EMCORE Reports Fiscal 2020 First Quarter Results

ALHAMBRA, Calif., Feb. 05, 2020 (GLOBE NEWSWIRE) -- EMCORE Corporation (Nasdaq: EMKR), a leading provider of mixed-signal products that provide the foundation for today’s leading-edge aerospace & defense systems and high-speed communication networks, today announced results for its fiscal 2020 first quarter ended December 31, 2019 (1Q20).  Management will host a conference call to discuss financial and business results tomorrow, Thursday, February 6, 2020, at 8:00 AM Eastern Time.

Consolidated revenue was $25.5 million, a 5% sequential-quarter increase, and comprised $13.7 million from the Aerospace and Defense segment and $11.8 million from the Broadband segment.  Net loss on a GAAP basis was $1.3 million and on a non-GAAP basis was $1.8 million, compared with a net loss of $15.0 million and $7.7 million in the prior quarter, respectively.  Adjusted EBITDA was positive $0.2 million.

“EMCORE delivered solid results in the first quarter, with significantly improved operating performance, as well as break-even Adjusted EBITDA two quarters ahead of schedule,” said Jeff Rittichier, EMCORE’s President and CEO.  “While there is still much work to be done this year to further improve our operations, including the completion of our move to EMS manufacturing for our Cable TV products, we believe we are off to a good start and are pleased with the progress we have made thus far.”

Consolidated Results

Aerospace and Defense (A&D) Segment

A&D’s sequential-quarter revenue slightly decreased due to lower sales of Fiber Optic Gyroscopes, largely offset by increased Quartz MEMS and Defense Optoelectronics revenue.  A&D’s gross margin increase was driven by improved Quartz MEMS and Defense Optoelectronic margins.

Broadband Segment

Broadband’s sequential-quarter revenue increase was driven by increased sales across the full portfolio of product lines including CATV, Chips, and Wireless.  Broadband’s gross margin increase, excluding a 4Q19 $4.7 million non-recurring charge related to the transitioning of the CATV business, was driven by a more favorable mix and lower costs.

Business Outlook

The Company expects revenue for the fiscal second quarter ending March 31, 2020 (2Q20) to be in the range of $23 million to $25 million.

Conference Call

The Company will discuss its financial results on February 6, 2020 at 8:00 a.m. ET (5:00 a.m. PT). The call will be available by dialing 800-353-6461. For international callers, please dial +1 334-323-0501. The conference passcode number is 7352152. The call will be webcast live via the Company's website at http://investor.emcore.com/events.cfm. A webcast will be available for replay beginning Thursday, February 6, 2020 for at least 90 days following the conclusion of the call on the Company's website.

About EMCORE

EMCORE Corporation is a leading provider of advanced mixed-signal products that provide the foundation for today’s leading-edge aerospace & defense systems and high-speed broadband communication networks. Our optical chips, components, subsystems and systems enable broadband and wireless service providers to continually enhance their network capacity, speed, and coverage to advance the free flow of information that empowers the lives of millions of people daily. The mixed-signal technology at the heart of our broadband transmission products is shared with our fiber optic gyros and military communications links to provide the aerospace and defense markets state-of-the-art systems that keep us safe in an increasingly unpredictable world.

EMCORE’s performance-leading optical components and systems serve a broad array of applications including cable television, fiber-to-the-premise networks, telecommunications, data centers, wireless infrastructure, satellite RF fiber links, navigation systems, and military communications.  EMCORE has vertically integrated manufacturing capability through its world-class Indium Phosphide (InP) wafer fabrication facility at our headquarters in Alhambra, California and is ISO 9001 certified in Alhambra and at our facility in Beijing, China. Our manufacturing facility located in Concord, California is registered to AS 9100 standards. For further information about EMCORE, visit http://www.emcore.com.

Use of Non-GAAP Financial Measures

The Company conforms to U.S. Generally Accepted Accounting Principles (GAAP) in the preparation of its financial statements.  We disclose supplemental non-GAAP earnings measures for gross profit margin, operating expenses, operating profit margin, net income, and earnings per share, as well as adjusted EBITDA.

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.  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, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate.

These forward-looking statements may be identified by the use of terms and phrases such as “anticipates”, “believes”, “can”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “may”, “plans”, “projects”, “targets”, “will”, and similar expressions or variations of these terms and similar phrases. Additionally, statements concerning future matters such as the development of new products, enhancements or technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. We caution that these forward-looking statements relate to future events or our future financial performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of our business or our industry to be materially different from those expressed or implied by any forward-looking statements.

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including without limitation, the following: (a) the rapidly evolving markets for the Company's products and uncertainty regarding the development of these markets; (b) the Company's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; (c) delays and other difficulties in commercializing new products; (d) the failure of new products: (i) to perform as expected without material defects, (ii) to be manufactured at acceptable volumes, yields, and cost, (iii) to be qualified and accepted by our customers, and (iv) to successfully compete with products offered by our competitors; (e) uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally; (f) actions by competitors; (g) risks and uncertainties related to applicable laws and regulations, including the impact of changes to applicable tax laws and tariff regulations; (h) acquisition-related risks, including that (i) the revenues and net operating results obtained from our acquisition of the Systron Donner Inertial ("SDI") business may not meet our expectations, (ii) the costs and cash expenditures for integration of the SDI business operations may be higher than expected, (iii) there could be losses and liabilities arising from the acquisition of SDI that we will not be able to recover from any source, and (iv) we may not realize sufficient scale in our navigation systems product line from the SDI acquisition and will need to take additional steps, including making additional acquisitions, to achieve our growth objectives for this product line; (i) risks related to our ability to obtain capital; (j) risks related to the transition of certain of our manufacturing operations from our Beijing facility to a contract manufacturer’s facility; and (k) other risks and uncertainties discussed under Item 1A - Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, as updated by our subsequent periodic reports.

Forward-looking statements are based on certain assumptions and analysis made in light of our experience and perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate under the circumstances. While these statements represent our judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results. All forward-looking statements in this press release are made as of the date hereof, based on information available to us as of the date hereof, and subsequent facts or circumstances may contradict, obviate, undermine, or otherwise fail to support or substantiate such statements. We caution you not to rely on these statements without also considering the risks and uncertainties associated with these statements and our business that are addressed in our filings with the Securities and Exchange Commission (“SEC”) that are available on the SEC’s web site located at www.sec.gov, including the sections entitled “Risk Factors” in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. Certain information included in this press release may supersede or supplement forward-looking statements in our other Exchange Act reports filed with the SEC. We assume no obligation to update any forward-looking statement to conform such statements to actual results or to changes in our expectations, except as required by applicable law or regulation.

EMCORE CORPORATION

Condensed Consolidated Statement of Operations

EMCORE CORPORATION

Condensed Consolidated Balance Sheets

EMCORE CORPORATION

Reconciliations of GAAP to Non-GAAP Financial Measures

Released February 5, 2020