EMCORE Corporation Announces Financial Results for Third Quarter Ended June 30, 2013

EMCORE Corporation Announces Financial Results for Third Quarter Ended June
30, 2013

  *Consolidated revenue of $33.5 million
  *Consolidated GAAP net loss of $7.3 million
  *Anticipate Q4 revenue of $42 to $45 million

ALBUQUERQUE, N.M., Aug. 6, 2013 (GLOBE NEWSWIRE) -- EMCORE Corporation
(Nasdaq:EMKR), a leading provider of compound semiconductor-based components,
subsystems, and systems for the fiber optics and solar power markets, today
announced its financial results for its fiscal third quarter ended June 30,
2013.

Financial Results

Revenue:

Consolidated revenue for the third quarter ended June 30, 2013 was $33.5
million, which represents a 18.5% decrease compared to the prior year and a
20.8% decrease from the immediate preceding quarter. On a segment basis,
revenue for our Fiber Optics segment was $21.6 million, which represents a
16.5% decrease compared to the prior year and 6.8% decrease compared to the
immediate preceding quarter. Revenue for the Photovoltaics segment was $11.9
million, which represents a 21.8% decrease compared to the prior year and
37.8% decrease compared to the immediate preceding quarter. The reduction in
the Photovoltaics segment was primarily due to a large international order
that was expected to ship in the third quarter but approval to ship was not
received prior to June 30 2013. This order has subsequently shipped to the
customer and revenue is expected to be recognized in the fourth quarter.

Gross Profit:

Consolidated gross profit was approximately $4.0 million. Consolidated gross
margin was 12.1%, which represents an increase from the 10.7% gross margin
reported in the prior year and a decrease from the 18.5% gross margin reported
in the immediate preceding quarter. On a segment basis, Fiber Optics gross
margin was 3.0%, which represents a decrease from the 9.3% gross margin
reported in the prior year and a decrease from the 7.0% gross margin reported
in the immediate preceding quarter. Photovoltaics gross margin was 28.6%,
which represents an increase from the 13.0% gross margin reported in the prior
year and a decrease from the 32.5% gross margin reported in the immediate
preceding quarter.

Operating Income (Loss):

The consolidated operating loss was $7.7 million, which represents a $1.1
million improvement when compared to the prior year and a $19.8 million
deterioration when compared to the immediate preceding quarter. The
quarter-over-quarter variance compared to the prior quarter was primarily due
to lower gross profit and flood-related insurance proceeds received in the
previous quarter.

Net Income (Loss):

The consolidated net loss was $7.3 million, which represents a $1.8 million
improvement when compared to the prior year and a $19.0 million deterioration
when compared to the immediate preceding quarter. The consolidated net loss
per share was $0.27 compared to a net loss per share of $0.38 in the prior
year and net income per share of $0.44 in the immediate preceding quarter.

Non-GAAP Net Income (Loss):

After excluding certain non-cash and other infrequent transactions as set
forth in the attached non-GAAP table, our non-GAAP net loss for the third
quarter ended June 30, 2013 was $5.9 million, which represents an improvement
of approximately $1.5 million from the prior year and a deterioration of
approximately $5.9 million from the immediate preceding quarter. The
consolidated non-GAAP net loss per share was $0.22, which represents an
improvement from the $0.31 loss per share reported in the prior year and a
deterioration from breakeven per share reported in the immediate preceding
quarter.

Order Backlog

As of June 30, 2013, order backlog for our Photovoltaics segment totaled $58.1
million, which represents a 59% increase from $36.5 million reported as of
March 31, 2013. Order backlog is defined as purchase orders or supply
agreements accepted by us with expected product delivery and/or services to be
performed and deferred revenue expected to be recognized within the next
twelve months. Product sales from our Fiber Optics segment are made pursuant
to purchase orders, often with short lead times.

Suncore Joint Venture Equity Sale

EMCORE entered into an equity transfer agreement in June 2013 pursuant to
which the Company agreed to transfer its 40% equity interest in Suncore for
$4.8 million. Closing is subject to customary conditions, including Chinese
regulatory approvals. The payment for the consideration is expected to occur
in the Company's fourth fiscal quarter.

Business Outlook

On a consolidated basis, we expect revenue for our fourth quarter ended
September 30, 2013 to be in the range of $42 to $45 million.

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 August 6, 2013 following the conclusion of the
call on the Company's website.

To assist in better understanding the Company and the markets in which the
Company operates, we are providing supplemental slides to our earnings call
that can be accessed on our website at www.emcore.com under investor
relations.

Conferences

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

  *Citi 2013 Global Technology Conference, September 3-4, 2013, at the
    Hilton, New York, NY.
  *ROTH Capital Partners Semiconductor Corporate Access Day, September 9,
    2013, at the St. Regis, San Francisco, CA

About EMCORE

EMCORE Corporation offers a broad portfolio of compound semiconductor-based
products for the fiber optics and 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 impact on the Company related to
the asset sales to Sumitomo and Suncore Photovoltaic, and the sale of its 40%
interest in Suncore Photovoltaic Technology Co., Ltd.; (b) the rapidly
evolving markets for the Company's products and uncertainty regarding the
development of these markets; (c) 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; (d) delays and other difficulties in commercializing
new products; (e) 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; (f) we
may not be successful in undertaking the steps currently planned in order to
increase our liquidity; (g) uncertainties concerning the availability and cost
of commodity materials and specialized product components that we do not make
internally; (h) actions by competitors; and (i) 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 income (loss) per share)
(unaudited)
                                                               
                           For the Three Months Ended    For the Nine Months
                                                          Ended
                           June 30,  March 31, June 30,  June 30,  June 30,
                            2013      2013      2012      2013      2012
Revenue                     $ 33,473  $ 42,277  $ 41,062  $ 125,056 $ 116,293
Cost of revenue             29,429    34,444    36,677    102,231   103,064
Gross profit                4,044     7,833     4,385     22,825    13,229
                                                               
Operating expense (income):                                     
Selling, general, and       7,039     6,771     8,758     20,714    24,603
administrative
Research and development    4,674     4,112     4,996     14,176    17,757
Impairment                  —         —         1,425     —         1,425
Litigation settlements      —         —         1,050     —         1,050
Flood-related (recovery)    —         —         (293)     —         5,519
loss
Flood-related insurance     —         (14,808)  —         (19,000)  (5,000)
proceeds
Gain on sale of Assets      —         (413)     (2,793)   (413)     (2,793)
Total operating expense     11,713    (4,338)   13,143    15,477    42,561
(income)
                                                               
Operating (loss) income     (7,669)   12,171    (8,758)   7,348     (29,332)
                                                               
Other income (expense):                                         
Interest expense, net       (185)     (186)     (146)     (609)     (396)
Foreign exchange gain       181       (21)      (196)     261       60
(loss)
Loss from equity method     —         —         —         —         (1,201)
investment
Change in fair value of     373       (267)     61        343       (90)
financial instruments
Other expense               17        —         —         17        —
Total other income          386       (474)     (281)     12        (1,627)
(expense)
                                                               
Income (loss) before income (7,283)   11,697    (9,039)   7,360     (30,959)
tax expense
                                                               
Income tax expense          —         —         —         (120)     —
                                                               
Foreign income tax expense  —         —         —         —         (1,644)
on capital distributions
                                                               
Net income (loss)           $ (7,283) $ 11,697  $ (9,039) $ 7,240   $ (32,603)
                                                               
Per share data:                                                 
                                                               
Net income (loss) per basic $ (0.27)  $ 0.44    $ (0.38)  $ 0.27    $ (1.39)
share
                                                               
Net income (loss) per       $ (0.27)  $ 0.44    $ (0.38)  $ 0.27    $ (1.39)
diluted share
                                                               
Weighted-average number of  26,609    26,310    23,686    26,320    23,441
basic shares outstanding
                                                               
Weighted-average number of  26,609    26,642    23,686    26,620    23,441
diluted shares outstanding
                                                               

                                                       
EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                       
                                              As of     As of
                                              June30,  September30,
                                              2013      2012
ASSETS                                                  
Current assets:                                         
Cash and cash equivalents                      $ 5,914   $ 9,047
Restricted cash                                702       82
Accounts receivable, net                       39,289    36,939
Inventory                                      36,391    35,192
Prepaid expenses and other current assets      11,222    14,146
                                                       
Total current assets                           93,518    95,406
                                                       
Property, plant, and equipment, net            50,665    47,896
Goodwill                                       20,384    20,384
Other intangible assets, net                   2,476     3,428
Other non-current assets, net                  1,067     2,752
                                                       
Total assets                                   $ 168,110 $ 169,866
                                                       
LIABILITIES and SHAREHOLDERS' EQUITY                    
Current liabilities:                                    
Borrowings from credit facility                $ 20,061  $ 19,316
Accounts payable                               22,460    38,814
Warrant liability                              327       670
Accrued expenses and other current liabilities 26,010    32,635
                                                       
Total current liabilities                      68,858    91,435
                                                       
Asset retirement obligations                   5,129     
Deferred gain associated with sale of assets   3,400     3,400
Other long-term liabilities                    693       1,004
                                                       
Total liabilities                              78,080    100,843
                                                       
Shareholders' equity:                                   
Common stock                                   735,982   722,345
Treasury stock                                 (2,071)   (2,071)
Accumulated other comprehensive income         1,506     1,376
Accumulated deficit                            (645,387) (652,627)
                                                       
Total shareholders' equity                     90,030    69,023
                                                       
Total liabilities and shareholders' equity     $ 168,110 $ 169,866
                                                       

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 Income (Loss)
(in thousands, except per share data)
(unaudited)
                                                               
                           For the Three Months          For the Nine Months
                           June30,  March31, June30,  June30,  June30,
                            2013     2013      2012     2013     2012
Net income (loss) – US GAAP $ (7,283) $ 11,697  $ (9,039) $ 7,240   $ (32,603)
Adjustments:                                                    
Amortization expense        317       317       383       952       1,328
Stock-based compensation    1,152     1,051     1,275     3,285     5,997
expense
Asset retirement
obligations - accretion     53        54        51        161       172
expense
Specific severance and      241       181       —         422       —
restructuring charges
Impairment                  —         —         1,425     —         1,425
Litigation settlements, net —         —         1,050     —         1,050
Flood-related (recovery)    —         —         (293)     —         5,519
loss
Flood-related insurance     —         (14,808)  —         (19,000)  (5,000)
proceeds
Gain on sale of assets      —         (358)     (2,793)   (358)     (2,793)
Losses on inventory         —         —         278       —         1,621
purchase commitments
Specific warranty charges   —         1,425     —         1,425     —
Foreign exchange (gain)     (181)     21        196       (261)     (60)
loss
Loss from equity method     —         —         —         —         1,201
investment
Change in fair value of     (373)     267       (61)      (343)     90
financial instruments
Interest expense, net       185       186       146       609       396
Income tax expense          —         —         —         120       —
Foreign income tax expense  —         —         —         —         1,644
on capital distributions
Total adjustments           1,394     (11,664)  1,657     (12,988)  12,590
                                                               
Net income (loss) -         $ (5,889) $ 33      $ (7,382) $ (5,748) $ (20,013)
Non-GAAP
Net income (loss) -         $ (0.22)  $ 0.00    $ (0.31)  $ (0.22)  $ (0.85)
Non-GAAP per basic share
Net income (loss) -         $ (0.22)  $ 0.00    $ (0.31)  $ (0.22)  $ (0.85)
Non-GAAP per diluted share
Weighted average number of  26,609    26,310    23,686    26,320    23,441
basic shares outstanding
Weighted average number of  26,609    26,642    23,686    26,320    23,441
diluted shares outstanding
                                                               

Stock-based compensation expense

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

                                                              
Stock-based Compensation Expense
(in thousands) For the Three Months                  For the Nine Months
                                                              
              June30,2013 March31, June30,2012 June30,2013 June30,2012
                             2013
Cost of        $ 311         $ 290     $ 220         $ 916         $ 1,289
revenue
Selling,
general, and   485           459       708           1,326         2,954
administrative
Research and   356           302       347           1,043         1,754
development
Total
stock-based    $ 1,152       $ 1,051   $ 1,275       $3,285        $ 5,997
compensation
expense
                                                              

CONTACT: Mark Weinswig
         Chief Financial Officer
         (505) 332-5000
         investor@emcore.com
        
         TTC Group
         Victor Allgeier
         (646) 290-6400
         vic@ttcominc.com

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