Q4 2011 Earnings Call
December 27, 2011 4:30 pm ET
Mark B. Weinswig - Chief Financial Officer and Principal Accounting Officer
Victor Allgeier -
Hong Q. Hou - Chief Executive Officer, President and Director
William Stein - Crédit Suisse AG, Research Division
Alex B. Henderson - Miller Tabak + Co., LLC, Research Division
Edward A. Zabitsky - ACI Research
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Good day ladies and gentlemen, and thank you for standing by. Welcome to the EMCORE Corporation Fourth Quarter Fiscal Year 2011 Earnings Conference. [Operator Instructions] As a reminder today's call is being recorded. And at this time, I'd like to turn the call over to Vic Allgeier of TTC group. Please go ahead.
Thank you, and good afternoon, everyone. Before we begin, we would like to remind you that the information provided herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. These forward-looking statements are largely based on our expectations and projections about future events and financial trends affecting the financial condition of our business.
Such forward-looking statements include, in particular, projections about our future results, statements about our plans, strategies, business prospects, changes in trends in our business and the markets in which we operate. Management cautions that these forward-looking statements relate to future events on our future financial performance and are subject to business, economic and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of our business or our industry to be materially different from those expressed or implied by any forward-looking statements.
Neither management nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We caution you not to rely on these statements without also considering the risks and uncertainties associated with these statements and our business that are addressed in our filings with the U.S. Securities and Exchange Commission that are available on the SEC's website, located at www.sec.gov, including the sections entitled Risk Factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q. We assume no obligation to update any forward-looking statements to conform such statements to actual results or to changes in our expectations, except as required by applicable law or regulation.
With us today from EMCORE are Dr. Hong Hou, President and Chief Executive Officer; and Mark Weinswig Chief Financial Officer. Mark will review the financial results and Hong will discuss business highlights before we open the call up to questions.
I'll now turn the call over to Mark.
Mark B. Weinswig
Thank you, Vic, and good afternoon, and happy holidays, everyone. Today I'm going to focus my discussion on our fourth fiscal quarter operating results and our balance sheet. In addition, I will update you on the initiatives we have undertaken since September 30.
Please note that the effect of the flooding of our contract manufacturer's facility in Thailand is not reflected in our Q4 results. Hong will discuss the impact of the flood later in the call.
Consolidated revenue for our fourth fiscal quarter was $52.1 million, which is an increase of $2.6 million or 5% over the previous quarter. This was in line with our prior guidance of $51 million to $55 million in revenue.
On a segment basis, our Photovoltaics business accounted for $21.2 million or 41% of the company's total revenue. This represents a $5 million or 31% increase in the revenue for this segment in the prior quarter and was an all-time high for the Space Solar business. We believe that the Space Solar business will continue to experience year-over-year growth, although our revenues in any given quarter maybe a bit lumpy, as illustrated with our significant increase in Q4.
The Fiber Optics segment accounted for $30.9 million or 59% of the company's total revenue. This represents a decrease of roughly $2.3 million or 7% from the prior quarter with the decrease primarily driven by lower sales of our Broadband business and our end-of-life products. The key accomplishment in the quarter was hitting revenue of $9 million from our tunable laser product.
Consolidated gross margin was flat at 19% from the prior quarter primarily attributed to a significant improvement in our Solar division partially offset by a decrease in our Fiber division.
On a segment basis, Photovoltaic gross margins increased to 21% and was driven by a return to the 30% gross margin level for our Satellite Solar business. This was due to higher revenues partially offset by lower margins from the Terrestrial Solar business. In the first quarter, we believe that our margins should improve for this segment.
Fiber Optics gross margin was 18% or 1.4 percentage point decrease from the prior quarter primarily due to lower revenues and excess in obsolete expenses.
Operating expenses, excluding the impairment loss and litigation settlements, decreased $2.8 million from the prior quarter to $16.4 million, primarily due to lower R&D expenses in both our Fiber and Solar segments and lower stock comp FAS 123R expenses.
We recorded an impairment loss of $8 million in the quarter related to our Fiber Optics segment.
Our Solar CPV joint venture, Suncore, had a loss of roughly $1 million for Q4. We expect those losses to decrease over time as Suncore begins producing product in volume. Hong will discuss the Suncore strategy and opportunity in more detail.