EMCORE 8-K EX 99.1 PRESS RELEASE
Published on February 17, 2005
Press
Release
EMCORE
RECEIVES PRELIMINARY EARN-OUT STATEMENT FROM VEECO
SOMERSET, New
Jersey, February 17, 2005 -- EMCORE Corporation (NASDAQ: EMKR), a leading
provider of compound semiconductor-based components and subsystems for the
broadband, fiber optic, satellite, and wireless communications markets,
announced today that it has received a preliminary statement of 2004 TurboDisc
Net Sales from Veeco Instruments Inc. (NASDAQ: VECO) in connection with the
earn-out from the November 2003 sale of the capital equipment business
(TurboDisc) to Veeco.
In November 2003,
EMCORE sold its TurboDisc capital equipment business to Veeco in a
transaction that is valued at up to $80.0 million. The selling price was
$60.0 million in cash at closing, with an additional aggregate maximum payout of
$20.0 million over the next two years. EMCORE will receive in cash or
stock 50% of all revenues from the TurboDisc business that exceed $40.0 million
in each of the next two years, beginning January 1, 2004.
EMCORE had been
expecting a 2004 earn-out (payable in the first quarter of 2005) of between $15
and $17 million based on Veeco’s prior public statements. In its 10-Q for
the quarter ended September 30, 2004, which was filed with the Securities and
Exchange Commission, Veeco stated, “the Company expects to pay a substantial
portion ($15.0 million to $18.0 million) of the amount potentially payable to
Emcore during the first quarter of 2005, based on revenues achieved through
September 30, 2004 and projections for the fourth quarter of
2004.” Elsewhere in the same filing, Veeco added,
“Epitaxial process equipment sales were up $44.6 million, or 184.9%, due to
$51.9 million of TurboDisc sales….”
On February 11,
2005, Veeco issued a press release postponing its earnings release for the
quarter and year ended December 31, 2004 “pending completion of an internal
investigation of improper accounting.”
On February 15,
2005, Veeco submitted to Emcore a preliminary earn-out statement of 2004
TurboDisc Net Sales, subject to change based on the outcome of their
investigation and completion of their year end audit. In its letter, Veeco
stated, “[o]ur current best estimate is that 2004 Net Sales will be $64.9
million. However, transactions totaling $6.5 million of such sales are currently
under review….” Confirmation of TurboDisc Net Sales being $64.9 million
would result in a first earn-out payment to EMCORE of $12.5 million. The
Asset Purchase Agreement requires that Veeco submit a final statement of 2004
TurboDisc Net Sales no later than February 15, 2005, which has not yet been
received. EMCORE has the right to review and have audited Veeco’s
statement of TurboDisc Net Sales.
Commenting on
Veeco’s accounting investigation and its impact on the expected earn-out, Thomas
G. Werthan, EMCORE’s Chief Financial Officer, stated, “We are surprised and
disappointed that the first earn-out payment may be less than we expected and
previously announced. However, based on Veeco’s comments regarding their outlook
for 2005, we still expect that EMCORE will receive the balance of the earn-out
in 2006.”
Mr. Werthan
continued, “This transaction was an asset deal that closed over fifteen months
ago. Any potential changes to Veeco’s 2004 financial results relate to events
after the sale to Veeco. The revenue recognition and other accounting issues at
Veeco’s TurboDisc division are a purely internal matter for Veeco.”
Reuben F. Richards,
Jr., President and CEO of EMCORE, added, “While Veeco’s accounting problems are
regrettable, we are working with Veeco to obtain a final statement of TurboDisc
Net Sales and close-out the first earn-out payment as quickly as
possible.”
About
EMCORE
EMCORE Corporation
offers a broad portfolio of compound semiconductor-based components and
subsystems for the broadband, fiber optic, satellite, and wireless
communications markets. The company's integrated solutions philosophy embodies
state-of-the-art technology, material science expertise, and a shared vision of
our customer's goals and objectives to be leaders in the transport of voice,
data, and video over copper, hybrid fiber/coax (HFC), fiber, satellite, and
wireless networks. EMCORE's solutions include: optical components and subsystems
for fiber-to-the-premise, cable television, and high speed data and
telecommunications networks; solar cells, solar panels, and fiber optic ground
station links for global satellite communications; and electronic materials for
high bandwidth wireless communications systems, such as Wi-Fi Internet access
and cell phones. Through its joint venture participation in GELcore, LLC, EMCORE
plays a vital role in developing and commercializing next-generation
High-Brightness LED technology for use in the general and specialty illumination
markets. For further information about EMCORE, visit
http://www.emcore.com.
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 relating to future events that involve risks and
uncertainties. Words such as "expects," "anticipates," "intends," "plans,"
believes," and "estimates," and variations of these words and similar
expressions, identify these forward-looking statements. These forward-looking
statements include, without limitation, (a) any statements or implications
regarding EMCORE's ability to remain competitive and a leader in its industry,
and the future growth of EMCORE, or the industry and the economy in general; (b)
statements regarding the expected level and timing of benefits to EMCORE from
its current cost reduction efforts, including (i) expected cost reductions and
their impact on EMCORE's financial performance, (ii) EMCORE's continued
leadership in technology and manufacturing in its markets, and (iii) the belief
that the cost reduction efforts will not impact product development or
manufacturing execution; (c) any statement or implication that the products
described in this press release (i) will be successfully introduced or marketed,
(ii) will be qualified and purchased by our customers, or (iii) will perform to
any particular specifications or performance or reliability standards; (d) any
and all guidance provided by EMCORE regarding its expected financial performance
in current or future periods, including, without limitation, with respect to the
timing or amount of anticipated earn-out payments from Veeco. 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) EMCORE's cost reduction efforts may not be
successful in achieving their expected benefits, or may negatively impact
EMCORE's operations; (b) reduced revenues resulting from the TurboDisc sale; (c)
the failure of the 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 and (d) other risks and uncertainties
described in EMCORE's filings with the Securities and Exchange Commission such
as cancellations, rescheduling or delays in product shipments; manufacturing
capacity constraints; lengthy sales and qualification cycles; difficulties in
the production process; changes in semiconductor industry growth; increased
competition; delays in developing and commercializing new products; and other
factors. The forward-looking statements contained in this news release are made
as of the date hereof and EMCORE does not assume any obligation to update the
reasons why actual results could differ materially from those projected in the
forward-looking statements.
CONTACT:
EMCORE
Corporation
Tom Werthan - Chief
Financial Officer
(732)
271-9090
info@emcore.com
or
TTC
Group
Victor Allgeier
(212) 227-0997
info@ttcominc.com