EMCORE Corporation (Nasdaq: EMKR), the world’s largest independent
provider of inertial navigation solutions to the aerospace and
defense industry, today announced personnel and expense reduction
actions, including the planned full closure of the Alhambra, CA
site.
Personnel reductions are expected to result in annualized
savings of approximately $17 million and are the first stage of a
restructuring program that is expected to include additional
actions designed to further reduce annualized operating costs in an
expedited manner. While the personnel reductions are significant
and represent approximately 40% of EMCORE’s workforce, they are
designed to enable EMCORE to execute on its current and planned
business base. The Company expects the Alhambra shutdown to be
fully completed during the fourth fiscal quarter ending September
30, 2024. Restructuring charges, including severance, facility
consolidation, and other related items, are expected to be
finalized and recorded in the third fiscal quarter ending June 30,
2024.
“This personnel reduction and facility closure represent a
critical set of initial steps to achieve adjusted cash flow break
even ahead of September 30, 2024,” said Cletus Glasener, Chairman
of the Board of EMCORE. “These actions and other anticipated cost
reduction and performance improvement measures are critical to best
position EMCORE for success moving forward.”
“The EMCORE Board and leadership team express their sincere
gratitude for the service of the individuals affected by these
reductions and wish them well,” added Mr. Glasener.
About EMCORE
EMCORE Corporation is a leading provider of inertial navigation
products for the aerospace and defense markets. We leverage
industry-leading Photonic Integrated Chip (PIC), Quartz MEMS,
Lithium Niobate, and chip-level technology to deliver
state-of-the-art component and system-level products across our
end-market applications. EMCORE has vertically-integrated
manufacturing capability at its facilities in Budd Lake, NJ,
Concord, CA, and Tinley Park, IL. Our manufacturing facilities
maintain ISO 9001 quality management certification, and we are
AS9100 aerospace quality certified in Budd Lake and Concord. For
further information about EMCORE, please visit
http://www.emcore.com.
Forward-Looking Statements
The information provided herein may include forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934
(“Exchange Act”). These forward-looking statements are largely
based on our current expectations and projections about future
events and financial trends affecting the financial condition of
our business. Such forward-looking statements include, in
particular, projections about our future results, including our
personnel and expense reduction actions, including the closure of
the Alhambra site and the timing thereof, expectations related to
the cost savings and the timing of completion of the restructuring,
timing of recognizing charges related to the restructuring,
expected benefits of the restructuring, our belief that the
personnel reduction and facility closure represent a critical set
of initial steps to achieve adjusted cash flow break even ahead of
September 30, 2024, our belief that the restructuring is critical
to best position EMCORE for success moving forward, other
anticipated performance improvement measures and statements about
our future results of operations and financial position, plans,
strategies, business prospects, changes, and trends in our business
and the markets in which we operate.
These forward-looking statements may be identified by the use of
terms and phrases such as “anticipates”, “believes”, “can”,
“could”, “estimates”, “expects”, “forecasts”, “intends”, “may”,
“plans”, “projects”, “targets”, “will”, and similar expressions or
variations of these terms and similar phrases. Additionally,
statements concerning future matters such as the development of new
products, future growth, enhancements or technologies, sales
levels, expense levels, and other statements regarding matters that
are not historical are forward-looking statements. We caution that
these forward-looking statements relate to future events or our
future financial performance and are subject to business, economic,
and other risks and uncertainties, both known and unknown, that may
cause actual results, levels of activity, performance, or
achievements of our business or our industry to be materially
different from those expressed or implied by any forward-looking
statements.
These forward-looking statements involve risks and uncertainties
that could cause actual results to differ materially from those
projected, including without limitation, the following: (a) any
disruptions to our operations a result of the restructuring; (b)
risks related to costs and expenses incurred in connection with
restructuring activities and other anticipated performance
improvement measures and anticipated operational costs saving
arising from the restructuring actions other anticipated
performance improvement measures; (c) risks related to the loss of
personnel; (d) risks related to customer and vendor relationships
and contractual obligations with respect to the shutdown of the
Broadband business segment and the discontinuance of its defense
optoelectronics product line; (e) risks related to the anticipated
scaling of the Company’s inertial navigation business including (i)
the rapidly evolving markets for the Company's products and
uncertainty regarding the development of these markets, (ii) 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, (iii) delays and other difficulties in commercializing
new products, (iv) the failure of new products: (A) to perform as
expected without material defects; (B) to be manufactured at
acceptable volumes, yields, and cost; (C) to be qualified and
accepted by our customers; and (D) to successfully compete with
products offered by our competitors, (v) uncertainties concerning
the availability and cost of commodity materials and specialized
product components that we do not make internally, (vi) actions by
competitors, (vii) acquisition-related risks, including that (A)
the revenues and net operating results obtained from our recent
acquisitions may not meet our expectations, (B) the costs and cash
expenditures for integration of our recent acquisitions may be
higher than expected, (C) we may not recognize the anticipated
synergies from our recent acquisitions, (D) there could be losses
and liabilities arising from these acquisitions that we will not be
able to recover from any source, and (E) we may not realize
sufficient scale from these acquisitions and will need to take
additional steps, including making additional acquisitions, to
achieve our growth objectives for this product line, (viii) risks
related to our ability to obtain capital, (ix) the effect of
component shortages and any alternatives thereto, (x) risks and
uncertainties related to manufacturing and production capacity and
expansion plans related thereto, and (xi) risks related to the
conversion of order backlog into product revenue; (f) risks related
to the closing the manufacturing support and engineering center in
China; and (g) 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, 2023, as updated by our subsequent
periodic reports.
Forward-looking statements are based on certain assumptions and
analysis made in light of our experience and perception of
historical trends, current conditions, and expected future
developments as well as other factors that we believe are
appropriate under the circumstances. While these statements
represent our judgment on what the future may hold, and we believe
these judgments are reasonable, these statements are not guarantees
of any events or financial results. All forward-looking statements
in this press release 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
caution you not to rely on these statements without also
considering the risks and uncertainties associated with these
statements and our business that are addressed in our filings with
the Securities and Exchange Commission (“SEC”) that are available
on the SEC’s web site located at www.sec.gov, including the
sections entitled “Risk Factors” in our Annual Report on
Form 10-K and our Quarterly Reports on Form 10-Q. Certain
information included in this press release may supersede or
supplement forward-looking statements in our other Exchange Act
reports filed with the SEC. We do not intend to update any
forward-looking statement to conform such statements to actual
results or to changes in our expectations, except as required by
applicable law or regulation.
Investor Contact:
EMCORE CorporationTom MinichielloChief
Financial Officerinvestor@emcore.com
EMCORE (NASDAQ:EMKR)
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