EMCORE Corporation Announces Preliminary Unaudited Results for its Second Quarter Ended March 31, 2008
Wednesday May 7, 8:26 pm ET
- 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 - News), 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.
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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.
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Profitable in September of this year. Looks great for Emcore, a company that rarely has reported a profit. Hold long and strong into 2009 with profits increasing and the solar IPO looming. How can shorts not cover now? |
