Discontinued Operations

12 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

In April 2023, we initiated a restructuring program that includes the strategic shutdown of our Broadband business segment (including our cable TV, wireless, sensing and chips product lines) and the discontinuance of our defense optoelectronics product line. During the quarter ended September 30, 2023, the Broadband business segment and defense optoelectronics product line were considered as held for sale based upon (i) the existence of an executed non-binding letter of intent to sell our Broadband business segment (other than our chips product line) and our defense optoelectronics product line and (ii) in consideration of ongoing negotiations for the sale of the chips product line business. Given the prospective sale of the Broadband business segment and defense optoelectronics product line, we identified these asset groups as discontinued operations during the quarter ended September 30, 2023. We ceased operations of our chips business and indium phosphide wafer fabrication facility during the quarter ended September 30, 2023. In accordance with the authoritative guidance for discontinued operations (Accounting Standards Codification (ASC) 205-20), the Company determined that these business lines met held-for sale and discontinued operations accounting criteria during the quarter ended September 30, 2023. Accordingly, the Company classified the results of these business lines as discontinued operations in its consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with these business lines were classified as held for sale in the consolidated balance sheets for all periods presented.

In connection with (i) certain cash reduction actions approved by the Board in November 2022 and (ii) the restructuring program, the Board approved modifications to RSUs and PSUs previously granted to 36 employees under the 2019 Plan whose service with the Company was terminated. The modifications accelerated the vesting of 429 thousand RSUs and 291 thousand PSUs that had been scheduled to vest subsequent to each such employee’s termination of employment with EMCORE. The modifications resulted in incremental stock-based compensation expense of $0.6 million during the fiscal year ended September 30, 2023.

The following table presents key components of assets and liabilities that were classified as held for sale on the consolidated balance sheets:


	September 30,
(in thousands)	2023		2022
Cash	$	81	$	526
Accounts receivable, net of credit loss of $0	974		4,250
Contract assets	—		757
Inventory	10,063		10,753
Other current assets	1,154		1,728
Property, plant, and equipment, net	4,131		13,291
Operating lease right-of-use assets	56		99
Total assets	16,459		31,404
Remeasurement of assets	9,195		—
Assets held for sale	7,264		31,404
Accounts payable	1,854		2,350
Accrued expenses and other current liabilities	1,697		1,427
Contract liabilities	—		29
Operating lease liabilities - current	22		42
Operating lease liabilities - non-current	36		57
Other comprehensive income	1,053		860
Total liabilities	$	4,662	$	4,765

During the quarter ended September 30, 2023, the Company recorded a loss related to the remeasurement of the discontinued business lines to fair value less cost to sell of $9.6 million. The selling costs were approximately $0.4 million.

The following table presents key components of net (loss) income that were classified as discontinued operations on the consolidated statements of operations:


	Year Ended September 30,
(in thousands)	2023		2022
Revenue	$	9,674	$	78,808
Cost of Revenue	(16,723)		(53,156)
Gross Profit	(7,049)		25,652
Selling, general, and administrative	2,810		5,486
Research and development	3,459		4,754
Severance	2,597		1,213
Loss (gain) on sale of assets	10,407		(2,685)
Other (income) expense	(376)		456
(Loss) income from discontinued operations	$	(25,946)	$	16,428