Emcore Corporation Announces Financial Results for Fourth Quarter and Fiscal Year Ended September 30, 2010

Comparison of Financial Data for 2009 & 2010 in Millions of US Dollars

Quarterly Results Consolidated revenue for the fourth fiscal quarter ended September 30, 2010 was $54.1 million, which represents a 16% sequential increase compared to the immediate preceding quarter. On a segment basis, revenue for the Fiber Optics segment was $34.4 million, which represents a 9% sequential increase compared to the immediate preceding quarter. Revenue for the Photovoltaics segment was $19.7 million, which represents a 30% sequential increase compared to the immediate preceding quarter. Consolidated gross profit was $12.8 million, no change when compared to the immediate preceding quarter. Consolidated gross margin was 23.6%, down from the 27.5% gross margin reported in the immediate preceding quarter. On a segment basis, Fiber Optics gross margin was 20.4%, down from the 25.9% gross margin reported in the immediate preceding quarter. Photovoltaics gross margin was 29.3%, down from the 30.7% gross margin reported in the immediate preceding quarter. The consolidated operating loss was $1.8 million, an improvement of $6.5 million, or 78%, from the $8.3 million operating loss reported in the preceding quarter. The consolidated net loss was $0.9 million, an improvement of $8.3 million, or 90%, from the net loss of $9.2 million reported in the preceding quarter. The consolidated net loss per share was $0.01, an improvement of $0.10 per share from the $0.11 net loss per share reported in the preceding quarter. Fiscal Year Results Consolidated revenue for the fiscal year ended September 30, 2010 was $191.3 million, an increase of $14.9 million, or 8%, from $176.4 million reported in the prior year. On a segment basis, revenue for the Fiber Optics segment was $121.7 million, an increase of $7.6 million, or 7%, from $114.1 million reported in the prior year. Revenue for the Photovoltaics segment was $69.6 million, an increase of $7.3 million, or 12%, from $62.3 million reported in the prior year. Consolidated gross profit was $50.7 million, an improvement of $57.0 million, from a gross loss of $6.3 million reported in the prior year. Consolidated gross margin was 26.5%, an improvement from the negative 3.6% gross margin reported in the prior year. In the prior year, the Company incurred significant excess and obsolescence inventory charges. On a segment basis, Fiber Optics gross margin was 23.1%, an improvement from the negative 13.0% gross margin reported in the prior year. Photovoltaics gross margin was 32.3%, an improvement from the 13.6% gross margin reported in the prior year. The consolidated operating loss was $21.4 million, an improvement of $119.6 million, or 85%, from the $141.0 million operating loss reported in the prior year. In fiscal 2009, the Company recorded $60.8 million of non-cash impairment charges related to goodwill, intangible assets, and other long-lived assets in the Fiber Optics segment. The consolidated net loss was $23.7 million, an improvement of $115.1 million, or 83%, from the net loss of $138.8 million reported in the prior year, with the variance primarily due to the non-cash provisions and impairment charges discussed above as well as, improved operating performance at the gross margin level. The consolidated net loss per share was $0.28, an improvement of $1.47 per share from the $1.75 net loss per share reported in the prior year. As of September 30, 2010, the Company had a consolidated order backlog of approximately $71.3 million, a $3.7 million, or 6%, increase from the $67.6 million order backlog reported as of the end of the preceding quarter. On a segment basis, the year-end Photovoltaics order backlog totaled $52.9 million, a $10.4 million, or 25%, increase from $42.5 million reported as of the end of the preceding quarter. The year-end Fiber Optics order backlog totaled $18.4 million, a $6.7 million, or 27% decrease from $25.1 million reported as of the end of the preceding quarter. Order backlog is defined as purchase orders or supply agreements accepted by the Company with expected product delivery and/or services to be performed within the next twelve months. During fiscal 2010, management implemented a series of measures and continues to evaluate opportunities intended to align the Company's cost structure with its revenue forecasts. On July 30, 2010, the Company entered into an agreement for the establishment and operation of a joint venture with San'An Optoelectronics Co., Ltd. for the purpose of engaging in the development, manufacturing, and distribution of CPV receivers, modules, and systems for terrestrial solar power applications under license from the Company. As of September 30, 2010, cash and cash equivalents was approximately $19.9 million and working capital totaled $34.9 million. For the fiscal year ended September 30, 2010, the Company generated $3.4 million in cash from operations compared with a consumption of $29.6 million of cash in the prior year. The improvement in cash flow was due primarily to improved operating performance and working capital management, as well as an increase in customer deposits and advanced payments when compared to the prior year. With respect to measures taken to improve liquidity, in November 2010, the Company entered into a three-year $35 million asset-backed revolving credit facility with Wells Fargo Bank, which can be used for working capital, letters of credit, and other general corporate purposes. Business Outlook In the first fiscal quarter ending December 31, 2010, the Company expects consolidated revenue to be $50 to $53 million. Conference Call Emcore discussed its results in a conference call. A replay of the call will be available beginning Tuesday, December 21, 2010 at 7:30 p.m. EST until December 28, 2010 at 11:59 p.m. EST. The replay call-in number for U.S. callers is 877-870-5176  for international callers it is 858-384-5517 and the access code is 4387832. The call also will be web cast via the Company's web site at http://www.emcore.com. Emcore Corporation offers a broad portfolio of compound semiconductor-based products for the broadband, fiber optics, space and solar power markets. Emcores Fiber Optics segment offers optical components, subsystems and systems for high speed data and telecommunications networks, cable television (CATV) and fiber-to-the-premises (FTTP). The firm’s Photovoltaics segment provides products for both space and terrestrial applications. For space applications, EMCORE offers high efficiency gallium arsenide (GaAs) solar cells, covered interconnected cells (CICs) and panels. For terrestrial applications, EMCORE is adapting its high-efficiency GaAs solar cells for use in solar concentrator systems.