- Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, thank you for standing by. And welcome to the EMCORE Corporation Fiscal 2022 Fourth Quarter Results Conference Call. At this time all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions]. today's be that advised be conference recorded. may Please hand over Chief to would Officer, now speaker conference to like Minichiello, I your a today, go ahead. please Financial Tom

Tom Minichiello

expectations update assumes good highlights. XXXX fourth Jeff On you results. our and begin Thank afternoon will business. the and statements by Act unknown, business, be welcome industry these those issued meaning and or our that the cautions you based and expressed strategies, current and Act different statements release our EMCORE's this performance are included business of President in events would in which entitled Management to in I Rittichier, the you of quarter We everyone about our we'll is Factors the discuss will fiscal to to and on available call, our posted these activity, The uncertainties, that XXA Risk Executive plans, the of are levels performance to at XXXX like and results, the Section future and in the and these located and forward-looking then annual questions. business on you, statements. we future of of and forward-looking from the required within statements achievements statements any the conform company's statements SEC's events XX-K. of remind the actual report as information changes and results expectations, and XXXX. sections and EMCORE's future company on results, and conference with are of business regulation. our include the applicable rely taking associated statements materially afternoon, that any the uncertainties we except about company's actual cause not in But on or statements trends with such both on other call which in this caution news Securities economic of law to or the or operate. risks The website forward-looking largely Section provided on obligation our we statements and to discussion markets financial projections and emcore.com. or filings financial may Officer, in the changes XXE Form herein to forward-looking Such to Exchange by consider begin, or Chief by forward-looking conclude affecting to relate results, about before also implied the These we business prospects website business, forward-looking including to may statements projections risks to known trends no to sec.gov., update subject future include

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

Jeff Rittichier

Putting inertial company's navigation with navigation a EMCORE and KVH accelerated major solutions. and the future. now us independent being former its larger defense, much under is loss turbulence revenue significant and an point $XX.X in in largest revenue. represented challenges fiscal operating move the LXHarris provider defense aerospace and our broadband. space TV adjusted the and And a coming runway this of Thank million in of of results, XX% turning operating purchase the presents of any and good continued generating to less created Cable from XX% $X.X of coming team. on Changes from the business magnitude operating the Consolidated integration into of QX $XX.X was for million. everyone. changes the than aerospace EBITDA for as QX, represented you, and circumstances. EMCORE, a Tom, million significant with of QX negative afternoon, it X%

underneath were continues the non-GAAP players will was on industry a five The cable of but in number a year’s that also and affected equipment million. out to not million events that start are operating that provide Our demand are EBITDA off nearly were as cable margin, the of expected industry the COVID, TV $X.X will products to worth Cisco color aftermath of of loss by non-GAAP I In forward. themselves gross decided was the bubble adjusted our within call $X.X QXs a negative saying overhang period. Tom the two-year TV margins changing exit to repeat going struggle by In last well. pointed that we itself that caused business. built

that However, the week, just from move ATX technology announced that Cisco, last platform to forward. licensed Prisma technology allowing II they publicly entire

demand shift within planned own While slowed as transceivers we were in wireless their expect term, next not Semiconductor quarters. traction for with to meet to to and don't QX, shipments the these additional are silicon With few chips developments broadband systems projections. and our of enough the them expected provide down internal the to customers and DAS shipments. in form a in customers catalyst availability continued recovery to business chip our and improve over get cable TV meaningful engagements longer growth to that able get said, for

business, a broadband, stronger get that statements we've made summer, assets ramp stage the statement non-core our steeper bit the mismatch expect direction our setting last ramp in made the a to FY Going say core cable to for return was forward strategic during to and meaningful TV resolving defense. that map from which between in direction. incongruent progress update in the see I our conclude would To to on much see call, I and the this this aerospace I'd my we -- increasingly a Today, like on point 'XX. chip strategic with about

to Turning defense, with KVH. operation, and by our was Chicago comments owned formerly aerospace I'll my begin now which

of back Bud the diligence, begin products began Chicago the able on back goals get on and in The met QX, two the due the process. that in team new during allowed of and to subsequently We identified to integration extended the help these teams get December them During were and to set combined efforts track. Lake shipments shipping Concord we programs quarter. needed development schedule engineering

of of agreements begin new validating for two important recently used to synergy TAIMU summer. to scalability in largest contracts, even in were technology Vulcan is builds navigation Chicago, the also the United primary in and for vehicles, stage ramp production. meet T-A-I-M-U the as the over and now product the and a shipment solid they navigation targets for We board. last strong systems arguments transaction quarter, that originated that awarded to of continued space or we for their is production on These or began navigation. cost of the winding has able to $XX flight well are is supply will IMU, of of Launch new as schedule several The made products. grade lean coil the on the of orders, that long-term set progress launch it book Chicago worth and to well are critical million five team for the be as several Alliance, TAIMU out part for new would continues to launch beginning I Alhambra. TAIMU point IMU milestones control which Centaur for and also Critical favor make boost for March happen in years Atlas

is full recover during downdraft the calendar volume in to to in builds calendar million these complete production, they're to its produce happened from million and COVID. products to $XX Aviation 'XX. expectation product Our order to in book continues the expected enable qualification year $XX revenue. hit that The Civil significant annually year When QMEMS line launches late

all with customer. for significant international along enable expecting of larger qualified this us We're exports. more jets. munition will be x to or getting in we important well regional demand guided shipped uptick and a as precision order are for for a business In that of QX, systems inertial We domestic as XXX an used PGM orders, critical contracts

PGMs area said an before, EMCORE FY and systems, segment As the of significant largest be are for 'XX. measurement we've for inertial expected to market in growth are

the annual of target In with SDIXXX volumes to advised was Beyond worldwide. approximately one international a trip, per that total year, million. contractors we defense with are customer, units to X,XXX a and range test this I from qualify value $XX working recent

of integration team. navigation space on on to move focus the like I comments to former Before few the a I'd and guidance, KVH and

entity. make this key One all manufacturing work four of a to of in our our single facilities objectives is year like

out agreement But about navigation and space of costs a As of the exit building. running of and to enable of rest part team is LXHarris's KVH with This navigation. us behind Chicago that services system Rhode transition a is the IT the from engineering quarter the EMCORE the made today, was system. transaction. of cutover running the Island is and the common now we've space will moved already ERP

improve to MES and make help PLM facilities exit is of systems. only all efficient, us MES, Ultimately, OpEx this began realized ERP, when cutting expect into ERP out and scale on complete integrate control Camstar we and benefits this upgrades the are and Alhambra inventory. for shop transition important. EMCORE after and and more floor other services. facilities we the While The true reduce and will have will processes our the rolling We costs common

TV current in Turning markets. and now guidance to the cable for to see continue we weakness wireless quarter, the

make I With we're to turn chip to over driven weakness revenue, largely it cable back a the growth to will the million Chicago. the in full Inertial will we December Navigation won't out of will expecting call $XX be quarter. in Although enough million revenue offset the quarter's gains for by performance $XX Tom. that, Consequently, see modest range TV. in

Tom Minichiello

coming revenue million, was was million Illinois, was A&D addition Navigation XX% outside to Consolidated from when with for the Jeff. of defense, broadband. from XQ on Chicago. The the million XX% and segment largely operation August was compared the you, That and attributable Thank $XX growth Aerospace to prior revenue revenue acquired increase aerospace X. Industries and fiscal $X.X Park, just from defense $XX.X of a quarter. in KVH Tinley located Inertial

$X of navigation up space the revenue on prior products the TV XQ. experienced by to last Chips was and of the million of TV in partly $XXX,XXX to million, increased flat. revenue. million $XX.X wireless revenue sales quarter, were defense collectively in a to compared sales products the lower at much slide quarter shortages was $X.X TV has million addition, sales customers. A&D way, Non sold downward cable XX% mostly optical when down $X or of in offset deeper last rest are to the quarter $X.X in around, basis. Optoelectronics These into million infrastructure revenue XX the generated Broadband $X.X of fourth following QMEMS due Clearly and shipments during continued two and cable to quarter the $X years. essentially fog -- this down wireless a revenue the led the million company of In than fiscal sequential year. segment rebound A drop we by decrease to quarter, and the I'm broadband compared sorry before of chain revenues higher market. million the transmitters supply lasers the fiscal all time cycle cable due was least sensing compared was a and in

the turn on of rest me focus to Let will results, impacted that now compared a to quarter the include non-GAAP was Consolidated operating following. several which X%, gross factors by XX% the before be the basis. of the of margin

business revenue to First, cost XQ percentage of and and method. of was the in higher due the first accounting its than Lake for costs quarter under completion recognition the Bud included reporting space full timing normal navigation and

of was gross a for in business included Navigation below that consistently the resulted the Inertial in the acquired Chicago prorated cost achieved levels in the quarter partial Second, quarter, middle and past. significantly the margin

the result Concord other fiscal the an full and component taken drop Fourth, segment. included one in Alhambra Third, a a to Chicago once both including end. are year for with we historical of their fully related expenses was from integrated expect to compared continued low revenue, nature. factors broadband TV the the under of due will of largely the The at were recent/lower part resulting operation acquisition absorption businesses quarter, Operating and Navigation the quarter. margin inclusion our inventory better. margin to overhead in the aforementioned $XX.X count the costs, more two in Lake charges, $XX.X and of associated recently Many in wafer gross cable Bud fab. the return for that in the XQ, non-recurring acquired revaluation fiscal a in And or was inventory to the costs, prior two adjustment million Inertial QMEMS operations million of to transitional of performances,

moving Before change line, to it's EMCORE bottom momentous a and has that to to highlight important rapid profile. the the revenue undergone

XX% positioned later of with in reach, fiscal coming larger half of company total is in a broader doubt cable XX% There In revenue flipped the marketplace quarters base business. accounted for is of during a of year XQ, and XX% 'XX Inertial better stable for products, which future. first has cyclical growth, a this higher TV to from and and is time portfolio of substantially aerospace over market. fiscal than accounted our The The completely the of couple just expanded no revenue, highly Navigation broadband now customer defense. more for A&D

world's of provider and the Navigation solutions. Inertial independent fourth largest now are We largest

three a the changes Our just the million was mix as in also results the with was to transaction per a measures, to top two Fiscal results This The the with the $XX.X future results related million negative to margin I $X associated the million XQ for of included adjusted with and fiscal $X.XX and of the costs impairment growth, outlined, was fog reversal was need well $X.X the swift to reflect million share. incentive or loss $X.XX items as during net first XQ items GAAP million $X.X net size quarters EBITDA per Together asset excluded a XQ credit one-time comp included fiscal charge million long moment. loss and acquisitions. associated accrued 'XX. operating of significant line. GAAP non-cash the Shifting invest loss million, non-GAAP gross of Alhambra $XX.X variable and lived operation the accounting the $X.X share. $XX.X or from

activities, $XX.X Inertial second the the payment to million Nav $XX million to XX, XX. Turning sheet, we the million $XX.X borrowing these Inertial business, balance June decrease acquisition, acquisition $XX into CapEx. time with $X.X the Capital $X.X from entered credit XX, to million and of to $X.X Links transaction in a acquire in facility costs September had the in The in of September at at million from level million included KVH. of million cash related Chicago Navigation $XX.X million final Offsetting uses represents compared the of at space representing financing consisted Fire acquisition the was and at cash Nav which under cash

a Before to of also to I'd cover like recent we get questions, events. other couple

rationalization expenses cost roughly million management of a total of and sold designed and costs reduce reorganization reduction and to This First, by involved the OpEx. $X.X approximately completed a two between acquisitions of initiative. annually, cost a split our enforce integration goods recently XX% XX% included

record the We a quarter cash related anticipate a of December expect accelerated which in stock for comprise severance to we time. costs, vesting combination will over and charge

Nav million last the This week, proceeds. asset and part in announced Inertial generated of KVH. property of transaction the sale Park obtained leaseback as transaction cash we as Tinley the Second, from completed $XX.X acquisition net

for So now questions. opening the open. are [Operator your up Instructions] with Richard Shannon, line we that, now call your is

Richard Shannon

nature. one questions them. Thanks here. I here time to guys. for number the of repeat gross you are great, items don't you're one a Tom first is mentioned in seeing on my that want margins. Like Okay, taking

are makes about think other for understand about are magnitude broadband if I And them. September December? margins us four in of think you there COGS One, one gross sense. what here. are It certainly seems like thinking do we transitional The how how ones added quarter? two that you potentially help the ultimately, for much could

Tom Minichiello

charges MEM mentioned, had I So, just A&D that the acquisition, with margins, side, Quartz total of let's for are where and the the the gross stick Concord. in two we

when margin an the you A&D mid of to to in that for that, quarter, and high the you and up -- just gross those all taken So, with to, teens, high call alone. mid impact adjust XX% take it, you're XX%,

And business put trajectory. that yields the integrate you're as so getting do a as And, on prices to we operation better where back than last this there And much that and acquisitions. even activities done with it is healthier quarter. Quartz things other was have like MEMS things with that, us things and we've in the we and

Richard Shannon

Okay, to seems December? is. thinking try from good about given like think, do quantify here, what have view you'd it so of you're end the on the that days to verse, I XX you that quarter a want for your what

So, you XX% good mid-teens how start the in with A&D put all together end number here? this XX%. here But would

Tom Minichiello

I if outlined of that mid the the so just to we're between doing would I is, prepared in Quartz the and better. A&D. isn't to And sort consolidated margin, it low adjust way then range of call gross items the I to the for TV quarters. integration, that the is -- all down not the several acquisition cycle becomes going you sort changes about going number for in Yes, improve in if broadband for think Because is remarks, it A&D MEMS be so to issue we're it's you that XX% much to cable mid for think

to So size the of just you'll that of revenue the alone. the because continue see struggle

quarter. in reduction go the effect bit a full bit example, little in Because quarter. higher a the the So, doing the or December it the That's some we a that in XXXX maybe number, in impact of little at 'XX, of quarter. late consolidated talked fourth you're for But we're that of December, early together, lot you we'll so -- looking that that have the happened in take quarter. in the quarter, just put things things But March if will just get force the a minus, December in well. of kind that'll when about, December most plus that XX%

take that the single we integration on things year start end onto the fiscal would of you'll So see as in actions, the March that and of come improvement the things a do and the we to those front, through of getting sort of gross of quarter, some mentioned, to towards margin. other system Jeff everybody an terms kinds on

Richard Shannon

Okay, to last part that catch here. so

So to with here. reduction the XX% of you million going back of that COGS said course in $X.X annually

benefit there's if that immediately, happened happened late be like relatively the it of quarters coming sounds it so from that quarter. been So, It like any far. won't rip? little see might couple in the a COGS December It of so into take to necessarily fairly sounds

Tom Minichiello

So you it's X.X. correctly, just you thought said one I correction, I If X.X. heard

So…

Richard Shannon

I think three said I but…

Tom Minichiello

Okay.

Richard Shannon

but I speakers]. what think I said three that's [multiple

Tom Minichiello

Yes, Yes, okay. okay. I I said three. hope

So, yes X.X.

quarter. that's when a XXX so, And

looking And that see So quarter, of full weeks XXX roughly, operating ago, quarter. of goods cost we since month sold expenses early the part March you'll you the on of know quarter. and action the the December a in just of impact in full few a the you're at last XXX at in took the

Jeff Rittichier

let you here. color Richard, two Jeff. -- me little of to here's other Hey, pieces Want give

news that inventory repeat is Bad the not things enough that an nearly So, we're the we products. the the Hey, significant is that one we was good yield, took on humans the hit expecting quarter. of course news doubled congruent in of valuation margin gross for to line. example, for

that but expecting of sort from in benefit us we're some it the hurt that's actually So thing QX. see

that to other of is is the to terms its about in thing EMCORE really the continues simplify RF The think other business.

structure. call simplify let's going the that of that broadly part remove had it were positions set more Right. are to considered And a the larger We folks management BUs. more, of

it it of mission simplifying positions, it it the structure, So collapses the what because eliminate is we're does the just company. BU

Richard Shannon

kind bit a about Okay, here. top fair Jeff, enough. little let's talk of line

additional the for mostly operation clear. quarter is of coming from like guidance sounds the it's months Your KVH the here. It

some about other I think the of constraints we've and been supply in among chain business QMEME parts is in things. hearing

other trends March how kind maybe held back here? So, talk And here, into do that of by the supply about quarter? much how going is forward about we then think dynamics or being

Jeff Rittichier

get that weren't where the Yes, it's so, chain But because an we're current shipments, that help oddly aren't antenna supply are in chips issue. other transceivers push to the silicon help can't badly see, seen in used issue now what because primarily shipments too circuit what enough, build they in because we March. of places, in hit we've but is expecting are But to to for much expecting they the interesting are an problem, systems wireless. and enough what we going us boards, some distributed actually connectors, or getting will customers in still semiconductors, us back quarter,

March from a So I would better supply see expect look to constrained perspective.

Richard Shannon

I'm about talk here Okay, here. us when there's about question, fair like at and like, other last any seems more the to of on here. structure quarters, we're you the I'll thinking together putting both get give than you guessing, maybe here. could a because looks what you when enough. can out ones kind structure get But and that interested line breakeven, it this few at See, then guys timing, breakeven. least you in to looking if And probably But thoughts. jump all of just

Tom Minichiello

of lot of into Sure, middle need I lower of a with or like there's it's sort on gross half back sort to margin. it's revenue will FY get potentially up gross even the a until to the with several lot of sort so can range, range a we on we of year, maybe 'XX, million a The yes, going here. a margin, mid-XXs can it And basis. depend that quarterly mean, hit if moving of grow XX, pieces quarter-by-quarter quarters the million the improvement, a And, fiscal to call Richard. factors. $XX $XX with of out, early to

adjusted in to breakeven topline that you the a expenses. XX with operating for margin put forecast of you So, EBITDA gross a XX at to mid-XXs if somewhere on low in tack of would sort sort

Jeff Rittichier

here, Yes, by other prices to costs gross so absorption think. overhead is number and margins, a thing gross echoes remarks you look out might Tom's than it Richard that the the constrained bit, more point other When at is people the margin market, say, the in out significant costs control. or are oh, collapsing fixed have your reality are the absorption, they example, oftentimes for high liquid of are factor. gallons facilities But XX,XXX overhead in that a of nitrogen, is

And that of navigation that mentioned are to comments, to was product in so Bud things designed in volume/margin will the while product that's in this I make is, as quarter for now. my happening volume and end for constraints one start feeling be significant dent the a high about going a important March high we building that Lake, in been – long-term a we've ULA, navigation

the also think signs Chicago. I are in positive

whole we asked just we've those you tech of about volume. product, products which out they the in KVH new with And if few cleared former the that team, are now shipping that announced, things Now a me a generation XXX. collectively from

that an to say quarter. of Right. make I really start the all in will would March So impact,

on XX% Qualitatively, about driving for costs orders, is not higher So, the Quartz to about Tom's instituting it's costs new the MEMS it's a of just doesn't increase of a and semiconductors price some because But down, absorption, affect help up, the all contracts, or prices that about overhead those material we although are time. a recovering going numbers, of it's are period got the locked our mostly. bit certainly right. us for in of

Richard Shannon

Thank That great. line, Okay, the good detail. Jeff I Tom. jump was and will you. from

Tom Minichiello

Thank Richard. you,

Operator

Tim Instructions] Securities, for proceed. Savageaux next One Thank question Our you may moment Northland [Operator comes you. with from question.

Tim Savageaux

to Hi, small, My mean, first business of side. actually getting the I cable about good a most afternoon. at be in that's term. in must near I the headed December and decent know kind with it guess of on small having multi-year the zero looking pretty but guidance, part that. even I frame investment we're I of really is a context broader we think what close now. question And talking pretty to cycle program, suppliers regard or you down to the not in very quarter seeing, somewhere years, CapEx, And Charter it's your a

So are abruptly it's the inventory I course, my of maybe for the you've builds several disconnect we out mentioned of several customers. I guess whether of exiting factor, among question there. is network know, where there kind And business. moving searching -- quickly. final was at potentials, the analog a technology I'm before of point And the are more linear some the Cisco

would this of three factors, names at you plus If are look perspective, dozen at those looks in seeing how EMCORE you covering what assess disconnect in least cable universe, what and a half my from between the sort others what seeing?

Jeff Rittichier

shipped that And was in It's fraction five lasers of that COVID. for a two of and installed. Sure, I'll Real never years years tackle that transmitters simple. worth Tom. one, large

in product in warehouses distributor it in it's the of is And sitting so sitting the Cisco former the CommScope. major And of U.S.

there. optics broad is different based EMCORE And so the not overhang supplier products. cable of many is a

nodes try no with concentration linear that amplifiers, inventory we what still million it efficient. our it's a during that. we of more how thing well. we about customers here And the a or there so losses. But we for do But that's able run That's the that's out to actually are, did selling terrific And but bit back worth to the continue I'm certainly are had big very And interesting can is do became we And EML will we so not, there. it's mostly done pile the little has because the profits, during efficient their about believe is the There's profit. But up well. as They cable big because of trip is, we cable. nothing we numbers. warehouses. is during sorry, that telling were And making out and were end are business, -- in down, just clear a where it's with were of And competitive no, inventory the is us, the COVID. running to time there's of do reality transmitters us. to $X

Tim Savageaux

just for that? and that a terms cable? making it mean, I you strategic -- on any in have you sounds just of about made exit comment to add the like up that guess want on Do color. guys are And to business. thanks I and color front Great, on progress, you to that, preparing follow you

Jeff Rittichier

did, I wish wish I Tim. could, I

say to some fast got we we're to can. there we've as as soon As going as out it get

Tim Savageaux

last then for one and me. Okay,

One were It quarter able sensing. just I programs a because maybe you've Datacom, to telecom And, ago, of know Have And maybe the to making does spanning added a you that? on been compared two working of to might went there. some you saw quick quarters side, quarter, mentioned that take last opportunity or sounds how number issues chip look I a through factor. supply a is you be you like progress a what you that gating think couple But moment. you ago?

Jeff Rittichier

Yes.

exactly So, believe, trying there happened. it and I are, I'm when think of to

but haven't yes, are we'd shipments QX And can't picked could believe that would. customers an from I we program in over know, our issues Europe stopped up much Shanghai, are example, piece strange, COVID is which what silicon little even progress be they it's had and so as up been in continue it issue. U.S., still we customer. get they've sensing existing us in the China a about I people and in moving, just run rail the The China, So we of and how enough. offices, bit. as as off to I an in parts China, because we've telling the enough talked said one through They in for production and seems there's if a is little oddly given more fast hoped picked in

say and are So, these lasers. it about would that are tunable – we used in I transceivers, that chips talked being

of But a customer that, insight to names. Beyond shortages There's going a more not business that just lot allowed on. hopefully what's I'm right little now. mention just into silicon that in you gives

Tim Savageaux

much. very Okay, thanks

Operator

to Rittichier, Jeff over closing turn for like would to the remarks. any I you, Thank call back now

Jeff Rittichier

recognize Happy EMCORE. Sure. interest season an all I'd close I'd Year. company aerospace for wonderful all to business. reinvent like for and like New as to perseverance And your Thank their the also and wish we you I to a defense team in as you. thanking by our finally, holiday want you

Operator

for concludes you. Thank Thank you today's conference call. disconnect. now This may participating, you

EMCORE (EMKR) 21 Dec 222022 Q4 Earnings call transcript