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Emcore Corp. reports first-quarter revenues increase 17% from a year ago
February 7, 2005
SOMERSET, N.J. -- EMCORE Corporation (NASDAQ:EMKR) , 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 2005 first quarter ended December 31, 2004.
Revenues for the first quarter of fiscal 2005 were $27.0 million, an increase of 17% from the $23.1 million reported in the first quarter of fiscal 2004, and an increase of $1.5 million, or 6%, sequentially from the $25.5 million in the previous quarter. Revenues were fueled by strong demand for the Company's 10 Gigabit Ethernet products.
Gross profit in the first quarter was $2.1 million, or 8%, double the 4% reported in the previous quarter. Gross margins are expected to continue to improve as a result of materials cost reductions, yield improvements, and outsourcing of high volume products.
Operating expenses of $10.6 million represented a decrease of 6.5% from the same quarter last year and flat sequentially. Included in operating expenses during the quarter were severance charges of $0.5 million. The declines in operating expenses were principally driven by more focused research and development efforts and products moving from development to production, thereby reducing R&D expenditures.
EMCORE reported a net loss from continuing operations for the quarter of $9.1 million, or $0.19 per basic and diluted share. This compares to a net loss from continuing operations of $9.8 million or $0.26 per basic and $0.25 per diluted share for the same quarter a year ago, and $10.8 million or $0.23 per basic and diluted share last quarter. The current quarter loss per share not including severance charges would have been $0.18 per basic and diluted share, as presented on a non-GAAP basis in the notes to the accompanying financial statements.
Cash, cash equivalents and marketable securities at December 31, 2004 totaled approximately $38.3 million. Loss before interest, taxes, depreciation, amortization and other non-cash items (adjusted EBITDA) was $4.6 million, down from $6.5 million in the previous quarter. The expected improvements in gross margins and revenues are projected to eliminate that loss throughout fiscal 2005. During the current quarter, the Company expects to receive an additional $15-$17 million from last year's sale of its equipment division.
Management Discussion and Outlook:
"EMCORE continues to improve its operating performance, with revenues reaching the high end of expectations. Gross margins doubled since last quarter and we expect further increases in both revenues and margins as 2005 progresses," commented Reuben F. Richards, Jr., President & CEO. "Going forward, EMCORE will maintain our focus on improving gross margins by increasing yields, reducing costs, and expanding upon our current program of outsourcing high volume products to overseas contract manufacturers. In addition, EMCORE intends to spin-off or eliminate certain non-core development projects which will also improve operational performance. Adjusted EBITDA of $(4.6) million improved $2 million from the September quarter and we expect to see significant improvement in adjusted EBITDA in the March quarter, with the target being adjusted EBITDA breakeven. For the quarter ending March 31, 2005, we expect revenues of $29-$30 million," added Mr. Richards.
Emcore Corp.
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