |
Stock-based compensation expense | 1,535 | 1,734 | |||||
Asset retirement obligation accretion | (18 | ) | 51 | ||||
Amortization of intangible assets | 287 | 326 | |||||
Severance expense | (17 | ) | 475 | ||||
Loss (gain) on sale of assets | 24 | (1,171 | ) | ||||
Transition-related expense | 1,264 | 2,060 | |||||
Litigation-related expense | 884 | 105 | |||||
Other income | (46 | ) | (107 | ) | |||
Foreign exchange (gain) loss | (46 | ) | (75 | ) | |||
Income tax expense (benefit) | 54 | 94 | |||||
Non-GAAP net loss | $ | (8,307 | ) | $ | (8,201 | ) | |
Non-GAAP net loss per share basic and diluted | $ | (0.18 | ) | $ | (0.22 | ) | |
Interest expense, net | 222 | 241 | |||||
Depreciation expense | 1,566 | 1,450 | |||||
Adjusted EBITDA | $ | (6,519 | ) | $ | (6,510 | ) | |
Adjusted EBITDA % | (24 | %) | (26 | %) |
Three Months Ended | Three Months Ended | |||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||
2Q23 | 1Q23 | 2Q23 | 1Q23 | |||||||||||||
Aerospace and Defense | Broadband | |||||||||||||||
Gross profit | $ | 5,515 | $ | 4,108 | Gross profit | $ | (1,804 | ) | $ | (1,049 | ) | |||||
Gross margin | 22 | % | 19 | % | Gross margin | (112 | %) | (32 | %) | |||||||
Stock-based compensation expense | 249 | 273 | Stock-based compensation expense | 82 | 114 | |||||||||||
Asset retirement obligation accretion | (30 | ) | 39 | Asset retirement obligation accretion | 12 | 12 | ||||||||||
Amortization of intangible assets | 254 | 293 | Amortization of intangible assets | 33 | 33 | |||||||||||
Non-GAAP gross profit | $ | 5,988 | $ | 4,713 | Non-GAAP gross profit | $ | (1,677 | ) | $ | (890 | ) | |||||
Non-GAAP gross margin | 24 | % | 22 | % | Non-GAAP gross margin | (104 | %) | (27) % | ||||||||
R&D expense | $ | 5,253 | $ | 4,349 | R&D expense | $ | 544 | $ | 1,002 | |||||||
Stock-based compensation expense | (176 | ) | (193 | ) | Stock-based compensation expense | (77 | ) | (79 | ) | |||||||
Non-GAAP R&D expense | $ | 5,077 | $ | 4,156 | Non-GAAP R&D expense | $ | 467 | $ | 923 | |||||||
Non-GAAP profit | $ | 911 | $ | 557 | Non-GAAP profit | $ | (2,144 | ) | $ | (1,813 | ) |
Contact:
(626) 293-3400
investor@emcore.com

Source: EMCORE Corporation