SOMERSET, N.J. -- EMCORE Corporation (Nasdaq: EMKR - News), a leading provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite, and wireless communications markets, today announced its financial results for the fiscal 2006 second quarter ended March 31, 2006.

Revenues for the second quarter of fiscal 2006 were $41.2 million, an increase of 35% from the $30.4 million reported in the second quarter of fiscal 2005, and an increase of $1.3 million, or 3%, from the $39.9 million in the previous quarter. All three of the Company's operating segments, Fiber Optics, Photovoltaics and Electronic Materials and Devices, posted revenue increases year over year. Sequentially, Fiber Optics and Electronic Materials and Devices revenues increased, while Photovoltaics experienced a marginal revenue decrease of 4%. Gross profit for the quarter was $8.7 million or 21%, an increase of 57% from $5.5 million a year earlier. The gross margin of 21% represents an increase of 4 percentage points from the 17% gross margin recorded in the previous quarter. Included in cost of goods sold for the three and six-month periods ended March 31, 2006 are $0.1 million and $0.3 million of stock-based compensation expense, respectively. No stock-based compensation expense was recognized in the previous year. For the six months ended March 31, 2006, revenues totaled $81.1 million, an increase of 41% or $23.7 million as compared to the $57.4 million recorded for the six months ended March 31, 2005.

Operating expenses totaled $16.0 million for the three months ended March 31, 2006. Excluding the one-time $2.7 million expense relating to loan forgiveness (as described in the Company's Form 8-K filed on March 1, 2006 and Form 8-K/A filed on March 6, 2006), operating expenses for the second quarter of fiscal 2006 totaled $13.3 million, an increase of $1.6 million from the previous quarter. The increase was primarily attributable to the operating expenses of the three businesses acquired by the Company during the past four months. As the Company completes the integration of these recent acquisitions, it expects the operating expenses related to the acquisitions to decrease. For the six-month period ended March 31, 2006, operating expenses totaled $27.7 million, an increase of $7.8 million from the previous year. Included in operating expenses for the three and six-month periods ended March 31, 2006 are $0.9 million and $1.6 million of stock-based compensation expense, respectively, and $2.7 million of loan forgiveness. No stock-based compensation expense was recognized in the previous year.

The Company reported an operating loss of $7.3 million for the three months ended March 31, 2006. Excluding the $2.7 million in loan forgiveness and the $0.9 million of stock-based compensation expense, the operating loss totaled $3.7 million, or $(0.07) per share. This compares to an operating loss of $3.7 million, or $(0.08) per share in the prior year and $3.7 million, or $(0.08) per share in the prior quarter after deducting stock- based compensation expense of $1.1 million.

EMCORE reported a net loss for the second quarter of fiscal 2006 of $6.9 million or $(0.14) per basic and diluted share. Excluding the stock-based compensation expense of $0.9 million, the loan forgiveness of $2.7 million, and the final earn-out payment from the sale of the Company's equipment division in November 2003 of $2.0 million, the net loss is $5.3 million, or $(0.11) per share. GELcore, the Company's joint venture with GE Lighting, incurred a loss for the quarter of $0.4 million as compared to a profit of $0.5 million in the previous quarter, representing a $(0.02) impact on earnings per share. In the previous year, EMCORE's quarterly net loss was $4.9 million, or $(0.10) per share, after excluding the $12.5 million first earn-out payment from the sale of the Company's equipment division in November 2003. In the previous quarter, EMCORE's net loss was $4.3 million, or $(0.09) per share, excluding stock-based compensation expense of $1.1 million and the loss on convertible subordinated notes of $1.1 million.

Cash, cash equivalents and marketable securities at March 31, 2006 totaled approximately $33.9 million, essentially the same as the prior quarter ended balance. Income before interest, taxes, depreciation, amortization and other non-cash items (adjusted EBITDA) was approximately $0.4 million, an improvement of $0.3 million and $0.8 million as compared to adjusted EBITDA for the prior year and prior quarter, respectively.

Emcore Corp. (Nasdaq: EMKR)