EMCORE PRESS RELEASE - QTR 4 REVENUE UPDATE, STOCK OPTION REVIEW, AND HEADQUARTERS RELO
Published on November 6, 2006
Exhibit
99.1
Press
Release
EMCORE
Corporation Announces Preliminary Unaudited Revenue Estimate for Fourth Fiscal
Quarter Ended September 30, 2006
SOMERSET,
New Jersey, November 6, 2006
- EMCORE
Corporation (NASDAQ: EMKR), a leading provider of compound semiconductor-based
components and subsystems for the broadband, fiber optic, satellite, and
solar
power markets, today announced that revenue from continuing operations for
the
fourth quarter of fiscal 2006 is currently expected to be approximately $35
million, below expectations of $40 million from continuing operations.
Continuing operations relate to the Company’s Fiber Optic and Photovoltaic
divisions. The Electronic Materials and Device division was sold during the
fourth fiscal quarter.
The
shortfall is primarily associated with the Photovoltaics division, which
did not
receive export licenses covering three international satellite programs in
time
to ship product during the fourth quarter. The Company has since received
license approvals on all three of the programs and will be shipping against
those orders during the first quarter of fiscal 2007. A fourth export license
is
expected later in the first quarter of fiscal 2007. The Company is currently
required to obtain approvals from the Department of State in order to export
certain satellite photovoltaic products. The Company has shipped these specific
products in the past and has requested a Commodity Jurisdiction classification
that would simplify the export of these products.
Fourth
quarter revenues from the Company’s fiber optic division are expected to be
approximately $28.0 million, an increase of approximately 7.7%, or $2.0 million
from the $26.0 million recorded in the third fiscal quarter ended June 30,
2006.
The revenue increase was the result of an increase in demand for the Company’s
10G product line. The Company experienced flat revenues in its video transport
line for CATV and FTTX products.
The
Company expects the revenue shortfall to impact gross margins in the fourth
fiscal quarter. General and administrative expenses are also expected to
increase due to the expenses associated with the Company’s voluntary review of
past stock option grants.
“While
we
were certainly disappointed that the export licenses were not issued in the
fourth quarter as expected, now that the license applications have been
approved, the product will ship in our first quarter. As a result, our
Photovoltaics division should report record revenue gains in the first fiscal
quarter of 2007,” stated Reuben F. Richards, Jr., President and Chief Executive
Officer. “First quarter revenues in our fiber optics segment are estimated to
increase 3% over the fourth quarter,” Mr. Richards added.
Voluntary
Review of Historical Stock Option Practices
The
Company also announced, in an 8-K filed today, that it has engaged in a
voluntary review of its historical stock option grant procedures. The review
was
initiated by senior management and is being conducted by a Special Committee
of
the Board of Directors, comprised solely of independent directors, with the
assistance of independent counsel and accounting experts. The review is ongoing
and is not complete.
Based
on
the ongoing review, senior management, in consultation with the Audit Committee
of the Board of Directors, has concluded that it is likely that measurement
dates for certain stock option grants differed from the recorded grant dates
for
such awards. At this time, and based on the preliminary analysis available,
the
Company expects to record non-cash charges for stock based compensation expense
of approximately $24 million. The Company continues to analyze the impact
of
this issue, but believes
it will result in non-cash charges that
will
principally affect fiscal years 2000-2003. The Company has also not yet
determined the financial impact of any tax consequences related to these
stock
option grants, what remedial actions may be taken, nor the financial impact
of
any remedial actions taken.
Accordingly,
on November 6, 2006, senior management and the Audit Committee determined
that
the Company’s financial statements included in its annual and interim reports
and any related reports of its independent registered public accounting firm,
earnings press releases and similar communications previously issued by the
Company for the periods beginning with fiscal year 2000 should no longer
be
relied upon.
About
EMCORE
EMCORE
Corporation offers a broad portfolio of compound semiconductor-based products
for the broadband, fiber optic, satellite and solar power markets. EMCORE’s
Fiber Optic segment offers optical components, subsystems and systems for
high-speed data and telecommunications networks, cable television (CATV)
and
fiber-to-the-premises (FTTP). EMCORE’s Photovoltaic segment provides products
for both satellite and terrestrial applications. For satellite applications,
EMCORE offers high efficiency Gallium Arsenide (GaAs) solar cells, Covered
Interconnect Cells (CICs) and panels. For terrestrial applications, EMCORE
is
adapting its high-efficiency GaAs solar cells for use in solar concentrator
systems. For further information about EMCORE, visit
http://www.emcore.com.
The
information provided in this press release includes 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. Actual operating
results
may differ materially from such forward-looking statements and are subject
to
certain risks and uncertainties that may cause the actual results or performance
of the Company to be materially different from any future results or performance
expressed or implied by the forward-looking statements contained herein.
These
include, but are not limited to the fact that financial results for the quarter
are estimates that have not been finally reviewed and therefore remain subject
to additional adjustments; and other factors described in EMCORE's filings
with
the Securities and Exchange Commission. 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.
Moreover,
this press release contains forward-looking statements regarding the Company’s
voluntary review of its historical stock option granting practices. These
forward-looking statements are based on the Company’s current expectations and
are subject to risks and uncertainties that could cause actual results to
differ
materially from those expressed in the forward-looking statements, including
risks and uncertainties relating to developments in regulatory and legal
guidance regarding stock option grants and accounting for such grants. For
example, information may be learned and analysis may be undertaken concerning
the Company’s historic stock option grants and accounting that may materially
impact the Company’s financial statements or results. The Company’s review of
its historical stock options grants is not complete. Readers are cautioned
not
to place undue reliance on these forward-looking statements, which speak
only as
of the date hereof, and the Company undertakes no obligation to update these
forward-looking statements to reflect subsequent events or
circumstances.
Contacts:
EMCORE
Corporation
Tom
Werthan - Chief Financial Officer
(732)
271-9090
info@emcore.com
KEKST
AND COMPANY
Fred
Spar
(212)
521-4813
OR
Joseph
Kuo
(212)
521-4863