EMKR
$3.08
Emcore
($.05)
(1.60%)
Earnings Details
3rd Quarter June 2019
Thursday, August 08, 2019 7:00:00 AM
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Summary

EMCORE Sees Revenue Below Estimates

Emcore (EMKR) reported a 3rd Quarter June 2019 loss of $0.20 per share on revenue of $17.2 million. The consensus estimate was a loss of $0.17 per share on revenue of $17.2 million. Revenue fell 2.8% compared to the same quarter a year ago.

The company said it expects fourth quarter revenue of $22.0 million to $24.0 million. The current consensus revenue estimate is $25.9 million for the quarter ending September 30, 2019.

Emcore Corp is a provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and terrestrial solar power markets.

Results
Reported Earnings
($0.20)
Earnings Whisper
-
Consensus Estimate
($0.17)
Reported Revenue
$17.2 Mil
Revenue Estimate
$17.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

EMCORE Corporation Announces Financial Results for Fiscal Third Quarter Ended June 30, 2019

  • Consolidated Q3 revenue of $17.2 million
  • Consolidated Q3 GAAP operating loss of $10.2 million and Non-GAAP operating loss of $5.1 million
  • GAAP pre-tax EPS from continuing operations of $(0.37) and Non-GAAP pre-tax EPS from continuing operations of $(0.18)

ALHAMBRA, Calif., Aug. 08, 2019 (GLOBE NEWSWIRE) -- EMCORE Corporation (NASDAQ: EMKR), a leading provider of advanced Mixed-Signal Optics products that provide the foundation for today's leading-edge defense systems and high-speed communications network infrastructures, today announced financial results for its fiscal third quarter ended June 30, 2019.

Jeffrey Rittichier, EMCORE’s President and CEO remarked, “Low capital spending by the CATV service providers coupled with the China trade dispute created significant headwinds for EMCORE in Q3 which will continue into Q4.” Rittichier went on to say, “EMCORE’s Aerospace and Defense products performed well over the quarter and Raytheon is now EMCORE’s largest customer. Going forward, Aerospace and Defense will be EMCORE’s largest business.”

Financial Highlights - Fiscal Third Quarter Ended June 30, 2019

Financial Highlights For the Three Months Ended
(in thousands) June 30, 2019 March 31, 2019 June 30, 2018
Revenue $17,219  $21,745  $17,717 
GAAP Gross Profit $3,704  $5,809  $1,198 
Non-GAAP Gross Profit $3,838  $5,932  $1,298 
GAAP Operating loss $(10,213) $(5,507) $(7,954)
Non-GAAP Operating (loss) income $(5,120) $(2,196) $(6,926)
GAAP pre-tax loss $(10,463) $(4,979) $(8,414)
Non-GAAP pre-tax (loss) income $(5,021) $(1,972) $(6,710)
GAAP pre-tax EPS - per diluted share $(0.37) $(0.18) $(0.31)
Non-GAAP pre-tax EPS - per diluted share $(0.18) $(0.07) $(0.26)

Financial Statement Highlights for the Third Quarter of Fiscal 2019:

  • Consolidated revenue was $17.2 million, representing a 20.8% decrease from the prior quarter
  • Consolidated GAAP gross margin was 21.5%, representing a decrease from 26.7% in the prior quarter
  • Consolidated Non-GAAP gross margin was 22.3%, representing a decrease from 27.3% in the prior quarter
  • Consolidated GAAP operating margin was (59.3)%, representing a decrease from (25.3)% in the prior quarter
  • Consolidated Non-GAAP operating margin was (29.7)%, representing a decrease from (10.1)% in the prior quarter
  • GAAP diluted pre-tax EPS was $(0.37), representing a decrease from $(0.18) in the prior quarter
  • Non-GAAP diluted pre-tax EPS was $(0.18), representing a decrease from $(0.07) in the prior quarter
  • Cash and cash equivalents were $20.5 million at the end of the quarter, a decrease of $30.1 million when compared to the end of the prior quarter

Business Outlook
The Company expects revenue for the fiscal fourth quarter ending September 30, 2019 to be in the range of $22 to $24 million.

Conference Call
The Company will discuss its financial results on August 8, 2019 at 8:00 a.m. ET (5:00 a.m. PT). The call will be available by dialing 800-367-2403. For international callers, please dial +1 334-777-6978. The conference passcode number is 2766905. 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, August 8, 2019 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 Optics products that provide the foundation for today’s leading-edge defense systems and high-speed communication network infrastructures. Our optical chips, components, subsystems and systems enable broadband and wireless 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 Optics 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 fully 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. For further information about EMCORE, visit http://www.emcore.com.

Use of Non-GAAP Financial Measures
We disclose non-GAAP gross profit, gross margin percentage, operating income (loss), operating margin percentage, pre-tax EPS and pre-tax income (loss) as a supplemental measure to U.S. GAAP gross profit, gross margin percentage, operating income (loss), operating margin percentage, pre-tax EPS and pre-tax income (loss) regarding our operational performance. These financial measures exclude the impact of certain items that we do not believe are indicative of our core operating results; therefore, they have not been calculated in accordance with U.S. GAAP. A reconciliation of non-GAAP pre-tax income (loss) to GAAP income (loss), which identifies the items excluded from the non-GAAP measures, are provided in the table below titled "Reconciliation of GAAP to Non-GAAP Financial Measures".

We believe that these additional non-GAAP financial measures are useful to investors in assessing our operating performance. We also use these financial measures 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 measures. We also believe that it is in the best interests of our investors to provide this non-GAAP information.

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

Non-GAAP financial measures are not in accordance with or an alternative for U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP financial measures and our disclosures of these measures 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 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 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) uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally; (f) actions by competitors; and (g) 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, 2018, 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 Statements of Operations
(in thousands, except per share data)
(unaudited)

  For the Three Months Ended For the Nine Months Ended
  June 30, 2019 March 31, 2019 June 30, 2018 June 30, 2019 June 30, 2018
Revenue $17,219  $21,745  $17,717  $62,965  $60,376 
Cost of revenue 13,515  15,936  16,519  47,644  46,317 
Gross profit 3,704  5,809  1,198  15,321  14,059 
Operating expense:          
Selling, general, and administrative 9,288  6,996  5,237  23,877  15,700 
Research and development 4,629  4,360  3,915  13,008  11,015 
Loss from change in estimate on ARO obligation   (40)   (40)  
(Gain) loss on sale of assets         39 
Total operating expense 13,917  11,316  9,152  36,845  26,754 
Operating loss (10,213) (5,507) (7,954) (21,524) (12,695)
Other income (expense):          
Interest income, net 99  224  216  590  490 
Foreign exchange gain (loss) (349) 304  (676) (31) 136 
Other income          
Total other income (expense) (250) 528  (460) 559  626 
Loss before income tax (expense) benefit (10,463) (4,979) (8,414) (20,965) (12,069)
Income tax (expense) benefit (14) (15)   (44) 502 
Net (loss) income $(10,477) $(4,994) $(8,414) $(21,009) $(11,567)
Per share data:          
Net loss per basic and diluted share $(0.37) $(0.18) $(0.31) $(0.76) $(0.43)
           
           
Weighted-average number of basic and diluted shares outstanding 28,005  27,652  27,387  27,730  27,204 


EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

  As of June 30, 2019 As of September 30, 2018
ASSETS   
Current assets:   
Cash and cash equivalents$20,503  $63,117 
Restricted cash158  78 
Accounts receivable, net18,451  19,275 
Inventory31,123  20,850 
Prepaid expenses and other current assets17,169  12,730 
Total current assets87,404  116,050 
Property, plant, and equipment, net37,231  18,216 
Goodwill798   
Other intangible assets, net250   
Non-current inventory912  1,433 
Other non-current assets, net61  199 
Total assets$126,656  $135,898 
LIABILITIES and SHAREHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$10,615  $12,997 
Accrued expenses and other current liabilities23,462  14,205 
Total current liabilities34,077  27,202 
Asset retirement obligations1,850  1,809 
Other long-term liabilities122  82 
Total liabilities36,049  29,093 
Shareholders’ equity:   
Common stock738,841  734,066 
Treasury stock(47,721) (47,721)
Accumulated other comprehensive income921  885 
Accumulated deficit(601,434) (580,425)
Total shareholders’ equity90,607  106,805 
Total liabilities and shareholders’ equity$126,656  $135,898 


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

EMCORE Corporation
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)

  For the Three Months Ended For the Nine Months Ended
  June 30, 2019 March 31, 2019 June 30, 2018 June 30, 2019 June 30, 2018
US GAAP net loss $(10,477) $(4,994) $(8,414) $(21,009) $(11,567)
           
Income tax expense (benefit) 14  15    44  (502)
Other income          
Foreign exchange (gain) loss 349  (304) 676  31  (136)
Total other income & tax related adjustments 363  (289) 676  75  (638)
           
Stock based compensation expense - R&D 189  139  157  483  461 
Stock based compensation expense - SG&A 367  473  625  999  1,915 
Litigation, acquisition and strategic planning related expenses 521  2,635  127  5,827  593 
Legal fees and interest related to Arbitration Award 3,745      3,745   
Severance and restructuring charges   (19) 19  38  747 
Severance associated with acquired business 137      137   
Loss (gain) from change in estimate on ARO obligation   (40)   (40)  
(Gain) loss on sale of assets         39 
Total operating expense adjustments 4,959  3,188  928  11,189  3,755 
           
ARO accretion 13  14  17  41  50 
Stock based compensation expense - COGS 121  109  83  341  337 
Total COGS adjustments 134  123  100  382  387 
Non-GAAP pre-tax (loss) income $(5,021) $(1,972) $(6,710) $(9,363) $(8,063)
           
GAAP EPS - per diluted share $(0.37) $(0.18) $(0.31) $(0.76) $(0.43)
Other income and tax related adjustments 0.01  (0.01) 0.02  0.00  (0.02)
Operating expense adjustments 0.18  0.12  0.03  0.40  0.14 
COGS adjustments 0.00  0.00  0.00  0.01  0.01 
Non-GAAP pre-tax EPS - per diluted share $(0.18) $(0.07) $(0.26) $(0.35) $(0.30)
GAAP Gross Margin Percentage 21.5% 26.7% 6.8% 24.3% 23.3%
Non GAAP Gross Margin Percentage 22.3% 27.3% 7.3% 24.9% 23.9%
GAAP Operating Margin Percentage (59.3)% (25.3)% (44.9)% (34.2)% (21.0)%
Non GAAP Operating Margin Percentage (29.7)% (10.1)% (39.1)% (15.8)% (14.2)%


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

Stock-based Compensation ExpenseFor the Three Months Ended For the Nine Months Ended
(in thousands)June 30, 2019 March 31, 2019 June 30, 2018 June 30, 2019 June 30, 2018
Cost of revenue$121  $109  $83  $341  $337 
Selling, general, and administrative367  473  625  999  1,915 
Research and development189  139  157  483  461 
Total stock-based compensation expense$677  $721  $865  $1,823  $2,713 

Contact:
EMCORE Corporation
Mark Gordon
(626) 293-3400
investor@emcore.com

Sapphire Investor Relations, LLC
Erica Mannion or Michael Funari
(617) 542-6180
investor@emcore.com

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Source: EMCORE Corporation