Message #23 From:
NewsBot Date: June 4, 2008 10:19:43 AM
EMCORE Corporation Announces Preliminary Unaudited Results for its Second Quarter Ended March 31, 2008
- 2nd quarter revenue increased 42% year-over-year and 20% over prior quarter to approximately $56.3 million
- 3rd quarter revenue guidance is estimated to increase over 75% year-over-year to $77-80 million
- Fiscal 2008 revenue guidance is increased to $280-$295 million
- EMCORE completes acquisition of Intel's telecom, enterprise, storage and fiber-optic connects cable businesses
- EMCORE expects net profitability by the September quarter
ALBUQUERQUE, N.M., May 7 /PRNewswire-FirstCall/ -- EMCORE Corporation
(Nasdaq: EMKR solar stock), a leading provider of compound semiconductor-based components
and subsystems for the broadband, fiber optic, satellite, and terrestrial
solar power markets, today announced preliminary unaudited financial results
for its second quarter ended March 31, 2008.
Consolidated revenue for the quarter ended March 31, 2008 totaled
approximately $56.3 million. This represents a revenue increase of over 42%
when compared to $39.6 million of revenue reported in the same period last
year. This also represents a revenue increase of 20% when compared to the
prior quarter. Consolidated revenue for the six months ended March 31, 2008
totaled approximately $103.2 million. This represents a revenue increase of
32% when compared to $78.2 million of revenue reported in the same period last
year. Both of the Company's operating segments posted increases in quarterly
revenue when compared year-over-year and quarter-over-quarter.
For the three months ended March 31, 2008, revenue from the Company's
Fiber Optics segment increased $11.4 million or 44% to $37.6 million from
$26.2 million, as reported in the same period last year. For the six months
ended March 31, 2008, Fiber Optics revenue increased $20.0 million or 39% to
$71.6 million from $51.6 million, as reported in the same period last year.
Sequentially, Fiber Optics revenue increased over 10% from $34 million. The
increase in revenue was due to our acquisition of the telecom-related assets
of Intel's Optical Platform Division and a significant increase in quarterly
revenue from the Company's datacom product lines.
Photovoltaics revenue for the three months ended March 31, 2008 increased
$5.2 million or 39% to $18.6 million from $13.4 million as reported in the
same period last year. For the six months ended March 31, 2008, Photovoltaics
revenue increased $5.0 million or 19% to $31.6 million from $26.6 million, as
reported in the same period last year. Sequentially, Photovoltaics revenue
increased over 44% from $12.9 million. The significant increase in revenue was
due to new product and business introduction of concentrator photovoltaics
(CPV) for solar power applications. Total revenue from CPV components and
systems was $4.4 million for the three months ended March 31, 2008, which
represents over a ten-fold increase in revenues when compared
quarter-over-quarter. CPV-related revenue is expected to increase dramatically
in the June quarter as production ramps on multiple manufacturing lines.
During the quarter, the Company also experienced increased demand for its
satellite solar cells and related products.
Excluding stock-based compensation expense, Fiber Optics gross margins
were 24.3% and 24.2% for the three and six months ended March 31, 2008,
respectively. This represents an increase in gross margin from 17% as reported
for the three months ended March 31, 2007 and an increase in gross margin from
19% as reported for the six months ended March 31, 2007. Fiber Optics gross
margin also increased from the prior quarter, which was 24% as reported, The
increase in Fiber Optics gross margins is primarily due to increased revenue,
facility consolidation, and other restructuring efforts completed by the
Company in the prior year.
During the March quarter, the Company took one-time charges of
approximately $6.3 million in its Photovoltaics segment for inventory
write-downs and start-up costs in our solar cell receiver line and CPV system
business. Our Albuquerque fab capacity increased by approximately 35% during
the quarter. Excluding stock-based compensation expense and these non
recurring charges, Photovoltaics gross margin were 22%, an increase from 17%
in the previous quarter. On a GAAP basis, Photovoltaics gross margins were
negative 12% and 0% for the three and six months ended March 31, 2008,
respectively, adversely impacted by the non-recurring charges.
Adjusted gross profit and gross margin of the consolidated business was
$12.9 million or 23% for the three months ending March 31, 2008. On a GAAP
basis, consolidated gross margin for the quarter ended March 31, 2008 was
approximately 12%, as adversely impacted by the $6.3 million of non-recurring
charges. This represents a decrease from 18% gross margin as reported in the
same period last year. Consolidated gross margin for the six months ended
March 31, 2008 was approximately 16%, which was slightly higher than gross
margin reported in the same period last year.
Operating expenses for the three and six month periods ended March 31,
2008 totaled $19.6 million and $38.9 million, respectively. This represents a
decrease in operating expense when compared year-over-year and
quarter-over-quarter. Excluding stock-based compensation expense and other
non-recurring charges, operating expenses for the three and six months ended
March 31, 2008 totaled $19.1 million and $35.4 million, respectively. This
represents a an increase in operating expenses of $2.9 million when compared
to the prior quarter. A significant portion of this increase in operating
expenses was due to acquisition-related and new product and business
introduction costs. During the quarter ended March 31, 2008, the Company
incurred over $1.6 million in operating expenses associated with the
acquisition of Intel's telecom division and transitional services being
provided by Intel. Operating expenses also increased approximately
$1.3 million in the quarter due to costs incurred developing new product and
business opportunities for the Company's new terrestrial solar power product
lines.
Operating loss for the three and six month periods ended March 31, 2008
totaled $12.9 million and $22.1 million, respectively. This represents a
decrease in operating loss when compared year-over-year and
quarter-over-quarter. Excluding stock-based compensation expense and other
non-recurring charges, our adjusted operating loss for the three and six
months ended March 31, 2008 totaled $6.0 million and $11.9 million,
respectively.
In January 2008, the Company entered into agreements with holders of
approximately 97.5%, or approximately $83.3 million of its outstanding 5.50%
convertible subordinated notes due 2011 (the 'Notes') pursuant to which the
holders converted their Notes into the Company's common stock. In addition,
the Company called for redemption all of its remaining outstanding Notes. Upon
conversion of the Notes, the Company issued shares of its common stock, based
on a conversion price of $7.01, in accordance with the terms of the Notes. To
incentivize certain holders to convert their Notes, the Company made cash
payments to such holders equal to 4% of the principal amount of the Notes
converted, plus accrued interest. The Company recognized a loss totaling
$4.7 million on the conversion of Notes to equity. The Notes conversion
resulted in a reduction of future interest payments of approximately
$4.7 million, on an annual basis, through May 2011.
Excluding stock-based compensation expense and other non-recurring
charges, our adjusted net loss for the three and six months ended March 31,
2008 totaled $6.0 million or $0.09 loss per share and $12.7 million or $0.22
loss per share, respectively. On a GAAP basis, net loss for the three and six
month periods ended March 31, 2008 totaled $17.5 million, or $0.27 loss per
share and $31.9 million, or $0.55 loss per share, respectively.
As of March 31, 2008, the Company had an order backlog of approximately
$158 million as compared to a backlog of approximately $156 million as of
December 31, 2007. The March 31, 2008 order backlog is comprised of
$133 million for our Photovoltaics segment and $25 million for our Fiber
Optics segment.
At March 31, 2008, total cash, cash equivalents, marketable securities,
and long-term cash investments at March 31, 2008 was approximately
$30.5 million, a decrease of $0.6 million from the prior quarter. The Company
generated positive cash flows from operations for the six month period ended
March 31, 2008. During fiscal 2008, the Company purchased approximately
$9.6 million in equipment to develop and manufacture CPV-related components
and systems.
Management Discussion and Outlook:
'We are pleased with our strategic achievements in the quarter. We
successfully negotiated and closed the transactions of the asset purchase from
Intel in the areas of Telecom, Enterprise, Storage, and Connects Cable fiber
optics business. This strengthened EMCORE's position in Fiber Optics component
and subsystem arena significantly. With the added and existing product
portfolio, EMCORE is poised as a major player in broadband, telecom,
enterprise and high-performance computing markets with leading products and
technology for sustainable and profitable growth in the future. The business
development in the terrestrial solar power area continues to be very
successful. We continue to broaden our customer base and book new orders. This
quarter represents the first significant revenue from this new line of
business which we have invested in over the last couple of years. Our debt
conversion and equity financing activities strengthened our balance sheet and
provided enough capital to execute our current business plan,' stated Dr. Hong
Q. Hou, Chief Executive Officer. 'We are happy to achieve the aggressive
top-line growth and meet our revenue guidance, and we are increasing our
revenue guidance going forward for this quarter and the rest of the year. The
business fundamentals remain strong for the continued growth. We remain
optimistic that we will achieve operational profitability in the second half
of 2008. The management team is intensely focusing on delivering that
profitability,' added Dr. Hou.
'The Board of Directors has authorized the management of the Company to
prepare a comprehensive operational and strategic plan for the separation of
the Company's Fiber Optics and Photovoltaic businesses into separate
corporations.' Reuben F. Richards, Jr., Executive Chairman stated, 'We are
excited to be taking the first steps in this process, which we believe allows
us to maximize the potential of both our business segments. We will be working
closely with investment, accounting and legal advisors over the coming months
to develop a structure for this separation that will maximize operating
efficiencies as well as maximizing shareholder value.'
Company & Quarterly Highlights:
January 23, 2008 -- EMCORE announced that it will supply its solar CPV
components and systems to the Spanish market through several agreements.
-- EMCORE was awarded a 300-kilowatt (kW) CPV system contract by Spain's Institute of Concentrator Photovoltaics Systems (ISFOC). EMCORE expects to have its CPV systems installed in Castilla-La Mancha, Spain by December 2008. -- EMCORE reached an agreement to construct an 850-kW solar power park in Extremadura, Spain. EMCORE will be utilizing its CPV solar power system and provide a turn-key solution with a scope of work including engineering, procurement, and construction. This project is expected to be completed before July 2008 in order to take advantage of the current high feed-in tariff. -- EMCORE received a purchase order for one million CPV components from a prominent CPV system integrator. This order is expected to be completed by March 2009 with CPV products being deployed in projects within the Spanish market.
January 31, 2008 -- EMCORE announced that it has signed a memorandum of
understanding for the supply of between 200 megawatt (MW) and 700 MW of solar
power systems that are scheduled for deployment in utility scale solar power
projects under development in the southwestern region of the United States.
EMCORE will supply and install turn-key solar power systems utilizing EMCORE's
CPV systems developed at its Albuquerque, NM facility. The project developer,
SunPeak Solar, is securing land and grid access throughout 2008 and project
construction is expected to begin in early 2009. This agreement is not
expected to contribute revenues until 2009 and is dependent on the renewal of
the federal investment tax credit (ITC) extending into 2009 and beyond.
February 15, 2008 -- EMCORE entered into a securities purchase agreement
for the sale of $100 million of restricted common stock and warrants. Under
this agreement, investors purchased 8 million shares of our common stock, no
par value, and warrants to purchase an additional 1.4 million shares of our
common stock. The purchase price was $12.50 per share, priced at the 20 day
volume-weighted average price. The warrants grant the holder the right to
purchase one share of our common stock at a price of $15.06 per share. The
warrants are immediately exercisable and remain exercisable for a period of 5
years from the closing date. In addition, EMCORE entered into a registration
rights agreement with the investors to register for resale the shares of
common stock issued in this transaction and the shares of common stock to be
issued upon exercise of the warrants. Total agent fees incurred were 5.75% of
the gross proceeds, or $5.8 million. EMCORE used the net proceeds to acquire
the telecom assets of Intel's Optical Platform Division and for working
capital requirements.
February 22, 2008 -- EMCORE announced completion of the acquisition of the
telecom-related portion of Intel's Optical Platform Division. The telecom
assets EMCORE acquired include intellectual property, assets and technology
comprised of tunable lasers, tunable transponders, 300-pin transponders, and
integrated tunable laser assemblies. The acquisition agreement was signed and
announced on December 18, 2007. The purchase price was $75 million in cash and
$10 million in the Company's common stock, priced at a volume-weighted average
price of $13.84 per share, or 722,688 shares. This acquisition enhances
EMCORE's presence in the telecommunications market segment and expands its
fiber optics product portfolio. The acquired assets will be integrated into
EMCORE's Digital Products Division (EDP).
February 26, 2008 -- EMCORE announced new features to its 1550nm broadband
transmitter and optical amplifier product lines. In order to support the
requirements for extended bandwidth CATV systems and RF overlay for PON
networks, these new products offer 1GHz RF performance, dual hot swappable
power supplies and SNMP management capabilities.
February 27, 2008 -- EMCORE announced the introduction of a new line of
un-cooled coaxial DFB lasers. EMCORE's 1933 DFB laser family offers a low cost
solution for 1310nm linear fiber optic links. With an innovative design, the
1933 series requires no additional cooling since it can maintain performance
even with case temperatures ranging from -40A degrees C to +80A degrees C. The
1933 also features exceptionally high slope efficiency and linearity even with
optical output powers up to 12dBm.
April 2, 2008 -- EMCORE announced that it had been awarded a $4.6 million
follow-on production order for solar cell receiver assemblies from
Concentration Solar la Mancha of Manzanares (Ciudad Real), Spain. The
receivers will be incorporated into CS la Mancha's 500X concentrator
photovoltaic (CPV) system and will be deployed throughout Spain and other
locations in fully licensed and funded projects. Shipments are scheduled to
commence in the September quarter and complete in early 2009. CS la Mancha,
part of Renovalia Energy, a renewable energy company in Spain, has been
developing the CPV system for nearly two years, and has recently started
production and volume deployment.
April 10, 2008 -- EMCORE announced that it agreed to supply CPV systems to
XinAo Group in China. XinAo Group is one of China's largest energy companies
and is well known for its clean-energy technologies. The program will start
with the delivery of a 50 kilowatt (kW) concentrator photovoltaic (CPV) system
to be installed in Langfang, China. This system will be used for test and
evaluation purposes. Once the expected reliability and performance metrics
have been demonstrated, XinAo plans to install CPV systems to provide electric
power for its innovative coal gasification project, which is estimated to have
a requirement of 60 megawatts (MW) of power. XinAo believes that EMCORE's CPV
technology will provide a cost-effective solution for its energy needs. In
addition, XinAo intends to build a manufacturing plant in China, jointly owned
by EMCORE, to manufacture CPV systems designed and certified by EMCORE for the
Chinese market.
April 21, 2008 -- EMCORE announced completion of the acquisition of the
enterprise and storage assets of Intel's Optical Platform Division (OPD) and
the Intel Connects Cable (ICC) business for high-performance computing under
the terms signed and announced previously. The assets include intellectual
property, inventory, fixed assets and technology relating to XENPAK, X2, SFP,
and SFP+ optical transceivers for enterprise and storage customers, as well as
the Intel Connects Cables (ICC) active cable interconnects for
high-performance computing clusters. This acquisition will further enhance
EMCORE's presence in the local area and storage area network market segments.
These assets, along with the Telecom assets acquired in February 2008 from
Intel OPD, make EMCORE one of the major companies in the world with the most
comprehensive product portfolio, vertically-integrated capability and
infrastructure, and strong commitment to Telecom, Datacom, and Broadband fiber
optics businesses. The acquired assets will be integrated into the EMCORE
Digital Products (EDP) division.
May 5, 2008 -- EMCORE announced that it has entered into a $28 million
definitive supply agreement with ES System of Gwang-Ju, South Korea, for solar
cell receivers to be fielded in fully licensed and funded solar farms in South
Korea. This agreement incorporates an advance deposit to ensure production
priority, and will enable the installation of 70 megawatts (MW) of solar
farms. Production for this order has commenced and shipments are scheduled to
occur over the next 24 months with the provisions for accelerated deliveries
as well as future purchase options under the same terms.
EMCORE will discuss its quarterly results on a conference call to be held
on Thursday, May 8, 2008, at 9:00 a.m. ET. To participate in the conference
call, U.S. callers should dial (toll free) 866-710-0179 and international
callers should dial 334-323-9871. The access code for the call is 39197. A
replay of the call will be available beginning May 8, 2008 at 12:00 p.m. ET
until May 15, 2008 at 11:59 p.m. ET. The replay call-in number for U.S.
callers is 877-656-8905, for international callers it is 334-323-9859 and the
access code is 26373007. The call also will be web cast via the Company's web
site at http://www.emcore.com. Please go to the site beforehand to download
any necessary software.
About EMCORE:
EMCORE Corporation is a leading provider of compound semiconductor-based
components and subsystems for the broadband, fiber optic, satellite and solar
power markets. EMCORE's Fiber Optics segment offers optical components,
subsystems and systems that enable the transmission of video, voice and data
over high-capacity fiber optic cables for high-speed data and
telecommunications, cable television (CATV) and fiber-to-the-premises (FTTP)
networks. EMCORE's Solar Power segment provides solar products for satellite
and terrestrial applications. For satellite applications, EMCORE offers
high-efficiency compound semiconductor-based gallium arsenide (GaAs) solar
cells, covered interconnect cells and fully integrated solar panels. For
terrestrial applications, EMCORE offers concentrating photovoltaic (CPV)
systems for utility scale solar applications as well as offering its
high-efficiency GaAs solar cells and CPV components for use in solar power
concentrator systems. For specific information about our company, our products
or the markets we serve, please visit our website at http://www.emcore.com.
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 relating to future events that
involve risks and uncertainties. Such forward-looking statements include but
are not limited to words such as 'expects,' 'anticipates,' 'intends,' 'plans,'
believes,' and 'estimates,' and variations of these words and similar
expressions, identify these forward-looking statements. These forward-looking
statements also include, without limitation, (a) any statements or
implications regarding EMCORE's ability to remain competitive and a leader in
its industry, and the future growth of EMCORE, or the industry and the economy
in general; (b) statements regarding the expected level and timing of benefits
to EMCORE from its current cost reduction efforts, including (i) expected cost
reductions and their impact on EMCORE's financial performance, (ii) EMCORE's
ability to reduce operating expenses associated with its recent acquisitions
(iii) EMCORE's continued leadership in technology and manufacturing in its
markets, and (iv) the belief that the cost reduction efforts will not impact
product development or manufacturing execution; (c) any statement or
implication that the products described in this press release (i) will be
successfully introduced or marketed, (ii) will be qualified and purchased by
our customers, or (iii) will perform to any particular specifications or
performance or reliability standards; (d) any and all guidance provided by
EMCORE regarding its expected financial performance in future periods,
including, without limitation, with respect to anticipated revenues for the
third quarter of fiscal 2008 or expected revenues from recent and anticipated
acquisitions. 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) EMCORE's cost reduction
efforts may not be successful in achieving their expected benefits,
(including, among other things, cost structure, gross margin and other
profitability improvements), due to, among other things, shifts in product
mix, selling price pressures, costs and delays related to product transfers to
lower cost manufacturing locations and associated facility closures,
integration difficulties, and execution concerns; (b) EMCORE may encounter
difficulties in integrating its recent acquisitions and as a result may
sustain increased operating expenses, delays in commercializing new products,
production difficulties associated with transferring products to EMCORE's
manufacturing facilities and disruption of customer relationships (c) the
failure of the 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 and (d) other risks and uncertainties
described in EMCORE's filings with the Securities and Exchange Commission such
as cancellations, rescheduling or delays in product shipments; manufacturing
capacity constraints; lengthy sales and qualification cycles; difficulties in
the production process; changes in semiconductor industry growth; increased
competition; delays in developing and commercializing new products; and other
factors. The forward-looking statements contained in this news release are
made as of the date hereof and EMCORE does not assume any obligation to update
the reasons why actual results could differ materially from those projected in
the forward-looking statements.
