EMKR - Earnings call transcript Q2 2021

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Operator

Good day, and welcome to the EMCORE Second Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tom Minichiello, Chief Financial Officer. Please go ahead.

Tom Minichiello

Thank you, and good morning everyone and welcome to our conference call to discuss EMCORE's fiscal 2021 second quarter results. issued is we website, on release emcore.com. news yesterday posted afternoon our The Jeff and highlights. EMCORE's will this Rittichier, On call, President a of begin discussion Chief our business with Officer Executive financial I update we'll by questions. will taking the you our conclude then quarter, results on and for

statements our operate. to we of future to XXXX plans, are the conform to of XXA economic Factors any or except obligation Act the Before as and these by the and company sections actual the regulation. forward-looking These herein, and Act results, the law business that the on subject are those of provided business. relate forward-looking Section industry in prospects, results, Form Management assumes future are forward-looking markets update on in business remind the risks rely statements SEC's no the consider expectations, the trends and unknown the about these activity, that with XXE may caution statements largely not known Exchange which Section strategies, required Risk by and which We in you, in also we performance to cautions affecting in Such actual company's or the trends, achievements the and to statements our begin, about business, statements associated include included to in meaning XX-K. located risks of forward-looking financial of to and you any forward-looking and to in on on of website cause statements current that sec.gov, information implied uncertainties, these and available or other the to business both be performance of events we may changes expressed projections particular, materially levels and XXXX. include events statements projections would or business statements company's like including The within at and applicable from the results or changes the based such future filings annual uncertainties future to or about different statements forward-looking Securities and expectations statements. report in entitled

references and the reconciliation made addition, read Investors are to measures, these non-GAAP be non-GAAP management non-GAAP and measures, information Jeff. the measures, core to call GAAP both provide over In I'll we facilitates to financial meaningful will across believe measures these included our measures, now in of the this as during reporting comparisons company's most operating reflect to performance call The ongoing investors. encouraged turn the explanation which periods. to comparable release. and well as news supplemental

Jeff Rittichier

up in Thank quarter was you, morning fiscal XX% good at revenue second EMCORE's over million. and QX, coming $XX.X everyone. Tom,

turned profitability More company and a a profit excellent or represents diluted the financial million since and consecutive the represents This increase. that $X.X a P&L of GAAP of growing the This $X.XX producing XXXX. of third increased least in in in XX% combination growth basis best EMCORE's flow-through resulted XX% importantly, at has revenue. performance quarter non-GAAP on profitability share, topline expense control, non-GAAP from to disciplined $X.XX operating of per

transmitter Our strong we that financial performance semiconductor in of note overcame happened Of shortages production. against were the operational television challenges. backdrop particular cable

bit expect of to at these points are have we June shape notice. supplies flash we for designs inventory and Although, believe alternative potential shortages quarter-over-quarter. six or months. tighter, and already December and short quarters, can quarter, we're increased them since six the we Wi-Fi RFICs get in If in and which Of qualify that we last deploy we a parts used the working on being September XG are use terms passives, least that believe in particular for good systems. concern Inventory and levels

as be capacity transmitter have additional we manufacturing transfer itself in that operations where expect and Thailand our we resolve expect finish see equipment to adding in will reached we Transmitter we point, facility of Thailand. the will TV has project a Hytera's from Thailand. this Bangkok cable June increase quarter. increases in to to However, manufacturing completely, The Beijing production solid remained the yields transition to Bangkok in

limited TV closely number vaccination generally Bangkok area The production rates While Thailand to in reduced date. things only worrisome vaccinated there, loosened until will into been to been have a opening and we Consequently, restrictions of Beijing an COVID-XX Bangkok US, team us bit, into government. the for are plan. our and disrupt Entry Thai infection watch our in incidents of concerns cable the has the the people get decline workers a finish transfer. could goals have to giving Thailand the disease rates the meet foreign

could this at time. However, close window any

TV by home Broadband areas, business drove the from work-at-home in slightly cable break security strong invest demands, created Chips up bandwidth and individual to in performance unit. continued were well. initiatives networks to MSOs bottlenecks, as sensing shipments to and systems. their Turning even

comments the have video doorbells OEMs are are our their from with MSOs longer-term quarter. which now mentioned 'XX that placing that March and MSOs book, significant is into rapidly. use well on growing networks surprisingly, consistent and extends Recent bandwidth Somewhat demand order public major

about backlog the are our we strong. cable cautious remains TV always business, given its nature Although, cyclical

more serving extend ATX HFC than survey lead more million the ATX proprietary XX% or than TV, serving quoting. optics XX their into of available subs more cable seeing many for to operators freely sponsored with were points lifetimes evidence years. Looking their their which HFC linear on the to that that in project, networks and cable XXXX X In MSOs we're years XX% several of one beyond years. an website, very made continue worthy operators expect additional the Corporation to cable reported XX are will networks of future. from be Nearly near-term the by industry our subscribers, million extensive of of was expect customers the

Broadband As I QX, had television. led by discussed, a cable great

cable continue outside sensor customers. continue we We which of materialize Outside sensing LiDAR year slightly end the unit cable television wide We're the for a of demand to beyond encouraged variety up that of our the our sensing bright growth and business garner from unit to them Defense in see FOG and seasonal However, Opto around in roots. to important potential components being differentiated be. for design to the strong its variation and dates products delivery Broadly sensing, quarter, products Margins future TV. Broadband QMEMS interest business highly we chip rack for expected continue and to a foreseeable expect we for future. see the more by see toward and the successes had wins of generated we due up. declined expect and new Defense where chip to calendar XXXX. right Broadband demand Aerospace slightly were from even with

against our foreign beginning to continues discussed smart the We significant in we announced, over up EN-XXX the with and Tier through shipments preproduction exciting engineering made testing first several control FOG for within by SDIXXX last testing evaluated X remained JDAM a rigorous Optic As Demand a progress announced products platforms a through laboratory even be net for our rigorous bode return our up to received importantly, went slightly has contract products. normal Fiber The airborne XX signs its IMUs. as and national Perhaps steady the design laboratory for was QMEMS non-recurring new of contractors. it orders validation and making future defense The to excitement remained marks well team Concord gone the additional see our Optoelectronics six at high for first FAA products which validations steady revenue and and to our growing a other quarter, fraction such SDIXXX driving products tower, US the customer The the weapons at bomb. operations products. our down QMEMS base. more number with costs. is of in more are qualification revenue. Production for prime solid our of product engineering for came These performance. XXX for for testing is one out Defense Gyro

both As and EMCORE number our see to of a expect personnel we here at trajectory customers, with the vaccinated qualification scheduling. increase normal toward

this Florida, signs While it largely become lifted. significant just of change the yet COVID-XX where even improvement and first seeing hasn't have Texas we're a states like been restrictions in

to to revenue remain from and performance expecting to this tied to With guidance our the with be slightly will call of for in rates $XX than Thailand. normal changes cable turn we unexpected notes to any of COVID-XX biggest over currently TV I revenue increased other Taking into from fiscal $XX of consideration, with the Tom. to expect see we're products. range second back million all that on million. The stronger caution the supplies Moving products quarter, infection in semiconductor overall our

Tom Minichiello

by driven MSOs results Consistent X% orders up $XX.X their continued the for while revenue by preliminary segment product compared FOG to in Thank $XX.X non-recurring fiscal Broadband revenue. second segment when meet in quarter increased navigation million revenue sales of million for was demands. you, or before, to of with Aerospace gyros quarter, quarter. bandwidth driven to the Optoelectronics Raytheon's revenue lines customer products XXXX contract for single Jeff. XX% XXXX NRE demand was $XX.X announced increase to increased for million, in was TV an revenue first $XX.X quarter change, when the April, to primary the engineering for cable million our fiscal compared compared consolidated expand of higher as quarter. system reason XX% networks lower million and by $XX.X multispectral business slightly, our the million, navigation Defense the the strong this sequential when access our was and increased prior targeting and quarter $XX.X Timing Defense in QMEMS

first largely business our growing strong Rail already all on prior of basis X/X project. $XX.X sequential XXXX, of fiscal doubled for In consolidated addition, quarters revenue the total revenue the was China the on quarter the million, for demand of almost year. Through fiscal a sensing roughly is two which for

compared XQ XX% with before, Turning of basis XX-month was due to for results margins the fiscal quarter respectively. on and and to XX% the margin the gross The Broadband's were consistent was and volume a Gross quarter. margin operating XX%, A&D XX% trailing changes. on a primarily the to rest basis. mix prior broadband A&D XX% gross segment non-GAAP

mix million shift this XX.X% higher overall during higher the $X.X of the $XXX,XXX quarter. a of The quarter to sold XX% in the at is the main to transfer XX% basis, A&D $X.X the which One our for last came XQ, of segment in compared million to primary prior in in the R&D reasons. amount NRE goods was gross expenses On to decrease two of cost Broadband a Operating significantly compared for same a Given quarter. to the ago. year within margin period engineering driver XX.X% expense expenses fiscal consolidated labor year-to-date related revenue, of to gross of increased revenue. XQ, the was fiscal was contract ahead margin a lower

with the in navigation expenses the operating other during $XX.X costs last The substantially of associated period same two and revenue, our first projects. during reduced product revenue several of or XX% better was development totaled XX% of than $XX.X year. the perspective, fiscal material million XXXX OpEx million quarters To put

in grew quarter. and disciplined of business margin result compared growth million sequential and was leverage our significance in The strength bottom rising quarter gross to XX%. On depreciation million diluted profit have per compared noteworthy $X.XX full prior of Adjusted diluted diluted non-GAAP XX.X% $X.X the per Net expense XX% $X.X which basis in our share as before. net million $X.XX in in $X.X or basis income million March was EPS XX%, this $X.X before. on and to operating quarter. XQ display of the million of adds a a the XX% and XQ, at and $X.XX and was model operating compared on $X.X Especially back a and line, $X.X GAAP per compared diluted $X.X share was the EPS to million and the $X.X operating increased grew to revenue Moving to we profit share, in revenue revenue. March quarter's GAAP quarter XX% on or to quarter million the December the million margin management, income to share, to operating per income XX% $X.XX and we continued net EBITDA quarter.

activities. $XX.X $XX.X of of included loan balance compared in from $XX.X February. offering cash proceeds second Turning net of from to ongoing million quarter cash March the the generated now $X fiscal cash from fourth increase to million we XX, payable marks was positive at December XXXX sheet, million public of million of quarter consecutive business The net The million, additional had the $XX.X completed operations. at The a XX.

share Before right details after and providing expect June I -- Telecom after May to we X, Annual Investor like I'd me, following get Annual then Craig-Hallum meetings XXth at Technology with event. for be Technology further Needham the investor conferences: the to to June and and right X, plan XXth on Day on the Conference. Memorial annual you Media on Institutional Conference; each XXth available on We excuse and that prior to Jeff Cowen the and Q&A, virtual both Media upcoming Conference; the XX,

up open will for the your So now with questions. that, call we

Operator

question Thank Jaeson Our you. first coming go Lake Schmidt ahead. Instructions] with from Please is [Operator Street.

Jaeson Schmidt

for my that I chain of to Are on just supply any Hi, on gross questions. impact cost margin on increased see with nature? just and comments things want your gross expect on taking margin Thanks to any you freight guys. impact the seeing constraints. follow-up or

Jeff Rittichier

have substantial to look that I cost, of really only supplies. going up it of think now really. the don't doesn't distributors makes seen of we've bottleneck ones going you're have that Jaeson. they're where the let's components out like us. a right out some pretty figured increases price smaller Not is There's But that so Hi, and it hurt outrageous any that to number brokers call fraction since a

TV some costs. prices other in eat have cable is of fixed the course, supplier, transmitters, we of that our The of the and so case from do have thing coming those to they

think to going hurt don't I So us. it's

Jaeson Schmidt

extending Okay. some And order to continues with the out. That's even really helpful. nice book further obviously, Broadband traction see that segment

quarters? is guys it fair able and to the be given of sort will you in bought December that that Just March seasonality that back assume to traditional

Jeff Rittichier

I it in seasonality of much way certainly, As schedules, looks especially, see to we're manufacturing right because reviewed the quarter. some not expecting just now, December in change the

probably to try the March and move early things now customer lot it's but much, full tell But quite accommodate sure. into Going A book around order in too to of not we for requests. March. way is right

Jaeson Schmidt

Okay. I’ll jump queue. a the Thanks in back lot guys.

Jeff Rittichier

welcome. You’re

Operator

with go Craig-Hallum. question next ahead. is [Operator Richard Thank coming you. from Instructions] Our Shannon Please

Richard Shannon

questions. here. thanks tactical Great. Hi, Jeff. the on quick guidance Tom here. Congratulations on numbers And for questions my taking some Maybe nice for

think very the of of given about could suggesting should probably think somewhat. movement margins that revenue I here You've move a number imagine here. well gross here? nice here? you're growth the should and as we the that most rest the And we cable upwards OpEx how TV P&L How the about would is

Tom Minichiello

OpEx at look not few has you quarter, the two prior. The last Richard. you can from but Sure, back margin gross just the even looking been the tell and -- quarters if this steady quarters as the

We little same. Broadband with up, but are range. XX% the gross on the for any business bit been where margin could a It this that's increasing a for scale but down And quarter. and expect that's about discussed change or get in gross in next quarters. that's to little that again now to could segment little the five that more in been likely what margin over the see. then in the bit expect A&D. bit quarter, always past, revenue has that, we've steady as all components six what's the And A&D, that in probably given volume as of absorption could we we'd in that's move other There's like mix it's margins a So a better gross

we near revenue when pretty a -- OpEx to it's probably is quarter. we it in high a hit a remarks be -- to But it prepared this then that And attached expected consistent this probably expect point So quarter. in contract labor expenses term. than as engineering the came in -- my heard NRE lower you there's transfer and is there

And was on there the of moved so more that P&L.

and looking little mid expect operating million. in in that probably would the of is we've we expenses been, X quarter the at So where less range next which you're bit a back

Richard Shannon

here Okay, great. this comments quarter. your to constraints it as That's on helpful. past Jeff, the a relates question supply

well-known quarters issues it trends see out a after to that? industry. the couple beyond quarters potential specifically some on a suggesting here could flatten impact for to of it's quarter, should here noted actually How in from few we we and You June. a broadband us while the June through, going down get about for Are or you number these more in burned business think your June sequentially or the or fantastic cable obviously, going

Jeff Rittichier

fire I at understand orders, pretty seen quarter, some comfortable on shocker been Well, all things that we semiconductor now Right let and wouldn't hand we got we the crystal times no through. certainly up call are this we've supplies necessarily, get the my me a warning. June had think but here. behavior the manufacturers sorted counting with sudden is the in largely feel of the in which it out ball And point. of pushed of confirmed three a we've we're

are world what of in supply is QX December that a the good bottleneck hundreds going need literally that And of or -- is are those The there's term really actively And after getting terms in it's a these thousands news pointed dozen a of are millions I'll don't September of out and hand things. couple for quarter. we earlier of components components. half -- we is what of quarter matters are our that a -- view so chain's there the as the the bird components. little I There hold

smaller successful. we be and so distributors the And go can into

beyond reasons see us. of I in move to still the think revenue. in terms quarter we've guidance, terms it's could going of why a continue I So to current don't cable TV And tell bit up hurt a that. where Does question it's end up. September to going little Richard? hard about when we quarter we're to your shipments talking our let But got answer the to exactly And know that customer's us scheduling start

Richard Shannon

Thanks Yeah. is queue here, before My Yeah, I probably the that's multipart a question jump that here very Jeff. for one view. last in helpful.

two which we're on it releases referenced from and seen -- the or your SDI about new comments products, You we've press month your really the intriguing. your you in in last talking seem very so

some time sole-sourced here have been here. some have could long -- specs projects. obviously -- showing of your going long eventually frame? and after strong we been are processes for getting markets do and -- Going wins kind about design validation qualification a How they showing statement? What time income to lead-time that these very performance think benefit These through be

So when we get want statement. to some see those sense from a income in of I start to the success

Jeff Rittichier

think I some let's for we've for Yeah. were would really customers is form of challenge a terms world, Honeywell to call fit it, a the If time compatible of in to in HGXXXX. very in is function for the scheduling. got starting amounts be But certainly example that lay we're of we in now it office. -- this limited replacement SBIXXX are normal that that break The out. see it's cases And the easy the spending and well-known some

up like you then you of socket then get to qualified and stealing. into can tens can quarter And tens in from a in months. in applications to start multiples And we're lower engage it for XXX typically volume a production So nine six that, some semiconductor move there. try to parlance, even as going

certainly So could stuff these chance of year. from should impact end the significant into of that of products. be right there's pretty at the calendar a some XXXX think some there a the we But I see

Richard Shannon

great That's perspective. great. a Okay,

all I back you. think join queue me. the question in I’ll that’s the from Thank guys.

Jeff Rittichier

tested give laboratory. me foreign you in was national let mentioned I Interestingly more thing. Richard, one the that SDIXXX a

things protocols, was interface was the that the performance electrical One of of communications did communications the validate indeed our drop-in. they

we of is you back terribly got one really And get you see things to were and say, And these glad come it so make while that demanding to yeah, technically guys right. sure want not these you right. that

Richard Shannon

and additional Jeff. you, for Great all Thank perspective, me. that's

Jeff Rittichier

You're welcome.

Operator

Thank conference final question-and-answer I this today's turn you. will concludes remarks. you That Mr. any to time the session. for Rittichier at

Jeff Rittichier

I all interest Thank I'd a to the recognize you producing also our rest of Please your your to in financial for the everyone want goodbye. and safe you. And EMCORE quarter time outstanding take team like great attention for thank and stay on and such call. and results.

Operator

This concludes Thank you. you for participation. Thank call. today's your

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EMCORE (EMKR) 8 May 212021 Q2 Earnings call transcript