EX-99.1 2 exhibit991-pressreleaseq4f.htm EXHIBIT 99.1 PRESS RELEASE DECEMBER 4 2019 Exhibit



EXHIBIT 99.1
emcorelogogray2019q2a03.jpg

PRESS RELEASE

EMCORE Reports Fiscal 2019 Fourth Quarter and Year-End Results

ALHAMBRA, CA, December 4, 2019 - EMCORE Corporation (NASDAQ: EMKR - News), 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 fourth quarter (4Q19) and year ended September 30, 2019 (FY19). Management will host a conference call to discuss financial and business results tomorrow, Thursday, December 5, 2019 at 8:00 a.m. Eastern Time.

“Revenue increased to $24.3 million in the fourth fiscal quarter, reflecting the first full quarter of contribution from the SDI acquisition. Together with the continued strength in demand for EMCORE’s Aerospace and Defense products, for the first time this end market represented nearly 60% of our total revenue,” said Jeff Rittichier, EMCORE’s President and CEO. “While there is still much work to be done, our strategic focus is clear. We must drive further operating leverage in our business while continuing to make the investments necessary to maintain growth in Aerospace and Defense.”


 
Three Months Ended
 
 
Sep 30, 2019
Jun 30, 2019
Increase/
(in millions)
4Q19
3Q19
(Decrease)
Revenue
$
24.3

$
17.2

$
7.1

Gross Margin (1)
(1
)%
22
 %
(23
)%
Operating Expenses (1)
$
14.4

$
13.9

$
0.5

Operating Margin (1)
(60
)%
(59
)%
(1
)%
Net Income (Loss) (1)
$
(15.0
)
$
(10.5
)
$
(4.5
)
Earnings (Loss) per share (1)
$
(0.52
)
$
(0.37
)
$
(0.15
)
Non-GAAP Gross Margin (2)
19
 %
23
 %
(4
)%
Non-GAAP Operating Expenses (2)
$
12.4

$
9.1

$
3.3

Non- GAAP Operating Margin (2)
(32
)%
(30
)%
(2.0
)%
Non-GAAP Net Income (Loss) (2)
$
(7.7
)
$
(5.0
)
$
(2.7
)
Non-GAAP Earnings (Loss) Per share (2)
$
(0.27
)
$
(0.18
)
$
(0.09
)
Adjusted EBITDA (2)
$
(5.7
)
$
(3.3
)
$
(2.4
)
Ending Cash, cash equivalents and restricted cash
$
22.0

$
20.7

$
1.3

Current Borrowings from Credit Facility
$
5.5

$
0.0

$
5.5

(1) 4Q19 includes $4.8M of net charges related to the transitioning of the CATV product line
(2) Please refer to the schedules at the end of this press release for complete GAAP to non-GAAP reconciliations and other information related to non-GAAP financial measures

 




 
Twelve Months Ended
 
 
Sep 30, 2019
Sep 30, 2018
Increase/
(in millions)
FY19
FY18
(Decrease)
Revenue
$
87.3

$
85.6

$
1.7

Gross Margin (1)
17
 %
22
 %
(5
)%
Operating Expenses (1)
$
51.2

$
36.8

$
14.4

Operating Margin (1)
(41
)%
(21
)%
(20
)%
Net Income (Loss) (1)
$
(36.0
)
$
(17.5
)
$
(18.5
)
Earnings (Loss) per share (1)
$
(1.29
)
$
(0.64
)
$
(0.65
)
Non-GAAP Gross Margin (2)
23
 %
23
 %
0
 %
Non-GAAP Operating Expenses (2)
$
38.1

$
31.2

$
6.9

Non- GAAP Margin (2)
(20
)%
(14
)%
(6
)%
Non-GAAP Net Income (Loss) (2)
$
(17.0
)
$
(11.2
)
$
(5.8
)
Non-GAAP Earnings (Loss) Per Share (2)
$
(0.61
)
$
(0.41
)
$
(0.20
)
Adjusted EBITDA (2)
$
(10.6
)
$
(6.4
)
$
(4.2
)
Ending Cash, cash equivalents and restricted cash
$
22.0

$
63.2

$
(41.2
)
Current Borrowings from Credit Facility
$
5.5

$
0.0

$
5.5

(1) FY19 includes $4.8M of net charges recorded in 4Q19 related to the transitioning of the CATV product line
(2) Please refer to the schedules at the end of this press release for complete GAAP to non-GAAP reconciliations and other information related to non-GAAP financial measures


Business Outlook
The Company expects revenue for the fiscal first quarter ending December 31, 2019 (1Q20) to be in the range of $25 to $27 million.

Conference Call
The Company will discuss its financial results on December 5, 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 2374375. 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, December 5, 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 aerospace & defense systems and high-speed broadband communication networks. Our optical chips, components, subsystems and systems enable broadband and wireless service 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 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
The Company conforms to U.S. Generally Accepted Accounting Principles (GAAP) in the preparation of its financial statements. We disclose supplemental non-GAAP earnings measures for gross profit margin, operating expenses, operating profit margin, net income, and earnings per share. We also disclose adjusted EBITDA, a non-earnings measure.
Management believes these supplemental non-GAAP measures reflect the Company’s core ongoing operating performance and facilitates comparisons across reporting periods. The Company uses these measures when evaluating its financial results and




for planning and forecasting of future periods. We believe that these supplemental non-GAAP measures are also useful to investors in assessing our operating performance. While we believe in the usefulness of these supplemental non-GAAP measures, there are limitations. Our non-GAAP measures may not be reported by other companies in our industry and/or 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 measures as a supplement to GAAP and by providing the reconciliations to the most comparable GAAP measure.
The schedules at the end of this press release reconcile the Company’s non-GAAP measures to the most directly comparable GAAP measure. The adjustments share one or more of the following characteristics: they are unusual and the Company does not expect them to recur in the ordinary course of its business, they do not involve the expenditure of cash, they are unrelated to the ongoing operation of the business in the ordinary course, or their magnitude and timing is largely outside of the Company’s control. For all reporting periods disclosed, the Company has applied consistent rationale, method, and adjustments in reconciling non-GAAP measures to the most directly comparable GAAP measure.
Non-GAAP measures are not in accordance with or an alternative to GAAP, nor are they meant to be considered in isolation or as a substitute for comparable GAAP measures. Our disclosures of these measures should be read only in conjunction with our financial statements prepared in accordance with GAAP. Non-GAAP measures should not be viewed as a substitute for the Company’s GAAP results.

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; (g) risks and uncertainties related to applicable laws and regulations, including the impact of changes to applicable tax laws and tariff regulations; (h) acquisition-related risks, including that (i) the revenues and net operating results obtained from the Systron Donner Inertial ("SDI") business may not meet our expectations, (ii) the costs and cash expenditures for integration of the SDI business operations may be higher than expected, (iii) there could be losses and liabilities arising from the acquisition of SDI that we will not be able to recover from any source, and (iv) we may not realize sufficient scale in our navigation systems product line from the SDI acquisition and will need to take additional steps, including making additional acquisitions, to achieve our growth objectives for this product line; (i) risks related to our ability to obtain capital; (j) risks related to the transition of certain of our manufacturing operations from our Beijing facility to a contract manufacturer’s facility;
and (k) 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 Twelve Months Ended
 
 
September 30, 2019
 
June 30, 2019
 
September 30, 2018
 
September 30, 2019
 
September 30, 2018
Revenue
 
$
24,300

 
$
17,219

 
$
25,241

 
$
87,265

 
$
85,617

Cost of revenue
 
24,532

 
13,515

 
20,813

 
72,176

 
67,130

Gross profit
 
(232
)
 
3,704

 
4,428

 
15,089

 
18,487

Operating expense:
 
 
 
 
 
 
 
 
 
 
Research and development
 
6,435

 
4,629

 
4,372

 
19,443

 
15,387

Selling, general, and administrative
 
8,217

 
9,288

 
5,532

 
32,094

 
21,232

Loss (gain) from change in estimate on ARO obligation
 
26

 
—

 
145

 
(14
)
 
145

(Gain) loss on sale of assets
 
(302
)
 
—

 
(5
)
 
(302
)
 
34

Total operating expense
 
14,376

 
13,917

 
10,044

 
51,221

 
36,798

Operating profit (loss)
 
(14,608
)
 
(10,213
)
 
(5,616
)
 
(36,132
)
 
(18,311
)
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Interest income, net
 
39

 
99

 
243

 
629

 
733

Foreign exchange gain (loss)
 
(396
)
 
(349
)
 
(570
)
 
(427
)
 
(434
)
Other income
 
—

 
—

 
110

 
—

 
110

Total other income (expense)
 
(357
)
 
(250
)
 
(217
)
 
202

 
409

Income (loss) before income tax (expense) benefit
 
(14,965
)
 
(10,463
)
 
(5,833
)
 
(35,930
)
 
(17,902
)
Income tax (expense) benefit
 
(10
)
 
(14
)
 
(53
)
 
(54
)
 
449

Net income (loss)
 
$
(14,975
)
 
$
(10,477
)
 
$
(5,886
)
 
$
(35,984
)
 
$
(17,453
)
Per share data:
 
 
 
 
 
 
 
 
 
 
Net income (loss) per basic and diluted share
 
$
(0.52
)
 
$
(0.37
)
 
$
(0.21
)
 
$
(1.29
)
 
$
(0.64
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average number of basic and diluted shares outstanding
 
28,734

 
28,005

 
27,424

 
27,983

 
27,266






EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
 As of September 30, 2019
 
As of September 30, 2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
21,574

 
$
63,117

Restricted cash
403

 
78

Total cash, cash equivalents and restricted cash
21,977

 
63,195

Accounts receivable, net
19,552

 
19,275

Inventory
24,051

 
20,850

Prepaid expenses and other current assets
6,389

 
12,730

Total current assets
71,969

 
116,050

Property, plant, and equipment, net
37,223

 
18,216

Goodwill
69

 
—

Intangible assets, net
239

 
—

Non-current inventory
—

 
1,433

Other non-current assets, net
62

 
199

Total assets
$
109,562

 
$
135,898

LIABILITIES and SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Borrowings from credit facility
$
5,497

 
$
—

Accounts payable
$
10,701

 
$
12,997

Accrued expenses and other current liabilities
14,521

 
14,205

Total current liabilities
30,719

 
27,202

Asset retirement obligations
1,890

 
1,809

Other long-term liabilities
207

 
82

Total liabilities
32,816

 
29,093

Shareholders’ equity:
 
 
 
Common stock
739,926

 
734,066

Treasury stock
(47,721
)
 
(47,721
)
Accumulated other comprehensive income
950

 
885

Accumulated deficit
(616,409
)
 
(580,425
)
Total shareholders’ equity
76,746

 
106,805

Total liabilities and shareholders’ equity
$
109,562

 
$
135,898







                                                                                                                                                                                                                   

EMCORE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(unaudited)
 
 
Three Months Ended
Twelve Months Ended
 
 
Sep 30, 2019
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
 
 
4Q19
3Q19
FY 19
FY 18
Gross Profit (Loss)
 
$
(232
)
$
3,705

$
15,090

$
18,486

Gross Margin
 
(1
)%
22
%
17
%
22
%
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
Stock-based compensation
 
128

121

468

451

Asset retirement obligation (ARO) accretion
 
14

14

14

206

Amortization of acquired intangibles
 
11

—

11

—

Severance and restructuring charges
 
—

137

118

168

CATV transition - inventory adjustment
 
4,714

—

4,714

—

 Total adjustments
 
4,867

272

5,325

825

 
 
 
 
 
 
Non-GAAP Gross Profit
 
$
4,635

$
3,977

$
20,415

$
19,311

Non-GAAP Gross Margin
 
19
 %
23
%
23
%
23
%


 
 
Three Months Ended
Twelve Months Ended
 
 
Sep 30, 2019
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
 
 
4Q19
3Q19
FY 19
FY 18
Operating Expenses
 
$
14,376

$
13,917

$
51,221

$
36,797

Stock-based compensation
 
(655
)
(557
)
(2,138
)
(3,199
)
Acquisition related expenses
 
(146
)
(335
)
(819
)
(84
)
Severance and restructuring charges
 
(86
)
—

(86
)
(416
)
CATV transition - severance charges
 
(388
)
—

(445
)
—

CATV transition - gain on sale of asset
 
302

—

302

—

Litigation related expenses and arbitration ruling
 
(1,022
)
(3,931
)
(9,961
)
(1,679
)
Gain/loss due to change in ARO estimate
 
(26
)
—

14

(145
)
Gain/loss on sale of assets
 
—

—

4

(34
)
 Non-GAAP Operating Expenses
 
$
12,355

$
9,094

$
38,092

$
31,240






 
 
Three Months Ended
Twelve Months Ended
 
 
Sep 30, 2019
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
 
 
4Q19
3Q19
FY 19
FY 18
Operating Profit (Loss)
 
$
(14,608
)
$
(10,212
)
$
(36,132
)
$
(18,311
)
Operating Margin
 
(60
)%
(59
)%
(41
)%
(21
)%
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
Stock-based compensation
 
783

677

2,606

3,649

Asset retirement obligation (ARO) accretion
 
14

14

14

206

Acquisition related expenses
 
146

335

819

84

Amortization of acquired intangibles
 
11

—

11

—

Severance and restructuring charges
 
86

137

260

584

CATV transition - severance charges
 
388

—

388

—

CATV transition - inventory adjustment
 
4,714

—

4,714

—

CATV transition - gain on sale of asset
 
(302
)
—

(302
)
—

Litigation related expenses and arbitration ruling
 
1,022

3,931

9,961

1,679

Gain/loss due to change in ARO estimate
 
26

—

(14
)
145

Gain/loss on sale of assets
 
—

—

(4
)
34

  Total adjustments
 
6,888

5,094

18,453

6,381

 
 
 
 
 
 
Non-GAAP Operating Profit (Loss)
 
(7,720
)
(5,118
)
(17,679
)
(11,930
)
Non-GAAP Operating Margin
 
(32
)%
(30
)%
(32
)%
(30
)%
 
 
 
 
 
 
Depreciation
 
2,070

1,770

7,040

5,550

Adjusted EBITDA
 
$
(5,650
)
$
(3,348
)
$
(10,639
)
$
(6,380
)
Adjusted EBITDA %
 
(23
)%
(19
)%
(12
)%
(7
)%





 
 
Three Months Ended
Twelve Months Ended
 
 
Sep 30, 2019
Jun 30, 2019
Sep 30, 2019
Sep 30, 2018
 
 
4Q19
3Q19
FY 19
FY 18
Net Income (Loss)
 
$
(14,975
)
$
(10,477
)
$
(35,984
)
$
(17,453
)
Earnings (Loss) Per Share
 
$
(0.52
)
$
(0.37
)
$
(1.29
)
$
(0.64
)
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
Stock-based compensation
 
783

677

2,606

3,649

Asset retirement obligation (ARO) accretion
 
14

14

14

206

Acquisition related expenses
 
146

335

819

84

Amortization of acquired intangibles
 
11

—

11

—

Severance and restructuring charges
 
86

137

260

584

CATV transition - severance charges
 
388

—

388

—

CATV transition - inventory adjustment
 
4,714

—

4,714

—

CATV transition - gain on sale of asset
 
(302
)
—

(302
)
—

Litigation related expenses and arbitration ruling
 
1,022

3,931

9,961

1,679

Gain/loss due to change in ARO estimate
 
26

—

(14
)
145

Gain/loss on sale of assets
 
—

—

(4
)
34

Foreign currency gain/loss
 
396

349

427

434

Non-operating income/(expense)
 
—

—

—

(110
)
Income tax (benefit)/expense
 
10

15

54

(449
)
  Total adjustments
 
7,294

5,458

18,934

6,256

 
 
 
 
 
 
Non-GAAP Net Income (Loss)
 
(7,681
)
(5,019
)
(17,050
)
(11,197
)
Non-GAAP Earnings (Loss) Per Share
 
(0.27
)
(0.18
)
(0.61
)
(0.41
)
 
 
 
 
 
 
Interest income/expense
 
(39
)
(99
)
(630
)
(733
)
Depreciation
 
2,070

1,770

7,040

5,550

Adjusted EBITDA
 
$
(5,650
)
$
(3,348
)
$
(10,640
)
$
(6,380
)
Adjusted EBITDA %
 
(23
)%
(19
)%
(12
)%
(7
)%

Contact:
EMCORE Corporation
Tom Minichiello
(626) 293-3400
investor@emcore.com

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