ALBUQUERQUE, N.M., December 27, 2011 (GLOBE NEWSWIRE) -- EMCORE Corporation, a leading provider of compound semiconductor-based components, subsystems, and systems for the fiber optics and solar power markets, today announced its financial results for its fourth quarter and fiscal year ended September 30, 2011.
Quarterly Financial Results
Revenue:
Consolidated revenue for the fourth quarter ended September 30, 2011 was $52.1 million, which represents a 4% decrease compared to the prior year and a 5% increase compared to the immediate preceding quarter. On a segment basis, revenue for the Fiber Optics segment was $30.9 million, which represents a 10% decrease compared to the prior year and a 7% decrease compared to the immediate preceding quarter. Revenue for the Photovoltaics segment was $21.2 million, which represents an 8% increase compared to the prior year and a 31% increase compared to the immediate preceding quarter.
Gross Profit:
Consolidated gross profit was $10.0 million, which represents a 22% decrease compared to the prior year and a 6% increase compared to the immediate preceding quarter. Consolidated gross margin was 19.2%, which represents a decrease from the 23.6% gross margin reported in the prior year and an increase from the 19.1% gross margin reported in the immediate preceding quarter. On a segment basis, Fiber Optics gross margin was 18.0%, which represents a decrease from the 20.4% gross margin reported in the prior year and a decrease from the 19.4% gross margin reported in the immediate preceding quarter. Photovoltaics gross margin was 21.0%, which represents a decrease from the 29.3% gross margin reported in the prior year and an increase from the 18.6% gross margin reported in the immediate preceding quarter.
Operating loss:
The consolidated operating loss was $14.4 million, which represents a $12.6 million increase in operating loss when compared to the prior year and a $3.2 million increase in operating loss when compared to the immediate preceding quarter. The quarter-over-quarter variance was primarily due to the $8.0 impairment charge recorded on the long-lived assets of our Fiber Optics segment offset slightly by the change in litigation settlements totaling $1.5 million and a decrease in non-cash stock-based compensation expense of $1.1 million.
After excluding certain non-cash and other adjustments as set forth in the attached non-GAAP table, adjusted operating loss for the fourth quarter ended September 30, 2011 was $1.4 million, which represents an additional operating loss of $4.1 million from the loss reported for the prior year and a decrease in operating loss of $2.3 million from the loss reported for the immediate preceding quarter.
Net loss:
The consolidated net loss was $14.3 million, which represents a $13.4 million increase in net loss when compared to the prior year and a $3.2 million increase in net loss when compared to the immediate preceding quarter. The consolidated net loss per share was $0.15, which represents a $0.14 increase in net loss per share when compared to the prior year and a $0.03 increase in net loss per share when compared to the immediate preceding quarter. During the fourth quarter ended September 30, 2011, EMCORE recorded $1.0 million of non-operating expense related to our Suncore joint venture.
Annual Financial Results
Revenue:
Consolidated revenue for fiscal 2011 was $200.9 million, which represents a 5% increase compared to the prior year. On a segment basis, revenue for the Fiber Optics segment was $125.6 million, which represents a 3% increase compared to the prior year. Revenue for the Photovoltaics segment was $75.3 million, which represents an 8% increase compared to the prior year.
Gross Profit:
Consolidated gross profit was $42.8 million, which represents a 16% decrease compared to the prior year. Consolidated gross margin was 21.3%, which represents a decrease from the 26.5% gross margin reported in the prior year. On a segment basis, Fiber Optics gross margin was 18.5%, which represents a decrease from the 23.1% gross margin reported in the prior year. Photovoltaics gross margin was 26.0%, which represents a decrease from the 32.3% gross margin reported in the prior year.
Operating loss:
The consolidated operating loss was $32.5 million, which represents an $11.1 million increase in operating loss when compared to the prior year. The year-over-year variance was primarily due to the decrease in gross profit and the $8.0 impairment charge recorded on the long-lived assets of our Fiber Optics segment, offset slightly by lower stock-based compensation expense of $2.4 million and the net gain related to litigation settlements totaling $1.1 million.
After excluding certain non-cash and other adjustments as set forth in the attached non-GAAP table, adjusted operating loss for the fiscal year ended September 30, 2011 was $5.7 million, which represents an additional operating loss of $14.6 million from the adjusted operating loss reported for the prior year.
Net loss:
The consolidated net loss was $34.2 million, which represents a $10.5 million increase in net loss when compared to the prior year. The consolidated net loss per share was $0.38, which represents a $0.10 increase in net loss per share when compared to the prior year. During fiscal 2011, we recorded $1.8 million of non-operating expense related to their Suncore joint venture.
Balance Sheet Update
As of September 30, 2011, cash, cash equivalents, and restricted cash totaled approximately $16.1 million. With respect to measures taken to improve liquidity, in December 2011, EMCORE amended the Wells Fargo credit facility, which included adding new classes of assets into the borrowing base calculation and reducing the excess availability covenant requirements. As a result of this amendment, they can increase their potential borrowings by up to $14 million. In addition, they entered into an equity line of credit arrangement with Commerce Court Small Cap Value Fund, Ltd. in August 2011, pursuant to which, they may sell up to $50 million in shares of their common stock over the 24-month term.
Business Outlook and Commentary
As previously disclosed on October 24, 2011, flood waters infiltrated the offices and manufacturing floorspace of their primary contract manufacturer in Thailand. The areas used to manufacture their fiber optic products and their process and test equipment were submerged in several feet deep flood water for more than a month. As a result, the manufacturing infrastructure that supports approximately 50% of their Fiber Optics segment revenue was damaged. This has had a significant impact on their operations and their ability to meet customer demand for fiber optics products.
Production capabilities for three major product lines were impacted: these include Telecom products, such as tunable lasers and our high-volume tunable XFP line (their low-volume TXFP production line is in the Bay Area and producing products), Cable television (CATV) laser components and transmitters, and other legacy products. Over the past two months, they have been developing and implementing alternative manufacturing plans in their own facilities in China and the U.S. to meet short-term customer demand. Concurrently, they have been focusing on rebuilding the high-volume production infrastructure for impacted product lines in other locations owned by their primary contract manufacturer in Thailand, as well as the EMCORE facility in China. Their focus during the rebuild is on a quick recovery and strategies to better configure the equipment for efficiency, reduce our cost structure, and provide manufacturing diversification in order to turn this crisis into an opportunity.
Purchase orders have been issued to replace the damaged process and test equipment and new equipment is now being received. Between their own facilities and their contract manufacturer, they expect to rebuild their production capacity for their CATV business by the end of March 2012, and rebuild the production capacity of their Telecom production lines before the end of May 2012. They are working closely with customers on their recovery manufacturing plan to align with their needs.
As for the inventory materials, they were able to move a significant portion of their finished goods inventory to the second story of the facility right before the flood waters reached the manufacturing floor. This has allowed EMCORE to serve the near-term demands of some key customers. The major focus is to work with their customers to meet their near-term needs and to ascertain that the demand will still be there for their products when we are back to full capacity. EMCORE is pleased that many of their key customers for Telecom products have stepped up and committed their demand through non-cancelable purchase orders and pre-payments. As a result, their production capacity for tunable lasers in calendar 2012, when it is fully recovered, is almost fully booked with the existing commitments from customers. This illustrates the differentiation of their product and the strong relationships with their customers.
EMCORE entered into agreements with their key contract manufacturing partner and Wells Fargo Business Credit. These agreements significantly improved the Company's liquidity position while we process and receive proceeds from insurance claims. They believe that they have a solid plan in place to rebuild their impacted business.
The Company expects the revenues for its first quarter of fiscal year 2012 ending December 2011 to be in a range of $36 to $38 million with the sequential revenue decline primarily attributable to the flood impact to its Fiber Optics business.
About EMCORE
EMCORE Corporation is a leading provider of compound semiconductor-based components and subsystems for the fiber optics 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 Photovoltaics 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. http://www.emcore.com
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