QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
or | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___ to ___ |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | |||||||||
(Nasdaq Global Market) |
Page | |||||||||||
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Selling, general, and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Severance | |||||||||||||||||||||||
(Gain) loss on sale of assets | ( | ( | |||||||||||||||||||||
Total operating expense | |||||||||||||||||||||||
Operating (loss) income | ( | ( | |||||||||||||||||||||
Other (expense) income: | |||||||||||||||||||||||
Gain on extinguishment of debt | |||||||||||||||||||||||
Interest income (expense), net | ( | ||||||||||||||||||||||
Foreign exchange (loss) gain | ( | ( | |||||||||||||||||||||
Pension expense | ( | ( | |||||||||||||||||||||
Total other (expense) income | ( | ( | |||||||||||||||||||||
(Loss) income before income tax expense | ( | ( | |||||||||||||||||||||
Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Foreign exchange translation adjustment | ( | ( | |||||||||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Per share data | |||||||||||||||||||||||
Net (loss) income per basic share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted-average number of basic shares outstanding | |||||||||||||||||||||||
Net (loss) income per diluted share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted-average number of diluted shares outstanding |
As of | |||||||||||
June 30, 2022 | September 30, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net of credit loss of $ | |||||||||||
Contract assets | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Assets held for sale | |||||||||||
Total current assets | |||||||||||
Property, plant, and equipment, net | |||||||||||
Goodwill | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other intangible assets, net | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES and SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Contract liabilities | |||||||||||
Operating lease liabilities - current | |||||||||||
Total current liabilities | |||||||||||
Operating lease liabilities - non-current | |||||||||||
Asset retirement obligations | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock, | |||||||||||
Treasury stock at cost; | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Shares of common stock | |||||||||||||||||||||||
Balance, beginning of period | |||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Stock option exercises | |||||||||||||||||||||||
Issuance of common stock - ESPP | |||||||||||||||||||||||
Sale of common stock | |||||||||||||||||||||||
Balance, end of period | |||||||||||||||||||||||
Value of common stock | |||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Stock option exercises | |||||||||||||||||||||||
Tax withholding paid on behalf of employees for stock-based awards | ( | ( | ( | ( | |||||||||||||||||||
Issuance of common stock - ESPP | |||||||||||||||||||||||
Sale of common stock, net of offering costs | |||||||||||||||||||||||
Balance, end of period | |||||||||||||||||||||||
Treasury stock, beginning and ending of period | ( | ( | ( | ( | |||||||||||||||||||
Accumulated other comprehensive income | |||||||||||||||||||||||
Balance, beginning of period | |||||||||||||||||||||||
Translation adjustment | ( | ( | |||||||||||||||||||||
Balance, end of period | |||||||||||||||||||||||
Accumulated deficit | |||||||||||||||||||||||
Balance, beginning of period | ( | ( | ( | ( | |||||||||||||||||||
Net (loss) income | ( | ( | |||||||||||||||||||||
Balance, end of period | ( | ( | ( | ( | |||||||||||||||||||
Total shareholders’ equity | $ | $ | $ | $ |
For the Nine Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | |||||||||||
Stock-based compensation expense | |||||||||||
Provision adjustments related to credit loss | ( | ||||||||||
Provision adjustments related to product warranty | |||||||||||
(Gain) loss on disposal of property, plant, and equipment | ( | ||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable and contract assets | ( | ||||||||||
Inventory | ( | ||||||||||
Other assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other current liabilities | ( | ||||||||||
Contract liabilities | ( | ||||||||||
Operating lease liabilities - current | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchase of equipment | ( | ( | |||||||||
Proceeds from disposal of property, plant, and equipment | |||||||||||
Acquisition of business | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from employee stock purchase plan and equity awards | |||||||||||
Proceeds from sale of common stock | |||||||||||
Issuance cost associated with sale of common stock | ( | ||||||||||
Taxes paid related to net share settlement of equity awards | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Effect of exchange rate changes provided by foreign currency | ( | ||||||||||
Net increase in cash, cash equivalents, and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||
Cash paid during the period for interest | $ | $ | |||||||||
Cash paid during the period for income taxes | $ | $ | |||||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||||||
Changes in accounts payable related to purchases of equipment | $ | ( | $ |
(in thousands) | Amount | ||||
Tangible assets acquired: | |||||
Accounts receivable | $ | ||||
Inventory | |||||
Contract assets | |||||
Operating lease right-of-use assets | |||||
Property, plant, and equipment | |||||
Net pension benefit assets | |||||
Intangible assets acquired | |||||
Goodwill | |||||
Liabilities assumed: | |||||
Accounts payable and accrued expenses | ( | ||||
Contract liabilities | ( | ||||
Operating lease liabilities | ( | ||||
Asset retirement obligations | ( | ||||
Total purchase consideration | $ |
As of | |||||||||||
(in thousands) | June 30, 2022 | September 30, 2021 | |||||||||
Cash | $ | $ | |||||||||
Cash equivalents | |||||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
As of | |||||||||||
(in thousands) | June 30, 2022 | September 30, 2021 | |||||||||
Accounts receivable, gross | $ | $ | |||||||||
Allowance for credit loss | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
As of | |||||||||||
(in thousands) | June 30, 2022 | September 30, 2021 | |||||||||
Raw materials | $ | $ | |||||||||
Work in-process | |||||||||||
Finished goods | |||||||||||
Inventory | $ | $ |
As of | |||||||||||
(in thousands) | June 30, 2022 | September 30, 2021 | |||||||||
Equipment | $ | $ | |||||||||
Furniture and fixtures | |||||||||||
Computer hardware and software | |||||||||||
Leasehold improvements | |||||||||||
Construction in progress | |||||||||||
Property, plant, and equipment, gross | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Property, plant, and equipment, net | $ | $ |
(in thousands) | For the Three and Nine Months Ended June 30, 2022 | ||||
Interest cost | $ | ||||
Loss on Pension Plan assets | |||||
Total pension expense | $ |
As of | |||||
(in thousands) | June 30, 2022 | ||||
Benefit obligation | $ | ||||
Fair value of Pension Plan assets | |||||
Net pension asset | $ |
As of | |||||||||||
(in thousands) | June 30, 2022 | September 30, 2021 | |||||||||
Compensation | $ | $ | |||||||||
Warranty | |||||||||||
Legal expenses and other professional fees | |||||||||||
Income and other taxes | |||||||||||
Severance and restructuring accruals | |||||||||||
Litigation settlement | |||||||||||
Other | |||||||||||
Accrued expenses and other current liabilities | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Employee stock options | $ | $ | $ | $ | |||||||||||||||||||
RSUs and RSAs | |||||||||||||||||||||||
PSUs and PRSAs | |||||||||||||||||||||||
ESPP | |||||||||||||||||||||||
Outside director equity awards and fees in common stock | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
Selling, general, and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted average number of shares outstanding - basic | |||||||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Stock options | |||||||||||||||||||||||
PSUs, RSUs, and restricted stock | |||||||||||||||||||||||
Weighted average number of shares outstanding - diluted | |||||||||||||||||||||||
Earnings per share - basic | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Earnings per share - diluted | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted average antidilutive options, unvested restricted RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation |
As of | |||||
June 30, 2022 | |||||
Exercise of outstanding stock options | |||||
Unvested RSUs and RSAs | |||||
Unvested PSUs and PRSAs (at | |||||
Issuance of stock-based awards under the Equity Plans | |||||
Purchases under the officer and director share purchase plan | |||||
Total reserved |
(in thousands) | For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Aerospace and Defense | $ | $ | $ | $ | |||||||||||||||||||
Broadband | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Segment profit | |||||||||||||||||||||||
Aerospace and Defense gross profit | $ | $ | $ | $ | |||||||||||||||||||
Aerospace and Defense research and development expense | |||||||||||||||||||||||
Aerospace and Defense segment profit | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Broadband gross profit | $ | $ | $ | $ | |||||||||||||||||||
Broadband research and development expense | |||||||||||||||||||||||
Broadband segment profit | $ | $ | $ | $ | |||||||||||||||||||
Total segment profit | $ | ( | $ | $ | $ | ||||||||||||||||||
Unallocated expense (income) | |||||||||||||||||||||||
Selling, general, and administrative | $ | $ | $ | $ | |||||||||||||||||||
Severance | |||||||||||||||||||||||
(Gain) loss on sale of assets | ( | ( | |||||||||||||||||||||
Gain on extinguishment of debt | ( | ( | |||||||||||||||||||||
Interest (income) expense, net | ( | ( | ( | ||||||||||||||||||||
Foreign exchange loss (gain) | ( | ( | |||||||||||||||||||||
Pension expense | |||||||||||||||||||||||
Total unallocated expense (income) | $ | $ | ( | $ | $ | ||||||||||||||||||
(Loss) income before income tax expense | $ | ( | $ | $ | ( | $ |
For the Three Months Ended June 30, | |||||||||||||||||||||||
(in thousands) | 2022 | % of Revenue | 2021 | % of Revenue | |||||||||||||||||||
Aerospace and Defense | |||||||||||||||||||||||
Navigation and Inertial Sensing | $ | % | $ | % | |||||||||||||||||||
Defense Optoelectronics | |||||||||||||||||||||||
Broadband | |||||||||||||||||||||||
CATV Lasers and Transmitters | |||||||||||||||||||||||
Chip Devices | |||||||||||||||||||||||
Other Optical Products | |||||||||||||||||||||||
Total revenue | $ | % | $ | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands) | 2022 | % of Revenue | 2021 | % of Revenue | |||||||||||||||||||
Aerospace and Defense | |||||||||||||||||||||||
Navigation and Inertial Sensing | $ | % | $ | % | |||||||||||||||||||
Defense Optoelectronics | |||||||||||||||||||||||
Broadband | |||||||||||||||||||||||
CATV Lasers and Transmitters | |||||||||||||||||||||||
Chip Devices | |||||||||||||||||||||||
Other Optical Products | |||||||||||||||||||||||
Total revenue | $ | % | $ | % |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
United States and Canada | $ | $ | $ | $ | |||||||||||||||||||
Asia | |||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of revenue | 83.5 | 59.6 | 70.9 | 61.2 | |||||||||||||||||||
Gross profit | 16.5 | 40.4 | 29.1 | 38.8 | |||||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Selling, general, and administrative | 32.9 | 14.3 | 22.8 | 15.6 | |||||||||||||||||||
Research and development | 19.1 | 10.5 | 13.9 | 11.0 | |||||||||||||||||||
Severance | — | — | 1.3 | — | |||||||||||||||||||
(Gain) loss on sale of assets | (5.6) | 0.6 | (1.9) | 0.4 | |||||||||||||||||||
Total operating expense | 46.4 | 25.4 | 36.1 | 27.0 | |||||||||||||||||||
Operating (loss) income | (30.0) | % | 15.0 | % | (7.0) | % | 11.8 | % |
For the Three Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Revenue | $ | 23,675 | $ | 42,658 | $ | (18,983) | (44.5) | % | |||||||||||||||
Cost of revenue | 19,777 | 25,433 | (5,656) | (22.2) | |||||||||||||||||||
Gross profit | 3,898 | 17,225 | (13,327) | (77.4) | |||||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Selling, general, and administrative | 7,800 | 6,081 | 1,719 | 28.3 | |||||||||||||||||||
Research and development | 4,513 | 4,500 | 13 | 0.3 | |||||||||||||||||||
(Gain) loss on sale of assets | (1,318) | 250 | (1,568) | (627.2) | |||||||||||||||||||
Total operating expense | 10,995 | 10,831 | 164 | 1.5 | |||||||||||||||||||
Operating (loss) income | $ | (7,097) | $ | 6,394 | $ | (13,491) | (211.0) | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Revenue | $ | 98,561 | $ | 114,490 | $ | (15,929) | (13.9) | % | |||||||||||||||
Cost of revenue | 69,849 | 70,059 | (210) | (0.3) | |||||||||||||||||||
Gross profit | 28,712 | 44,431 | (15,719) | (35.4) | |||||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Selling, general, and administrative | 22,550 | 17,941 | 4,609 | 25.7 | |||||||||||||||||||
Research and development | 13,675 | 12,567 | 1,108 | 8.8 | |||||||||||||||||||
Severance | 1,318 | — | 1,318 | 100.0 | |||||||||||||||||||
(Gain) loss on sale of assets | (1,919) | 439 | (2,358) | (537.1) | |||||||||||||||||||
Total operating expense | 35,624 | 30,947 | 4,677 | 15.1 | |||||||||||||||||||
Operating income | $ | (6,912) | $ | 13,484 | $ | (20,396) | (151.3) | % |
For the Three Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Aerospace and Defense | $ | 13,416 | $ | 12,327 | $ | 1,089 | 8.8 | % | |||||||||||||||
Broadband | 10,259 | 30,331 | (20,072) | (66.2) | |||||||||||||||||||
Total revenue | $ | 23,675 | $ | 42,658 | $ | (18,983) | (44.5) | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Aerospace and Defense | $ | 32,322 | $ | 39,097 | $ | (6,775) | (17.3) | % | |||||||||||||||
Broadband | 66,239 | 75,393 | (9,154) | (12.1) | |||||||||||||||||||
Total revenue | $ | 98,561 | $ | 114,490 | $ | (15,929) | (13.9) | % |
For the Three Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Aerospace and Defense | $ | 1,551 | $ | 3,872 | $ | (2,321) | (59.9) | % | |||||||||||||||
Broadband | 2,347 | 13,353 | (11,006) | (82.4) | |||||||||||||||||||
Total gross profit | $ | 3,898 | $ | 17,225 | $ | (13,327) | (77.4) | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Aerospace and Defense | $ | 4,468 | $ | 11,747 | $ | (7,279) | (62.0) | % | |||||||||||||||
Broadband | 24,244 | 32,684 | (8,440) | (25.8) | |||||||||||||||||||
Total gross profit | $ | 28,712 | $ | 44,431 | $ | (15,719) | (35.4) | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Net cash provided by operating activities | $ | 8,149 | $ | 6,729 | $ | 1,420 | 21.1 | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Net cash used in investing activities | $ | (4,362) | $ | (2,422) | $ | (1,940) | (80.1) | % |
For the Nine Months Ended June 30, | |||||||||||||||||||||||
(in thousands, except percentages) | 2022 | 2021 | Change | ||||||||||||||||||||
Net cash (used in) provided by financing activities | $ | (278) | $ | 33,397 | $ | (33,675) | (100.8) | % |
2.1 | ||||||||
2.2 | ||||||||
2.3 | ||||||||
2.4 | ||||||||
2.5 | ||||||||
2.6 | ||||||||
2.7 | ||||||||
2.8 | ||||||||
2.9 | ||||||||
10.1† | ||||||||
31.1** | ||||||||
31.2** | ||||||||
32.1*** | ||||||||
32.2*** | ||||||||
101.INS** | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH** | XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
104** | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
EMCORE CORPORATION | ||||||||||||||
Date: | August 9, 2022 | By: | /s/ Jeffrey Rittichier | |||||||||||
Jeffrey Rittichier | ||||||||||||||
Chief Executive Officer (Principal Executive Officer) | ||||||||||||||
Date: | August 9, 2022 | By: | /s/ Tom Minichiello | |||||||||||
Tom Minichiello | ||||||||||||||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | August 9, 2022 | By: | /s/ Jeffrey Rittichier | ||||||||||||||
Jeffrey Rittichier | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
(Principal Executive Officer) |
Date: | August 9, 2022 | By: | /s/ Tom Minichiello | ||||||||||||||
Tom Minichiello | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
(Principal Financial and Accounting Officer) |
Date: | August 9, 2022 | By: | /s/ Jeffrey Rittichier | ||||||||||||||
Jeffrey Rittichier | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
(Principal Executive Officer) |
Date: | August 9, 2022 | By: | /s/ Tom Minichiello | ||||||||||||||
Tom Minichiello | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
(Principal Financial and Accounting Officer) |
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Income Statement [Abstract] | ||||
Revenue | $ 23,675 | $ 42,658 | $ 98,561 | $ 114,490 |
Cost of revenue | 19,777 | 25,433 | 69,849 | 70,059 |
Gross profit | 3,898 | 17,225 | 28,712 | 44,431 |
Operating expense: | ||||
Selling, general, and administrative | 7,800 | 6,081 | 22,550 | 17,941 |
Research and development | 4,513 | 4,500 | 13,675 | 12,567 |
Severance | 0 | 0 | 1,318 | 0 |
(Gain) loss on sale of assets | (1,318) | 250 | (1,919) | 439 |
Total operating expense | 10,995 | 10,831 | 35,624 | 30,947 |
Operating (loss) income | (7,097) | 6,394 | (6,912) | 13,484 |
Other (expense) income: | ||||
Gain on extinguishment of debt | 0 | 6,561 | 0 | 6,561 |
Interest (income) expense, net | 9 | 579 | (14) | 481 |
Foreign exchange (loss) gain | (185) | 87 | (160) | 256 |
Pension expense | (349) | 0 | (349) | 0 |
Total other (expense) income | (525) | 7,227 | (523) | 7,298 |
(Loss) income before income tax expense | (7,622) | 13,621 | (7,435) | 20,782 |
Income tax expense | (27) | (6) | (25) | (214) |
Net (loss) income | (7,649) | 13,615 | (7,460) | 20,568 |
Foreign exchange translation adjustment | 69 | (5) | 91 | (26) |
Comprehensive (loss) income | $ (7,580) | $ 13,610 | $ (7,369) | $ 20,542 |
Per share data | ||||
Net (loss) income per basic share (in dollars per share) | $ (0.20) | $ 0.37 | $ (0.20) | $ 0.62 |
Weighted-average number of basic shares outstanding (in shares) | 37,425 | 36,768 | 37,197 | 33,069 |
Net (loss) income per diluted share (in dollars per share) | $ (0.20) | $ 0.35 | $ (0.20) | $ 0.59 |
Weighted-average number of diluted shares outstanding (in shares) | 37,425 | 38,893 | 37,197 | 34,777 |
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
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Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 267 | $ 260 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 44,449,000 | 43,890,000 |
Common stock, shares outstanding (in shares) | 37,543,000 | 36,984,000 |
Treasury stock, shares held (in shares) | 6,906,000 | 6,906,000 |
Description of Business |
9 Months Ended |
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Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessEMCORE Corporation (referred to herein, together with its subsidiaries, as the “Company,” “we,” “our,” or “EMCORE”) is a leading provider of sensors for navigation in the aerospace and defense market as well as a manufacturer of lasers and optical subsystems for use in the broadband industry. We pioneered the linear fiber optic transmission technology that enabled the world’s first delivery of Cable TV (“CATV”) directly on fiber, and today are a leading provider of advanced products that enable communications systems and service providers to meet growing demand for increased bandwidth and connectivity. The technology at the heart of our broadband communications products is shared with our fiber optic gyroscope (“FOG”) and inertial sensors to provide the aerospace and defense markets with state-of-the-art navigation systems technology. With the acquisitions of (a) Systron Donner Inertial, Inc. (“SDI”), a navigation systems provider with a scalable, chip-based platform for higher volume gyro applications utilizing quartz micro-electromechanical system (“QMEMS”) technology, in June 2019, and (b) the L3Harris Space and Navigation (“S&N”) business in April 2022, we further expanded our portfolio of gyros and inertial sensors with SDI’s QMEMS gyro and accelerometer technology and S&N's FOG and ring laser gyro (“RLG”) technology. We have fully vertically-integrated manufacturing capability through our indium phosphide (“InP”) compound semiconductor wafer fabrication facility at our headquarters in Alhambra, CA and through our QMEMS processing and sensor manufacturing facility in Concord, CA and our FOG and RLG manufacturing facility in Budd Lake, NJ. These facilities support our vertically-integrated manufacturing strategy for QMEMS, FOG, and RLG products for navigation systems, and, with respect to our Alhambra, CA facility, for our chip, laser, transmitter, and receiver products for broadband applications. With both analog and digital circuits on multiple chips, or even a single chip, the value of Mixed-Signal device solutions is often substantially greater than traditional digital applications and requires a specialized expertise held by us which is unique in the optics industry. |
Summary of Significant Accounting Policies |
9 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, they do not include all information and notes required by U.S. GAAP for annual financial statements. In our opinion, the interim financial statements reflect all adjustments, which are all normal recurring adjustments, that are necessary to provide a fair presentation of the financial results for the interim periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for an entire fiscal year. The condensed consolidated balance sheet as of September 30, 2021 has been derived from the audited consolidated financial statements as of such date. For a more complete understanding of our business, financial position, operating results, cash flows, risk factors and other matters, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. Significant Accounting Policies and Estimates Pension Plan With the acquisition of S&N, we acquired the assets and assumed the liabilities associated with a pension plan, now named the Emcore Space & Navigation Corporation Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. Subsequent to quarter end, as of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. The investments in the Pension Plan are measured at fair value using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. If these estimates differ significantly from actual results, the impact to the condensed consolidated financial statements may be material. Recent Accounting Pronouncements We recently adopted the following accounting standards, which had the following impacts on our condensed consolidated financial statements: In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing various exceptions, such as the exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items. The amendments in this update also simplify the accounting for income taxes related to income-based franchise taxes and require that an entity reflect enacted tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard was effective for our fiscal year beginning October 1, 2021. The adoption of this new standard did not have a material impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU required an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contract. The ASU is effective for the Company for our annual and interim periods beginning October 1, 2023. We early adopted this standard effective with our fiscal year beginning October 1, 2021. The early adoption of this new standard did not have a material impact on the condensed consolidated financial statements. Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures.
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Acquisition |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition On April 29, 2022, we completed the acquisition of the L3Harris Technologies, Inc. (“L3H”) Space and Navigation business (“S&N”) for a total purchase price of approximately $5.0 million in cash, exclusive of transaction costs and expenses and subject to certain post-closing working capital adjustments, resulting in a cash payment at closing of the acquisition of approximately $2.4 million. Following the closing, we began integrating S&N into our Aerospace and Defense reportable segment and have included the financial results of S&N in our condensed consolidated financial statements beginning on the acquisition date. Revenue and net loss of S&N from the acquisition date of $4.3 million and $0.7 million, respectively, is included in our condensed consolidated statements of operations and comprehensive (loss) income for the three and nine months ended June 30, 2022. Preliminary Purchase Price Allocation The total purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Due to the fact that the acquisition occurred in the current interim period, the Company's fair value estimates for the purchase price allocation are preliminary. The final determination of fair value for the assets acquired and liabilities assumed is subject to further change and will be completed as soon as possible, but no later than one year from the acquisition date. The preliminary estimates that are not yet finalized relate to identifiable intangible assets and asset retirement obligations. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in a material adjustment to goodwill. The table below represents the preliminary purchase price allocation to the assets acquired and liabilities assumed of S&N based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions:
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Cash, Cash Equivalents and Restricted Cash |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:
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Accounts Receivable, net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, net | Accounts Receivable, net The components of accounts receivable consisted of the following:
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Inventory |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory The components of inventory consisted of the following:
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Property, Plant, and Equipment, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant, and Equipment, net | Property, Plant, and Equipment, net The components of property, plant, and equipment, net consisted of the following:
During the fiscal year ended September 30, 2020, the Company entered into agreements to sell equipment and these assets were reclassified to assets held for sale. The balance as of June 30, 2022 and September 30, 2021 was $0.5 million and $1.2 million, respectively. The balance of assets held for sale will be sold in the quarter ending September 30, 2022. During the three months ended June 30, 2022 and 2021, the Company sold certain equipment and recognized a (gain) loss on sale of assets of $(1.3) million and $0.3 million, respectively. During the nine months ended June 30, 2022 and 2021, the Company sold certain equipment and recognized a (gain) loss on sale of assets of $(1.9) million and $0.4 million, respectively. Geographical Concentrations Long-lived assets consist of land, building, property, plant, and equipment. As of June 30, 2022 and September 30, 2021, 93% and 96%, respectively, of our long-lived assets were located in the United States. The remaining long-lived assets are primarily located in Thailand. The increase in long-lived assets in Thailand was a result of consigning additional equipment in CIP for production purposes for use predominantly in the CATV Lasers and Transmitters product line.
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Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | Benefit Plans We assumed a defined benefit pension plan (the “Pension Plan”) on April 29, 2022 as a result of the acquisition of S&N. The Pension Plan was frozen to new hires as of March 31, 2007 and employees hired on or after April 1, 2007 are not eligible to participate in the Pension Plan. Subsequent to quarter end, as of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. Benefits are based on years of credited service at retirement. Annual contributions to the Pension Plan are not less than the minimum funding standards outlined in the Employee Retirement Income Security Act of 1974, as amended. We make contributions to the Pension Plan with the goal of ensuring that it is adequately funded to meet its future obligations. We did not make any contributions to the Pension Plan during the period from April 29, 2022 to June 30, 2022 and do not anticipate making any contributions for the remainder of 2022. The weighted average discount rate used to determine the projected benefit obligation of the Pension Plan as of the date of the S&N acquisition on April 29, 2022 was 4.40%. The weighted average discount rate used to determine interest cost related to the Pension Plan for the period from April 29, 2022 to June 30, 2022 was 4.40%. The components of the pension expense are as follows:
Total pension expense is included as a component of other (expense) income on the condensed consolidated statements of operations and comprehensive (loss) income for the three and nine months ended June 30, 2022. The net pension asset assumed with the S&N acquisition is as follows:
Net pension asset is included as a component of other non-current assets on the condensed consolidated balance sheets as of June 30, 2022. As of June 30, 2022 the Pension Plan assets consist of cash and cash equivalents. 401(k) Plan We have a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this savings plan, participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. During each of the three months ended June 30, 2022 and 2021, our matching contribution was $0.2 million in cash, respectively. During each of the nine months ended June 30, 2022 and 2021, our matching contribution was $0.8 million in cash, respectively.
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Accrued Expenses and Other Current Liabilities |
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Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities The components of accrued expenses and other current liabilities consisted of the following:
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Income and Other Taxes |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income and Other Taxes | Income and Other Taxes During the three months ended June 30, 2022 and 2021, the Company recorded an income tax expense of $27,000 and $6,000, respectively. Income tax expense during the three months ended June 30, 2022 is composed primarily of Texas gross margin taxes. Income tax expense during the three months ended June 30, 2021 is composed primarily of state tax expense which is driven by the State of California's temporary suspension of net operating loss ("NOL") utilization. During the nine months ended June 30, 2022 and 2021, the Company recorded an income tax expense of $25,000 and $214,000, respectively. Income tax expense for the nine months ended June 30, 2022 is composed primarily of Texas gross margin taxes. Income tax expense for the nine months ended June 30, 2021 is composed primarily of state tax expense which is driven by the State of California's temporary suspension of NOL utilization. For the three months ended June 30, 2022 and 2021 the effective tax rate on continuing operations was 0.4% and 0.0%, respectively. For the nine months ended June 30, 2022 and 2021 the effective tax rate on continuing operations was 0.3% and 1.0%, respectively. The tax rate for the three and nine months ended June 30, 2022 is primarily driven by Texas gross margin taxes. The Company uses estimates to forecast the results from continuing operations for the current fiscal year as well as permanent differences between book and tax accounting. We have not provided for income taxes on non-U.S. subsidiaries’ undistributed earnings as of June 30, 2022 because we plan to indefinitely reinvest the unremitted earnings of our non-U.S. subsidiaries and all of our non-U.S. subsidiaries historically have negative earnings and profits. All deferred tax assets have a full valuation allowance as of June 30, 2022, except for the tax amortization of indefinitely lived goodwill, which cannot be utilized to reduce deferred tax assets. On a quarterly basis, the Company evaluates the positive and negative evidence to assess whether the more likely than not criteria has been satisfied in determining whether there will be further adjustments to the valuation allowance. As of June 30, 2022 and September 30, 2021, we did not accrue any significant uncertain tax benefit, interest, or penalties as tax liabilities on our condensed consolidated balance sheets. During the three and nine months ended June 30, 2022, there were no material increases or decreases in unrecognized tax benefits.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnifications We have agreed to indemnify certain customers against claims of infringement of intellectual property rights of others in our sales contracts with these customers. Historically, we have not paid any claims under these customer indemnification obligations. We enter into indemnification agreements with each of our directors and executive officers pursuant to which we agree to indemnify them for certain potential expenses and liabilities arising from their status as a director or executive officer of the Company. We maintain directors and officers insurance, which covers certain liabilities relating to our obligation to indemnify our directors and executive officers in certain circumstances. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular claim. Legal Proceedings We are subject to various legal proceedings, claims, and litigation, either asserted or unasserted, that arise in the ordinary course of business. The outcome of these matters is currently not determinable and we are unable to estimate a range of loss, should a loss occur, from these proceedings. The ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and the results of these matters cannot be predicted with certainty. Professional legal fees are expensed when incurred. We accrue for contingent losses when such losses are probable and reasonably estimable. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information. Should we fail to prevail in any legal matter, or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially affected. Intellectual Property Lawsuits We protect our proprietary technology by applying for patents where appropriate and, in other cases, by preserving the technology, related know-how, and information as trade secrets. The success and competitive position of our product lines are impacted by our ability to obtain intellectual property protection for our research and development efforts. We have, from time to time, exchanged correspondence with third parties regarding the assertion of patent or other intellectual property rights in connection with certain of our products and processes. Resilience Litigation In February 2021, Resilience Capital (“Resilience”) filed a complaint against us with the Delaware Chancery Court containing claims arising from the February 2020 sale of SDI’s real property (the “Concord Property Sale”) located in Concord, California (the “Concord Real Property”) to Eagle Rock Holdings, LP (“Buyer”) and that certain Single-Tenant Triple Net Lease, dated as of February 10, 2020, entered into by and between SDI and the Buyer, pursuant to which SDI leased from the Buyer the Concord Real Property for a 15 year term. The Resilience complaint seeks, among other items, (a) a declaration that the Concord Property Sale included a non-cash component, (b) a decree requiring us and Resilience to follow the appraisal requirements set forth in that certain Purchase and Sale Agreement (the "SDI Purchase Agreement"), dated as of June 7, 2019, by and among the Company, The Resilience Fund IV, L.P., The Resilience Fund IV-A, L.P., Aerospace Newco Holdings, Inc. and Ember Acquisition Sub, Inc., (c) recovery of Resilience’s costs and expenses, and (d) pre- and post-judgment interest. In April 2021, we filed with the Delaware Chancery Court our answer to the Resilience complaint and counterclaims against Resilience, in which we are seeking, among other items, (a) dismissal of the Resilience complaint and/or granting of judgment in favor of EMCORE with respect to the Resilience complaint, (b) entering final judgment against Resilience awarding damages to us for Resilience’s fraud and breaches of the SDI Purchase Agreement in an amount to be proven at trial and not less than $1,565,000, (c) a judicial determination of the respective rights and duties of us and Resilience under the SDI Purchase Agreement, (d) an award to us of costs and expenses, and (e) pre- and post-judgment interest. We believe that the claims made by Resilience in its complaint are without merit and we intend to vigorously defend ourselves against them.
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Equity Plans We provide long-term incentives to eligible officers, directors, and employees in the form of equity-based awards. We maintain three equity incentive compensation plans, collectively described as our “Equity Plans”: (a) the 2010 Equity Incentive Plan, (b) the 2012 Equity Incentive Plan, and (c) the 2019 Equity Incentive Plan. We issue new shares of common stock to satisfy awards granted under our Equity Plans. In March 2022, our shareholders approved the Amended and Restated EMCORE Corporation 2019 Equity Incentive Plan, which was adopted by the Company’s Board of Directors in December 2021, and increased the maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2019 Equity Incentive Plan by an additional 1.9 million shares. Stock-Based Compensation The following table sets forth stock-based compensation expense by award type:
The following table sets forth stock-based compensation expense by expense type:
(Loss) Income Per Share The following table sets forth the computation of basic and diluted net (loss) income per share:
Basic earnings per share ("EPS") is computed by dividing net (loss) income for the period by the weighted-average number of common stock outstanding during the period. Diluted EPS is computed by dividing net (loss) income for the period by the weighted average number of common stock outstanding during the period, plus the dilutive effect of outstanding restricted stock units ("RSUs") and restricted stock awards ("RSAs"), performance stock units ("PSUs"), stock options, and shares issuable under the employee stock purchase plan ("ESPP") as applicable pursuant to the treasury stock method. Certain of the Company's outstanding share-based awards, noted in the table above, were excluded because they were anti-dilutive, but they could become dilutive in the future. The anti-dilutive stock options and shares of outstanding and unvested restricted stock were excluded from the computation of earnings per share for the three and nine months ended June 30, 2022 due to the Company incurring a net loss for such periods. Future Issuances Common stock reserved for future issuances was as follows:
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Segment and Revenue Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Revenue Information | Segment and Revenue Information Reportable Segments Reported below are the Company’s segments for which separate financial information is available and upon which operating results are evaluated by the chief operating decision maker, the Chief Executive Officer, to assess performance and to allocate resources. We do not allocate sales and marketing, general and administrative expenses, or interest expense and interest income to our segments because management does not include the information in its measurement of the performance of the operating segments. Also, a measure of segment assets and liabilities has not been provided to the Company's chief operating decision maker and therefore is not shown below. Information on reportable segments utilized by the chief operating decision maker is as follows:
Product Categories Revenue is classified by major product category as presented below:
Geographical Concentration The following table sets forth revenue by geographic area based on our customers’ billing addresses:
Customer Concentration Portions of the Company’s sales are concentrated among a limited number of customers. Significant customers are defined as customers representing greater than 10% of consolidated revenue. Revenue from two significant customers represented an aggregate of 37% and 62% of our consolidated revenue for the three months ended June 30, 2022 and 2021, respectively. Revenue from two significant customers represented an aggregate of 54% of our consolidated revenue for the nine months ended June 30, 2022. Revenue from three significant customers represented an aggregate of 70% of our consolidated revenue for the nine months ended June 30, 2021. The percentage from significant customers decreased due to lower CATV revenue from our Broadband segment. The duration, severity, and future impact of the COVID-19 pandemic is highly uncertain and could result in significant disruptions to the business operations of the Company’s customers. If one or more of these significant customers significantly decreases their orders for the Company’s products, or if we are unable to deliver finished products to the customer in connection with such orders, the Company’s business could be materially and adversely affected.
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Subsequent Event |
9 Months Ended |
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Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Purchase Agreement On August 9, 2022, EMCORE Corporation (“EMCORE”) entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and among EMCORE, Delta Acquisition Sub, Inc., a Delaware corporation and wholly owned subsidiary of EMCORE (“EMCORE Sub”), and KVH Industries, Inc., a Delaware corporation (“Seller”), pursuant to which Seller agreed to sell the assets (the “Purchased Assets”) primarily related to its Inertial Navigation segment (the “Business”), including Seller's property interests in its Tinley Park facility, to EMCORE (the “Transaction”). The signing and closing of the Transaction occurred simultaneously. Under the terms of the Purchase Agreement, EMCORE paid approximately $55.0 million in cash for the Purchased Assets (the “Purchase Price”), subject to certain working capital adjustments. The Transaction also involved EMCORE’s assumption of specified liabilities, generally including the liabilities primarily related to the Business. At the closing, $1.0 million of the Purchase Price (the “Holdback Amount”) was held back by EMCORE as security for certain post-closing obligations of Seller. The Holdback Amount will be released over time, if at all, upon satisfaction by Seller of certain of its post-closing obligations. In connection with the Transaction, the parties entered into a transition services agreement pursuant to which Seller will provide certain migration and transition services to facilitate an orderly transaction of the operation of the Business to EMCORE in the twelve month period following consummation of the Transaction. The Purchase Agreement contains certain representations, warranties, covenants, and indemnification provisions, including for breaches of covenants and for losses resulting from Seller liabilities specifically excluded from the Transaction. In connection with its entry into the Purchase Agreement, EMCORE obtained a customary representations and warranties insurance policy as recourse for certain losses arising out of breaches of representations and warranties of Seller set forth in the Purchase Agreement. The representations and warranties insurance policy is subject to certain policy limits, exclusions, deductibles, and other terms and conditions. Seller has agreed that, for the period commencing on the date of closing until the five-year anniversary thereof, neither Seller nor any of its affiliates will, directly or indirectly, compete with the business related to the development, engineering, manufacturing, marketing, distribution or sale of navigation sensors and systems or inertial sensors and systems for defense or commercial applications (including self-driving vehicles), as operated by Seller as of immediately prior to the closing, subject to certain limitations. Seller has also agreed that, for a period of 24 months after the closing, neither Seller nor any of its affiliates will, directly or indirectly, solicit to employ or employ any employee of EMCORE or any employee transferred to EMCORE as part of the Transaction. In consideration of the recency of the completion of the purchase, we have not completed the initial accounting for the business combination and have not evaluated stand-alone acquiree revenue and earnings in the pre-acquisition period for supplemental pro-forma presentation and, accordingly have not included disclosure related to such items. New ABL Credit Agreement On August 9, 2022, EMCORE and EMCORE Space & Navigation Corporation (the “Borrowers”) entered into that certain Credit Agreement, dated as of August 9, 2022 (the “Credit Agreement”), among the Borrowers, the lenders party thereto and Wingspire Capital LLC, as administrative agent for the lenders (the “Agent”). The Credit Agreement provides for two credit facilities: (a) an asset-based revolving credit facility in an aggregate principal amount of up to $40.0 million, subject to a borrowing base consisting of eligible accounts receivable and eligible inventory (subject to certain reserves), and (b) a term loan facility in an aggregate principal amount of $6.0 million. The making of the loans under the Credit Agreement is subject to the satisfaction of certain conditions precedent, including, among other things, the execution and delivery of a pledge and security agreement, pursuant to which the obligations under the Credit Agreement will be secured on a senior secured basis (subject to permitted liens) by substantially all assets of the Borrowers and substantially all assets of any future guarantors. Although no subsidiaries of EMCORE are currently required to guarantee the Borrowers’ obligations under the Credit Agreement, EMCORE Sub may be required to become a borrower or a guarantor under the Credit Agreement under certain circumstances as determined by the Agent in its sole discretion, and domestic subsidiaries of EMCORE that are formed or acquired after the closing under the Credit Agreement will be required to become guarantors under the Credit Agreement. The proceeds of the loans made on the closing date under the Credit Agreement may be used (a) to finance the Transaction and pay fees, costs and expenses in connection therewith, (b) to pay fees, costs and expenses in connection with the financing, and (c) for general corporate purposes. Borrowings under the Credit Agreement will mature on August 8, 2025, and will bear interest, at a rate per annum equal to term SOFR plus a margin of 3.75% in the case of revolving loans and term SOFR plus a margin of 5.50% in the case of term loans. In addition, the Borrowers will be responsible for the Agent’s annual collateral monitoring fees as well as the lenders’ fees and expenses, including a closing fee of 1.0% of the aggregate principal amount of the commitments as of the closing with respect to revolving loans and 1.50% of the aggregate principal amount of the commitments as of the closing with respect to term loans. The Borrowers may also be required to pay an unused line fee of 0.50% in respect of the undrawn portion of the revolving commitments, which is generally based on average daily usage of the revolving facility during the immediately preceding month. The Credit Agreement contains representations and warranties, reporting and other affirmative covenants, and negative covenants that are generally customary for credit facilities of this type. Among others, the Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit the Borrowers’ and their respective subsidiaries’ ability to incur indebtedness, grant liens, enter into sale and leaseback transactions, enter into swap agreements, make loans, acquisitions and investments, change the nature of their business, acquire or sell assets or consolidate or merge with or into other persons or entities, declare or pay dividends or make other restricted payments, enter into transactions with affiliates, enter into burdensome agreements, change fiscal year, amend organizational documents, and use proceeds to fund any activities of or business with any person that is the subject of governmental sanctions. In addition, the Credit Agreement requires that, for any period commencing upon the occurrence of an event of default or excess availability under the Credit Agreement being less than the greater of $5.0 million and 15% of the revolving commitments until such time as no event of default shall be continuing and excess availability under the Credit Agreement shall be at least the greater of $5.0 million and 15% of the revolving commitments for a period of 60 consecutive days, the Borrowers satisfy a consolidated fixed charge coverage ratio of not less than 1.10:1.00. The Credit Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Borrowers under the Credit Agreement to be immediately due and payable, and exercise rights and remedies available to the lenders under the Credit Agreement or applicable law or equity. At the closing under the Credit Agreement, the Borrowers borrowed revolving loans in an aggregate principal amount of $14.3 million and term loans in an aggregate principal amount equal to the entire term loan commitment.
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Organization, Consolidation and Presentation of Financial Statements (Policies) |
9 Months Ended |
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Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, they do not include all information and notes required by U.S. GAAP for annual financial statements. In our opinion, the interim financial statements reflect all adjustments, which are all normal recurring adjustments, that are necessary to provide a fair presentation of the financial results for the interim periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for an entire fiscal year. The condensed consolidated balance sheet as of September 30, 2021 has been derived from the audited consolidated financial statements as of such date. For a more complete understanding of our business, financial position, operating results, cash flows, risk factors and other matters, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
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Significant Accounting Policies and Estimates | Significant Accounting Policies and Estimates Pension Plan With the acquisition of S&N, we acquired the assets and assumed the liabilities associated with a pension plan, now named the Emcore Space & Navigation Corporation Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. Subsequent to quarter end, as of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. The investments in the Pension Plan are measured at fair value using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. If these estimates differ significantly from actual results, the impact to the condensed consolidated financial statements may be material.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements We recently adopted the following accounting standards, which had the following impacts on our condensed consolidated financial statements: In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing various exceptions, such as the exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items. The amendments in this update also simplify the accounting for income taxes related to income-based franchise taxes and require that an entity reflect enacted tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new standard was effective for our fiscal year beginning October 1, 2021. The adoption of this new standard did not have a material impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU required an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contract. The ASU is effective for the Company for our annual and interim periods beginning October 1, 2023. We early adopted this standard effective with our fiscal year beginning October 1, 2021. The early adoption of this new standard did not have a material impact on the condensed consolidated financial statements. Other accounting standards that have been issued or proposed by FASB and do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures.
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Legal Costs | Professional legal fees are expensed when incurred. We accrue for contingent losses when such losses are probable and reasonably estimable. |
Acquisition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below represents the preliminary purchase price allocation to the assets acquired and liabilities assumed of S&N based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions:
|
Cash, Cash Equivalents and Restricted Cash (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:
|
Accounts Receivable, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accounts Receivable, net | The components of accounts receivable consisted of the following:
|
Inventory (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | The components of inventory consisted of the following:
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Property, Plant, and Equipment, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | The components of property, plant, and equipment, net consisted of the following:
|
Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||
Components of Pension Expense | The components of the pension expense are as follows:
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Schedule of Defined Benefit Plan, Plan with Projected Benefit Obligation in Excess of Plan Assets | The net pension asset assumed with the S&N acquisition is as follows:
|
Accrued Expenses and Other Current Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accrued Expenses and Other Current Liabilities | The components of accrued expenses and other current liabilities consisted of the following:
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Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense - By Award Type | The following table sets forth stock-based compensation expense by award type:
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Schedule of Stock-based Compensation Expense - By Expense Type | The following table sets forth stock-based compensation expense by expense type:
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Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net (loss) income per share:
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Schedule of Common Stock Reserved for Future Issuances | Common stock reserved for future issuances was as follows:
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Segment and Revenue Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reportable Segment | Information on reportable segments utilized by the chief operating decision maker is as follows:
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Schedule of Revenue by Major Product Category | Revenue is classified by major product category as presented below:
|
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Schedule of Revenue by Geographic Region | The following table sets forth revenue by geographic area based on our customers’ billing addresses:
|
Acquisition - Narrative (Details) - L3Harris Technologies, Inc. - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Apr. 29, 2022 |
Jun. 30, 2022 |
Jun. 30, 2022 |
|
Business Acquisition [Line Items] | |||
Aggregate consideration | $ 5.0 | ||
Cash payments at closing of acquisition | 2.4 | ||
Net revenue | 4.3 | ||
Net loss | $ 0.7 | ||
Transaction costs | $ 0.3 | $ 0.8 |
Acquisition - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Apr. 29, 2022 |
Sep. 30, 2021 |
---|---|---|---|
Tangible assets acquired: | |||
Goodwill | $ 354 | $ 69 | |
L3Harris Technologies, Inc. | |||
Tangible assets acquired: | |||
Accounts receivable | $ 803 | ||
Inventory | 370 | ||
Contract assets | 6,206 | ||
Operating lease right-of-use assets | 1,529 | ||
Property, plant, and equipment | 1,996 | ||
Net pension benefit assets | 1,727 | ||
Intangible assets acquired | 1,460 | ||
Goodwill | 285 | ||
Liabilities assumed: | |||
Accounts payable and accrued expenses | (1,848) | ||
Contract liabilities | (6,024) | ||
Operating lease liabilities | (1,565) | ||
Asset retirement obligations | (2,500) | ||
Total purchase consideration | $ 2,439 |
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Sep. 30, 2020 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash | $ 19,482 | $ 16,547 | ||
Cash equivalents | 55,127 | 55,074 | ||
Restricted cash | 520 | 61 | ||
Total cash, cash equivalents, and restricted cash | $ 75,129 | $ 71,682 | $ 68,297 | $ 30,538 |
Accounts Receivable, net - Schedule of Components of Accounts Receivable (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Receivables [Abstract] | ||
Accounts receivable, gross | $ 24,554 | $ 32,109 |
Allowance for credit loss | (267) | (260) |
Accounts receivable, net | $ 24,287 | $ 31,849 |
Inventory - Schedule of Components of Inventory (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 15,217 | $ 16,146 |
Work in-process | 10,716 | 11,410 |
Finished goods | 3,273 | 4,753 |
Inventory | $ 29,206 | $ 32,309 |
Property, Plant, and Equipment, net - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 64,043 | $ 58,595 |
Accumulated depreciation | (37,964) | (36,051) |
Property, plant, and equipment, net | 26,079 | 22,544 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 42,932 | 37,985 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 1,380 | 1,125 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 3,589 | 3,575 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 7,186 | 6,663 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 8,956 | $ 9,247 |
Property, Plant, and Equipment, net - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2021 |
|
Property, Plant and Equipment [Line Items] | |||||
(Gain) loss on sale of assets | $ (1,318) | $ 250 | $ (1,919) | $ 439 | |
United States | Long-lived Assets | Geographic Concentration Risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk, percentage | 93.00% | 96.00% | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant, and equipment held for sale | $ 500 | $ 500 | $ 1,200 |
Benefit Plans - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Apr. 29, 2022 |
|
Defined Benefit Plan Disclosure [Line Items] | |||||
Matching contribution | $ 0.2 | $ 0.2 | $ 0.8 | $ 0.8 | |
L3Harris Technologies, Inc. | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Weighted average discount rate | 4.40% | 4.40% | 4.40% |
Benefit Plans - Schedule of Net Benefit Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2022 |
|
Retirement Benefits [Abstract] | ||
Interest cost | $ 60 | $ 60 |
Loss on Pension Plan assets | 349 | 349 |
Total pension expense | $ 409 | $ 409 |
Benefit Plans - Schedule of Defined Benefit Plan, Plan with Projected Benefit Obligation in Excess of Plan Assets (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Benefit obligation | $ 8,203 |
Fair value of Pension Plan assets | 9,581 |
Net pension asset | $ 1,378 |
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Compensation | $ 6,783 | $ 7,192 |
Warranty | 1,381 | 1,125 |
Legal expenses and other professional fees | 202 | 152 |
Income and other taxes | 0 | 104 |
Severance and restructuring accruals | 525 | 0 |
Litigation settlement | 575 | 70 |
Other | 2,185 | 925 |
Accrued expenses and other current liabilities | $ 11,651 | $ 9,568 |
Income and Other Taxes - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 27,000 | $ 6,000 | $ 25,000 | $ 214,000 | |
Effective tax rate on continuing operations | 0.40% | (0.00%) | 0.30% | 1.00% | |
Interest and penalties accrued as tax liabilities | $ 0 | $ 0 | $ 0 | ||
Uncertain tax reserve, period increase (decrease) | $ 0 | $ 0 |
Commitments and Contingencies (Details) - Resilience Litigation - USD ($) $ in Thousands |
1 Months Ended | |
---|---|---|
Apr. 30, 2021 |
Feb. 10, 2020 |
|
Resilience Capital | ||
Loss Contingencies [Line Items] | ||
Damages sought value (not less than) | $ 1,565 | |
Concord Property | ||
Loss Contingencies [Line Items] | ||
Lease length in years | 15 years |
Equity - Narrative (Details) shares in Millions |
1 Months Ended | |
---|---|---|
Mar. 31, 2022
shares
|
Jun. 30, 2022
plan
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity incentive compensation plans maintained by the company | plan | 3 | |
2019 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional number of shares authorized for the plan (in shares) | shares | 1.9 |
Equity - Schedule of Stock-based Compensation Expense - by Expense Category (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,523 | $ 1,176 | $ 3,755 | $ 3,010 |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 275 | 220 | 604 | 564 |
Selling, general, and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,001 | 752 | 2,537 | 1,830 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 247 | $ 204 | $ 614 | $ 616 |
Equity - Schedule of Common Stock Reserved for Future Issuances (Details) |
Jun. 30, 2022
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise of outstanding stock options (in shares) | 13,884 |
Issuance of stock-based awards under the Equity Plans (in shares) | 341,304 |
Purchases under the officer and director share purchase plan (in shares) | 88,741 |
Total reserved (in shares) | 6,649,337 |
RSUs and RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested restricted stock units and awards (in shares) | 2,587,302 |
PSUs and PRSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested award potential, percentage | 200.00% |
Unvested performance stock units and awards (in shares) | 3,618,106 |
Segment and Revenue Information - Schedule of Reportable Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Segment Reporting Information [Line Items] | ||||
Revenue | $ 23,675 | $ 42,658 | $ 98,561 | $ 114,490 |
Gross profit | 3,898 | 17,225 | 28,712 | 44,431 |
R&D expense | 4,513 | 4,500 | 13,675 | 12,567 |
Operating (loss) income | (7,097) | 6,394 | (6,912) | 13,484 |
Unallocated expense (income) | ||||
Selling, general, and administrative | 7,800 | 6,081 | 22,550 | 17,941 |
Severance | 0 | 0 | 1,318 | 0 |
(Gain) loss on sale of assets | (1,318) | 250 | (1,919) | 439 |
Gain on extinguishment of debt | 0 | (6,561) | 0 | (6,561) |
Interest (income) expense, net | (9) | (579) | 14 | (481) |
Foreign exchange (loss) gain | 185 | (87) | 160 | (256) |
Pension expense | 349 | 0 | 349 | 0 |
Total unallocated expense (income) | 7,007 | (896) | 22,472 | 11,082 |
(Loss) income before income tax expense | (7,622) | 13,621 | (7,435) | 20,782 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 23,675 | 42,658 | 98,561 | 114,490 |
Operating (loss) income | (615) | 12,725 | 15,037 | 31,864 |
Operating segments | Aerospace And Defense | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 13,416 | 12,327 | 32,322 | 39,097 |
Gross profit | 1,551 | 3,872 | 4,468 | 11,747 |
R&D expense | 3,834 | 3,598 | 12,037 | 10,441 |
Operating (loss) income | (2,283) | 274 | (7,569) | 1,306 |
Operating segments | Broadband | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 10,259 | 30,331 | 66,239 | 75,393 |
Gross profit | 2,347 | 13,353 | 24,244 | 32,684 |
R&D expense | 679 | 902 | 1,638 | 2,126 |
Operating (loss) income | $ 1,668 | $ 12,451 | $ 22,606 | $ 30,558 |
Segment and Revenue Information - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Segment Reporting Information [Line Items] | ||||
Segment revenue | $ 23,675 | $ 42,658 | $ 98,561 | $ 114,490 |
United States and Canada | ||||
Segment Reporting Information [Line Items] | ||||
Segment revenue | 19,043 | 37,705 | 86,751 | 100,157 |
Asia | ||||
Segment Reporting Information [Line Items] | ||||
Segment revenue | 1,684 | 2,305 | 6,498 | 9,475 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Segment revenue | 2,243 | 1,603 | 3,999 | 2,817 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Segment revenue | $ 705 | $ 1,045 | $ 1,313 | $ 2,041 |
Segment and Revenue Information - Narrative (Details) - Sales Revenue, Segment - Customer Concentration Risk |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Two Significant Customers | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Concentration risk, percentage | 37.00% | 62.00% | 54.00% | |
Three Significant Customers | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Concentration risk, percentage | 70.00% |
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