EMCORE Corporation (Nasdaq: EMKR), the world’s largest independent
provider of inertial navigation solutions to the aerospace and
defense industry, today announced results for the fiscal 2024 first
quarter (1Q24) ended December 31, 2023. Management will host a
conference call to discuss 1Q24 financial and business results on
February 8, 2024 at 5:00 p.m. Eastern Time (ET).
For 1Q24, EMCORE’s consolidated revenue was $24.1 million. Net
loss on continuing operations was $4.4 million and $2.6 million on
a GAAP and non-GAAP basis, respectively. Adjusted EBITDA was
negative $1.7 million. Please refer to the schedules at the end of
this press release for GAAP to non-GAAP reconciliations and other
information related to non-GAAP financial measures.
“Chicago, Concord, and Alhambra showed increased revenue over
the September quarter, but not enough to offset the lower shipments
out of Budd Lake. We faced some unexpected headwinds from export
license timing and a PCB materials issues that ran up against the
holidays. Nevertheless, we continued to achieve a solid gross
margin and substantially reduced internally-funded R&D. When
comparing to the year-ago quarter, Inertial Navigation revenue grew
21%” said Jeff Rittichier, President and Chief Executive Officer of
EMCORE. “Going-forward, we expect a return to quarterly top-line
growth in the June quarter, including revenue from new programs,
continued engineering and operational integration among sites, and
full business systems integration within the fiscal year.”
Consolidated Results
|
Three Months Ended |
|
|
Dec 31, 2023 |
Sep 30, 2023 |
+increase/ -decrease |
|
1Q24 |
4Q23 |
Revenue |
$24.1M |
$26.8M |
-$2.7M |
Gross margin |
25% |
26% |
|
-1% |
|
Operating expenses
(a) |
$10.4M |
$35.7M |
-$25.3M |
Net loss on continuing
operations (a) |
($4.4M) |
($28.8M) |
+$24.4M |
Net loss on continuing operations per share, basic and diluted
(a) |
($0.05) |
($0.42) |
|
+$0.37 |
|
Non-GAAP gross margin
(b) |
29% |
31% |
|
-2% |
|
Non-GAAP operating
expenses (b) |
$9.5M |
$10.1M |
-$0.6M |
Non-GAAP net loss on
continuing operations (b) |
($2.6M) |
($2.0M) |
-$0.6M |
Non-GAAP net loss on continuing operations per share, basic and
diluted (b) |
($0.03) |
($0.03) |
|
$— |
|
Adjusted EBITDA |
($1.7M) |
($0.9M) |
-$0.8M |
Ending cash and cash
equivalents |
$21.2M |
$26.7M |
-$5.5M |
Line of credit and loan payable |
$8.6M |
$10.6M |
-$2.0M |
(a) 4Q23 includes $22.6M of asset impairments inclusive of a $19.0M
goodwill impairment. (b) Please refer to the schedules at the end
of this press release for GAAP to non-GAAP reconciliations and
other information related to non-GAAP financial measures. |
Business Outlook
The Company expects revenue for the fiscal second quarter (2Q24)
ending March 31, 2024 to be in the range of $23 million to $25
million.
Conference Call
The Company will host a conference call to discuss its financial
results on Thursday, February 8, 2024 at 2:00 p.m. PT (5:00
p.m. ET). To participate in the conference call, click on the
following link (ten minutes prior to the call) to register:
https://register.vevent.com/register/BI0cb1e94665954530a1646c193481d018.
Once registered, participants will have the option of: 1) dialing
in from their phone (using their PIN); or 2) clicking the “Call Me”
option to receive an automated call directly to their phone. The
call will be webcast live via the Company's investor website at
https://investor.emcore.com. Please go to the site beforehand to
register and download any necessary software. The webcast will be
available for replay beginning Thursday, February 8, 2024,
following the conclusion of the call.
About EMCORE
EMCORE Corporation is a leading provider of inertial navigation
products for the aerospace and defense markets. We leverage
industry-leading Photonic Integrated Chip (PIC), Quartz MEMS, and
Lithium Niobate chip-level technology to deliver state-of-the-art
component and system-level products across our end-market
applications. EMCORE has vertically-integrated manufacturing
capability at its facilities in Alhambra, CA, Budd Lake, NJ,
Concord, CA, and Tinley Park, IL. Our manufacturing facilities all
maintain ISO 9001 quality management certification, and we are
AS9100 aerospace quality certified at our facilities in Alhambra,
Budd Lake, and Concord. For further information about EMCORE,
please visit https://www.emcore.com.
Use of Non-GAAP Financial Measures
The Company conforms to U.S. Generally Accepted Accounting
Principles (“GAAP”) in the preparation of its financial statements.
We disclose supplemental non-GAAP earnings measures, including for
gross profit, gross margin, operating expenses, and net loss, as
well as adjusted EBITDA. The Company has, regardless of result,
applied consistent rationale and methods when presenting
supplemental non-GAAP measures.
Management believes these supplemental non-GAAP measures reflect
the Company’s core ongoing operating performance and facilitate
comparisons across reporting periods. The Company uses these
measures when evaluating its financial results and for planning and
forecasting of future periods. We believe that these supplemental
non-GAAP measures are also useful to investors in assessing our
operating performance. While we believe in the usefulness of these
supplemental non-GAAP measures, there are limitations. Our non-GAAP
measures may not be reported by other companies in our industry
and/or may not be directly comparable to similarly titled measures
of other companies due to potential differences in calculation. We
compensate for these limitations by using these non-GAAP measures
as a supplement to GAAP and by providing the reconciliations to the
most comparable GAAP measure.
The schedules at the end of this press release reconcile the
Company’s non-GAAP measures to the most directly comparable GAAP
measure. The adjustments share one or more of the following
characteristics: (a) they are unusual and the Company does not
expect them to recur in the ordinary course of its business, (b)
they do not involve the expenditure of cash, (c) they are unrelated
to the ongoing operation of the business in the ordinary course, or
(d) their magnitude and timing is largely outside of the Company’s
control. All of these items meet one or more of the characteristics
listed above. The criteria that must be met for litigation-related
expense to qualify as a non-GAAP measure is that it must be
directly connected to active litigation that the Company
infrequently encounters and is unrelated to the ongoing operations
of the business in the ordinary course. All legal expenses related
to the ordinary course of business are included in the non-GAAP
results consistently for all reporting periods. The Company has,
for all reporting periods disclosed in this press release, applied
consistent rationale, method, and adjustments in reconciling
non-GAAP measures to the most directly comparable GAAP measure,
reflecting the Company’s core ongoing operating performance and
facilitating comparisons across reporting periods that the Company
uses when evaluating its financial results, planning and
forecasting future periods, and that are useful to investors in
assessing our performance.
Non-GAAP measures are not in accordance with or an alternative
to GAAP, nor are they meant to be considered in isolation or as a
substitute for comparable GAAP measures. Our disclosures of these
measures should be read only in conjunction with our financial
statements prepared in accordance with GAAP. Non-GAAP measures
should not be viewed as a substitute for the Company’s GAAP
results.
Forward-Looking Statements
The information provided herein may include forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934
(“Exchange Act”). These forward-looking statements are based on our
current expectations and projections about future events and
financial trends affecting the financial condition of our business.
Such forward-looking statements include, in particular, business
outlook, including expected revenue for 2Q24, our strategy and
focus, and statements about our future results of operations and
financial position, plans, strategies, business prospects, changes,
and trends in our business and the markets in which we operate.
These forward-looking statements may be identified by the use of
terms and phrases such as “anticipates”, “believes”, “can”,
“could”, “estimates”, “expects”, “forecasts”, “intends”, “may”,
“plans”, “projects”, “targets”, “will”, and similar expressions or
variations of these terms and similar phrases. Additionally,
statements concerning future matters such as the development of new
products, future growth, enhancements or technologies, sales
levels, expense levels, and other statements regarding matters that
are not historical are forward-looking statements. We caution that
these forward-looking statements relate to future events or our
future financial performance and are subject to business, economic,
and other risks and uncertainties, both known and unknown, that may
cause actual results, levels of activity, performance, or
achievements of our business or our industry to be materially
different from those expressed or implied by any forward-looking
statements.
These forward-looking statements involve risks and uncertainties
that could cause actual results to differ materially from those
projected, including without limitation, the following: (a) risks
related to our ability to obtain capital; (b) disruptions to our
operations as a result of our restructuring activities; (c) costs
and expenses incurred in connection with restructuring activities
and anticipated operational cost savings arising from the
restructuring actions; (d) the effects of personnel losses; (e)
risks related to the sale of our Broadband and defense
optoelectronics businesses, including without limitation (i) the
failure to fully realize the anticipated benefits of such
transaction, (ii) third party costs incurred by the Company related
to any such transaction, (iii) risks associated with liabilities
related to the transaction that were retained by the Company, and
(iv) risks and uncertainties related to the transfer to the buyer
of our manufacturing support and engineering center in China; (f)
risks related to shutdown or potential sale of our Chips business
and wafer fabrication facility, including without limitation (i)
the failure to successfully negotiate or execute definitive
transaction agreements, (ii) termination of any definitive
agreement prior to closing, (iii) failure to achieve any
anticipated proceeds from any such sale or to fully realize the
anticipated benefits of such a transaction, even if the potential
transaction occurs, (iv) diversion of management’s time and
attention from our remaining businesses to the sale of such
businesses, (v) third party costs incurred by the Company related
to any such transaction, and (vi) risks associated with any
liabilities related to the transaction or any such assets or
business that are retained by the Company in any sale transaction;
(g) rapidly evolving markets for the Company’s products and
uncertainty regarding the development of these markets; (h) the
Company's historical dependence on sales to a limited number of
customers and fluctuations in the mix of products and customers in
any period; (i) delays and other difficulties in commercializing
new products; (j) the failure of new products: (i) to perform as
expected without material defects, (ii) to be manufactured at
acceptable volumes, yields, and cost, (iii) to be qualified and
accepted by our customers, and (iv) to successfully compete with
products offered by our competitors; (k) uncertainties concerning
the availability and cost of commodity materials and specialized
product components that we do not make internally; (l) actions by
competitors; (m) risks and uncertainties related to the outcome of
legal proceedings; (n) risks and uncertainties related to
applicable laws and regulations; (o) acquisition-related risks,
including that (i) the revenues and net operating results obtained
from our recent acquisitions may not meet our expectations, (ii)
the costs and cash expenditures for integration of our recent
acquisitions may be higher than expected, may take longer than
expected to implement and may result in fewer efficiencies and
improvements to the operation of our business and our financial
results than currently expected, (iii) we may not recognize the
anticipated synergies from our recent acquisitions, (iv) there
could be losses and liabilities arising from these acquisitions
that we will not be able to recover from any source, and (v) we may
not realize sufficient scale from these acquisitions and will need
to take additional steps, including making additional acquisitions,
to achieve our growth objectives; (p) the effect of component
shortages and any alternatives thereto; (q) risks and uncertainties
related to manufacturing and production capacity; (r) risks related
to the conversion of order backlog into product revenue; and (s)
other risks and uncertainties discussed under Item 1A - Risk
Factors in our Annual Report on Form 10-K for the fiscal year ended
September 30, 2023, as updated by our subsequent periodic
reports.
Forward-looking statements are based on certain assumptions and
analysis made in light of our experience and perception of
historical trends, current conditions, and expected future
developments as well as other factors that we believe are
appropriate under the circumstances. While these statements
represent our judgment on what the future may hold, and we believe
these judgments are reasonable, these statements are not guarantees
of any events or financial results. All forward-looking statements
in this press release are made as of the date hereof, based on
information available to us as of the date hereof, and subsequent
facts or circumstances may contradict, obviate, undermine, or
otherwise fail to support or substantiate such statements. We
caution you not to rely on these statements without also
considering the risks and uncertainties associated with these
statements and our business that are addressed in our filings with
the Securities and Exchange Commission (“SEC”) that are available
on the SEC’s web site located at www.sec.gov, including the
sections entitled “Risk Factors” in our Annual Report on
Form 10-K and our Quarterly Reports on Form 10-Q. Certain
information included in this press release may supersede or
supplement forward-looking statements in our other Exchange Act
reports filed with the SEC. We do not intend to update any
forward-looking statement to conform such statements to actual
results or to changes in our expectations, except as required by
applicable law or regulation.
EMCORE CORPORATIONCondensed Consolidated
Balance
Sheets(unaudited) |
|
|
|
|
|
December 31, |
|
September 30, |
(in thousands) |
|
2023 |
|
|
|
2023 |
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
20,679 |
|
|
$ |
26,211 |
|
Restricted cash |
|
495 |
|
|
|
495 |
|
Accounts receivable, net of credit loss of $299 and $356,
respectively |
|
16,922 |
|
|
|
15,575 |
|
Contract assets |
|
7,293 |
|
|
|
8,402 |
|
Inventory |
|
31,954 |
|
|
|
28,905 |
|
Prepaid expenses |
|
4,088 |
|
|
|
4,612 |
|
Other current assets |
|
513 |
|
|
|
922 |
|
Assets held for sale |
|
3,871 |
|
|
|
7,264 |
|
Total current assets |
|
85,815 |
|
|
|
92,386 |
|
Property, plant, and
equipment, net |
|
14,605 |
|
|
|
15,517 |
|
Operating lease right-of-use
assets |
|
20,857 |
|
|
|
21,564 |
|
Other intangible assets,
net |
|
11,751 |
|
|
|
12,245 |
|
Other non-current assets |
|
2,159 |
|
|
|
2,201 |
|
Total assets |
$ |
135,187 |
|
|
$ |
143,913 |
|
LIABILITIES and SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
12,357 |
|
|
$ |
9,683 |
|
Accrued expenses and other current liabilities |
|
8,880 |
|
|
|
8,471 |
|
Contract liabilities |
|
1,894 |
|
|
|
1,630 |
|
Financing payable |
|
184 |
|
|
|
460 |
|
Loan payable - current |
|
852 |
|
|
|
852 |
|
Operating lease liabilities - current |
|
3,093 |
|
|
|
3,033 |
|
Liabilities held for sale |
|
356 |
|
|
|
4,662 |
|
Total current liabilities |
|
27,616 |
|
|
|
28,791 |
|
Line of credit |
|
4,650 |
|
|
|
6,418 |
|
Loan payable -
non-current |
|
3,117 |
|
|
|
3,330 |
|
Operating lease liabilities -
non-current |
|
20,101 |
|
|
|
20,882 |
|
Asset retirement
obligations |
|
4,255 |
|
|
|
4,194 |
|
Other long-term
liabilities |
|
8 |
|
|
|
8 |
|
Total liabilities |
|
59,747 |
|
|
|
63,623 |
|
Commitments and
contingencies |
|
|
|
Shareholders’
equity: |
|
|
|
Common stock, no par value,
100,000 shares authorized; 84,209 shares issued and 77,302 shares
outstanding as of December 31, 2023; 84,014 shares issued and
77,108 shares outstanding as of September 30, 2023 |
|
825,948 |
|
|
|
825,119 |
|
Treasury stock at cost; 6,906
shares as of December 31, 2023 and September 30,
2023 |
|
(47,721 |
) |
|
|
(47,721 |
) |
Accumulated other
comprehensive income |
|
350 |
|
|
|
350 |
|
Accumulated deficit |
|
(703,137 |
) |
|
|
(697,458 |
) |
Total shareholders’ equity |
|
75,440 |
|
|
|
80,290 |
|
Total liabilities and shareholders’ equity |
$ |
135,187 |
|
|
$ |
143,913 |
|
EMCORE CORPORATIONCondensed Consolidated
Statements of
Operations(unaudited) |
|
|
Three Months Ended December 31, |
(in thousands, except for per share data) |
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
24,123 |
|
|
$ |
19,979 |
|
Cost of revenue |
|
18,035 |
|
|
|
15,600 |
|
Gross profit |
|
6,088 |
|
|
|
4,379 |
|
Operating
expense: |
|
|
|
Selling, general, and administrative |
|
6,609 |
|
|
|
9,289 |
|
Research and development |
|
3,609 |
|
|
|
4,215 |
|
Severance |
|
211 |
|
|
|
16 |
|
Gain on sale of assets |
|
(31 |
) |
|
|
(1,171 |
) |
Total operating expense |
|
10,398 |
|
|
|
12,349 |
|
Operating loss |
|
(4,310 |
) |
|
|
(7,970 |
) |
Other
expense: |
|
|
|
Interest expense, net |
|
(9 |
) |
|
|
(215 |
) |
Other (expense) income |
|
(16 |
) |
|
|
107 |
|
Total other expense |
|
(25 |
) |
|
|
(108 |
) |
Loss from continuing operations before income tax expense |
|
(4,335 |
) |
|
|
(8,078 |
) |
Income tax expense from
continuing operations |
|
(28 |
) |
|
|
(94 |
) |
Net loss from continuing
operations |
$ |
(4,363 |
) |
|
$ |
(8,172 |
) |
Loss from discontinued
operations |
$ |
(1,316 |
) |
|
$ |
(3,521 |
) |
Net loss |
$ |
(5,679 |
) |
|
$ |
(11,693 |
) |
Per share
data: |
|
|
|
Net loss on continuing
operations per share, basic and diluted |
$ |
(0.05 |
) |
|
$ |
(0.22 |
) |
Net loss on discontinued
operations per share, basic and diluted |
$ |
(0.01 |
) |
|
$ |
(0.09 |
) |
Net loss per share, basic and
diluted |
$ |
(0.06 |
) |
|
$ |
(0.31 |
) |
Weighted-average number of
shares outstanding, basic and diluted |
|
88,987 |
|
|
|
37,557 |
|
EMCORE CORPORATIONReconciliations of GAAP
to Non-GAAP Financial
Measures(unaudited) |
|
|
Three Months Ended |
|
Dec 31, 2023 |
|
Sep 30, 2023 |
(in thousands, except for
percentages) |
1Q24 |
|
4Q23 |
Gross profit |
$ |
6,088 |
|
|
$ |
6,893 |
|
Gross margin |
|
25 |
% |
|
|
26 |
% |
Stock-based compensation
expense |
|
329 |
|
|
|
352 |
|
Asset retirement obligation
accretion |
|
61 |
|
|
|
51 |
|
Intangible asset
amortization |
|
494 |
|
|
|
924 |
|
Non-GAAP gross
profit |
$ |
6,972 |
|
|
$ |
8,220 |
|
Non-GAAP gross margin |
|
29 |
% |
|
|
31 |
% |
|
Three Months Ended |
|
Dec 31, 2023 |
|
Sep 30, 2023 |
(in thousands) |
1Q24 |
|
4Q23 |
Operating expense |
$ |
10,398 |
|
|
$ |
35,718 |
|
Stock-based compensation
expense |
|
(519 |
) |
|
|
(978 |
) |
Impairment expense |
|
— |
|
|
|
(22,612 |
) |
Severance expense |
|
(211 |
) |
|
|
— |
|
Gain on sale of assets |
|
31 |
|
|
|
— |
|
Transition/M&A-related
expense |
|
(158 |
) |
|
|
(661 |
) |
Litigation-related income
(expense) |
|
2 |
|
|
|
(1,346 |
) |
Non-GAAP operating
expense |
$ |
9,543 |
|
|
$ |
10,121 |
|
|
Three Months Ended |
|
Dec 31, 2023 |
|
Sep 30, 2023 |
(in thousands, except for per
share data and percentages) |
1Q24 |
|
4Q23 |
Net loss from continuing operations |
$ |
(4,363 |
) |
|
$ |
(28,846 |
) |
Net loss from continuing
operations per share, basic and diluted |
$ |
(0.05 |
) |
|
$ |
(0.42 |
) |
Stock-based compensation
expense |
|
848 |
|
|
|
1,330 |
|
Asset retirement obligation
accretion |
|
61 |
|
|
|
51 |
|
Intangible asset
amortization |
|
494 |
|
|
|
924 |
|
Impairment expense |
|
— |
|
|
|
22,612 |
|
Severance expense |
|
211 |
|
|
|
— |
|
Gain on sale of assets |
|
(31 |
) |
|
|
— |
|
Transition/M&A-related
expense |
|
158 |
|
|
|
661 |
|
Litigation-related (income)
expense |
|
(2 |
) |
|
|
1,346 |
|
Other expense |
|
16 |
|
|
|
9 |
|
Income tax expense
(benefit) |
|
28 |
|
|
|
(135 |
) |
Non-GAAP net loss from
continuing operations |
$ |
(2,580 |
) |
|
$ |
(2,048 |
) |
Non-GAAP net loss from
continuing operations per share, basic and diluted |
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Interest expense, net |
|
9 |
|
|
|
147 |
|
Depreciation expense |
|
903 |
|
|
|
994 |
|
Adjusted
EBITDA |
$ |
(1,668 |
) |
|
$ |
(907 |
) |
Adjusted EBITDA % |
|
(7 |
%) |
|
|
(3 |
%) |
Contact:EMCORE CorporationTom Minichiello(626)
293-3400investor@emcore.com
EMCORE (NASDAQ:EMKR)
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