EMCORE (US:EMKR)2024-05-08 23:55Financial Data and Key Metrics Changes - Revenue for fiscal Q2 was $19.6 million, down from $24.1 million in the prior quarter, primarily due to delays in shipments and production issues [28][29] - Gross margin decreased to 15% in fiscal Q2 from 29% in the previous quarter, attributed to lower revenue and production yield issues [29] - Operating loss for the March quarter was $6.9 million compared to $2.6 million in the December quarter, with a negative adjusted EBITDA of $5.8 million [8][29] Business Line Data and Key Metrics Changes - The decline in revenue was significantly impacted by two torpedo programs, Mark 54 and Mark 48, where shipments were delayed [28] - Operating expenses increased to $9.8 million in fiscal Q2 from $9.5 million in fiscal Q1, with R&D expenses rising due to lower nonrecurring engineering revenue [29] Market Data and Key Metrics Changes - The company is experiencing a continued decline in revenue from its Budd Lake site following the cancellation of a project, which has affected overall performance [7][28] Company Strategy and Development Direction - The company is focused on bottom line growth and has initiated actions to right-size its cost structure, with a restructuring committee evaluating further actions [10][33] - The company aims to achieve adjusted cash flow breakeven by the end of the quarter ending September 2024, excluding restructuring costs [33][53] Management's Comments on Operating Environment and Future Outlook - Management expressed dissatisfaction with the second fiscal quarter results but is committed to taking necessary actions for future success [15][36] - Guidance for the June quarter anticipates revenue in the range of $19 million to $21 million, with expectations for a return to top line growth in the first half of fiscal '25 [31][36] Other Important Information - The company completed the sale of its discontinued Chips business line for $2.92 million, marking the exit from legacy businesses [27][32] - A new lender has been secured, providing additional flexibility and removing previous liquidity requirements [12][20] Q&A Session Summary Question: What is the current cash burn rate and urgency to rectify cash levels? - Management indicated a cash balance of $12 million at the end of March, with expectations to increase this to $14 million with additional proceeds from the sale of the fab [41][50] Question: What actions are being contemplated regarding cost restructuring and capital raises? - Management acknowledged the need for restructuring, which will incur expenses, and is exploring options to raise necessary cash [49][51] Question: Can you clarify the outlook for revenue and profitability? - Management clarified that the objective is to achieve cash flow breakeven by the end of September 2024, with revenue expected to remain flat in the second half of 2024 before returning to growth in early 2025 [53][54]