EMKR - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Benjamin, and I'll be your conference operator today. At this time, I would like to welcome everyone to EMCORE Corporation Fiscal 2024 Second Quarter Results Conference Call. [Operator Instructions] I would like to turn the call over to Tom Minichiello, EMCORE's Chief Financial Officer. Please go ahead.

Thomas Minichiello

good discuss and quarter EMCORE's and conference to results. Benjamin, to call Fiscal you, afternoon, welcome everyone, our Thank XXXX, second our The is issued we website, on news emcore.com. this release posted afternoon

call today Matt Development. and President Joining me Vice on is Glasener, the Vargas, and Chairman Marketing Sales, Cletus of Board; of Business the

review results talk we'll an few get and by new important a going exciting developments, will today. things will discuss I'll financial Matt by and As minutes, in of with who Cletus, we'll a role followed taking about on be the effective recent taking questions. conclude

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

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

the MEMS shut XX first consisted due use tactical-grade Mark measurement $XX.X Fiscal the on now get primarily proceeds March the business the Quartz results, to million. along $XX.X X transaction This recap million, XX X our down quarter's buildings March both involves Alhambra the Torpedo million revenue Lower-than-expected recently an October, indium on with to we last fab involving wafer million for compared line we quarter our all-cash one a want which the with and a sublease factors: back phosphide revenue that of X inertial end-of-lease prior and and was legacy in to XQ, or the but Mark $X.XX Mark move held and in units start closing, obligations. was deposit now The to the Before of programs, testing sale closed remediation the and the XX were IMUs. represents into order $X.XX These week campus units and but final was closeout reported result the of delivery related XX the our I discontinued shipment cash included a to In case customer $X site. pushed a the assuming businesses. I'll received the sale of have April. of also ship into ready at XX, a IMUs buyer finished the Mark that in as million March, go, ready been September. at deal last the company's goods and on complete price shipped. The which up of were April Chips was quarter received Alhambra to following of

late has one Budd that Gyroscope completing last with Optic third a material in navigation resulted to in transitioning second or and a program. production decline Fiber our Lake delays IMU late-arriving FOG early-stage TAIMU for was different from the project do grade continued cancellation The year. following in of And the revenue the to site

operating resulting of when $X.X before, largely well was XQ to tighter driven the which expense a quarter to our at of QMEMS issues overall $X.X compared the part Let in non-GAAP Concord. million yield of as fiscal a was due revenue Gross slightly by to due expense remains compared the higher production primarily revenue results, expenses sequentially on lower IRAD, the funded engineering, were in turn now XX% be lower level rest OpEx. This higher primarily or quarter me XQ basis. million the operation nonrecurring NRE was SG&A, XX% fiscal to margin to by in R&D offset which in in Operating management. will or fiscal as before, to internally compared lower R&D XQ.

charge million XQ Annualized to GAAP lower was cover of to March to be from March $X.X or $X million severance which the benefits the estimated Negative moment. fiscal approximately Net $X savings profit, XX% was result are was quarter's $X about a reductions As these These last actions adjusted quarter. personnel restructuring with loss a million share. Shifting gross quarter to the costs in million, gross $X.XX of and $X.X results million compared numbers million. the $X.X revenue associated to operating compared a $X.X million December during the loss for per profit. included quarter. EBITDA

Turning Total balance December compared at $X.X million at during the to the to of due $XX debt EBITDA. the the at million of net $X negative end outstanding was XX. The XX was adjusted $X.X cash third-party compared March $XX funds million quarter million to largely was to balance sheet. Cash XX, million $X.X decrease March million at December.

combined for with costs. CapEx during financing and of as $XXX,XXX and of We cash the also discontinued quarter activities, the total used $XXX,XXX ops, litigation-related following for part severance associated a items: $XXX,XXX for $XXX,XXX

of 'XX guidance. to the to and to on based fiscal 'XX. today Now the quarterly early fiscal be anticipate flat between We revenues know factors up back half slightly we

and June book expect term, we backlog of Longer of the in business to million. return our first be pipeline For beginning an to in revenue the the quarter, $XX growth 'XX. expected to fiscal current to points of range million opportunity half $XX topline

intently focused rightsize which the swift growth, right are business. line of on bottom now cost the We requires structure actions to

plan as are to this such activity and We the on takes have full shape. an we provide quickly already possible, as important update taking intend once moving actions, started

Cletus. So with turn over now call to that, I'll the

Cletus Glasener

company. we've on to this performance of Tom. taken of in improve the some I to the order you, developments call to the discuss requested Thank that participate recent

only remaining business. consideration exit expenses mentioned, transaction been The complete. to of minor As of completed million sale the this Tom with has received, approximately company legacy The actions legacy is business and the of the to all the the $X additional go. completes required

restructuring which the We Wingspire necessary also for cost with lender, already to debt best company breakeven, to The is last cash lender, and restructuring of management was make company committee to company's prior becoming of with by Hale objective created have Capital. announced the changes. The continue. September results. restructuring the a actions simultaneously also into ending adjusted intends that agreement entered the by new to make additional additional excluding to authority achieve XXXX. will the committee with The flow week continue These evaluate direct the the the end an Board to targeted begun will actions of restructuring necessary provide flexibility the the which and to costs quarter reductions assigned

with a new alternatives will also wish to the Board the adviser his In the additional up company's XXXX. these potentially after CEO, Rittichier Jeff and thank remain be leave assist decided exploring Jeff very Jeff possibly service capital the and down CEO. Board the since continue serving finally, to addition, He raising to to appreciate and transition accelerate him We company's shore has liquidity, step including facilitate will and Board to best. for to will restructuring the with the his actions. company the And willingness to Board. consult an the

will Board time Your establishing search. search CEO for of be performance and for complete comprised to an already that is EMCORE's improvement. responsible take the new necessary driving company begun executives has CEO, the operations will the In a this senior office the of meantime, and the we

the communication a to looks the Matt's of CEO office the the interim CEO search Matt the his company's to restructuring in profitability. assume created leadership, working CEO plans and forward newly with Vargas Additionally, demonstrated permanent great Board to The role of asked has completed. Board for until is has confidence his committee abilities and path the team him restructuring building in and accelerate to

committed our with to the second the Board necessary best the the actions quarter, is although results position take success Finally, company fiscal we're satisfied to for moving forward. for not

help and your execute sustainable the you strategy we situation pure-play actions aerospace much on do, call the positions in the for that, Operator? urgency to to strategy. The is demonstrate and questions. on that left the up but of have understands of interest decisions model company. And to and taken believe difficult Thank its defense company focused we've our have a the to for We we with future, the Board company's new we'll with the building best the execute determination open the the on leadership. recent make in

Operator

Please Instructions] [Operator question Capital line Richard your ahead. of And Craig-Hallum with from Group. go first the Shannon comes

Richard Shannon

here talked much us either results, than delayed a themselves, that and more that as some of not the the but How outlook been Lake with, sense due we've my to -- of there's know as thought lower help you're is more or programs I to, ago? few but March first about guess, here outlook little seeing go here. backlog situation issues I much one-time think maybe unusual in of to revenue dynamics sort as is degree something lost just TAIMU, like and the quarters some bit a we're here. involved guess Budd I back or what well that with it question versus quarter or are we get the decrease seems have of that the time, in issues here I issues manifest

Thomas Minichiello

a be Matt chime would it question. that that on good time say to would I have in

So if you're Matt, there...

Matt Vargas

answer, to think the of tranche I our fairly large element our Torpedo happy Indeed a of business is portfolio.

understand working been comprise are function total does working better. We manufacturing have and it to that But signal of demand diligently footprint. our a diligently large

that not affects directionally would moves it larger say of our I business. So it's issues, particular subset as an that endemic but

So that not can the a lift really anything Torpedo else business that the overall effect, but tranche of to quarter-over-quarter. is I large add

Richard Shannon

Okay.

a order So contemplating of restructuring at capital you're these I'd ongoing permanent meaningful I love that it, here. I I do if some guess bridge cost back need either and/or cost include which here guess? we the get long thought you of before. I least can you How about understand a lived visibility raises are that which you heard to enough something what degree actions would structure balance that or time to things fairly issues comments guess, correctly, by improvements versus Cletus' to outlook that those think suggest just to versus or better do maybe you a transitional, dynamics something X number to

Cletus Glasener

going is There's Thanks, going business be downsizing associated with to the expenses restructuring. do topline. to meet Richard. Restructuring to We're the current not the free.

cash. So that, cash to options that's looking we're do require to and going that to raise at various

Richard Shannon

looking we're of comfort or sense to enough from don't of Tom want inclusive expenses then. give Maybe quarter. know a that $XX just in million. asked quarter, a about when sitting -- a I Okay. X the be questions sort Maybe sense were to And level X cash, here best I of of That's your at here. this question of we're what not restructuring. But us above any terms from would burn you cash or of if fair said I think stay where there. give just inclusive last

we're think below I already that.

want I urgency a So of get that. in to sense rectifying

Thomas Minichiello

where the that. we The has would Yes. or lower to million almost it, way we the March, at to topline a at all than with that $XX obviously, at do do Richard, with thought lot we'd I end -- look is of finished be

it. another, how $X of We've think I about beginning fab. $XX up million the would at here's of call the got We sale So it, round got on just the quarter. the million

cash structure, terms the emphasize be million a no essentially. So the to that help that has the specificity million, of can't been debt that's of to much liquidity quarter. I new -- too that with that previous was of provide requirement the restructured to now other is among into important And going its the deal. Hale the we're quarter. enough $XX know I million don't because longer that's a going benefits doing we having under put $XX have end $XX.X June up and going in lender here at we what's around to want end But have where the

to we -- going but provided, term but kinds cash the the marches require doing may to one-time us obviously that here that that's be other out. use, the going cash here leeway as business activities will guidance So initial ultimately near and some actions the also some lower all as forward, give in we we're of

parts, So And not to part we've additional some happen. have may that a infusions of but got and it it. may work capital want we some form or make we to do to here of ability moving lot some of whether what be do

Richard Shannon

line jump Maybe enough. question, Tom. Fair last out Thanks Okay. of and that, for one I'll here.

having -- of from met that of office assume these organizations, I think leaders here. would Vargas before of this not and see would here include the CEO an kind other from groups see the KVH I Mr. here. I came you driver I So office all Jeff different as was the

understand else to office So is yet? help of those can the leaders going assigned the of involved CEO, you and have kind us been be who

Cletus Glasener

engineering, Those work very functions And to finance, with of marketing. limited the haven't. will that report office the legal, restructuring the represent sales leaders some and have, company, committee. to including the operations, Some not maybe Board within but will CEO closely and the

Operator

Your next from question Kinstlinger Brian Alliance Partners. the from line comes Global of

Brian Kinstlinger

profitability September Just achieve I'm at you will compared that I sure presume you to before expect you revenue looking first understand current to the by comment growth. to the second make half this end but I maybe mistaken. results a at if in said that quarter. the remain want year, return to levels quarter 'XX was of I the of

have profit $X in order So need to you quarterly reach a of assumptions? Do did million comments that to than I cut the I right? these Or expenses. that misunderstand more regarding

Cletus Glasener

Yes. adjusted on is be of the any restructuring end by to said flow What the cash was excluding an expenses. quarter, the objective basis breakeven we September

So talked talk breakeven. we didn't we cash profit, flow

Brian Kinstlinger

see will think, today, weakness thinking turn that you're Am correctly in clear, be half of to I calendar in hoping all was And similar understand it. meant second half first saying of you about you we right? XXXX. that XXXX -- Got of I did the I are than the as be you what revenue at kind

Thomas Minichiello

right, Yes, about, years fiscal I think yes. got you Those talking Brian. that it I were was

X just So difference. quarter

Brian Kinstlinger

impact the because the quarter. we're going much thing why only the now Is other units, -- understood. recovery The sure that on isn't the quarter? to that have I Yes. It XX yet wanted XX quarter Mark stronger not like first -- Mark Mark the those you've second only of make challenge the Is to seeing yet? question than the is of that more shipped sounded XX the an I second

Matt Vargas

I Tom. grab can that one,

than in spoke in you're revenues an about of that sort create Tom elaborating. things of Budd the what Those a activity Torpedo-nested less [indiscernible] as problem decline bit it's think think the Lake. I little slump was set in-line I described.

manufacturing time. So in tuning there's sensitivities a are that year individual to little signals Mark-XX relatively bit internal are but our separate a is agnostic, bit and demand Washington not fiscal necessarily Mark-XX bit programs, little implications but independent we're it's The of little that but X for takes a those separate signals. budget more, process more X demand

not answers hope your So outside but demand question, always that from correlated I perspective. they're necessarily an

Operator

don't over time. I the session. concludes We conference at closing That our questions to back remarks. this any have turn Glasener Cletus Q&A now for will

Cletus Glasener

Benjamin. you, Thank

you to shares our that's long that, so to us you support our to transition. So the to a for also this give like many who thanks And health will first, of do time. time I'd that convey who of sticking to all I'd transformative us to EMCORE this continue shareholders, working for our attending. you leadership We sincere this remarks. and have have is held the With like financial appreciate restore business. through Board with employees my the much of and through Thank company to

Operator

joining. and today's for all that you Thank call. Ladies concludes gentlemen,

You may now disconnect.

EMCORE (EMKR) 8 May 242024 Q2 Earnings call transcript