Form: 8-K

Current report filing

May 7, 2014

Documents




EXHIBIT 99.1


PRESS RELEASE

EMCORE Corporation Announces Financial Results for Second Quarter Ended March 31, 2014

•
Consolidated Q2 revenue of $42.2 million
•
Consolidated Q2 GAAP net loss of $5.4 million and non-GAAP net loss of $2.6 million
•
Anticipate Q3 revenue of $40 to $44 million


ALBUQUERQUE, New Mexico, May 7, 2014 - EMCORE Corporation (NASDAQ: EMKR - News), a leading provider of compound semiconductor-based components, subsystems, and systems for the fiber optics and space solar power markets, today announced its financial results for its fiscal second quarter ended March 31, 2014.

Financial Highlights - Second Quarter Ended March 31, 2014

Financial Highlights
For the Three Months Ended
 
 (in thousands)
3/31/2014
 
12/31/2013
 
3/31/2013
 
 
Fiber
 
Solar
 
Consolidated
 
Fiber
 
Solar
 
Consolidated
 
Fiber
 
Solar
 
Consolidated
 
Revenue
$
23,620

 
$
18,627

 
$
42,247

 
$
23,292

 
$
20,919

 
$
44,211

 
$
23,130

 
$
19,147

 
$
42,277

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit
$
1,933

 
$
4,933

 
$
6,866

 
$
2,397

 
$
7,738

 
$
10,135

 
$
1,619

 
$
6,214

 
$
7,833

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating (loss) income
$
(7,320
)
 
$
2,071

 
$
(5,249
)
 
$
(6,571
)
 
$
4,331

 
$
(2,240
)
 
$
7,892

 
$
4,279

 
$
12,171

 


Financial Statement Highlights for the second quarter of fiscal 2014:
•
Consolidated revenue was $42.2 million, representing a decrease from the immediate preceding quarter
•
Fiber Optics revenues increased 1.4% over the immediate preceding quarter to $23.6 million, and Photovoltaics revenue decreased 11.0% to $18.6 million over the immediate preceding quarter
•
Consolidated gross margin was 16.3%, a decrease from the 22.9% gross margin reported in the immediate preceding quarter
•
On a segment basis, Fiber Optics gross margin declined to 8.2% from the 10.3% gross margin reported in the immediate preceding quarter and Photovoltaics gross margin decreased to 26.5% from the 37.0% gross margin reported in the immediate preceding quarter. A $1.0 million warranty reserve related to the previously divested Enterprise business was recorded this period.




•
Consolidated operating loss was $5.2 million, a $3.0 million higher loss when compared to the immediate preceding quarter
•
Consolidated net loss was $5.4 million, a $3.4 million higher loss when compared to the immediate preceding quarter
•
Consolidated net loss per share was $0.18 compared to a net loss per share of $0.07 in the immediate preceding quarter
•
Non-GAAP net loss was $3.6 million, or $0.12 per share, a decline of approximately $3.1 million, or $0.10 per share, over the immediate preceding quarter
•
Order backlog for our Photovoltaics segment totaled $51.4 million as of March 31, 2014, representing a 7.1% decrease from $55.3 million reported as of December 31, 2013
•
Cash and cash equivalents increased $0.1 million to $18.2 million at the end of the second quarter, compared to $18.1 million at the end of the preceding quarter

Business Outlook
On a consolidated basis, we expect revenue for our third quarter ended June 30, 2014 to be in the range of $40 to $44 million with an increase in Fiber revenue and a decrease in Photovoltaics revenue.

Conference Call
We will discuss our financial results today at 4:30 p.m. ET. The call will be webcast via the Company's website at http://www.emcore.com. Please go to the site beforehand to download any necessary software. A webcast will be available for replay beginning May 7, 2014 following the conclusion of the call on the Company's website.

Conferences
Management is expecting to present at the following conferences over the next few months:

•
15th Annual B. Riley & Co. Investor Conference at Loews Santa Monica Beach Hotel, Santa Monica, CA on May 21, 2014.

About EMCORE
EMCORE Corporation offers a broad portfolio of compound semiconductor-based products for the fiber optics and space solar power markets. EMCORE's Fiber Optics business segment provides optical components, subsystems and systems for high-speed telecommunications, Cable Television (CATV) and Fiber-To-The-Premise (FTTP) networks, as well as products for satellite communications, video transport and specialty photonics technologies for defense and homeland security applications. EMCORE's Solar Photovoltaics business segment provides products for space power applications including high-efficiency multi-junction solar cells, Covered Interconnect Cells (CICs) and complete satellite solar panels. For further information about EMCORE, visit http://www.emcore.com.

Use of Non-GAAP Financial Measures
We provide a non-GAAP net loss disclosure as a supplemental measure to U.S. GAAP regarding our operational performance. This financial measure excludes the impact of certain items; therefore, it has not been calculated in accordance with U.S. GAAP.

We believe that this additional non-GAAP financial measure is useful to investors in assessing our operating performance. We also use this financial measure internally to evaluate our operating performance and for planning and forecasting of future periods. In addition, financial analysts that follow us may focus on and publish both historical results and future projections based on our non-GAAP financial measure. We also believe that it is in the best interest of our investors to provide this non-GAAP information.

While we believe that this non-GAAP financial measure provides useful supplemental information to investors, there are limitations associated with the use of this non-GAAP financial measure. Our non-GAAP financial measure may not be reported by all of our competitors and it 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 this non-GAAP financial measure as a supplement to U.S. GAAP and by providing a reconciliation of our non-GAAP financial measure to its most comparable U.S. GAAP financial measure.

Non-GAAP financial measures are not in accordance with or an alternative for U.S. GAAP. Our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable U.S. GAAP financial measures and it should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.





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 Exchange Act of 1934. 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 included in our Exchange Act reports, 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) we may not be successful in undertaking the steps currently planned in order to increase our liquidity; (f) uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally; (g) actions by competitors; and (h) other risks and uncertainties described in our filings with the Securities and Exchange Commission (“SEC”).

Neither management nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. 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 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 Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 
For the Three Months Ended
 
For the Six Months Ended
 
March 31, 2014
 
December 31, 2013
 
March 31, 2013
 
March 31, 2014
 
March 31, 2013
Revenue
$
42,247

 
$
44,211

 
$
42,277

 
$
86,458

 
$
91,583

Cost of revenue
35,381

 
34,076

 
34,444

 
69,457

 
72,802

Gross profit
6,866

 
10,135

 
7,833

 
17,001

 
18,781

Operating expense (income):
 
 
 
 
 
 
 
 
 
Selling, general, and administrative
6,911

 
7,972

 
6,771

 
14,883

 
13,675

Research and development
5,204

 
4,403

 
4,112

 
9,607

 
9,502

Flood-related insurance proceeds
—

 
—

 
(14,808
)
 
—

 
(19,000
)
Gain on sale of assets
—

 
—

 
(413
)
 
—

 
(413
)
Total operating expense (income)
12,115

 
12,375

 
(4,338
)
 
24,490

 
3,764

Operating (loss) income
(5,249
)
 
(2,240
)
 
12,171

 
(7,489
)
 
15,017

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(117
)
 
(126
)
 
(186
)
 
(243
)
 
(424
)
Foreign exchange (loss) gain
(90
)
 
100

 
(21
)
 
10

 
80

Gain on sale of investment
17

 
290

 
—

 
307

 
—

Change in fair value of financial instruments
7

 
(78
)
 
(267
)
 
(71
)
 
(30
)
Total other (expense) income
(183
)
 
186

 
(474
)
 
3

 
(374
)
(Loss) income before income tax expense
(5,432
)
 
(2,054
)
 
11,697

 
(7,486
)
 
14,643

Income tax expense
—

 
—

 
—

 
—

 
(120
)
Net (loss) income
$
(5,432
)
 
$
(2,054
)
 
$
11,697

 
$
(7,486
)
 
$
14,523

Per share data:
 
 
 
 
 
 
 
 
 
Net (loss) income per basic share
$
(0.18
)
 
$
(0.07
)
 
$
0.44

 
$
(0.25
)
 
$
0.55

Net (loss) income per diluted share
$
(0.18
)
 
$
(0.07
)
 
$
0.44

 
$
(0.25
)
 
$
0.54

Weighted-average number of basic shares outstanding
30,392

 
29,938

 
26,310

 
30,162

 
26,142

Weighted-average number of diluted shares outstanding
30,392

 
29,938

 
26,642

 
30,162

 
26,432







EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
As of
 
As of
 
March 31,
2014
 
September 30,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
18,175

 
$
16,104

Restricted cash
1,993

 
815

Accounts receivable, net
37,453

 
41,826

Inventory
28,518

 
32,115

Prepaid expenses and other current assets
7,144

 
9,437

Total current assets
93,283

 
100,297

Property, plant, and equipment, net
47,213

 
49,744

Goodwill
20,384

 
20,384

Other intangible assets, net
1,650

 
2,159

Other non-current assets, net
888

 
1,130

Total assets
$
163,418

 
$
173,714

LIABILITIES and SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Borrowings from credit facility
$
17,600

 
$
21,706

Accounts payable
19,006

 
19,643

Deferred gain associated with sale of assets
3,400

 
—

Warrant liability
226

 
155

Accrued expenses and other current liabilities
20,461

 
21,597

Total current liabilities
60,693

 
63,101

Asset retirement obligations
5,157

 
5,053

Deferred gain associated with sale of assets
—

 
3,400

Other long-term liabilities
898

 
981

Total liabilities
66,748

 
72,535

Shareholders’ equity:
 
 
 
Common stock
752,241

 
749,266

Treasury stock
(2,071
)
 
(2,071
)
Accumulated other comprehensive income
1,625

 
1,623

Accumulated deficit
(655,125
)
 
(647,639
)
Total shareholders’ equity
96,670

 
101,179

Total liabilities and shareholders’ equity
$
163,418

 
$
173,714








We have provided a reconciliation of our non-GAAP net income (loss) financial measure to its most directly comparable U.S. GAAP financial measure as indicated in the table below:

EMCORE Corporation
Non-GAAP Net (Loss) Income
(in thousands, except per share data)
(unaudited)
 
For the Three Months Ended
 
For the Six Months Ended
 
March 31, 2014
 
December 31, 2013
 
March 31, 2013
 
March 31, 2014
 
March 31, 2013
Net (loss) income - US GAAP
$
(5,432
)
 
$
(2,054
)
 
$
11,697

 
$
(7,486
)
 
$
14,523

Adjustments:
 
 
 
 
 
 
 
 
 
Amortization expense
254

 
254

 
317

 
508

 
634

Stock-based compensation expense
1,104

 
1,135

 
1,051

 
2,239

 
2,133

Asset retirement obligations - accretion expense
52

 
52

 
54

 
104

 
108

Specific severance and restructuring charges
358

 
454

 
181

 
812

 
181

Flood-related insurance proceeds
—

 
—

 
(14,808
)
 
—

 
(19,000
)
Gain on sale of assets
—

 
—

 
(358
)
 
—

 
(358
)
Specific warranty charges
1,045

 
—

 
1,425

 
1,045

 
1,425

Foreign exchange loss (gain)
90

 
(100
)
 
24

 
(10
)
 
(77
)
Gain on sale of investment
(17
)
 
(290
)
 
—

 
(307
)
 
—

Change in fair value of financial instruments
(7
)
 
78

 
267

 
71

 
30

Income tax expense
—

 
—

 
—

 
—

 
120

Total adjustments
2,879

 
1,583

 
(11,847
)
 
4,462

 
(14,804
)
Net (loss) income - Non-GAAP
$
(2,553
)
 
$
(471
)
 
$
(150
)
 
$
(3,024
)
 
$
(281
)
Net (loss) income - Non-GAAP per basic share
$
(0.08
)
 
$
(0.02
)
 
$
(0.01
)
 
$
(0.10
)
 
$
(0.01
)
Net (loss) income - Non-GAAP per diluted share
$
(0.08
)
 
$
(0.02
)
 
$
(0.01
)
 
$
(0.10
)
 
$
(0.01
)
Weighted average number of basic shares outstanding
30,392

 
29,938

 
26,310

 
30,162

 
26,142

Weighted average number of diluted shares outstanding
30,392

 
29,938

 
26,310

 
30,162

 
26,142






Stock-based compensation expense
The effect of recording stock-based compensation expense was as follows:


Stock-based Compensation Expense
For the Three Months Ended
 
For the Six Months Ended
 (in thousands)
March 31, 2014
 
December 31, 2013
 
March 31, 2013
 
March 31, 2014
 
March 31, 2013
Cost of revenue
$
214

 
$
217

 
$
290

 
$
431

 
$
605

Selling, general, and administrative
579

 
641

 
459

 
1,220

 
841

Research and development
311

 
277

 
302

 
588

 
687

Total stock-based compensation expense
$
1,104

 
$
1,135

 
$
1,051

 
$
2,239

 
$
2,133

 
 
 
 
 
 
 
 
 
 

Contact:
EMCORE Corporation
Mark Weinswig
(505) 332-5000
investor@emcore.com

TTC Group
Victor Allgeier
(646) 290-6400
vic@ttcominc.com

_________________________