UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ————————— FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number 001-36632 emcore® EMCORE Corporation (Exact name of registrant as specified in its charter) New Jersey (State or other jurisdicti ...

Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $24.3 million, an increase of $7.1 million or 41% compared to $17.2 million in Q3 2019 [35] - GAAP net loss was $15 million or $0.52 per share, compared to a loss of $10.5 million or $0.37 per share in Q3 2019 [38] - Non-GAAP operating loss was $7.7 million in Q4 compared to $5.1 million in Q3 [42] Business Line Data and Key Metrics Changes - Aerospace and Defense products accounted for nearly 60% of revenue, while Cable Television represented approximately 34% and Chips and Wireless about 6% combined [11] - The SDI acquisition contributed significantly to revenue, with a $5.8 million increase reported in Q4 [35] - Cable TV revenue showed a rebound from historically low levels in the previous quarter [35] Market Data and Key Metrics Changes - Demand for cable TV products is expected to improve modestly, with major MSOs indicating increased capital expenditures [23] - The chip market remains muted due to ongoing trade disputes and tariffs, leading to a strategic exit from lower-margin products [12] Company Strategy and Development Direction - The company plans to report two segments starting in fiscal 2020: Aerospace and Defense, and Broadband [36] - A shift to an EMS model for manufacturing is expected to improve margins and reduce costs [17] - The company is focusing on higher-margin products aimed at 25G applications and reducing the size of the cable TV organization [18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the timing and slope of the rebound in cable TV demand, expecting only modest improvements in the near term [23] - The company anticipates that Aerospace and Defense will become a larger part of the business, providing better predictability [30] - Management is optimistic about the growth potential in the Aerospace and Defense sector, with strong demand for navigation products and Defense Optoelectronics [25][30] Other Important Information - The company expects to realize savings from the EMS transition in Q3 2020, targeting breakeven on an adjusted EBITDA basis [31] - A non-cash write-down of $4.7 million was recognized for cable TV inventory due to lower expected demand [38] - Cash totaled $22 million at the end of Q4, with $4.2 million used in operating activities [43] Q&A Session Summary Question: Can the cable TV business actually grow in December? - Management believes there can be an uptick in the current quarter, but remains cautious about projecting a significant rebound [47] Question: Have there been significant changes in pricing for cable TV products? - Management noted no significant pricing erosion, with a movement towards more premium products [48] Question: What factors are driving success in the Aerospace and Defense business? - Success is attributed to the company's unique capabilities in handling high-frequency links and the ability to manufacture specialized products [49][50] Question: How did the defense products contribute to total revenue? - The defense products, including SDI, were classified under Aerospace and Defense due to their commonality with defense-related applications [56] Question: What is the expected gross margin for the first quarter? - Management indicated that gross margins could return to the mid-20s range, with improvements expected from operational changes [62]

EMCORE Corp (NASDAQ:EMKR) Q3 2019 Earnings Conference Call August 8, 2019 8:00 AM ET Company Participants Erica Mannion - Sapphire Investor Relations Mark Gordon - Interim Principal Financial & Accounting Officer Jeffrey Rittichier - CEO, President & Director Conference Call Participants Timothy Savageaux - Northland Capital Markets Jaeson Schmidt - Lake Street Capital Markets Operator Ladies and gentlemen, thank you for standing by, and welcome to the EMCORE Corporation Fiscal Third Quarter 2019 Earnings C ...

Revenue Performance - For the three months ended June 30, 2019, revenue decreased by 2.8% to $17.2 million compared to $17.7 million in the same period of the prior year, primarily due to lower sales volume of CATV systems and Chip Devices[142]. - For the nine months ended June 30, 2019, revenue increased by 4.3% compared to the same period in the prior year, driven by increased sales in Chip Devices and Navigation Systems[160]. - Revenue for the nine months ended June 30, 2019, was $62.965 million, an increase of 4.3% compared to $60.376 million in the same period of 2018[1]. Profitability - Gross profit for the three months ended June 30, 2019 increased by 209.2% to $3.7 million, with gross margins improving to 21.5% from 6.8% in the same period of the prior year[146][144]. - Gross profit increased by 9.0% to $15.321 million for the nine months ended June 30, 2019, primarily due to increased sales and decreased product costs[1]. - The company recorded a net loss of $(10.5) million for the three months ended June 30, 2019, compared to a net loss of $(8.4) million in the same period of the prior year, reflecting a 24.5% increase in loss[141]. - Net loss for the nine months ended June 30, 2019, was $21.009 million, an increase of 81.6% compared to a net loss of $11.567 million in the same period of 2018[1]. Expenses - Operating loss for the three months ended June 30, 2019 was $(10.2) million, representing an increase in loss as a percentage of revenue to (59.3)% from (44.9)% in the same period of the prior year[154]. - Selling, General and Administrative (SG&A) expenses increased to 53.9% of revenue for the three months ended June 30, 2019, up from 29.6% in the same period of the prior year, primarily due to legal fees related to litigation[149][148]. - Research and Development (R&D) expenses were 26.9% of revenue for the three months ended June 30, 2019, compared to 22.1% in the same period of the prior year, reflecting increased project spending[153][152]. - Total operating expenses rose to $36.845 million, a 37.7% increase from $26.754 million in the prior year, driven by higher SG&A and R&D expenses[1]. - SG&A expenses were 37.9% of revenue for the nine months ended June 30, 2019, compared to 26.0% in the same period of 2018[1]. - R&D expenses increased to 20.7% of revenue for the nine months ended June 30, 2019, up from 18.2% in the prior year[1]. Cash Flow and Financial Position - Cash and cash equivalents totaled $20.5 million as of June 30, 2019, with net working capital of approximately $53.3 million[1]. - Operating activities used cash of $11.709 million for the nine months ended June 30, 2019, compared to cash provided of $1.240 million in the same period of 2018, reflecting a change of $12.949 million[1]. - Interest income for the nine months ended June 30, 2019, was $0.590 million, an increase of 20.4% from $0.490 million in the prior year[1]. - The company has a revolving credit line of up to $15.0 million under its Credit Facility, with an outstanding balance of $1.6 million as of August 2, 2019[1]. - Net cash used in investing activities for the nine months ended June 30, 2019, was $(30.9) million, a significant increase of $(27.2) million or (738.8)% compared to $(3.7) million in 2018[190]. - Financing activities provided net cash of $35,000 for the nine months ended June 30, 2019, compared to a cash usage of $(812,000) in 2018, representing a $847,000 or 104.3% change[192]. Obligations and Commitments - Total contractual obligations and commitments as of June 30, 2019, amounted to $43.3 million, with $22.7 million due within a year and $14.5 million due in 1 to 3 years[195]. - Purchase obligations totaled $37.4 million, including $1.0 million committed for capital equipment purchases and an expected additional $1.1 million for completion of capital equipment installation[198]. - The company had unrecognized tax benefits of $0.5 million as of June 30, 2019, which are not included in the contractual obligations[196]. Risk Factors - The company does not currently hedge its foreign currency exposure, which may impact future financial conditions due to fluctuations in currency exchange rates[211]. - Interest rate risk is considered immaterial, with surplus cash invested in short-term deposits and money market accounts[212]. - Inflationary factors may adversely affect results of operations and cash flows, although no material impact has been observed to date[213]. - The company does not have any off-balance sheet arrangements other than operating leases that could materially affect its financial condition[201]. Internal Control and Review - The company is currently reviewing and evaluating the internal control over financial reporting due to the acquisition of SDI on June 7, 2019[217].

FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number 001-36632 emcore® EMCORE Corporation (Exact name of registrant as specified in its charter) New Jersey (State or other jurisdiction of incorporation or organization) 22-2746503 (I.R.S. Employer Identificatio ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2019 was $21.7 million, with broadband revenue representing 65% of total revenue, down from 72% in the prior quarter due to seasonal softness in the Cable TV market [7][8] - GAAP gross profit was approximately $5.8 million, or 26.7% of revenue, up from 24.2% in the prior quarter, driven by improvements in manufacturing cost structure [9] - Non-GAAP operating loss from continuing operations was $2.2 million, a $0.4 million increase compared to the prior quarter [10] - Cash and cash equivalents at the end of Q2 were approximately $50.6 million, a decrease of $6.7 million quarter-over-quarter [11] Business Line Data and Key Metrics Changes - Chips represented 16% of revenue, down from 18% in the prior quarter, while navigation grew to 19% of revenue from 10% in the prior quarter [8] - Satcom products increased 33% quarter-over-quarter and 227% year-over-year, with a strong backlog into Q3 [17] - Navigation revenue increased 66% quarter-over-quarter and 100% year-over-year, positioning the product line to double its revenue from FY '18 to FY '19 [21] Market Data and Key Metrics Changes - CATV accounted for 49% of revenue for the quarter, with expectations of an uptick in orders as infrastructure CapEx spending by major MSOs is anticipated to increase [8][28] - Demand in the chip market remained strong, growing 20% year-over-year, driven by legacy 2.5 GPON products and non-GPON-related products [19] Company Strategy and Development Direction - The company is focused on revenue diversification and operating performance initiatives, particularly in non-cable TV products [13] - L-EML technology development is progressing, with expectations for next-generation products in the coming months [16] - The company is making heavy investments in engineering talent and manufacturing to support growth in navigation revenue [22] Management's Comments on Operating Environment and Future Outlook - Management indicated that the only barrier to returning to profitability is cable TV product volume, which is cyclical [27] - Expectations for Q3 revenues are in the range of $21 million to $23 million, reflecting a return to normal for CATV orders and steady performance in chip and navigation products [29] - The company anticipates further improvements in gross margins as new chip products are released and manufacturing processes yield better results [25] Other Important Information - The company expects to see a significant decline in litigation expenses in Q3 as it enters the post-hearing phase for a majority of claims [10] - Capital expenditures in the quarter were $3.6 million, with ongoing investments in fab modernization [11] Q&A Session Summary Question: Can you quantify the number of customers in the navigation pipeline? - The navigation pipeline is growing, with a significant uptick in sampling, but the focus is on ramping the manufacturing process [31] Question: What is the confidence in growing CATV revenue in fiscal '19? - There is cautious optimism for an increase in orders, but visibility for the current quarter is limited [32] Question: What is the new breakeven revenue level? - The breakeven level is estimated to require an additional $4 million to $5 million on top of current revenues, depending on product mix [33] Question: Is there any cannibalization as customers transition to L-EML products? - There is no cannibalization; however, an increase in L-EML sales may decrease DFB sales at the link level [35] Question: What is the expected trend for capital expenditures? - Capital expenditures are expected to remain in line, with potential increases next year as new equipment is needed [37] Question: What is the outlook for Satcom revenue? - Satcom revenue is expected to remain stable, driven by ongoing projects like the FAA control tower upgrade [38] Question: What are the drivers of growth in the chip business? - Growth is driven by demand in PON, telco non-PON, and data center segments, with a shift away from lower-margin GPON products [41]

EMCORE Corporation (NASDAQ:EMKR) Q1 2019 Earnings Conference Call February 6, 2019 4:30 PM ET Company Participants Erica Mannion - Sapphire Investor Relations Jeff Rittichier - President & Chief Executive Officer Mark Gordon - Interim Principal Financial & Accounting Officer Conference Call Participants Jaeson Schmidt - Lake Street Capital Markets. Lee Krowl - B.Riley FBR Operator Ladies and gentlemen, thank you for standing by, and welcome to the EMCORE Corporation Fiscal First Quarter 2019 Earnings Confer ...

Part I: Financial Information [ITEM 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements) Presents EMCORE Corporation's unaudited condensed consolidated financial statements and notes for Q4 2018 [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss (Three Months Ended December 31, in thousands) | Metric (in thousands) | 2018 | 2017 | | :-------------------- | :-------- | :-------- | | Revenue | $24,001 | $24,036 | | Gross Profit | $5,808 | $7,914 | | Operating Loss | $(5,804) | $(812) | | Net Loss | $(5,538) | $(82) | | Comprehensive (Loss) Income | $(5,524) | $171 | | Net Loss Per Basic Share | $(0.20) | $(0.00) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (as of, in thousands) | Metric (in thousands) | December 31, 2018 | September 30, 2018 | | :-------------------- | :---------------- | :----------------- | | Cash and cash equivalents | $57,284 | $63,117 | | Total current assets | $109,374 | $116,050 | | Total assets | $129,991 | $135,898 | | Total current liabilities | $26,523 | $27,202 | | Total liabilities | $28,435 | $29,093 | | Total shareholders' equity | $101,556 | $106,805 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Three Months Ended December 31, in thousands) | Metric (in thousands) | 2018 | 2017 | | :-------------------- | :-------- | :-------- | | Net cash used in operating activities | $(2,869) | $(1,955) |\n| Net cash used in investing activities | $(2,878) | $(1,873) |\n| Net cash used in financing activities | $(150) | $(708) |\n| Net decrease in cash, cash equivalents and restricted cash | $(5,900) | $(4,521) |\n| Cash, cash equivalents and restricted cash at end of period | $57,295 | $64,233 | [Notes to our Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20our%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1. Description of Business](index=7&type=section&id=NOTE%201.%20Description%20of%20Business) EMCORE provides advanced Mixed-Signal Optics for communications, aerospace, and defense markets - EMCORE specializes in advanced Mixed-Signal Optics products for broadband communications and fiber optic gyros/inertial sensors for aerospace and defense markets[20](index=20&type=chunk) - The company operates as a single reporting segment, Fiber Optics, which includes Broadband (CATV, RFoG, satellite/microwave, wireless), Chip Devices, and Navigation Systems product lines[21](index=21&type=chunk) [NOTE 2. Recent Accounting Pronouncements](index=7&type=section&id=NOTE%202.%20Recent%20Accounting%20Pronouncements) Details adoption of new accounting standards (Topic 606, ASU 2017-09, ASU 2016-01) and upcoming standards - Adopted Topic 606, Revenue from Contracts with Customers, effective **October 1, 2018**, using the modified retrospective method with no significant cumulative impact to accumulated deficit[23](index=23&type=chunk)[24](index=24&type=chunk) - Adopted ASU 2017-09 (Stock Compensation) and ASU 2016-01 (Financial Instruments) effective **October 1, 2018**, with no impact on the condensed consolidated financial statements[26](index=26&type=chunk)[27](index=27&type=chunk) - Evaluating the impact of ASU 2016-13 (Credit Losses) effective **October 1, 2020**, and ASU 2016-02 (Leases) effective **October 1, 2019**[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [NOTE 3. Summary of Significant Accounting Policies](index=8&type=section&id=NOTE%203.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting policies for revenue recognition, receivables, performance obligations, and product warranty - Revenue from product sales is recognized when the customer obtains control, typically upon shipment, with shipping and handling activities accounted for as fulfillment costs[33](index=33&type=chunk) - Remaining performance obligations totaled **$4.3 million** as of December 31, 2018, with approximately **84%** expected to be recognized over the next year[39](index=39&type=chunk) Revenue by Major Product Category (Three Months Ended December 31, in thousands) | Product Line | 2018 Revenue | % of Revenue (2018) | 2017 Revenue | % of Revenue (2017) | | :------------- | :----------- | :------------------ | :----------- | :------------------ | | Broadband | $17,327 | 72% | $20,866 | 87% | | Chips | $4,215 | 18% | $2,151 | 9% | | Navigation | $2,459 | 10% | $1,019 | 4% | | Total Revenue | $24,001 | 100% | $24,036 | 100% | [NOTE 4. Cash, Cash Equivalents and Restricted Cash](index=10&type=section&id=NOTE%204.%20Cash%2C%20Cash%20Equivalents%20and%20Restricted%20Cash) Reconciles cash, cash equivalents, and restricted cash, noting legal or contractual restrictions Cash, Cash Equivalents and Restricted Cash Reconciliation (in thousands) | Category | December 31, 2018 | September 30, 2018 | December 31, 2017 | | :--------- | :---------------- | :----------------- | :---------------- | | Cash | $2,619 | $2,965 | $3,769 | | Cash equivalents | $54,665 | $60,152 | $60,431 | | Restricted cash | $11 | $78 | $33 | | Total | $57,295 | $63,195 | $64,233 | [NOTE 5. Fair Value Accounting](index=10&type=section&id=NOTE%205.%20Fair%20Value%20Accounting) Explains the three-level fair value hierarchy, with most financial instruments measured at Level 1 - Fair value measurements are classified into a hierarchy of three levels: Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Cash, cash equivalents, restricted cash, accounts receivable, other current assets, and accounts payable approximate fair value and are based on Level 1 measurements due to their short maturity[48](index=48&type=chunk)[49](index=49&type=chunk) [NOTE 6. Accounts Receivable](index=11&type=section&id=NOTE%206.%20Accounts%20Receivable) Details accounts receivable components, including gross receivables and allowance for doubtful accounts Accounts Receivable, Net (in thousands) | Category | December 31, 2018 | September 30, 2018 | | :--------- | :---------------- | :----------------- | | Accounts receivable, gross | $18,684 | $19,823 | | Allowance for doubtful accounts | $(322) | $(548) | | Accounts receivable, net | $18,362 | $19,275 | Allowance for Doubtful Accounts Changes (Three Months Ended December 31, in thousands) | Category | 2018 | 2017 | | :--------- | :--- | :--- | | Balance at beginning of period | $548 | $22 | | Provision adjustment - expense, net of recoveries | — | $17 | | Write-offs and other adjustments - deductions to receivable balances | $(226) | — | | Balance at end of period | $322 | $39 | [NOTE 7. Inventory](index=11&type=section&id=NOTE%207.%20Inventory) Presents inventory breakdown and a **$0.4 million** reserve on non-current inventory due to declining demand Inventory Components (in thousands) | Category | December 31, 2018 | September 30, 2018 | | :--------- | :---------------- | :----------------- | | Raw materials | $11,951 | $11,857 | | Work in-process | $5,515 | $5,402 | | Finished goods | $4,415 | $5,024 | | Inventory balance at end of period | $21,881 | $22,283 | | Current portion | $20,466 | $20,850 | | Non-Current portion | $1,415 | $1,433 | - A **$0.4 million** reserve was recorded on non-current inventory during the three months ended December 31, 2018, due to a decline in sales and future demand[54](index=54&type=chunk) [NOTE 8. Property, Plant, and Equipment, net](index=12&type=section&id=NOTE%208.%20Property%2C%20Plant%2C%20and%20Equipment%2C%20net) Lists components of property, plant, and equipment, net, which increased to **$19.1 million** due to construction Property, Plant, and Equipment, Net Components (in thousands) | Category | December 31, 2018 | September 30, 2018 | | :--------- | :---------------- | :----------------- | | Equipment | $37,025 | $36,625 | | Furniture and fixtures | $1,109 | $1,109 | | Computer hardware and software | $2,934 | $2,928 | | Leasehold improvements | $2,089 | $2,049 | | Construction in progress | $5,683 | $3,648 | | Property, plant, and equipment, gross | $48,840 | $46,359 | | Accumulated depreciation | $(29,752) | $(28,143) | | Property, plant, and equipment, net | $19,088 | $18,216 | [NOTE 9. Accrued Expenses and Other Current Liabilities](index=12&type=section&id=NOTE%209.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Itemizes accrued expenses and other current liabilities, including severance and a CFO separation charge Accrued Expenses and Other Current Liabilities Components (in thousands) | Category | December 31, 2018 | September 30, 2018 | | :--------- | :---------------- | :----------------- | | Compensation | $2,826 | $3,065 | | Warranty | $652 | $642 | | Professional fees | $1,095 | $604 | | Customer deposits | $285 | $22 | | Deferred revenue | $474 | $368 | | Income and other taxes | $9,311 | $7,593 | | Severance and restructuring accruals | $85 | $82 | | Other | $1,280 | $1,829 | | Total | $16,008 | $14,205 | - A charge of approximately **$0.1 million** was recorded in the three months ended December 31, 2018, related to the separation agreement with the former Chief Financial Officer[58](index=58&type=chunk) Severance and Restructuring Accruals (in thousands) | Category | Severance-related accruals | Restructuring-related accruals | Total | | :--------- | :------------------------- | :----------------------------- | :---- | | Balance as of September 30, 2018 | $7 | $75 | $82 | | Expense - charged to accrual | $57 | — | $57 | | Payments and accrual adjustments | $(13) | $(41) | $(54) | | Balance as of December 31, 2018 | $51 | $34 | $85 | Product Warranty Accruals (Three Months Ended December 31, in thousands) | Category | 2018 | 2017 | | :--------- | :--- | :--- | | Balance at beginning of period | $642 | $684 | | Provision for product warranty - expense | $56 | $58 | | Adjustments and utilization of warranty accrual | $(46) | $(29) | | Balance at end of period | $652 | $713 | [NOTE 10. Credit Facilities](index=13&type=section&id=NOTE%2010.%20Credit%20Facilities) Describes the **$15.0 million** revolving credit facility with Wells Fargo, extended to **November 2021**, with **$5.5 million** available - The Credit Facility with Wells Fargo Bank, N.A. provides a revolving credit line of up to **$15.0 million**, extended to **November 2021**[62](index=62&type=chunk) - As of December 31, 2018, there were no amounts outstanding under the Credit Facility, with approximately **$0.5 million** reserved for a stand-by letter of credit and **$5.5 million** available for borrowing[63](index=63&type=chunk) [NOTE 11. Income and Other Taxes](index=13&type=section&id=NOTE%2011.%20Income%20and%20Other%20Taxes) Discusses income tax expense/benefit, reporting a **$15 thousand** expense for Q4 2018 due to state minimum tax Income Tax (Expense) Benefit (Three Months Ended December 31, in thousands) | Metric | 2018 | 2017 | | :------- | :--- | :--- | | Income tax (expense) benefit | $(15) | $333 | - The effective tax rate on continuing operations was **0%** for the three months ended December 31, 2018, primarily due to operating loss and state minimum tax expense, compared to **(80.2)%** in the prior year due to the Tax Act[65](index=65&type=chunk) - All deferred tax assets have a full valuation allowance as of December 31, 2018[68](index=68&type=chunk) [NOTE 12. Commitments and Contingencies](index=14&type=section&id=NOTE%2012.%20Commitments%20and%20Contingencies) Outlines operating lease obligations, asset retirement obligations, indemnifications, and legal proceedings - Operating lease expense was approximately **$0.3 million** for both the three months ended December 31, 2018, and 2017[70](index=70&type=chunk) - Asset Retirement Obligation (ARO) liability was **$1.8 million** for the Alhambra facility and **$0.1 million** for the Beijing facility as of December 31, 2018[73](index=73&type=chunk)[75](index=75&type=chunk) - The company is involved in an arbitration with Phoenix Navigation Components, LLC concerning breach of contract, trade secrets, and patent claims, with hearings scheduled through **July 2019**[80](index=80&type=chunk) [NOTE 13. Equity](index=15&type=section&id=NOTE%2013.%20Equity) Details equity incentive plans (stock options, RSUs, PSUs), related compensation expenses, and 401(k)/ESPP Stock Option Activity (Three Months Ended December 31, 2018) | Category | Number of Shares | Weighted Average Exercise Price | | :--------- | :--------------- | :------------------------------ | | Outstanding as of September 30, 2018 | 69,980 | $4.74 | | Forfeited | (52) | $3.97 | | Expired | (1,267) | $5.21 | | Outstanding as of December 31, 2018 | 68,661 | $4.73 | | Exercisable as of December 31, 2018 | 47,122 | $4.77 | Restricted Stock Activity (RSUs and RSAs) (Three Months Ended December 31, 2018) | Category | Restricted Stock Units (Number of Shares) | Weighted Average Grant Date Fair Value (RSUs) | Restricted Stock Awards (Number of Shares) | Weighted Average Grant Date Fair Value (RSAs) | | :--------- | :---------------------------------------- | :-------------------------------------------- | :----------------------------------------- | :-------------------------------------------- | | Non-vested as of September 30, 2018 | 1,011,621 | $6.04 | 8,154 | $8.20 | | Granted | 10,000 | $4.48 | — | $0.00 | | Vested | (93,422) | $6.84 | — | $0.00 | | Forfeited | (117,108) | $4.73 | — | $0.00 | | Non-vested as of December 31, 2018 | 811,091 | $6.12 | 8,154 | $8.20 | Performance Stock Activity (PSUs and PRSAs) (Three Months Ended December 31, 2018) | Category | Performance Stock Units (Number of Shares at Target) | Weighted Average Grant Date Fair Value (PSUs) | Performance Stock Awards (Number of Shares at Target) | Weighted Average Grant Date Fair Value (PRSAs) | | :--------- | :--------------------------------------------------- | :-------------------------------------------- | :---------------------------------------------------- | :--------------------------------------------- | | Non-vested as of September 30, 2018 | 397,777 | $8.48 | 33,333 | $12.25 | | Granted | — | $0.00 | — | $0.00 | | Vested | (30,874) | $7.14 | — | $0.00 | | Forfeited | (132,579) | $7.24 | — | $0.00 | | Non-vested as of December 31, 2018 | 234,324 | $9.35 | 33,333 | $12.25 | Stock-based Compensation Expense (Three Months Ended December 31, in thousands) | Expense Type | 2018 | 2017 | | :------------- | :--- | :--- | | Employee stock options | $7 | $10 | | Restricted stock units and awards | $386 | $451 | | Performance stock units and awards | $(60) | $289 | | Employee stock purchase plan | $40 | $86 | | Outside director equity awards and fees in common stock | $52 | $79 | | Total stock-based compensation expense | $425 | $915 | | Expense Type | 2018 | 2017 | | :------------- | :--- | :--- | | Cost of revenue | $111 | $139 | | Selling, general, and administrative | $159 | $638 | | Research and development | $155 | $138 | | Total stock-based compensation expense | $425 | $915 | Basic and Diluted Net Loss Per Share (Three Months Ended December 31, in thousands, except per share) | Metric | 2018 | 2017 | | :------- | :--- | :--- | | Loss from continuing operations | $(5,538) | $(82) | | Denominator for basic and fully diluted net loss per share - weighted average shares outstanding | 27,534 | 27,032 | | Net loss per basic and fully diluted share | $(0.20) | $— | Common Stock Reserved for Future Issuances (as of December 31, 2018) | Category | Number of Common Stock Shares Available | | :--------- | :-------------------------------------- | | Exercise of outstanding stock options | 68,661 | | Unvested restricted stock units | 811,091 | | Unvested performance stock units and awards (at 200% maximum payout) | 535,314 | | Purchases under the employee stock purchase plan | 740,558 | | Issuance of stock-based awards under the Equity Plans | 1,879,160 | | Purchases under the officer and director share purchase plan | 88,741 | | Total reserved | 4,123,525 | [NOTE 14. Geographical Information](index=19&type=section&id=NOTE%2014.%20Geographical%20Information) Provides revenue breakdown by region, identifies significant customers, and specifies long-lived asset locations Revenue by Geographic Region (Three Months Ended December 31, in thousands) | Region | 2018 Revenue | 2017 Revenue | | :------- | :----------- | :----------- | | United States and Canada | $18,576 | $20,079 | | Asia | $4,045 | $2,657 | | Europe | $1,266 | $1,227 | | Other | $114 | $73 | | Total Revenue | $24,001 | $24,036 | - Revenue from four significant customers represented **74%** of consolidated revenue for the three months ended December 31, 2018, compared to **63%** from two customers in the prior year[110](index=110&type=chunk) - Approximately **65%** of long-lived assets were located in the United States as of December 31, 2018, with the remaining primarily in China[111](index=111&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=21&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Provides an overview of EMCORE's business, compares Q4 2018 and 2017 financial results, and assesses liquidity [Business Overview](index=21&type=section&id=Business%20Overview) - EMCORE Corporation is a leading provider of advanced Mixed-Signal Optics products for communications systems and aerospace and defense markets, leveraging its specialized expertise in the optics industry[114](index=114&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Consolidated Statements of Operations Data as a Percentage of Revenue (Three Months Ended December 31) | Metric | 2018 (%) | 2017 (%) | | :------- | :------- | :------- | | Revenue | 100.0 | 100.0 | | Cost of revenue | 75.8 | 67.1 | | Gross profit | 24.2 | 32.9 | | Selling, general, and administrative | 31.6 | 20.0 | | Research and development | 16.8 | 15.8 | | Total operating expense | 48.4 | 36.3 | | Operating loss | (24.2) | (3.4) | | Total other income | 1.2 | 1.7 | | Loss before income tax (expense) benefit | (23.0) | (1.7) | | Income tax (expense) benefit | (0.1) | 1.4 | | Net loss | (23.1) | (0.3) | Comparison of Financial Results (Three Months Ended December 31, in thousands, except percentages) | Metric | 2018 | 2017 | $ Change | % Change | | :------- | :-------- | :-------- | :-------- | :-------- | | Revenue | $24,001 | $24,036 | $(35) | (0.1)% | | Cost of revenue | $18,193 | $16,122 | $2,071 | 12.8% | | Gross profit | $5,808 | $7,914 | $(2,106) | (26.6)% | | Selling, general, and administrative | $7,593 | $4,819 | $2,774 | 57.6% | | Research and development | $4,019 | $3,800 | $219 | 5.8% | | Total operating expense | $11,612 | $8,726 | $2,886 | 33.1% | | Operating loss | $(5,804) | $(812) | $(4,992) | (614.8)% |\n| Total other income | $281 | $397 | $(116) | (29.2)% |\n| Loss before income tax (expense) benefit | $(5,523) | $(415) | $(5,108) | (1,230.8)%|\n| Income tax (expense) benefit | $(15) | $333 | $(348) | (104.5)% |\n| Net loss | $(5,538) | $(82) | $(5,456) | (6,653.7)%| [Revenue](index=22&type=section&id=Revenue) - Revenue slightly decreased by **0.1%** for the three months ended December 31, 2018, compared to the prior year, primarily due to lower sales volume of CATV systems and components, partially offset by increases in Chip Devices, RFoG products, and Navigation Systems[118](index=118&type=chunk) [Gross Profit](index=22&type=section&id=Gross%20Profit) - Consolidated gross margins decreased from **32.9%** in 2017 to **24.2%** in 2018[120](index=120&type=chunk) - Gross profit decreased by **26.6%** YoY, primarily due to sales of lower margin products and a **$0.4 million** reserve on non-current inventory[121](index=121&type=chunk) [Selling, General and Administrative ("SG&A")](index=23&type=section&id=Selling%2C%20General%20and%20Administrative%20%28%22SG%26A%22%29) - SG&A expense increased by **57.6%** YoY, primarily due to higher professional fees related to litigation proceedings with Phoenix Navigation Components, LLC and strategic planning expenses[124](index=124&type=chunk) - As a percentage of revenue, SG&A expenses increased from **20.0%** in 2017 to **31.6%** in 2018[125](index=125&type=chunk) [Research and Development ("R&D")](index=23&type=section&id=Research%20and%20Development%20%28%22R%26D%22%29) - R&D expense increased by **5.8%** YoY, primarily due to higher compensation costs and project spending, particularly in navigation systems[127](index=127&type=chunk) - As a percentage of revenue, R&D expenses increased from **15.8%** in 2017 to **16.7%** in 2018[128](index=128&type=chunk) [Operating Loss](index=23&type=section&id=Operating%20Loss) - Operating loss significantly increased by **614.8%** YoY, from **$(812) thousand** in 2017 to **$(5,804) thousand** in 2018, primarily due to the decline in gross profit and increase in SG&A expense[116](index=116&type=chunk)[129](index=129&type=chunk) - As a percentage of revenue, operating loss increased from **(3.4)%** in 2017 to **(24.2)%** in 2018[129](index=129&type=chunk) [Other Income](index=23&type=section&id=Other%20Income) - Total other income decreased by **29.2%** YoY, mainly due to a significant decrease in foreign exchange gain (from **$286 thousand** to **$14 thousand**), partially offset by higher interest income[116](index=116&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Income Tax Benefit (Expense)](index=24&type=section&id=Income%20Tax%20Benefit%20%28Expense%29) - The company recorded an income tax expense of **$15 thousand** for the three months ended December 31, 2018, compared to an income tax benefit of **$0.3 million** in the prior year, which was primarily due to the Tax Cuts and Jobs Act[133](index=133&type=chunk) [Order Backlog](index=24&type=section&id=Order%20Backlog) - Order backlog is not necessarily indicative of actual revenue or future order levels due to short lead times and susceptibility to revision or cancellation[134](index=134&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Key Liquidity Metrics (as of December 31, 2018, in thousands) | Metric | Amount | | :------- | :----- | | Cash and cash equivalents | $57,300 | | Net working capital | $82,900 | - The company believes its existing cash, cash equivalents, cash flows from operations, and available amounts under its Credit Facility will provide sufficient financial resources for at least the next twelve months[137](index=137&type=chunk) - As of January 31, 2019, the Credit Facility had **$5.5 million** available for borrowing[136](index=136&type=chunk) [Cash Flow](index=25&type=section&id=Cash%20Flow) Net Cash Used in Operating Activities (Three Months Ended December 31, in thousands, except percentages) | Metric | 2018 | 2017 | $ Change | % Change | | :------- | :--- | :--- | :------- | :------- | | Net cash used in operating activities | $(2,869) | $(1,955) | $(914) | (46.8)% | [Net Cash Used In Operating Activities](index=25&type=section&id=Net%20Cash%20Used%20In%20Operating%20Activities) - Net cash used in operating activities increased by **46.8%** YoY to **$2.9 million** for the three months ended December 31, 2018, primarily due to a net loss of **$5.5 million**, partially offset by changes in operating assets and liabilities[139](index=139&type=chunk)[145](index=145&type=chunk) [Working Capital Components](index=25&type=section&id=Working%20Capital%20Components) - In Q1 FY2019, accounts receivable decreased by **$0.9 million**, inventory decreased by **$0.4 million**, and accounts payable decreased by **$2.1 million**[139](index=139&type=chunk) [Net Cash Used In Investing Activities](index=26&type=section&id=Net%20Cash%20Used%20In%20Investing%20Activities) Net Cash Used in Investing Activities (Three Months Ended December 31, in thousands, except percentages) | Metric | 2018 | 2017 | $ Change | % Change | | :------- | :--- | :--- | :------- | :------- | | Net cash used in investing activities | $(2,878) | $(1,873) | $(1,005) | (53.7)% | - Net cash used in investing activities increased by **53.7%** YoY to **$2.9 million**, primarily due to capital expenditures for the wafer fabrication facility[147](index=147&type=chunk) [Net Cash Used In Financing Activities](index=26&type=section&id=Net%20Cash%20Used%20In%20Financing%20Activities) Net Cash Used in Financing Activities (Three Months Ended December 31, in thousands, except percentages) | Metric | 2018 | 2017 | $ Change | % Change | | :------- | :--- | :--- | :------- | :------- | | Net cash used in financing activities | $(150) | $(708) | $558 | 78.8% | - Net cash used in financing activities decreased by **78.8%** YoY to **$0.2 million**, mainly due to lower tax withholding paid on behalf of employees for stock-based awards[149](index=149&type=chunk)[150](index=150&type=chunk) [Contractual Obligations and Commitments](index=26&type=section&id=Contractual%20Obligations%20and%20Commitments) Contractual Obligations and Commitments (as of December 31, 2018, in thousands) | Type | Total | Less than 1 year | 1 to 3 years | 4 to 5 years | Over 5 years | | :----- | :---- | :--------------- | :----------- | :----------- | :----------- | | Purchase obligations | $30,860 | $30,414 | $307 | $139 | $— | | Asset retirement obligations | $2,192 | $40 | $— | $2,152 | $— | | Operating lease obligations | $3,272 | $587 | $1,425 | $1,260 | $— | | Total contractual obligations and commitments | $36,324 | $31,041 | $1,732 | $3,551 | $— | [Purchase Obligations](index=27&type=section&id=Purchase%20Obligations) - Total purchase obligations were **$30.9 million** as of December 31, 2018, with **$30.4 million** due within one year[151](index=151&type=chunk)[154](index=154&type=chunk) [Asset Retirement Obligations](index=27&type=section&id=Asset%20Retirement%20Obligations) - Total Asset Retirement Obligations (AROs) were **$2.2 million** as of December 31, 2018, with **$40 thousand** due within one year and the remainder over 4-5 years[151](index=151&type=chunk)[155](index=155&type=chunk) [Operating Leases](index=27&type=section&id=Operating%20Leases) - Total operating lease obligations were **$3.3 million** as of December 31, 2018, with **$0.6 million** due within one year[151](index=151&type=chunk)[156](index=156&type=chunk) [Off-Balance Sheet Arrangements](index=27&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company does not have any material off-balance sheet arrangements other than its operating leases[157](index=157&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes in critical accounting policies and estimates from those disclosed in the Annual Report on Form 10-K for the year ended September 30, 2018[158](index=158&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Outlines EMCORE's exposure to foreign currency, interest rate, inflation, and credit market risks [Foreign Currency Exchange Risks](index=28&type=section&id=Foreign%20Currency%20Exchange%20Risks) - The company is exposed to foreign currency exchange risks due to fluctuations in the Yuan Renminbi relative to the U.S. dollar, with translation adjustments recorded as accumulated other comprehensive income[161](index=161&type=chunk)[162](index=162&type=chunk) - Natural offsets in receipts and disbursements within the applicable currency are used as the primary means of reducing foreign currency risk; the company does not currently hedge its foreign currency exposure[164](index=164&type=chunk)[165](index=165&type=chunk) [Interest Rate Risks](index=28&type=section&id=Interest%20Rate%20Risks) - The company monitors interest rate risk on cash balances through cash flow forecasting and invests surplus cash in short-term deposits and money market accounts, believing its current interest rate risk is immaterial[166](index=166&type=chunk) [Inflation Risks](index=28&type=section&id=Inflation%20Risks) - Inflationary factors, such as increases in material costs and operating expenses, may adversely affect results if product sales prices do not proportionately increase[167](index=167&type=chunk) [Credit Market Conditions](index=28&type=section&id=Credit%20Market%20Conditions) - Turbulent credit market conditions, characterized by tightening lending standards and reduced credit availability, could impact the company's ability to obtain additional funding[168](index=168&type=chunk) [ITEM 4. Controls and Procedures](index=29&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Confirms effectiveness of disclosure controls and procedures as of **December 31, 2018**, with no material changes - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **December 31, 2018**[170](index=170&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter ended December 31, 2018, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[171](index=171&type=chunk) Part II: Other Information [ITEM 1. Legal Proceedings](index=30&type=section&id=ITEM%201.%20Legal%20Proceedings) Refers to detailed disclosures regarding legal proceedings, claims, and litigation in Note 12 - Disclosures related to legal proceedings are incorporated by reference from Note 12 - Commitments and Contingencies in the condensed consolidated financial statements[175](index=175&type=chunk) [ITEM 1A. Risk Factors](index=30&type=section&id=ITEM%201A.%20Risk%20Factors) Directs readers to comprehensive risk factors in the Annual Report on Form 10-K, noting no material changes - Readers should consider risk factors discussed in Part I, Item 1A, 'Risk Factors' in the Annual Report on Form 10-K for the fiscal year ended September 30, 2018[176](index=176&type=chunk) - The company does not believe its risks have changed materially since filing its Annual Report on Form 10-K on **December 4, 2018**[176](index=176&type=chunk) [ITEM 6. Exhibits](index=30&type=section&id=ITEM%206.%20Exhibits) Lists exhibits filed with the report, including corporate documents and equity plans, some correcting hyperlinks - Exhibits 2.1 through 10.17, previously included in the Annual Report on Form 10-K for the year ended September 30, 2018, are included to correct non-functioning hyperlinks[177](index=177&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) Contains official signatures of EMCORE Corporation's CEO and Interim Principal Financial Officer - The report is signed by Jeffrey Rittichier, Chief Executive Officer, and Mark A. Gordon, Interim Principal Financial and Accounting Officer, on **February 6, 2019**[189](index=189&type=chunk)