NASDAQ: EMKR

January 12, 2022

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Safe Harbor Statement

Forward-Looking Statements:

This presentation contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements concerning future matters such as demand for our products, industry and market conditions, the development of new products, enhancements or technologies, sales levels, expense levels and other statements regarding matters that are not historical are forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including without limitation, the following: (a) the rapidly evolving markets for the Company's products and uncertainty regarding the development of these markets; (b) the Company's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; (c) delays and other difficulties in commercializing new products; (d) the failure of new products: (i) to perform as expected without material defects, (ii) to be manufactured at acceptable volumes, yields, and cost, (iii) to be qualified and accepted by our customers, and (iv) to successfully compete with products offered by our competitors; (e) uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally; (f) actions by competitors; (g) risks and uncertainties related to applicable laws and regulations, including the impact of changes to applicable tax laws; (h) acquisition-related risks, including that (i) the revenues and net operating results obtained from the Systron Donner Inertial, Inc. ("SDI") business may not meet our expectations, (ii) the costs and cash expenditures for integration of the SDI business operations may be higher than expected, (iii) there could be losses and liabilities arising from the acquisition of SDI that we will not be able to recover from any source, and (iv) we may not realize sufficient scale in our navigation systems product line from the SDI acquisition and will need to take additional steps, including making additional acquisitions, to achieve our growth objectives for this product line; (i) risks related to our ability to obtain capital; (j) risks related to the transition of certain of our manufacturing operations from our Beijing facility to a contract manufacturer's facility; and (k) other risks and uncertainties discussed under Item 1A - Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as updated by our subsequent periodic reports. All forward-looking statements are made as of the date hereof, based on information available to us as of the date hereof, and subsequent facts or circumstances may contradict, obviate, undermine, or otherwise fail to support or substantiate such statements. We do not intend to update any forward-looking statement to reflect subsequent events or circumstances, except as required by law or regulation.

Non-GAAP Financial Measures:

This presentation includes non-GAAP financial measures where indicated. The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company's website: http://www.EMCORE.com or the SEC's website at: http://www.sec.gov. These non-GAAP financial measures complement the Company's consolidated financial statements presented in accordance with GAAP. However, these non-GAAP financial measures are not intended to supersede or replace the Company's US GAAP results. These non-GAAP measures are presented in part to enhance the understanding of the Company's historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.

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Leading provider of advanced mixed-signaldevices that provide the foundation for today's leading-edge aerospace & defense systems and high-speed broadband communication networks

Vertically integrated capabilities with world-class indium phosphide (InP) semiconductor Wafer Fabrication and Quartz MEMS facilities

Business Units focused on serving customers with excellence:

Aerospace & Defense

Inertial Navigation - QMEMS and Fiber Optic

Gyroscope (FOG) products

Defense Optoelectronics

Broadband

Cable TV Optical Components

Chips and Sensing products

Key Company Facts

Founded in 1984, IPO in 1993

Primary Locations:

  • Alhambra, CA (HQ): InP Wafer Fab, FOG, Defense-Opto, Broadband, and Administrative Functions
  • Concord, CA: Quartz MEMS

Revenue, quarter ended 9/30/21 (fiscal 4Q)

$44.0M

Revenue, fiscal year ended 9/30/21

$158.4M

Cash at 9/30/21

$71.7M

Debt at 9/30/21

$0.0M

Tangible Book Value at 9/30/21

$137.2M

Market Capitalization 1/11/22

$245.6M

Shares Outstanding 1/11/22

37.0M

Closing Share Price 1/11/22

$6.64

3

Product Diversity and Financial Profits

Investment Highlights

Growing and differentiated A&D navigation business

Leading share in "downstream" optics for CATV

New products derived from existing technology:

  • Sensing: LiDAR and directional drilling
  • Defense Optoelectronics

Highly synergistic Optoelectronics and MEMS manufacturing operations

Business Growth & Profit Drivers

Broadband access driving CATV growth

  • Broadband gross margin improved by 10 margin points in FY21 YoY

Program Expansion with FOG and MEMS Products

Margin improvement and expense control drive growing profitability

($ in millions)

FY20

FY21

YoY Delta

Total Revenue

$110.1

$158.4

44%

Non-GAAP Gross Margin(a)

33%

39%

6 pts

Non-GAAP Opex as a % of Revenue(a)

36%

24%

(12 pts)

4

(a) See reconciliation for GAAP to non-GAAP in Appendix.

Product Differentiation

Mixed-Signal Devices

Bridge the analog physical world with digital computing & communications

EMCORE is among a small number of suppliers worldwide

Hybrid Vertical Integration strategy

InP Wafer Fabrication and Quartz MEMS facilities

  • In-housechip design
  • Higher product performance and lower costs

In-house manufacturing for specialized, high value-added processes that enhance differentiation (e.g., inertial navigation products)

EMS for all PCBAs, rack assemblies, and lower cost products that serve more cyclical markets (e.g., optical components)

Drives CSWaP (lower Cost, smaller Size, lighter Weight, and less Power)

EMCORE's global leadership position in mixed-signal devices combined with vertical integration

creates high-performance CSWaP differentiation across the entire product portfolio

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Disclaimer

Emcore Corporation published this content on 12 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 January 2022 18:20:08 UTC.