EMCORE Corporation Announces Financial Results for Fourth Quarter and Fiscal Year Ended September 30, 2013

EMCORE Corporation Announces Financial Results for Fourth Quarter and Fiscal
Year Ended September 30, 2013

  *Consolidated Q4 revenue of $43.1 million
  *Consolidated Q4 GAAP net loss of $2.3 million
  *Consolidated revenue and net income for Fiscal Year 2013 of $168.1 million
    and $5.0 million, respectively
  *Anticipate Q1 revenue of $43 to $45 million

ALBUQUERQUE, N.M., Dec. 4, 2013 (GLOBE NEWSWIRE) -- EMCORE Corporation
(Nasdaq:EMKR), 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 fourth quarter and year
ended September 30, 2013.

Quarterly Financial Results

Revenue:

Consolidated revenue for the fourth quarter ended September 30, 2013 was $43.1
million, which represents a 9.3% decrease compared to the prior year and a
28.7% increase from the immediate preceding quarter. On a segment basis,
revenue for our Fiber Optics segment was $22.6 million, which represents a
24.9% decrease compared to the prior year and 4.9% increase compared to the
immediate preceding quarter. Revenue for the Photovoltaics segment was $20.5
million, which represents a 17.7% increase compared to the prior year and
71.9% increase compared to the immediate preceding quarter.

Gross Profit:

Consolidated gross profit was approximately $5.4 million. Consolidated gross
margin was 12.5%, which represents an increase from the 9.7% gross margin
reported in the prior year and an increase from the 12.1% gross margin
reported in the immediate preceding quarter. On a segment basis, Fiber Optics
gross margin was 11.6%, which represents an increase from the 2.4% gross
margin reported in the prior year and an increase from the 3.0% gross margin
reported in the immediate preceding quarter. Photovoltaics gross margin was
13.5%, which represents a decrease from the 22.2% gross margin reported in the
prior year and a decrease from the 28.6% gross margin reported in the
immediate preceding quarter.

Operating Loss:

The consolidated operating loss was $7.1 million, which represents a $0.8
million decline when compared to the prior year and a $0.5 million improvement
when compared to the immediate preceding quarter. The quarter-over-quarter
variance compared to the prior quarter was primarily due to higher gross
profit in the current quarter.

Net Loss:

The consolidated net loss was $2.3 million, which represents a $4.3 million
improvement when compared to the prior year and a $5.0 million improvement
when compared to the immediate preceding quarter. The consolidated net loss
per share was $0.08 compared to a net loss per share of $0.27 in the prior
year and the immediate preceding quarter.

Non-GAAP Net 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 fourth
quarter ended September 30, 2013 was $5.6 million, which represents an
improvement of approximately $0.7 million from the prior year and an
improvement of approximately $0.3 million from the immediate preceding
quarter. The consolidated non-GAAP net loss per share was $0.21, which
represents an improvement from the $0.26 loss per share reported in the prior
year and an improvement from the $0.22 loss per share reported in the
immediate preceding quarter.

Annual Financial Results

Revenue:

Consolidated revenue for fiscal 2013 was $168.1 million, which represents a
2.7% increase compared to the prior year. On a segment basis, revenue for the
Fiber Optics segment was $97.0 million, which represents a 0.9% increase
compared to the prior year. Revenue for the Photovoltaics segment was $71.2
million, which represents a 5.2% increase compared to the prior year.

Gross Profit:

Consolidated gross profit was $28.2 million, which represents a 58.2% increase
compared to the prior year. Consolidated gross margin was 16.8%, which
represents an increase from the 10.9% gross margin reported in the prior year.
On a segment basis, Fiber Optics gross margin was 10.1%, which represents an
increase from the 4.5% gross margin reported in the prior year. Photovoltaics
gross margin was 25.8%, which represents an increase from the 20.0% gross
margin reported in the prior year.

During fiscal 2012, lower fiber optics revenues due to the impact from the
Thailand flood resulted in higher manufacturing overhead as a percentage of
revenue. Manufacturing of certain fiber optics components was moved to
Company-owned facilities in the U.S., which involved higher labor and other
related costs. Photovoltaics gross margins increased in fiscal 2013 when
compared to the prior year primarily due to higher revenues and lower sales
activities in the lower margin terrestrial systems product line following the
sale of assets in fiscal 2012.

Operating Income:

The consolidated operating income was $0.2 million, which represents a $35.8
million increase in operating income when compared to the prior year.

Net Income:

The consolidated net income was $5.0 million, which represents a $44.2 million
increase in net income when compared to the prior year primarily due to higher
flood-related insurance recoveries and the gain on sale of the Suncore equity
interest. The consolidated net income per share was $0.19, which represents a
$1.85 increase in net income per share when compared to the prior year.

Non-GAAP Net 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 fiscal
year ended September 30, 2013 was $11.4 million, which represents an
improvement of approximately $15.0 million when compared to the prior year.
The consolidated non-GAAP net loss per share was $0.43, which represents an
improvement from the $1.12 loss per share reported in the prior year.

Order Backlog

As of September 30, 2013, order backlog for our Photovoltaics segment totaled
$57.1 million, which represents a 1.7% decrease from $58.1 million reported as
of June 30, 2013. Order backlog is defined as purchase orders or supply
agreements accepted by us with expected product delivery and/or services to be
performed 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 for the sale of its 40% equity interest
in Suncore for $4.8 million. The transaction was recorded and payment was
received in the Company's fourth fiscal quarter.

Business Outlook

On a consolidated basis, we expect revenue for our first quarter ended
December 31, 2013 to be in the range of $43 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 December 4, 2013 following the conclusion of
the call on the Company's website.

Conferences

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

  *16th Annual Needham Growth Conference, January 14-16, 2014, at The Palace
    Hotel, New York, NY.

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 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 per share data) (unaudited)
                                                               
                           For the Three Months Ended    Fiscal Year Ended
                           September June 30,  September September September
                           30, 2013  2013      30, 2012  30, 2013  30, 2012
                                                               
Revenue                     $ 43,091  $ 33,473  $ 47,488  $ 168,147 $ 163,781
Cost of revenue             37,718    29,429    42,891    139,949   145,955
Gross profit                5,373     4,044     4,597     28,198    17,826
                                                               
Operating expense (income):                                     
Selling, general, and       6,705     7,039     10,258    27,419    34,861
administrative
Research and development    5,796     4,674     4,581     19,972    22,338
Impairment                  —         —         —         —         1,425
Litigation settlements      —         —         —         —         1,050
Flood-related loss          —         —         —         —         5,519
Flood-related insurance     —         —         (4,000)   (19,000)  (9,000)
proceeds
Loss (Gain) on sale of      —         —         51        (413)     (2,742)
assets
Total operating expense     12,501    11,713    10,890    27,978    53,451
                                                               
Operating (loss) income     (7,128)  (7,669)  (6,293)  220      (35,625)
                                                               
Other income (expense):                                         
Interest expense, net       (191)     (185)     (281)     (800)     (677)
Foreign exchange gain       95        181       (15)      356       45
(loss)
Loss from equity method     —         —         —         —        (1,201)
investment
                                                               
Gain on sale of equity      4,800     —         —         4,800     —
interest
Change in fair value of     172       373       21        515       (69)
financial instruments
Other expense               —         17        —         17        —
Total other income          4,876     386       (275)     4,888     (1,902)
(expense)
Income (loss) before income (2,252)   (7,283)   (6,568)   5,108     (37,527)
tax expense
                                                               
Income tax expense          —         —         —         (120)     —
Foreign income tax expense  —         —         —         —         (1,644)
on capital distributions
                                                               
Net income (loss)           $ (2,252) $ (7,283) $ (6,568) $ 4,988   $ (39,171)
                                                               
Per share data:                                                 
Net income (loss) per basic $ (0.08)  $ (0.27)  $ (0.27)  $ 0.19    $ (1.66)
share
Net income (loss) per       $ (0.08)  $ (0.27)  $ (0.27)  $ 0.19    $ (1.66)
diluted share
                                                               
Weighted-average number of  27,158    26,609    23,892    26,531    23,559
basic shares outstanding
                                                               
Weighted-average number of  27,158    26,609    23,892    26,812    23,559
diluted shares outstanding



EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                           
                                              As of         As of
                                              September 30, September 30,
                                              2013          2012
ASSETS                                                      
Current assets:                                             
Cash and cash equivalents                      $ 16,104      $ 9,047
Restricted cash                                815           82
Accounts receivable, net                       41,826        36,939
Inventory                                      32,115        35,192
Prepaid expenses and other current assets      9,437         14,146
                                                           
Total current assets                           100,297       95,406
                                                           
Property, plant, and equipment, net            49,744        47,896
Goodwill                                       20,384        20,384
Other intangible assets, net                   2,159         3,428
Other non-current assets, net                  1,130         2,752
                                                           
Total assets                                   $173,714    $169,866
                                                           
LIABILITIES and SHAREHOLDERS' EQUITY                        
Current liabilities:                                        
Borrowings from credit facility                $21,706     $19,316
Accounts payable                               19,643        38,814
Warrant liability                              155           670
Accrued expenses and other current liabilities 21,597        32,635
                                                           
Total current liabilities                      63,101        91,435
                                                           
Asset retirement obligations                   5,053         5,004
Deferred gain associated with sale of assets   3,400         3,400
Other long-term liabilities                    981           1,004
                                                           
Total liabilities                              72,535        100,843
                                                           
Shareholders' equity:                                       
Common stock                                   749,266       722,345
Treasury stock                                 (2,071)      (2,071)
Accumulated other comprehensive income         1,623         1,376
Accumulated deficit                            (647,639)    (652,627)
                                                           
Total shareholders' equity                     101,179       69,023
                                                           
Total liabilities and shareholders' equity     $173,714    $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 Ended       Fiscal Year Ended
                     September  June 30,   September  September   September
                     30, 2013   2013       30, 2012   30, 2013    30, 2012
                                                              
Net income (loss) -   $(2,252) $(7,283) $(6,568) $4,988    $(39,171)
US GAAP
Adjustments:                                                   
Amortization expense  317       317       317       1,269      1,645
Stock-based           924       1,152     1,760     4,209      7,756
compensation expense
Asset retirement
obligations -         54        53        53        215        225
accretion expense
Specific severance
and restructuring     230       241       1,090     652        1,090
charges
Impairment            —        —        —        —         1,425
Litigation            —        —        —        —         1,050
settlements
Flood-related loss    —        —        —        —         5,519
Flood-related         —         —         (4,000)   (19,000)   (9,000)
insurance proceeds
Loss (Gain) on sale   —         —         51        (358)      (2,742)
of assets
Losses on inventory   —         —         723       —          2,344
purchase commitments
Specific warranty     —        —        —        1,425      —
charges
Foreign exchange gain (95)      (181)     16        (356)      (45)
(loss)
Loss from equity      —        —        —        —         1,201
method investment
Gain on sale of       (4,800)   —        —        (4,800)    —
equity interest
Change in fair value
of financial          (172)     (373)     (21)      (515)      69
instruments
Interest expense, net 192       185       281       801        677
Income tax expense    —        —        —        120        —
Foreign income tax
expense on capital    —        —        —        —         1,644
distributions
                                                              
Total adjustments     (3,350)   1,394     270       (16,338)   12,858
                                                              
Net loss - Non-GAAP   $(5,602) $(5,889) $(6,298) $(11,350) $(26,313)
                                                              
Net income (loss) -
Non-GAAP per basic    $(0.21)  $(0.22)  $(0.26)  $(0.43)   $(1.12)
share
                                                              
Net income (loss) -
Non-GAAP per diluted  $(0.21)  $(0.22)  $(0.26)  $(0.43)   $(1.12)
share
                                                              
Weighted average
number of basic       27,158     26,609     23,892     26,531      23,559
shares outstanding
                                                              
Weighted average
number of diluted     27,158     26,609     23,892     26,531      23,559
shares outstanding

Stock-based compensation expense

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

Stock-based Compensation      For the Three Months Ended  Fiscal Year Ended
Expense
                             September June 30, September September September
(in thousands)               30, 2013  2013     30, 2012  30, 2013  30, 2012
                                                                
Cost of revenue               $ 227     $ 311    $ 278     $ 1,143   $ 1,566
Selling, general, and         428       485      935       1,754     3,889
administrative
Research and development      269       356      547       1,312     2,301
Total stock-based             $ 924     $ 1,152  $ 1,760   $ 4,209   $ 7,756
compensation expense

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

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