Form: 8-K

Current report filing

July 11, 2007

CEUT Emerging Growth Conference
New York City, July 11, 2007
Reuben F. Richards, Jr.  Chief Executive Officer
Hong Hou, President & Chief Operating Officer
 July 9, 2007
EMCORE Corporation
 
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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. Such forward-looking statements include, but are not limited to, (a) the Company’s unaudited results for the third quarter and fiscal year 2007, (b) statements related to the Company’s voluntary review of its historic stock option granting practices, including statements concerning the determination of accounting adjustments and related tax and financial consequences in connection with the Special Committee’s recommendations, and (c) the timing of filing of reports with the Securities and Exchange Commission. of predicting quarterly and year end financial results, (b) the finalization and audit of the Company’s unaudited results of fiscal year 2006 and the first 2 quarters of fiscal year 2007, (c) the effects of the Company’s voluntary review of its historic stock option granting practices, including (i) risks and uncertainties relating to developments in regulatory and legal guidance regarding stock option grants and accounting for such grants, (ii) the possibility that the Company will not be able to file additional reports with the Securities and Exchange Commission in a timely manner, (iii) the possibility that the Company in consultation with the Company's independent public accountants or the SEC, may determine that additional stock-based compensation expenses and other additional expenses be recorded in connection with affected option grants (iv) the Company may incur negative tax consequences arising out of the stock option review, (v) the possible delisting of the Company’s stock from the Nasdaq National Market pursuant to Nasdaq Marketplace Rule 4310(c)(14), (vi) the timing and outcome of the Nasdaq appeal hearing, (vii) the impact of any actions that may be required or taken as a result of such review or the Nasdaq hearing and review process, (viii) risk of litigation arising out of or related to the Company’s stock option grants or a restatement of the Company’s financial statements, and (d) factors discussed from time to time in reports filed by the Company 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.
“Safe Harbor” Statement
July 9, 2007
 
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July 9, 2007
 
3

 
EFO
Ortel
Ortel
EFO
Microwave/RF
Transmitters/Receivers
FTTP PON TxRx
Parallel  Optics,
4 & 12x TxRx
LX4, CX4 TxRx
For 10G Ethernet
CATV Transmitters/
Receivers
Hybrid Fiber Coaxial (HFC) Network
Telecom Network
Ortel
OC-192 TxRx
SFF Tunable
DWDM XFP
EFO
EMCORE’s Components &
Subsystems in Networks & Premises
July 9, 2007
 
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July 9, 2007
 
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Source: Comcast
Comcast CapEx Budget
-- 24% Increase in 07 from 06
July 9, 2007
 
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Broadband (CATV, FTTP, Video
Transport) Business Strategy
§
Acquired five companies to position ourselves as a major player in  Broadband Components and Systems
§
Consolidated technology, IP, product portfolio & CATV customer base
§
Positioned as “Arms Merchant” to MSO and Telecom build-out
§
Multi-service operators (MSO’s) are accelerating CATV infrastructure upgrade in order to offer premium triple-play services
High-definition TV (HDTV), digital video and Video on Demand (VOD)
High-speed internet
Voice over IP (VoIP)
§
Emerging supplier of FTTP components
Expanded design wins within B-PON and G-PON customer base
Established China-based manufacturing facility to reduce cost and increase capacity
Vertically integrated: chip-to-subsystem
§
Penetrated into the high growth video transport and IPTV markets
§
Strong demand within CATV market
§
MSOs build networks to offer commercial services
§
Comcast and Time Warner upgrading the legacy Adelphia networks
§
Strong overseas market demand in Eastern Europe, Russia, India, China is driving the growth of CATV equipment manufacturers
July 9, 2007
 
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July 9, 2007
 
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July 9, 2007
 
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Source: Cisco Systems
10GbE Share estimated
to increase from 5% in
2006 to 45% in 2011
Demand for 10G Ethernet Increases
July 9, 2007
 
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Growth Drivers for EMCORE
Datacom/Telecom Business
Product Lines
§
Leading Supplier of 10Gb/s Ethernet Components and Transceivers
§
10Gb/s VCSEL/PIN  TOSA/ROSA components for SR applications
§
Supplying Xenpak LX4/CX4 and X2 CX4, sampling SFP+ SRL, LRM, & LR transceivers
§
Demand from the major customer is coming back after recent “Lean Manufacturing”
§
Broadest Portfolio of Parallel Optics Transceivers
§
4x single data rate (SDR) and double data rate (DDR) optical media conventors
§
12x SDR (2.5Gb/sx12) to a broad customer base for switching/routing
§
12x DDR (5.0Gb/sx12) for switching /supercomputer /backplane interconnects
§
Opportunities in Telecom and Infiniband Areas
§
Telecom: 300-pin SFF fully C-band tunable transponders, XFP DWDM 80km TxRxs
§
Infiniband: QSFP, SDR and DDR OMC transceivers, active cables
Platforms
§
State-of-the-art VCSEL/PD Component Fab and PON Packaged Components
§
VCSEL/PD die 1-10Gb/s, single to 2D arrays, and recently developed hermetic chips
§
Packaged components for DFB TO’s for GPON and GEPON, APD-TIA TO’s
§
LX4 Platform and Infrastructure for 40 Gb/s Product Solution
§
Push to become a standard and building prototype samples
July 9, 2007
 
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Silicon Response Range Limit
Multi-junction Solar Cells
§
Emcore’s Technology Employs Three Compound Semiconductor Junctions in Series
§
Each Junction Has a Different Bandgap
Top – 1.9 eV
Middle – 1.4 eV
Bottom – 0.7 eV
§
Three Junctions of Different Bandgaps Makes Better Use of Energy Available in the Solar Spectrum
§
Bandgap Engineering Available in III-V Multi-junction Solar Cells Offer a Path to Still Higher Performance
July 9, 2007
 
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EMCORE Space Photovoltaics Business
§
EPV division formed in 1998 in Albuquerque, NM
§
Facility ready in October 1998, and 1st  volume solar cell shipment in December 1999
§
Currently shipping 28.5% efficient solar cells in volume; 31% efficient IMM solar cells demonstrated
§
Outstanding on-orbit performance and reliability history
§
Emcore’s entry into the space market effectively eliminated the use of Silicon solar cells in high power GEO satellites
§
Mid 1990’s, 80% of satellite power was generated by Silicon
§
Today over 80% of new satellites are powered by multi-junction solar cells
EMCORE Space Photovoltaics Products
Solar Cells
Solar Panels
EMCORE Photovoltaics Division
July 9, 2007
 
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Growth Drivers of Space Solar
Major Customers
§
Space Systems/Loral, Lockheed Martin, Northrop-Grumman Space, Boeing, EADS Astrium, General Dynamics
Market Drivers 
§
Commercial Satellites: Growing demand for commercial programs; 33 commercial GEO awards in 2006 (highest since 2001)
§
Industry is at the leading edge of a replacement cycle as many of the satellites launched in the early 1990’s reach the end of their useful life
§
As one of two viable suppliers, EMCORE offers the best performance in the industry with outstanding space heritage and a strong reliability record
§
Government/Defense Programs: EMCORE is a leading engineering and manufacturing service company for government/defense programs
§
Technology leader: Record high-efficiency solar cells for space applications (31% with IMM design)
§
Solution oriented: EMCORE provides enabling solutions to mission critical programs
Backlog
§
Backlog exceeding $108M
§
Book-to-bill consistently greater than 1
July 9, 2007
 
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Source:  Merrill Lynch
Solar Module Market
§
2006 market for solar modules was approximately 2.2GW and >$8B worldwide
§
Growth forecasted at ~24% CAGR. The market size will be 7GW and $18B by 2010
§
Growth drivers:
§
Increased demand and cost of power
§
Government incentives
§
Reduced cost of solar power
§
Environmental concerns and political pressure
§
Germany and Japan accounted for 80% of total demand in 2005
§
US and Spain are likely to be the fastest growing markets over the next several years
July 9, 2007
 
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u
Solar Module Technologies
§
Crystalline Si: Conversion efficiency of 12-20% at module level
§
   Predominant technology
Most versatile for all applications 
§
Si shortage (at least until late of 2008)
Relatively high price: ~$3.5/W
Easy to scale up in production 
§
Low efficiency of surface area/land use 
Environmental concerns with some materials (Cadmium Telluride)
§
Concentrator Photovoltaics (CPV): efficiency of 25-30% at module level
§
Most efficient land use – more power generated per area
Less equipment and material requirement for production scale up
Suitable for commercial, agricultural, and power utility applications
More efficient for direct illumination than difused light
§
u
Pros:
u
u
 Cons:
u
 Pros:
 u
u
u
 Cons:
u
u
 
More cost effective ~$2.5/W
Pros:
u
u
 Thin Film: Conversion efficiency of 5-7% at module level
§
§
 Most Effective~ $2/W
 Cons:
u
u
More efficient for direct illumination than diffused light
July 9, 2007
 
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Solar Flux
Lens
Solar Cell
Receiver
1x
1,000x
Utilizes advanced solar cells to provide most cost effective solution
7x 5” Silicon cells
Produce Equal Power As
1x 1 cm2 triple
junction CPV
Terrestrial Application of Triple
Junction Technology
§
EMCORE’s triple junction solar cell technology is being adapted for terrestrial power generation
§
Lens concentrates solar flux to 500–1,000 times normal irradiance
§
Conversion efficiency improves under concentrated illumination
§
36% cell efficiency in production
§
40% cell will be introduced in 2007
July 9, 2007
 
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July 9, 2007
 
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July 9, 2007
 
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Growth Drivers of EMCORE
Terrestrial PV Business
§
EMCORE is the technology leader in multi-junction concentrator solar cells
§
36% efficient CPV cells in production
§
Aggressive roadmap to 45% efficiency by 2010
§
EMCORE is supporting numerous system developers with a broad range of custom CPV components
§
Backlog of over 20MW
§
Agreement for $100M supply over 7 years
§
EMCORE is pursuing an early market entry into CPV systems
§
Gen 1 system operating “on sun” for 5 months
§
Gen 2 to enter production in Fall of 2007
§
Demand is lined up with a supply agreement and strategic partners
§
Current annual capacity greater than 50MW
§
Well positioned to be a major player, with significant advantage in system performance and cost basis
§
Costs will be continuously reduced through system optimization and solar cell efficiency improvement
July 9, 2007
 
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Business Summary and  Priorities
§
Business Summary 
§
Strong broadband business (CATV & FTTP) at Ortel is near profitability
§
Space solar business at EPV is strong with good visibility and continued growth
Business is forecasted for continued profitability
§
Digital fiber business (10Gb and others) is recovering from the downturn caused by second source and inventory management
§
Solar power business units – ESP – will release new products to production by October 2007. Demand for products are lined up.
§
Priorities
§
Conclude the stock option restatement and file 10-K and 10-Qs
§
Close New Jersey site (due to HQ relocation) and recognize subsequent cost savings
§
Introduce terrestrial concentrator PV system to production providing the most cost-effective solution
§
Increase gross margins through more focused supply chain management and establishment of China Operations
§
Increase production capacity at Ortel and EPV to meet future growth demands
§
Expand the digital fiber (EFO) business with a broader product portfolio within Enterprise applications and enter Infiniband and Telecom markets
July 9, 2007
 
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FY08 Revenue Drivers (continued operations only)
Emerging business from terrestrial solar (ESP) systems in 2008
Strong space solar business: ~25% YoY growth
Strong CATV and video business: ~30% YoY growth
Recovery of 10G business and revenues
from new markets (telecom & Infiniband)
Revenue History and Projection
from Current Businesses
$115
  +40%
($ in millions)
$33
$51
$82
+61%
$144
+25% 
$170
+18% 
FY02
FY04
FY03
FY05
FY06
FY07
Projection  
$210-230
+25- 35% 
FY08
Forecast
July 9, 2007
 
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EMCORE Corporation
CEUT Emerging Growth Conference
New York City, July 11, 2007
Reuben F. Richards, Jr.  Chief Executive Officer
Hong Hou, President & Chief Operating Officer
July 9, 2007
 
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