EMCORE Corporation ( EMKR) F1Q11 (Qtr End 12/31/2010) Earnings Call February 3, 2011 4:30 pm ET Executives Victor Allgeier - TTC Group Hong Hou - President and Chief Executive Officer Mark Weinswig - CFO Analysts Peter Conway -Cox Investment Advisors Presentation Operator
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We caution you not to rely on these statements without also considering the risks and uncertainties associated with these statements and EMCORE’s business that are addressed in its filings with the Securities and Exchange Commission that are available on the SEC's website located at www.sec.gov, including the sections entitled Risk Factors in its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. EMCORE assumes no obligation to update any forward-looking statements to conform such statements to actual results or to change in its 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 Weinswig Today I am going to focus my discussion on our first fiscal quarter operating results. Conslidated revenues for our first fiscal quarter total 52.1 million, which is a decrease of $2 million or 4% from the prior quarter. This was inline with our prior guidance of 50 million to 53 million in revenue. On a segment basis, our Photovoltaics business accounted for 20.3 million or 39% of the company’s total revenue. Quarter-over-quarter, the business increased 0.6 million or 3% from the prior quarter. The increase in revenue is primarily driven by our space solar power generation products. It is important to note that this quarter Satellite Photovoltaics results were a record for EMCORE. The Fiber Optics segment accounted 31.8 million or 51% of the companys’ total revenue. This represents a decrease of roughly $2.6 million or 8% from the quarter, with the decrease primarily driven by lower sales of our digital products. As we noted last quarter, the ITC ruling on our parallel optic device products has had a negative impact on our overall results. In addition, in Q4, we had some large super computer related connector cable orders which fell in the first quarter. The active cables business is lumpy and based on specific build-ups; we expect this product line to increase from its current levels in future period.
We continue to experience improvements in our Cable TV business, where we are seeing further traction from customers. In addition, our tunable laser business also saw some significant increases in business levels. Hong will discuss these and other details later in the call.Consolidated gross margin increased to 24.3% from 23.6% in the prior quarter, primarily from an improvement in the Photovoltaic margins. On a segment basis, Photovoltaic’s gross margin was 33.1%, which is an increase from the 29.3% reported in the prior quarter. This was primarily due to leverage from higher volumes and a positive mix. Fiber Optics gross margin was 18.7%, a 1.7 percentage point reduction from the prior quarter, primarily due to an unfavorable mix shift and higher material cost associated with our telecom and datacom Fiber Optics business. The Telecom and Datacom division has experienced a product mix shift, as customers began to move towards newer technology platforms. We believe that this evolution will cause margins in this division to be under pressure until our new products begin to ramp in the latter part of this year. As we increase capacity, we will also see certain startup costs, associated with NREs in the manufacturing expansion, as these products move in to full production. Operating expenses increased $0.9 million from the prior quarter, to 15.5 million primarily due to some benefits realized in Q4 that we do not expect to continue in future periods. On a GAAP basis, the consolidated net loss for the fourth quarter was 3.6 million, a deterioration of 2.8 million from the prior quarter. Our non-GAAP adjusted EBITDA after excluding certain adjustments all of which are set forth in the non-GAAP payables included in today’s release was $0.6 million. Please not that we have included additional information depreciation, amortization, stock comp and other items in today’s release to provide further clarity on our results. Read the rest of this transcript for free on seekingalpha.com