EMCORE (US:EMKR)2019-08-09 20:28Revenue 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].