Thursday, February 11, 2016 10:52:49 AM
Book/sh 5.27
Cash/sh 4.32
Quick Ratio 5.70
http://finviz.com/quote.ashx?t=emkr
Positive SA article:
"Strong Earnings For Emcore
Feb. 9, 2016 11:54 AM ET|1 comment | About: EMCORE Corporation (EMKR)
The Small-Cap Authority The Small-Cap Authority?Follow(257 followers)
Summary
The company reported inline revenue and EPS for both the quarter and guidance.
While gross margins failed to meet expectations, the margin contraction is temporary.
Cash balance increased to $4.54 per share, representing nearly 90% of the market cap - other liquid assets add almost $1 more per share.
Conference call was very positive, with an optimistic outlook for the cable TV and chip segments.
After the close on Thursday, Emcore Corp (NASDAQ:EMKR) reported their fiscal Q1 earnings. I've written previously in detail about the company and their impressive balance sheet, so right now I will focus on the quarterly update.
Revenue and EPS were both inline for the quarter and guidance, with an increase in the company's sizable cash position. There also were some very positive comments on the conference call that reiterate optimism for 2016 and beyond. While gross margins were lower than expected, this looks like a temporary situation, and the company was able to make up for the lower margins with higher volume to hit their numbers. In a bad day for the market, and what appears to be an overreaction to the gross margin, the stock is down double digits, and is trading even closer to its cash value.
Gross margin for the quarter was 32.9%, down from 35.5% in the last fiscal year. The decline was driven by under-absorption of overhead, product mix and pricing pressure on GPON chips. We believe that these issues are temporary as cable TV volumes increase with the DOCSIS 3.1 upgrade cycle, which will improve both product mix and cost absorption.
One of the most positive comments from the call was regarding the chip business. Currently, GPON chips represent almost 80% of the company's chip revenue, which is why GPON pricing pressure had such an impact on margins. As EMKR diversifies their chip business, they believe that non-GPON chip revenue will represent one-third of chip revenue this year. Further, and most interesting, is that non-GPON chip shipments in 2016 could be larger than the entire chip business was in 2015, signaling very strong growth in the coming year.
The balance sheet remains the most intriguing part of the EMKR story. The $4.3 million cash balance increase in the quarter gives the company $4.54 per share in cash, nearly 90% of the market cap, in addition to an NOL worth roughly $2 per share. In addition, other liquid assets (receivables plus inventory, minus payables) add $0.87 per share.
Company management is exploring options to return value to shareholders, which among other potential options will likely result in a one-time cash dividend that could be $2.50 to $3.00 per share. With the recent decline in the stock price to the low $5s, you are getting the company for essentially nothing. With an enterprise value of $23 million, and consensus EBITDA estimate for 2017 of $10.5 million, the stock is now trading at just 2.2x EBITDA.
Disclosure: I am/we are long EMKR.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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http://seekingalpha.com/article/3878756-strong-earnings-emcore
Haven't verified the dividend, but what a deal if it happens! I can verify from the CEO's CC, this:
"Finally, with the continued strong results and large cash position, the Board of Directors is continuing to review options to enhance shareholder value. Last quarter we noted that the Board of Directors continued to evaluate the Company's cash needs and that the Company expects to approve a cash dividend or distribution to shareholders, with the timing and amount to be determined in the next few months following completion of a review. We are still in the process of working through this matter and expect to update shareholders in the future."
EMKR
Recent EMKR News
- Form 8-K - Current report • Edgar (US Regulatory) • 05/08/2024 08:02:45 PM
- EMCORE Reports Fiscal 2024 Second Quarter Results • GlobeNewswire Inc. • 05/08/2024 08:01:00 PM
- EMCORE Corporation to Host Fiscal 2024 Second Quarter Conference Call on May 8, 2024 • GlobeNewswire Inc. • 05/02/2024 08:03:00 PM
- EMCORE Announces Sale of Chips Business and Wafer Fabrication Operations for $2.92M and Certain Assumed Liabilities • GlobeNewswire Inc. • 05/02/2024 08:01:00 PM
- Form SC 13D/A - General statement of acquisition of beneficial ownership: [Amend] • Edgar (US Regulatory) • 03/08/2024 04:00:16 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/21/2024 09:05:13 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/16/2024 09:48:44 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 02/16/2024 09:47:43 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/16/2024 09:45:36 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/14/2024 08:18:56 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/14/2024 06:31:31 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/14/2024 04:16:42 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 02/12/2024 09:09:09 PM
- Form NT 10-Q - Notification of inability to timely file Form 10-Q or 10-QSB • Edgar (US Regulatory) • 02/12/2024 09:02:28 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/12/2024 08:16:22 PM
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- Form SC 13D/A - General statement of acquisition of beneficial ownership: [Amend] • Edgar (US Regulatory) • 02/09/2024 02:50:24 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/08/2024 09:04:39 PM
- EMCORE Reports Fiscal 2024 First Quarter Results • GlobeNewswire Inc. • 02/08/2024 09:01:00 PM
- EMCORE to Present at the TD Cowen 45th Annual Aerospace & Defense Conference • GlobeNewswire Inc. • 02/06/2024 09:01:00 PM
- EMCORE Corporation to Host Fiscal 2024 First Quarter Conference Call on February 8, 2024 • GlobeNewswire Inc. • 01/31/2024 09:01:00 PM
- Form 8-K/A - Current report: [Amend] • Edgar (US Regulatory) • 01/31/2024 01:00:29 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 01/26/2024 09:09:32 PM
- Form DEF 14A - Other definitive proxy statements • Edgar (US Regulatory) • 01/26/2024 09:06:58 PM
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