0000808326-22-000040 | 10-Q | XBRL Viewer

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Cover - shares	9 Months Ended
Cover - shares	Jun. 30, 2022	Aug. 05, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-36632
Entity Registrant Name	EMCORE Corp
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-2746503
Entity Address, Address Line One	2015 W. Chestnut Street
Entity Address, City or Town	Alhambra
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91803
City Area Code	626
Local Phone Number	293-3400
Title of 12(b) Security	Common stock, no par value
Trading Symbol	EMKR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		37,549,905
Entity Central Index Key	0000808326
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--09-30
Amendment Flag	false

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue	$ 23,675	$ 42,658	$ 98,561	$ 114,490
Cost of revenue	19,777	25,433	69,849	70,059
Gross profit	3,898	17,225	28,712	44,431
Operating expense:
Selling, general, and administrative	7,800	6,081	22,550	17,941
Research and development	4,513	4,500	13,675	12,567
Severance	0	0	1,318	0
(Gain) loss on sale of assets	(1,318)	250	(1,919)	439
Total operating expense	10,995	10,831	35,624	30,947
Operating (loss) income	(7,097)	6,394	(6,912)	13,484
Other (expense) income:
Gain on extinguishment of debt	0	6,561	0	6,561
Interest (income) expense, net	9	579	(14)	481
Foreign exchange (loss) gain	(185)	87	(160)	256
Pension expense	(349)	0	(349)	0
Total other (expense) income	(525)	7,227	(523)	7,298
(Loss) income before income tax expense	(7,622)	13,621	(7,435)	20,782
Income tax expense	(27)	(6)	(25)	(214)
Net (loss) income	(7,649)	13,615	(7,460)	20,568
Foreign exchange translation adjustment	69	(5)	91	(26)
Comprehensive (loss) income	$ (7,580)	$ 13,610	$ (7,369)	$ 20,542
Per share data
Net (loss) income per basic share (in dollars per share)	$ (0.20)	$ 0.37	$ (0.20)	$ 0.62
Weighted-average number of basic shares outstanding (in shares)	37,425	36,768	37,197	33,069
Net (loss) income per diluted share (in dollars per share)	$ (0.20)	$ 0.35	$ (0.20)	$ 0.59
Weighted-average number of diluted shares outstanding (in shares)	37,425	38,893	37,197	34,777

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2022	Sep. 30, 2021
Current assets:
Cash and cash equivalents	$ 74,609	$ 71,621
Restricted cash	520	61
Accounts receivable, net of credit loss of $267 and $260, respectively	24,287	31,849
Contract assets	7,439	361
Inventory	29,206	32,309
Prepaid expenses and other current assets	6,471	6,877
Assets held for sale	480	1,241
Total current assets	143,012	144,319
Property, plant, and equipment, net	26,079	22,544
Goodwill	354	69
Operating lease right-of-use assets	20,938	13,489
Other intangible assets, net	1,548	167
Other non-current assets	1,592	225
Total assets	193,523	180,813
Current liabilities:
Accounts payable	13,335	16,686
Accrued expenses and other current liabilities	11,651	9,568
Contract liabilities	9,042	368
Operating lease liabilities - current	2,156	1,198
Total current liabilities	36,184	27,820
Operating lease liabilities - non-current	19,240	12,684
Asset retirement obligations	4,516	2,049
Other long-term liabilities	9	794
Total liabilities	59,949	43,347
Commitments and contingencies (Note 11)
Shareholders’ equity:
Common stock, no par value, 50,000 shares authorized; 44,449 shares issued and 37,543 shares outstanding as of June 30, 2022; 43,890 shares issued and 36,984 shares outstanding as of September 30, 2021	785,743	782,266
Treasury stock at cost; 6,906 shares as of June 30, 2022 and September 30, 2021	(47,721)	(47,721)
Accumulated other comprehensive income	778	687
Accumulated deficit	(605,226)	(597,766)
Total shareholders’ equity	133,574	137,466
Total liabilities and shareholders’ equity	$ 193,523	$ 180,813

Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Sep. 30, 2021
Statement of Financial Position [Abstract]
Allowance for credit loss	$ 267	$ 260
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	44,449,000	43,890,000
Common stock, shares outstanding (in shares)	37,543,000	36,984,000
Treasury stock, shares held (in shares)	6,906,000	6,906,000

Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Accumulated other comprehensive income	Accumulated deficit
Beginning balance (in shares) at Sep. 30, 2020		29,551
Shares of common stock
Stock-based compensation (in shares)		534
Stock option exercises (in shares)		15
Issuance of common stock - ESPP (in shares)		126
Sale of common stock (in shares)		6,655
Ending balance (in shares) at Jun. 30, 2021		36,881
Balance, beginning of period at Sep. 30, 2020		$ 744,361	$ (47,721)	$ 918	$ (623,409)
Shares of common stock
Stock-based compensation		3,010
Stock option exercises		77
Tax withholding paid on behalf of employees for stock-based awards		(195)
Issuance of common stock - ESPP		382
Sale of common stock, net of offering costs		33,141
Translation adjustment	$ (26)			(26)
Net (loss) income	20,568				20,568
Balance, end of period at Jun. 30, 2021	131,106	$ 780,776	(47,721)	892	(602,841)
Beginning balance (in shares) at Mar. 31, 2021		36,775
Shares of common stock
Stock-based compensation (in shares)		101
Stock option exercises (in shares)		5
Issuance of common stock - ESPP (in shares)		0
Sale of common stock (in shares)		0
Ending balance (in shares) at Jun. 30, 2021		36,881
Balance, beginning of period at Mar. 31, 2021		$ 779,681	(47,721)	897	(616,456)
Shares of common stock
Stock-based compensation		1,176
Stock option exercises		31
Tax withholding paid on behalf of employees for stock-based awards		(112)
Issuance of common stock - ESPP		0
Sale of common stock, net of offering costs		0
Translation adjustment	(5)			(5)
Net (loss) income	13,615				13,615
Balance, end of period at Jun. 30, 2021	$ 131,106	$ 780,776	(47,721)	892	(602,841)
Beginning balance (in shares) at Sep. 30, 2021	36,984	36,984
Shares of common stock
Stock-based compensation (in shares)		553
Stock option exercises (in shares)		6
Issuance of common stock - ESPP (in shares)		0
Sale of common stock (in shares)		0
Ending balance (in shares) at Jun. 30, 2022	37,543	37,543
Balance, beginning of period at Sep. 30, 2021		$ 782,266	(47,721)	687	(597,766)
Shares of common stock
Stock-based compensation		3,755
Stock option exercises		29
Tax withholding paid on behalf of employees for stock-based awards		(307)
Issuance of common stock - ESPP		0
Sale of common stock, net of offering costs		0
Translation adjustment	$ 91			91
Net (loss) income	(7,460)				(7,460)
Balance, end of period at Jun. 30, 2022	$ 133,574	$ 785,743	(47,721)	778	(605,226)
Beginning balance (in shares) at Mar. 31, 2022		37,395
Shares of common stock
Stock-based compensation (in shares)		148
Stock option exercises (in shares)		0
Issuance of common stock - ESPP (in shares)		0
Sale of common stock (in shares)		0
Ending balance (in shares) at Jun. 30, 2022	37,543	37,543
Balance, beginning of period at Mar. 31, 2022		$ 784,371	(47,721)	709	(597,577)
Shares of common stock
Stock-based compensation		1,523
Stock option exercises		0
Tax withholding paid on behalf of employees for stock-based awards		(151)
Issuance of common stock - ESPP		0
Sale of common stock, net of offering costs		0
Translation adjustment	$ 69			69
Net (loss) income	(7,649)				(7,649)
Balance, end of period at Jun. 30, 2022	$ 133,574	$ 785,743	$ (47,721)	$ 778	$ (605,226)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net (loss) income	$ (7,460)	$ 20,568
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	3,292	3,053
Stock-based compensation expense	3,755	3,010
Provision adjustments related to credit loss	187	(35)
Provision adjustments related to product warranty	174	313
(Gain) loss on disposal of property, plant, and equipment	(1,919)	439
Other	299	(396)
Changes in operating assets and liabilities:
Accounts receivable and contract assets	7,306	(4,827)
Inventory	3,380	(7,395)
Other assets	(5,263)	(345)
Accounts payable	(4,706)	1,423
Accrued expenses and other current liabilities	6,941	(9,116)
Contract liabilities	2,650	(124)
Operating lease liabilities - current	(487)	161
Net cash provided by operating activities	8,149	6,729
Cash flows from investing activities:
Purchase of equipment	(4,743)	(3,004)
Proceeds from disposal of property, plant, and equipment	2,820	582
Acquisition of business	(2,439)	0
Net cash used in investing activities	(4,362)	(2,422)
Cash flows from financing activities:
Proceeds from employee stock purchase plan and equity awards	29	451
Proceeds from sale of common stock	0	35,937
Issuance cost associated with sale of common stock	0	(2,796)
Taxes paid related to net share settlement of equity awards	(307)	(195)
Net cash (used in) provided by financing activities	(278)	33,397
Effect of exchange rate changes provided by foreign currency	(62)	55
Net increase in cash, cash equivalents, and restricted cash	3,447	37,759
Cash, cash equivalents, and restricted cash at beginning of period	71,682	30,538
Cash, cash equivalents, and restricted cash at end of period	75,129	68,297
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	40	46
Cash paid during the period for income taxes	547	547
NON-CASH INVESTING AND FINANCING ACTIVITIES
Changes in accounts payable related to purchases of equipment	$ (76)	$ 1,026

Description of Business	9 Months Ended
Description of Business	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of BusinessEMCORE Corporation (referred to herein, together with its subsidiaries, as the “Company,” “we,” “our,” or “EMCORE”) is a leading provider of sensors for navigation in the aerospace and defense market as well as a manufacturer of lasers and optical subsystems for use in the broadband industry. We pioneered the linear fiber optic transmission technology that enabled the world’s first delivery of Cable TV (“CATV”) directly on fiber, and today are a leading provider of advanced products that enable communications systems and service providers to meet growing demand for increased bandwidth and connectivity. The technology at the heart of our broadband communications products is shared with our fiber optic gyroscope (“FOG”) and inertial sensors to provide the aerospace and defense markets with state-of-the-art navigation systems technology. With the acquisitions of (a) Systron Donner Inertial, Inc. (“SDI”), a navigation systems provider with a scalable, chip-based platform for higher volume gyro applications utilizing quartz micro-electromechanical system (“QMEMS”) technology, in June 2019, and (b) the L3Harris Space and Navigation (“S&N”) business in April 2022, we further expanded our portfolio of gyros and inertial sensors with SDI’s QMEMS gyro and accelerometer technology and S&N's FOG and ring laser gyro (“RLG”) technology. We have fully vertically-integrated manufacturing capability through our indium phosphide (“InP”) compound semiconductor wafer fabrication facility at our headquarters in Alhambra, CA and through our QMEMS processing and sensor manufacturing facility in Concord, CA and our FOG and RLG manufacturing facility in Budd Lake, NJ. These facilities support our vertically-integrated manufacturing strategy for QMEMS, FOG, and RLG products for navigation systems, and, with respect to our Alhambra, CA facility, for our chip, laser, transmitter, and receiver products for broadband applications. With both analog and digital circuits on multiple chips, or even a single chip, the value of Mixed-Signal device solutions is often substantially greater than traditional digital applications and requires a specialized expertise held by us which is unique in the optics industry.

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, they do not include all information and notes required by U.S. GAAP for annual financial statements. In our opinion, the interim financial statements reflect all adjustments, which are all normal recurring adjustments, that are necessary to provide a fair presentation of the financial results for the interim periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for an entire fiscal year. The condensed consolidated balance sheet as of September 30, 2021 has been derived from the audited consolidated financial statements as of such date. For a more complete understanding of our business, financial position, operating results, cash flows, risk factors and other matters, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. Significant Accounting Policies and Estimates Pension Plan With the acquisition of S&N, we acquired the assets and assumed the liabilities associated with a pension plan, now named the Emcore Space & Navigation Corporation Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. Subsequent to quarter end, as of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. The investments in the Pension Plan are measured at fair value using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. If these estimates differ significantly from actual results, the impact to the condensed consolidated financial statements may be material. Recent Accounting Pronouncements We recently adopted the following accounting standards, which had the following impacts on our condensed consolidated financial statements: In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing various exceptions, such as the exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items. The amendments in this update also simplify the accounting for income taxes related to income-based franchise taxes and require that an entity reflect enacted tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard was effective for our fiscal year beginning October 1, 2021. The adoption of this new standard did not have a material impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU required an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contract. The ASU is effective for the Company for our annual and interim periods beginning October 1, 2023. We early adopted this standard effective with our fiscal year beginning October 1, 2021. The early adoption of this new standard did not have a material impact on the condensed consolidated financial statements. Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures.

Acquisition

9 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition

On April 29, 2022, we completed the acquisition of the L3Harris Technologies, Inc. (“L3H”) Space and Navigation business (“S&N”) for a total purchase price of approximately $5.0 million in cash, exclusive of transaction costs and expenses and subject to certain post-closing working capital adjustments, resulting in a cash payment at closing of the acquisition of approximately $2.4 million. Following the closing, we began integrating S&N into our Aerospace and Defense reportable segment and have included the financial results of S&N in our condensed consolidated financial statements beginning on the acquisition date. Revenue and net loss of S&N from the acquisition date of $4.3 million and $0.7 million, respectively, is included in our condensed consolidated statements of operations and comprehensive (loss) income for the three and nine months ended June 30, 2022.

Preliminary Purchase Price Allocation

The total purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Due to the fact that the acquisition occurred in the current interim period, the Company's fair value estimates for the purchase price allocation are preliminary. The final determination of fair value for the assets acquired and liabilities assumed is subject to further change and will be completed as soon as possible, but no later than one year from the acquisition date. The preliminary estimates that are not yet finalized relate to identifiable intangible assets and asset retirement obligations. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in a material adjustment to goodwill.

The table below represents the preliminary purchase price allocation to the assets acquired and liabilities assumed of S&N based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions:


(in thousands)	Amount
Tangible assets acquired:
Accounts receivable	$	803
Inventory	370
Contract assets	6,206
Operating lease right-of-use assets	1,529
Property, plant, and equipment	1,996
Net pension benefit assets	1,727
Intangible assets acquired	1,460
Goodwill	285
Liabilities assumed:
Accounts payable and accrued expenses	(1,848)
Contract liabilities	(6,024)
Operating lease liabilities	(1,565)
Asset retirement obligations	(2,500)
Total purchase consideration	$	2,439

For the three and nine months ended June 30, 2022, the Company incurred transaction costs of approximately $0.3 million and $0.8 million, respectively, in connection with the S&N acquisition, which were expensed as incurred and included in selling, general and administrative expenses within the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

Cash, Cash Equivalents and Restricted Cash

9 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents [Abstract]

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Cash	$	19,482	$	16,547
Cash equivalents	55,127		55,074
Restricted cash	520		61
Total cash, cash equivalents, and restricted cash	$	75,129	$	71,682

The balance of restricted cash as of June 30, 2022 increased from September 30, 2021 due to an additional reserve related to our workers' compensation insurance policy. A reserve was taken as of June 30, 2022 in lieu of a corresponding letter of credit that was previously in place under our Credit and Security Agreement with Wells Fargo Bank, N.A., which terminated in May 2022 pursuant to its terms.

Accounts Receivable, net

9 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Accounts Receivable, net

The components of accounts receivable consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Accounts receivable, gross	$	24,554	$	32,109
Allowance for credit loss	(267)		(260)
Accounts receivable, net	$	24,287	$	31,849

Inventory

9 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Inventory

The components of inventory consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Raw materials	$	15,217	$	16,146
Work in-process	10,716		11,410
Finished goods	3,273		4,753
Inventory	$	29,206	$	32,309

Property, Plant, and Equipment, net

9 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment, net

The components of property, plant, and equipment, net consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Equipment	$	42,932	$	37,985
Furniture and fixtures	1,380		1,125
Computer hardware and software	3,589		3,575
Leasehold improvements	7,186		6,663
Construction in progress	8,956		9,247
Property, plant, and equipment, gross	$	64,043	$	58,595
Accumulated depreciation	(37,964)		(36,051)
Property, plant, and equipment, net	$	26,079	$	22,544

During the fiscal year ended September 30, 2020, the Company entered into agreements to sell equipment and these assets were reclassified to assets held for sale. The balance as of June 30, 2022 and September 30, 2021 was $0.5 million and $1.2 million, respectively. The balance of assets held for sale will be sold in the quarter ending September 30, 2022. During the three months ended June 30, 2022 and 2021, the Company sold certain equipment and recognized a (gain) loss on sale of assets of $(1.3) million and $0.3 million, respectively. During the nine months ended June 30, 2022 and 2021, the Company sold certain equipment and recognized a (gain) loss on sale of assets of $(1.9) million and $0.4 million, respectively.

Geographical Concentrations

Long-lived assets consist of land, building, property, plant, and equipment. As of June 30, 2022 and September 30, 2021, 93% and 96%, respectively, of our long-lived assets were located in the United States. The remaining long-lived assets are primarily located in Thailand. The increase in long-lived assets in Thailand was a result of consigning additional equipment in CIP for production purposes for use predominantly in the CATV Lasers and Transmitters product line.

Benefit Plans

9 Months Ended

Jun. 30, 2022

Retirement Benefits [Abstract]

Benefit Plans

We assumed a defined benefit pension plan (the “Pension Plan”) on April 29, 2022 as a result of the acquisition of S&N. The Pension Plan was frozen to new hires as of March 31, 2007 and employees hired on or after April 1, 2007 are not eligible to participate in the Pension Plan. Subsequent to quarter end, as of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. Benefits are based on years of credited service at retirement. Annual contributions to the Pension Plan are not less than the minimum funding standards outlined in the Employee Retirement Income Security Act of 1974, as amended. We make contributions to the Pension Plan with the goal of ensuring that it is adequately funded to meet its future obligations. We did not make any contributions to the Pension Plan during the period from April 29, 2022 to June 30, 2022 and do not anticipate making any contributions for the remainder of 2022.

The weighted average discount rate used to determine the projected benefit obligation of the Pension Plan as of the date of the S&N acquisition on April 29, 2022 was 4.40%. The weighted average discount rate used to determine interest cost related to the Pension Plan for the period from April 29, 2022 to June 30, 2022 was 4.40%.

The components of the pension expense are as follows:


(in thousands)	For the Three and Nine Months Ended June 30, 2022
Interest cost	$	60
Loss on Pension Plan assets	349
Total pension expense	$	409

Total pension expense is included as a component of other (expense) income on the condensed consolidated statements of operations and comprehensive (loss) income for the three and nine months ended June 30, 2022.

The net pension asset assumed with the S&N acquisition is as follows:


	As of
(in thousands)	June 30, 2022
Benefit obligation	$	8,203
Fair value of Pension Plan assets	9,581
Net pension asset	$	1,378

Net pension asset is included as a component of other non-current assets on the condensed consolidated balance sheets as of June 30, 2022. As of June 30, 2022 the Pension Plan assets consist of cash and cash equivalents.

401(k) Plan

We have a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this savings plan, participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. During each of the three months ended June 30, 2022 and 2021, our matching contribution was $0.2 million in cash, respectively. During each of the nine months ended June 30, 2022 and 2021, our matching contribution was $0.8 million in cash, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Accrued Expenses and Other Current Liabilities

9 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Compensation	$	6,783	$	7,192
Warranty	1,381		1,125
Legal expenses and other professional fees	202		152
Income and other taxes	—		104
Severance and restructuring accruals	525		—
Litigation settlement	575		70
Other	2,185		925
Accrued expenses and other current liabilities	$	11,651	$	9,568

Income and Other Taxes	9 Months Ended
Income and Other Taxes	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income and Other Taxes	Income and Other Taxes During the three months ended June 30, 2022 and 2021, the Company recorded an income tax expense of $27,000 and $6,000, respectively. Income tax expense during the three months ended June 30, 2022 is composed primarily of Texas gross margin taxes. Income tax expense during the three months ended June 30, 2021 is composed primarily of state tax expense which is driven by the State of California's temporary suspension of net operating loss ("NOL") utilization. During the nine months ended June 30, 2022 and 2021, the Company recorded an income tax expense of $25,000 and $214,000, respectively. Income tax expense for the nine months ended June 30, 2022 is composed primarily of Texas gross margin taxes. Income tax expense for the nine months ended June 30, 2021 is composed primarily of state tax expense which is driven by the State of California's temporary suspension of NOL utilization. For the three months ended June 30, 2022 and 2021 the effective tax rate on continuing operations was 0.4% and 0.0%, respectively. For the nine months ended June 30, 2022 and 2021 the effective tax rate on continuing operations was 0.3% and 1.0%, respectively. The tax rate for the three and nine months ended June 30, 2022 is primarily driven by Texas gross margin taxes. The Company uses estimates to forecast the results from continuing operations for the current fiscal year as well as permanent differences between book and tax accounting. We have not provided for income taxes on non-U.S. subsidiaries’ undistributed earnings as of June 30, 2022 because we plan to indefinitely reinvest the unremitted earnings of our non-U.S. subsidiaries and all of our non-U.S. subsidiaries historically have negative earnings and profits. All deferred tax assets have a full valuation allowance as of June 30, 2022, except for the tax amortization of indefinitely lived goodwill, which cannot be utilized to reduce deferred tax assets. On a quarterly basis, the Company evaluates the positive and negative evidence to assess whether the more likely than not criteria has been satisfied in determining whether there will be further adjustments to the valuation allowance. As of June 30, 2022 and September 30, 2021, we did not accrue any significant uncertain tax benefit, interest, or penalties as tax liabilities on our condensed consolidated balance sheets. During the three and nine months ended June 30, 2022, there were no material increases or decreases in unrecognized tax benefits.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Indemnifications We have agreed to indemnify certain customers against claims of infringement of intellectual property rights of others in our sales contracts with these customers. Historically, we have not paid any claims under these customer indemnification obligations. We enter into indemnification agreements with each of our directors and executive officers pursuant to which we agree to indemnify them for certain potential expenses and liabilities arising from their status as a director or executive officer of the Company. We maintain directors and officers insurance, which covers certain liabilities relating to our obligation to indemnify our directors and executive officers in certain circumstances. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular claim. Legal Proceedings We are subject to various legal proceedings, claims, and litigation, either asserted or unasserted, that arise in the ordinary course of business. The outcome of these matters is currently not determinable and we are unable to estimate a range of loss, should a loss occur, from these proceedings. The ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and the results of these matters cannot be predicted with certainty. Professional legal fees are expensed when incurred. We accrue for contingent losses when such losses are probable and reasonably estimable. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information. Should we fail to prevail in any legal matter, or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially affected. Intellectual Property Lawsuits We protect our proprietary technology by applying for patents where appropriate and, in other cases, by preserving the technology, related know-how, and information as trade secrets. The success and competitive position of our product lines are impacted by our ability to obtain intellectual property protection for our research and development efforts. We have, from time to time, exchanged correspondence with third parties regarding the assertion of patent or other intellectual property rights in connection with certain of our products and processes. Resilience Litigation In February 2021, Resilience Capital (“Resilience”) filed a complaint against us with the Delaware Chancery Court containing claims arising from the February 2020 sale of SDI’s real property (the “Concord Property Sale”) located in Concord, California (the “Concord Real Property”) to Eagle Rock Holdings, LP (“Buyer”) and that certain Single-Tenant Triple Net Lease, dated as of February 10, 2020, entered into by and between SDI and the Buyer, pursuant to which SDI leased from the Buyer the Concord Real Property for a 15 year term. The Resilience complaint seeks, among other items, (a) a declaration that the Concord Property Sale included a non-cash component, (b) a decree requiring us and Resilience to follow the appraisal requirements set forth in that certain Purchase and Sale Agreement (the "SDI Purchase Agreement"), dated as of June 7, 2019, by and among the Company, The Resilience Fund IV, L.P., The Resilience Fund IV-A, L.P., Aerospace Newco Holdings, Inc. and Ember Acquisition Sub, Inc., (c) recovery of Resilience’s costs and expenses, and (d) pre- and post-judgment interest. In April 2021, we filed with the Delaware Chancery Court our answer to the Resilience complaint and counterclaims against Resilience, in which we are seeking, among other items, (a) dismissal of the Resilience complaint and/or granting of judgment in favor of EMCORE with respect to the Resilience complaint, (b) entering final judgment against Resilience awarding damages to us for Resilience’s fraud and breaches of the SDI Purchase Agreement in an amount to be proven at trial and not less than $1,565,000, (c) a judicial determination of the respective rights and duties of us and Resilience under the SDI Purchase Agreement, (d) an award to us of costs and expenses, and (e) pre- and post-judgment interest. We believe that the claims made by Resilience in its complaint are without merit and we intend to vigorously defend ourselves against them.

Equity

9 Months Ended

Jun. 30, 2022

Equity [Abstract]

Equity

Equity Plans

We provide long-term incentives to eligible officers, directors, and employees in the form of equity-based awards. We maintain three equity incentive compensation plans, collectively described as our “Equity Plans”: (a) the 2010 Equity Incentive Plan, (b) the 2012 Equity Incentive Plan, and (c) the 2019 Equity Incentive Plan.

We issue new shares of common stock to satisfy awards granted under our Equity Plans. In March 2022, our shareholders approved the Amended and Restated EMCORE Corporation 2019 Equity Incentive Plan, which was adopted by the Company’s Board of Directors in December 2021, and increased the maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2019 Equity Incentive Plan by an additional 1.9 million shares.

Stock-Based Compensation

The following table sets forth stock-based compensation expense by award type:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Employee stock options	$	—	$	1	$	—	$	3
RSUs and RSAs	692		573		1,795		1,505
PSUs and PRSAs	708		403		1,602		989
ESPP	—		85		—		258
Outside director equity awards and fees in common stock	123		114		358		255
Total stock-based compensation expense	$	1,523	$	1,176	$	3,755	$	3,010

The following table sets forth stock-based compensation expense by expense type:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Cost of revenue	$	275	$	220	$	604	$	564
Selling, general, and administrative	1,001		752		2,537		1,830
Research and development	247		204		614		616
Total stock-based compensation expense	$	1,523	$	1,176	$	3,755	$	3,010

(Loss) Income Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands, except per share data)	2022		2021		2022		2021
Numerator
Net (loss) income	$	(7,649)	$	13,615	$	(7,460)	$	20,568
Denominator
Weighted average number of shares outstanding - basic	37,425		36,768		37,197		33,069
Effect of dilutive securities
Stock options	—		10		—		5
PSUs, RSUs, and restricted stock	—		2,115		—		1,703
Weighted average number of shares outstanding - diluted	37,425		38,893		37,197		34,777
Earnings per share - basic	$	(0.20)	$	0.37	$	(0.20)	$	0.62
Earnings per share - diluted	$	(0.20)	$	0.35	$	(0.20)	$	0.59
Weighted average antidilutive options, unvested restricted RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation	3,163		2,138		1,315		1,947

Basic earnings per share ("EPS") is computed by dividing net (loss) income for the period by the weighted-average number of common stock outstanding during the period. Diluted EPS is computed by dividing net (loss) income for the period by the weighted average number of common stock outstanding during the period, plus the dilutive effect of outstanding restricted stock units ("RSUs") and restricted stock awards ("RSAs"), performance stock units ("PSUs"), stock options, and shares issuable under the employee stock purchase plan ("ESPP") as applicable pursuant to the treasury stock method. Certain of the Company's outstanding share-based awards, noted in the table above, were excluded because they were anti-dilutive, but they could become dilutive in the future. The anti-dilutive stock options and shares of outstanding and unvested restricted stock were excluded from the computation of earnings per share for the three and nine months ended June 30, 2022 due to the Company incurring a net loss for such periods.

Future Issuances

Common stock reserved for future issuances was as follows:


			As of
			June 30, 2022
Exercise of outstanding stock options			13,884
Unvested RSUs and RSAs			2,587,302
Unvested PSUs and PRSAs (at 200% maximum payout)			3,618,106
Issuance of stock-based awards under the Equity Plans			341,304
Purchases under the officer and director share purchase plan			88,741
Total reserved			6,649,337

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Segment and Revenue Information

9 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment and Revenue Information

Reportable Segments

Reported below are the Company’s segments for which separate financial information is available and upon which operating results are evaluated by the chief operating decision maker, the Chief Executive Officer, to assess performance and to allocate resources. We do not allocate sales and marketing, general and administrative expenses, or interest expense and interest income to our segments because management does not include the information in its measurement of the performance of the operating segments. Also, a measure of segment assets and liabilities has not been provided to the Company's chief operating decision maker and therefore is not shown below.

Information on reportable segments utilized by the chief operating decision maker is as follows:


(in thousands)	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
	2022		2021		2022		2021
Revenue
Aerospace and Defense	$	13,416	$	12,327	$	32,322	$	39,097
Broadband	10,259		30,331		66,239		75,393
Total revenue	$	23,675	$	42,658	$	98,561	$	114,490
Segment profit
Aerospace and Defense gross profit	$	1,551	$	3,872	$	4,468	$	11,747
Aerospace and Defense research and development expense	3,834		3,598		12,037		10,441
Aerospace and Defense segment profit	$	(2,283)	$	274	$	(7,569)	$	1,306
Broadband gross profit	$	2,347	$	13,353	$	24,244	$	32,684
Broadband research and development expense	679		902		1,638		2,126
Broadband segment profit	$	1,668	$	12,451	$	22,606	$	30,558
Total segment profit	$	(615)	$	12,725	$	15,037	$	31,864
Unallocated expense (income)
Selling, general, and administrative	$	7,800	$	6,081	$	22,550	$	17,941
Severance	—		—		1,318		—
(Gain) loss on sale of assets	(1,318)		250		(1,919)		439
Gain on extinguishment of debt	—		(6,561)		—		(6,561)
Interest (income) expense, net	(9)		(579)		14		(481)
Foreign exchange loss (gain)	185		(87)		160		(256)
Pension expense	349		—		349		—
Total unallocated expense (income)	$	7,007	$	(896)	$	22,472	$	11,082
(Loss) income before income tax expense	$	(7,622)	$	13,621	$	(7,435)	$	20,782

Product Categories

Revenue is classified by major product category as presented below:


	For the Three Months Ended June 30,
(in thousands)	2022		% of Revenue		2021		% of Revenue
Aerospace and Defense
Navigation and Inertial Sensing	$	9,891	42	%	$	9,280	22	%
Defense Optoelectronics	3,525		15		3,047		7
Broadband
CATV Lasers and Transmitters	7,006		29		27,364		64
Chip Devices	1,353		6		819		2
Other Optical Products	1,900		8		2,148		5
Total revenue	$	23,675	100	%	$	42,658	100	%


	For the Nine Months Ended June 30,
(in thousands)	2022		% of Revenue		2021		% of Revenue
Aerospace and Defense
Navigation and Inertial Sensing	$	25,651	26	%	$	27,475	24	%
Defense Optoelectronics	6,671		7		11,622		10
Broadband
CATV Lasers and Transmitters	56,449		57		65,799		58
Chip Devices	3,534		4		2,403		2
Other Optical Products	6,256		6		7,191		6
Total revenue	$	98,561	100	%	$	114,490	100	%

Geographical Concentration

The following table sets forth revenue by geographic area based on our customers’ billing addresses:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands)	2022		2021		2022		2021
United States and Canada	$	19,043	$	37,705	$	86,751	$	100,157
Asia	1,684		2,305		6,498		9,475
Europe	2,243		1,603		3,999		2,817
Other	705		1,045		1,313		2,041
Total revenue	$	23,675	$	42,658	$	98,561	$	114,490

Customer Concentration

Portions of the Company’s sales are concentrated among a limited number of customers. Significant customers are defined as customers representing greater than 10% of consolidated revenue. Revenue from two significant customers represented an aggregate of 37% and 62% of our consolidated revenue for the three months ended June 30, 2022 and 2021, respectively. Revenue from two significant customers represented an aggregate of 54% of our consolidated revenue for the nine months ended June 30, 2022. Revenue from three significant customers represented an aggregate of 70% of our consolidated revenue for the nine months ended June 30, 2021. The percentage from significant customers decreased due to lower CATV revenue from our Broadband segment.

The duration, severity, and future impact of the COVID-19 pandemic is highly uncertain and could result in significant disruptions to the business operations of the Company’s customers. If one or more of these significant customers significantly decreases their orders for the Company’s products, or if we are unable to deliver finished products to the customer in connection with such orders, the Company’s business could be materially and adversely affected.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Subsequent Event	9 Months Ended
Subsequent Event	Jun. 30, 2022
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event Purchase Agreement On August 9, 2022, EMCORE Corporation (“EMCORE”) entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and among EMCORE, Delta Acquisition Sub, Inc., a Delaware corporation and wholly owned subsidiary of EMCORE (“EMCORE Sub”), and KVH Industries, Inc., a Delaware corporation (“Seller”), pursuant to which Seller agreed to sell the assets (the “Purchased Assets”) primarily related to its Inertial Navigation segment (the “Business”), including Seller's property interests in its Tinley Park facility, to EMCORE (the “Transaction”). The signing and closing of the Transaction occurred simultaneously. Under the terms of the Purchase Agreement, EMCORE paid approximately $55.0 million in cash for the Purchased Assets (the “Purchase Price”), subject to certain working capital adjustments. The Transaction also involved EMCORE’s assumption of specified liabilities, generally including the liabilities primarily related to the Business. At the closing, $1.0 million of the Purchase Price (the “Holdback Amount”) was held back by EMCORE as security for certain post-closing obligations of Seller. The Holdback Amount will be released over time, if at all, upon satisfaction by Seller of certain of its post-closing obligations. In connection with the Transaction, the parties entered into a transition services agreement pursuant to which Seller will provide certain migration and transition services to facilitate an orderly transaction of the operation of the Business to EMCORE in the twelve month period following consummation of the Transaction. The Purchase Agreement contains certain representations, warranties, covenants, and indemnification provisions, including for breaches of covenants and for losses resulting from Seller liabilities specifically excluded from the Transaction. In connection with its entry into the Purchase Agreement, EMCORE obtained a customary representations and warranties insurance policy as recourse for certain losses arising out of breaches of representations and warranties of Seller set forth in the Purchase Agreement. The representations and warranties insurance policy is subject to certain policy limits, exclusions, deductibles, and other terms and conditions. Seller has agreed that, for the period commencing on the date of closing until the five-year anniversary thereof, neither Seller nor any of its affiliates will, directly or indirectly, compete with the business related to the development, engineering, manufacturing, marketing, distribution or sale of navigation sensors and systems or inertial sensors and systems for defense or commercial applications (including self-driving vehicles), as operated by Seller as of immediately prior to the closing, subject to certain limitations. Seller has also agreed that, for a period of 24 months after the closing, neither Seller nor any of its affiliates will, directly or indirectly, solicit to employ or employ any employee of EMCORE or any employee transferred to EMCORE as part of the Transaction. In consideration of the recency of the completion of the purchase, we have not completed the initial accounting for the business combination and have not evaluated stand-alone acquiree revenue and earnings in the pre-acquisition period for supplemental pro-forma presentation and, accordingly have not included disclosure related to such items. New ABL Credit Agreement On August 9, 2022, EMCORE and EMCORE Space & Navigation Corporation (the “Borrowers”) entered into that certain Credit Agreement, dated as of August 9, 2022 (the “Credit Agreement”), among the Borrowers, the lenders party thereto and Wingspire Capital LLC, as administrative agent for the lenders (the “Agent”). The Credit Agreement provides for two credit facilities: (a) an asset-based revolving credit facility in an aggregate principal amount of up to $40.0 million, subject to a borrowing base consisting of eligible accounts receivable and eligible inventory (subject to certain reserves), and (b) a term loan facility in an aggregate principal amount of $6.0 million. The making of the loans under the Credit Agreement is subject to the satisfaction of certain conditions precedent, including, among other things, the execution and delivery of a pledge and security agreement, pursuant to which the obligations under the Credit Agreement will be secured on a senior secured basis (subject to permitted liens) by substantially all assets of the Borrowers and substantially all assets of any future guarantors. Although no subsidiaries of EMCORE are currently required to guarantee the Borrowers’ obligations under the Credit Agreement, EMCORE Sub may be required to become a borrower or a guarantor under the Credit Agreement under certain circumstances as determined by the Agent in its sole discretion, and domestic subsidiaries of EMCORE that are formed or acquired after the closing under the Credit Agreement will be required to become guarantors under the Credit Agreement. The proceeds of the loans made on the closing date under the Credit Agreement may be used (a) to finance the Transaction and pay fees, costs and expenses in connection therewith, (b) to pay fees, costs and expenses in connection with the financing, and (c) for general corporate purposes. Borrowings under the Credit Agreement will mature on August 8, 2025, and will bear interest, at a rate per annum equal to term SOFR plus a margin of 3.75% in the case of revolving loans and term SOFR plus a margin of 5.50% in the case of term loans. In addition, the Borrowers will be responsible for the Agent’s annual collateral monitoring fees as well as the lenders’ fees and expenses, including a closing fee of 1.0% of the aggregate principal amount of the commitments as of the closing with respect to revolving loans and 1.50% of the aggregate principal amount of the commitments as of the closing with respect to term loans. The Borrowers may also be required to pay an unused line fee of 0.50% in respect of the undrawn portion of the revolving commitments, which is generally based on average daily usage of the revolving facility during the immediately preceding month. The Credit Agreement contains representations and warranties, reporting and other affirmative covenants, and negative covenants that are generally customary for credit facilities of this type. Among others, the Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit the Borrowers’ and their respective subsidiaries’ ability to incur indebtedness, grant liens, enter into sale and leaseback transactions, enter into swap agreements, make loans, acquisitions and investments, change the nature of their business, acquire or sell assets or consolidate or merge with or into other persons or entities, declare or pay dividends or make other restricted payments, enter into transactions with affiliates, enter into burdensome agreements, change fiscal year, amend organizational documents, and use proceeds to fund any activities of or business with any person that is the subject of governmental sanctions. In addition, the Credit Agreement requires that, for any period commencing upon the occurrence of an event of default or excess availability under the Credit Agreement being less than the greater of $5.0 million and 15% of the revolving commitments until such time as no event of default shall be continuing and excess availability under the Credit Agreement shall be at least the greater of $5.0 million and 15% of the revolving commitments for a period of 60 consecutive days, the Borrowers satisfy a consolidated fixed charge coverage ratio of not less than 1.10:1.00. The Credit Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Borrowers under the Credit Agreement to be immediately due and payable, and exercise rights and remedies available to the lenders under the Credit Agreement or applicable law or equity. At the closing under the Credit Agreement, the Borrowers borrowed revolving loans in an aggregate principal amount of $14.3 million and term loans in an aggregate principal amount equal to the entire term loan commitment.

Organization, Consolidation and Presentation of Financial Statements (Policies)	9 Months Ended
	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, they do not include all information and notes required by U.S. GAAP for annual financial statements. In our opinion, the interim financial statements reflect all adjustments, which are all normal recurring adjustments, that are necessary to provide a fair presentation of the financial results for the interim periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for an entire fiscal year. The condensed consolidated balance sheet as of September 30, 2021 has been derived from the audited consolidated financial statements as of such date. For a more complete understanding of our business, financial position, operating results, cash flows, risk factors and other matters, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
Significant Accounting Policies and Estimates	Significant Accounting Policies and Estimates Pension Plan With the acquisition of S&N, we acquired the assets and assumed the liabilities associated with a pension plan, now named the Emcore Space & Navigation Corporation Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. Subsequent to quarter end, as of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. The investments in the Pension Plan are measured at fair value using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. If these estimates differ significantly from actual results, the impact to the condensed consolidated financial statements may be material.
Recent Accounting Pronouncements	Recent Accounting Pronouncements We recently adopted the following accounting standards, which had the following impacts on our condensed consolidated financial statements: In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing various exceptions, such as the exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items. The amendments in this update also simplify the accounting for income taxes related to income-based franchise taxes and require that an entity reflect enacted tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard was effective for our fiscal year beginning October 1, 2021. The adoption of this new standard did not have a material impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU required an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contract. The ASU is effective for the Company for our annual and interim periods beginning October 1, 2023. We early adopted this standard effective with our fiscal year beginning October 1, 2021. The early adoption of this new standard did not have a material impact on the condensed consolidated financial statements. Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures.
Legal Costs	Professional legal fees are expensed when incurred. We accrue for contingent losses when such losses are probable and reasonably estimable.

Acquisition (Tables)

9 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed


(in thousands)	Amount
Tangible assets acquired:
Accounts receivable	$	803
Inventory	370
Contract assets	6,206
Operating lease right-of-use assets	1,529
Property, plant, and equipment	1,996
Net pension benefit assets	1,727
Intangible assets acquired	1,460
Goodwill	285
Liabilities assumed:
Accounts payable and accrued expenses	(1,848)
Contract liabilities	(6,024)
Operating lease liabilities	(1,565)
Asset retirement obligations	(2,500)
Total purchase consideration	$	2,439

Cash, Cash Equivalents and Restricted Cash (Tables)

9 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents [Abstract]

Schedule of Cash, Cash Equivalents and Restricted Cash


	As of
(in thousands)	June 30, 2022		September 30, 2021
Cash	$	19,482	$	16,547
Cash equivalents	55,127		55,074
Restricted cash	520		61
Total cash, cash equivalents, and restricted cash	$	75,129	$	71,682

Schedule of Cash, Cash Equivalents and Restricted Cash


	As of
(in thousands)	June 30, 2022		September 30, 2021
Cash	$	19,482	$	16,547
Cash equivalents	55,127		55,074
Restricted cash	520		61
Total cash, cash equivalents, and restricted cash	$	75,129	$	71,682

Accounts Receivable, net (Tables)

9 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Schedule of Components of Accounts Receivable, net

The components of accounts receivable consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Accounts receivable, gross	$	24,554	$	32,109
Allowance for credit loss	(267)		(260)
Accounts receivable, net	$	24,287	$	31,849

Inventory (Tables)

9 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

The components of inventory consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Raw materials	$	15,217	$	16,146
Work in-process	10,716		11,410
Finished goods	3,273		4,753
Inventory	$	29,206	$	32,309

Property, Plant, and Equipment, net (Tables)

9 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

The components of property, plant, and equipment, net consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Equipment	$	42,932	$	37,985
Furniture and fixtures	1,380		1,125
Computer hardware and software	3,589		3,575
Leasehold improvements	7,186		6,663
Construction in progress	8,956		9,247
Property, plant, and equipment, gross	$	64,043	$	58,595
Accumulated depreciation	(37,964)		(36,051)
Property, plant, and equipment, net	$	26,079	$	22,544

Benefit Plans (Tables)

9 Months Ended

Jun. 30, 2022

Retirement Benefits [Abstract]

Components of Pension Expense

The components of the pension expense are as follows:


(in thousands)	For the Three and Nine Months Ended June 30, 2022
Interest cost	$	60
Loss on Pension Plan assets	349
Total pension expense	$	409

Schedule of Defined Benefit Plan, Plan with Projected Benefit Obligation in Excess of Plan Assets

The net pension asset assumed with the S&N acquisition is as follows:


	As of
(in thousands)	June 30, 2022
Benefit obligation	$	8,203
Fair value of Pension Plan assets	9,581
Net pension asset	$	1,378

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Schedule of Components of Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities consisted of the following:


	As of
(in thousands)	June 30, 2022		September 30, 2021
Compensation	$	6,783	$	7,192
Warranty	1,381		1,125
Legal expenses and other professional fees	202		152
Income and other taxes	—		104
Severance and restructuring accruals	525		—
Litigation settlement	575		70
Other	2,185		925
Accrued expenses and other current liabilities	$	11,651	$	9,568

Equity (Tables)

9 Months Ended

Jun. 30, 2022

Equity [Abstract]

Schedule of Stock-based Compensation Expense - By Award Type

The following table sets forth stock-based compensation expense by award type:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Employee stock options	$	—	$	1	$	—	$	3
RSUs and RSAs	692		573		1,795		1,505
PSUs and PRSAs	708		403		1,602		989
ESPP	—		85		—		258
Outside director equity awards and fees in common stock	123		114		358		255
Total stock-based compensation expense	$	1,523	$	1,176	$	3,755	$	3,010

Schedule of Stock-based Compensation Expense - By Expense Type

The following table sets forth stock-based compensation expense by expense type:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Cost of revenue	$	275	$	220	$	604	$	564
Selling, general, and administrative	1,001		752		2,537		1,830
Research and development	247		204		614		616
Total stock-based compensation expense	$	1,523	$	1,176	$	3,755	$	3,010

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted net (loss) income per share:


	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
(in thousands, except per share data)	2022		2021		2022		2021
Numerator
Net (loss) income	$	(7,649)	$	13,615	$	(7,460)	$	20,568
Denominator
Weighted average number of shares outstanding - basic	37,425		36,768		37,197		33,069
Effect of dilutive securities
Stock options	—		10		—		5
PSUs, RSUs, and restricted stock	—		2,115		—		1,703
Weighted average number of shares outstanding - diluted	37,425		38,893		37,197		34,777
Earnings per share - basic	$	(0.20)	$	0.37	$	(0.20)	$	0.62
Earnings per share - diluted	$	(0.20)	$	0.35	$	(0.20)	$	0.59
Weighted average antidilutive options, unvested restricted RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation	3,163		2,138		1,315		1,947

Schedule of Common Stock Reserved for Future Issuances

Common stock reserved for future issuances was as follows:


			As of
			June 30, 2022
Exercise of outstanding stock options			13,884
Unvested RSUs and RSAs			2,587,302
Unvested PSUs and PRSAs (at 200% maximum payout)			3,618,106
Issuance of stock-based awards under the Equity Plans			341,304
Purchases under the officer and director share purchase plan			88,741
Total reserved			6,649,337

Segment and Revenue Information (Tables)

9 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Schedule of Reportable Segment

Information on reportable segments utilized by the chief operating decision maker is as follows:


(in thousands)	For the Three Months Ended June 30,				For the Nine Months Ended June 30,
	2022		2021		2022		2021
Revenue
Aerospace and Defense	$	13,416	$	12,327	$	32,322	$	39,097
Broadband	10,259		30,331		66,239		75,393
Total revenue	$	23,675	$	42,658	$	98,561	$	114,490
Segment profit
Aerospace and Defense gross profit	$	1,551	$	3,872	$	4,468	$	11,747
Aerospace and Defense research and development expense	3,834		3,598		12,037		10,441
Aerospace and Defense segment profit	$	(2,283)	$	274	$	(7,569)	$	1,306
Broadband gross profit	$	2,347	$	13,353	$	24,244	$	32,684
Broadband research and development expense	679		902		1,638		2,126
Broadband segment profit	$	1,668	$	12,451	$	22,606	$	30,558
Total segment profit	$	(615)	$	12,725	$	15,037	$	31,864
Unallocated expense (income)
Selling, general, and administrative	$	7,800	$	6,081	$	22,550	$	17,941
Severance	—		—		1,318		—
(Gain) loss on sale of assets	(1,318)		250		(1,919)		439
Gain on extinguishment of debt	—		(6,561)		—		(6,561)
Interest (income) expense, net	(9)		(579)