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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New Jersey
(State or other jurisdiction of incorporation or organization)
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22-2746503
(I.R.S. Employer Identification No.)
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2015 W. Chestnut Street, Alhambra, California, 91803
(Address of principal executive offices) (Zip Code)
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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Common stock, no par value
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EMKR
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The Nasdaq Stock Market LLC (Nasdaq Global Market)
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Fiber Optic Gyroscope Products - EMCORE’s FOG program has received multiple U.S. patents and has been qualified for several key military programs for applications including Unmanned Aerial Systems (“UAS”), line-of-site stabilization, aviation and aeronautics. All EMCORE FOGs feature advanced optics with only three components for simplified assembly along with Digital Signal Processing (“DSP”) or Field Programmable Gate Array (“FPGA”) for higher accuracy, lower noise and greater efficiency. The integrated DSP or FGPA also improves optical drift stability and enables higher linearity and greater environmental flexibility. EMCORE’s FOG products range from tactical to navigational grade gyros where the critical specifications for fiber length, Angle Random Walk (“ARW”) and drift rate improves through the product line to provide customers greater flexibility in choosing the performance level that best meets their application.
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Quartz MEMS Gyroscope Products - EMCORE’s Systron Donner Inertial brand supplies the world’s highest performance MEMS Inertial Sensors & Systems. Our quartz MEMS Gyroscopes, Accelerometers, Inertial Measurement Units and GPS/INS products deliver a clear, continuously improving Size, Weight, Power, and Cost (“SWaPC”) advantages over alternative technologies. With more than 50 years of extensive experience EMCORE is continuously developing leading-edge disciplines with new innovative breakthrough products, which are enabling advanced performance capabilities in mission critical applications worldwide.
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FOG-Based Inertial Measurement Units and Navigation Systems Products - EMCORE’s FOG-based MU and INS systems provide superior SWaP compared to competing systems. Our products provide customers the flexibility to choose options from straightforward IMU operation to full navigation and are higher performance form, fit and function replacements for other IMUs and legacy systems. EMCORE’s FOG-based IMUs and INS products deliver high-precision with up to five-times better performance than competing units in compact, portable form-factors that provide standalone aircraft grade navigator performance at one-third the size of competing systems.
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High-Power Gain Chips Products - EMCORE, through our previous experience in the Telecom tunable module market, has design and engineering expertise in development and manufacturing of high-power gain chips for tunable lasers and transceivers utilized in coherent DWDM optical transmission systems.
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Photodiode Products - In addition to EMCORE’s offering of GPON and gain chip products, the Company also has an extensive offering of photodiodes for use in Telecommunications and Datacenter applications. These products include (but are not limited to) 2.5G and 10G APD top and bottom illuminated chips and COB, along with 10G PIN photodiode chips, with additional products in development.
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GPON Fiber-To-The-Premises (FTTP) and Data Center Chip Products - EMCORE’s chip devices portfolio is continually developing to support the latest advances in PON including GPON, 10G-EPON, XG-PON, XGS-PON, along with 4G LTE and data center applications. The Company’s laser chip devices offering includes 2.5G and 10G PON DFB and 10G Fabry-Perot laser chips. Wavelengths supported include 1270, 1290, 1310, 1330, 1490, 1550 and 1610 nm.
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Wireless Communications Products - The increasing dependence on wireless access for social media, text, email, uploading and downloading of apps, music, videos and photos has created greater demand for deployment of cost-effective, high-performance, integrated wireless Distributed Antenna System (“DAS”) networks. Wireless systems providers are building systems in subway tunnels, stadiums, hotels, high-speed trains and cruise ships. EMCORE has developed highly linear fiber optic products that are optimized for wireless applications which we believe integrate extremely well into these systems. They enhance bandwidth and linearity to enable the delivery of consistent, reliable signals in areas where interference is high or signals are weak. EMCORE’s products for wireless applications include DFB lasers and optical receivers specifically designed for wireless networks, 3 GHz and 6.5 GHz fiber optic links for cellular backhaul, 4G LTE and DAS.
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Laser, Receiver and Photodetector Component Products - We are a leading provider of optical components including lasers, receivers and photodetectors (also called “photodiodes”). Our products include CWDM (“Coarse Wavelength Division Multiplexing”) and DWDM (“Dense Wavelength Division Multiplexing”), 1310 nm and 1550 nm DFB lasers and optical receivers optimized for CATV, DOCSIS (Data Over Cable Service Interface Specification) 3.1 and wireless applications. In addition, we offer narrow linewidth 1310 and 1550 nm DFB lasers optimized for LiDAR and distributed sensing applications. Form-factors for laser products include 14-pin butterfly and coaxial TO-Can. In addition, we offer broadband photodiodes used in forward-and return-path broadband and FTTP applications. EMCORE’s component products to the global fiber optics industry leverage the benefits of our vertically-integrated infrastructure, low-cost manufacturing and early access to newly developed internally-produced components.
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invest in our research and development efforts, including by hiring additional technical and other personnel;
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maintain and expand our operating or manufacturing infrastructure;
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acquire complementary businesses, products, services or technologies; or
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otherwise pursue our strategic plans and respond to competitive pressures.
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a downturn in the markets for our customers’ products;
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discontinuation by our vendors of, or unavailability of, components or services used in our products;
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disruptions or delays in our manufacturing processes or in our supply of raw materials or product components;
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a failure to anticipate changing customer product requirements;
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market acceptance of our products;
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cancellations or postponements of previously placed orders;
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increased financing costs or any inability to obtain necessary financing;
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the impact on our business of current or future cost reduction measures;
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a loss of key personnel or the shortage of available skilled workers;
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economic conditions in various geographic areas where we or our customers do business;
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the impact of political uncertainties, such as government sequestration and uncertainties surrounding the federal budget, customer spending and demand for our products;
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significant warranty claims, including those not covered by our suppliers;
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product liability claims;
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other conditions affecting the timing of customer orders;
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reductions in prices for our products or increases in the costs of our raw materials;
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effects of competitive pricing pressures, including decreases in average selling prices of our products;
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fluctuations in manufacturing yields;
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obsolescence of products;
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research and development expenses incurred associated with new product introductions;
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natural disasters, such as hurricanes, earthquakes, fires, and floods;
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the emergence of new industry standards;
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the loss or gain of significant customers;
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the introduction of new products and manufacturing processes;
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changes in technology;
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intellectual property disputes;
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customs (including tariffs imposed on our products or raw materials, equipment or components used in the production of our products), import/export, and other regulations of the countries in which we do business;
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the occurrence of M&A activities; and
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acts of terrorism or violence and international conflicts or crises.
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problems integrating the acquired operations, personnel, technologies, or products with the existing business and products;
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failure to achieve cost savings or other financial or operating objectives with respect to an acquisition;
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possible adverse short-term effects on our cash flows or operating results, and the use of cash and other resources for the acquisition that might affect our liquidity, and that could have been used for other purposes;
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diversion of management's time and attention from our core business to the acquired business or joint venture;
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potential failure to retain key technical, management, sales, and other personnel of the acquired business or joint venture;
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difficulties in retaining relationships with suppliers and customers of the acquired business, particularly where such customers or suppliers compete with us;
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difficulties in the integration of financial reporting systems, which could cause a delay in the issuance of, or impact the reliability of our financial statements;
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failure to comply with Section 404 of the Sarbanes-Oxley Act of 2002, including a delay in or failure to successfully integrate these businesses into our internal control over financial reporting;
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insufficient experience with technologies and markets in which the acquired business is involved, which may be necessary to successfully operate and integrate the business;
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reliance upon joint ventures which we do not control;
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subsequent impairment of goodwill and acquired long-lived assets, including intangible assets; and
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assumption of liabilities including, but not limited to, lawsuits, environmental liabilities, regulatory liabilities, tax examinations and warranty issues.
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changing product specifications and customer requirements;
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unanticipated engineering complexities;
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expense reduction measures we have implemented and others we may implement;
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difficulties in hiring and retaining necessary technical personnel; and
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difficulties in allocating engineering resources and overcoming resource limitations.
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unexpected changes in regulatory requirements;
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legal uncertainties regarding liability, tariffs, and other trade barriers;
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inadequate protection of intellectual property in some countries;
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greater incidence of shipping delays;
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greater difficulty in overseeing manufacturing operations;
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greater difficulty in hiring talent needed to oversee manufacturing operations;
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potential political and economic instability and natural disasters;
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potential adverse actions by the U.S. government pursuant to its stated intention to reduce the loss of U.S. jobs;
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trade and travel restrictions; and
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the outbreak of infectious diseases which could result in travel restrictions or the closure of the facilities of our contract manufacturers.
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our customers can stop purchasing our products at any time without penalty;
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our customers may purchase products from our competitors; and
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our customers are not required to make minimum purchases.
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political and economic instability or changes in U.S. government policy with respect to these foreign countries may inhibit export of our products and limit potential customers’ access to U.S. dollars in a country or region in which those potential customers are located;
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we may experience difficulties in enforcing our legal contracts or the collecting of foreign accounts receivable in a timely manner and we may be forced to write off these receivables;
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tariffs and other barriers may make our products less cost competitive;
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the laws of certain foreign countries may not adequately protect our trade secrets and intellectual property or may be burdensome to comply with;
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potentially adverse tax consequences to our customers may damage our cost competitiveness;
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customs, import/export, and other regulations of the countries in which we do business may adversely affect our business;
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different technical standards or requirements, such as country or region-specific requirements to eliminate the use of lead
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currency fluctuations may make our products less cost competitive, affecting overseas demand for our products or otherwise adversely affecting our business; and
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language and other cultural barriers may require us to expend additional resources competing in foreign markets or hinder our ability to effectively compete.
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the Federal Acquisition Regulations, Defense Federal Acquisition Regulation Supplement and other supplemental agency regulations, which comprehensively regulate the formation and administration of, and performance under, U.S. government contracts;
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the Truth in Negotiations Act, which requires certification and disclosure of all factual cost and pricing data in connection with contract negotiations;
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the False Claims Act and the False Statements Act, which impose penalties for payments made on the basis of false facts provided to the government and on the basis of false statements made to the government, respectively; and
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the Foreign Corrupt Practices Act, which prohibits U.S. companies from providing anything of value to a foreign official to help obtain, retain or direct business, or obtain any unfair advantage.
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infringement claims (or claims for indemnification resulting from infringement claims) will not be asserted against us or that such claims will not be successful;
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future assertions will not result in an injunction against the sale of infringing products, which could require us to cease the manufacture, use or sale of the infringing products, processes or technology and expend significant resources to develop non-infringing technology, adversely affecting our business, results of operations, and cash flows;
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any patent owned or licensed by us will not be invalidated, circumvented, or challenged; or
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we will not be required to obtain licenses or pay substantial damages for past, present and future use of the infringing technology, the expense of which may adversely affect our results of operations, and cash flows.
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provided for the classification of our Board of Directors into three classes, with staggered three-year terms and, until recent respective amendments to our certificate of incorporation and bylaws to declassify our Board of Directors that became effective in March 2018 are fully phased in beginning with our 2021 annual meeting of shareholders, the current three-year term of certain of our directors will remain in effect until their current term expires;
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provide that directors may be removed at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of our outstanding shares of capital stock entitled to vote generally in the election of directors cast at a meeting of shareholders called for that purpose;
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provide that a supermajority vote of our shareholders is required to amend some portions of our amended and restated certificate of incorporation and amended and restated bylaws, including requiring approval by the holders of 80% or more of the outstanding shares of our capital stock entitled to vote generally in the election of directors for certain business combinations unless these transactions meet certain fair price criteria and procedural requirements or are approved by two-thirds of our continuing directors;
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authorize the issuance of preferred stock, without any requirement of vote or class vote of shareholders, commonly referred to as “blank check” preferred stock, which shares of preferred stock may have rights senior to those of our common stock;
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limit the persons who can call special shareholder meetings; shareholders do not have authority to call a special meeting of shareholders;
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establish advance notice requirements that must be complied with by shareholders to nominate persons for election to our Board of Directors or to propose matters that can be acted on by shareholders at shareholder meetings;
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do not provide for cumulative voting in the election of directors; and
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provide for the filling of vacancies on our Board of Directors by action of 66 2/3% of the directors and not by the shareholders.
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Location
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Function
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Approximate
Square Footage
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Term
(in calendar year)
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Alhambra, California
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Corporate Headquarters
Manufacturing and research and development facilities |
75,000
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Lease covering one of six buildings expired in 2011; other leases covering five of six buildings expire in 2023 (1) and (2)
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Langfang, China
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Warehouse facility
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1,100
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Lease expired in 2019 (2)
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Beijing, China
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Manufacturing facility
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23,200
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Lease expires in 2021 (1)
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Concord, California
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Manufacturing and research and development facility
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110,000
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N/A - Owned property
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(1)
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Leases have the option to be renewed by us at fixed terms.
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(2)
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Certain facility leases which have expired are being maintained on a month-to-month basis.
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Statements of Operations Data
(in thousands, except loss per share)
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For the Fiscal Years ended September 30,
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2019
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2018
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2017
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2016
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2015
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Revenue
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$
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87,265
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$
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85,617
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$
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122,895
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$
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91,998
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$
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81,685
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Gross profit
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15,089
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18,487
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42,534
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30,954
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28,691
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Operating (loss) income
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(36,132
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)
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(18,311
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)
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7,741
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2,939
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(4,522
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)
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(Loss) income from continuing operations
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(35,984
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)
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(17,453
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)
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8,221
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2,619
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(2,272
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)
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Income from discontinued operations
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—
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—
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14
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5,647
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65,372
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Net (loss) income
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(35,984
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)
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(17,453
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)
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8,235
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8,266
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63,100
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Net (loss) income per basic share
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Continuing operations
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$
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(1.29
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)
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$
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(0.64
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)
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$
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0.31
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$
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0.10
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$
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(0.08
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)
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Discontinued operations
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—
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—
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—
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0.22
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2.18
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Net (loss) income per basic share
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$
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(1.29
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)
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$
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(0.64
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)
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$
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0.31
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$
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0.32
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|
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$
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2.10
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Net (loss) income per diluted share
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Continuing operations
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$
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(1.29
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)
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$
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(0.64
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)
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$
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0.30
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$
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0.10
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$
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(0.08
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)
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Discontinued operations
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—
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—
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—
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0.21
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2.18
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Net (loss) income per diluted share
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$
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(1.29
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)
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$
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(0.64
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)
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$
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0.30
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$
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0.31
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$
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2.10
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Balance Sheet Data
(in thousands)
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As of September 30,
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2019
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2018
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2017
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2016
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2015
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Cash, cash equivalents and restricted cash
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$
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21,977
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$
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63,195
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$
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68,754
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$
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64,870
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$
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112,260
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Working capital
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41,250
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88,848
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103,042
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92,957
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127,994
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Total assets
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109,562
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135,898
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144,084
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127,211
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160,907
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Long-term liabilities
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2,097
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1,891
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1,667
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|
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1,635
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|
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1,774
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Shareholders' equity
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|
76,746
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|
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106,805
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120,774
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107,317
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|
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135,442
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•
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On June 7, 2019, we completed the acquisition of Systron Donner Inertial, Inc. (“SDI”), a private-equity backed navigation systems provider with a scalable, chip-based platform for higher volume gyro applications utilizing Quartz MEMS technology. The total purchase price was approximately $25.0 million, consisting of (i) approximately $22.8 million in cash, subject to certain working capital adjustments and (ii) the issuance of 810,698 shares of common stock with an aggregate value of approximately $3.0 million as of the closing date. Subsequent to the closing, we calculated the working capital adjustment and determined that our aggregate purchase price should be reduced by approximately $0.7 million, which was paid in the three months ended September 30, 2019. Following the closing, we began integrating SDI into our Navigation Systems product line and have included the financial results of SDI in our condensed consolidated financial statements beginning on the acquisition date. Net revenue and net loss of SDI from the acquisition date through September 30, 2019 of $9.8 million and $0.6 million, respectively, is included in our consolidated statements of operations and comprehensive (loss) income for the fiscal year ended September 30, 2019. Acquired assets of SDI comprise 25% of the total consolidated assets as of September 30, 2019.
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We recorded a $4.7 million inventory write-down on CATV products and a $1.3 million write-downe on non-current inventory in the fiscal year ended September 30, 2019 due to the decline in sales and future demand of the inventory.
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We incurred approximately $0.8 million of merger and acquisition costs in the fiscal year ended September 30, 2019 in conjunction with the acquisition of SDI.
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We recorded an award to Phoenix Navigation Components, LLC (“Phoenix”) of attorneys’ fees and costs in the amount of approximately $3.8 million. In connection with the litigation proceedings involving Phoenix, we incurred approximately $5.7 million of legal expenses.
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We recorded a $1.0 million write-down on non-current inventory in the fiscal year ended September 30, 2018 due to the decline in sales and future demand of the inventory.
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As a result of the revision in the estimated amount and timing of cash flows for Asset Retirement Obligations (“ARO” or “AROs”) during the fiscal year ended September 30, 2018, the Company increased the ARO liability by $0.1 million and recorded a loss from change in estimate on ARO liability.
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We recorded a charge to impairments of approximately $0.5 million in the fiscal year ended September 30, 2017 in connection with the transition of our manufacturing operations in China to a new manufacturing facility. See Note 9 - Property, Plant, and Equipment, net for additional information.
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During the fiscal year ended September 30, 2017, the Company recorded charges of $2.0 million related to various reductions in workforce primarily related to the outsourcing of our wafer fabrication lab and operations assembly and the opening of our new manufacturing facility in China. See Note 10 - Accrued Expenses and Other Current Liabilities for additional information.
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On July 5, 2016, the Company declared a special cash dividend of $1.50 per share of the Company's common stock, for a total of $39.2 million. The dividend was paid on July 29, 2016 to shareholders of record as of the close of business on July 18, 2016.
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On September 23, 2014, Sumitomo Electric Industries, Ltd. ("SEI") filed for arbitration against EMCORE, in accordance with the terms of the Master Purchase Agreement between the parties. SEI was seeking $47.5 million from EMCORE, relating to numerous claims. On April 12, 2016, the International Court of Arbitration tribunal rejected SEI's claims. The panel ruled that EMCORE owed SEI none of the amounts SEI sought in the arbitration and that the Company was entitled to collect the $1.9 million held in escrow, which was received in June 2016 and was included in cash at September 30, 2016. The Company was also entitled to recover $2.6 million in legal fees and costs from SEI, which was received in June 2016 and has been recorded by EMCORE within operating income.
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In September 2016, the Company paid $2.9 million previously accrued related to a termination fee for terminating a prior joint venture agreement.
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During fiscal year 2016, the Company paid $6.1 million for the purchase of long-term inventory as a result of the vendor announcing it would cease manufacturing a part.
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As a result of the SEI arbitration tribunal ruling above, during the fiscal year ended September 30, 2016, we recognized a gain associated with the release of $3.4 million of previously deferred gain associated with the sale of assets and reversal of other liabilities of $0.4 million, resulting in a credit of $3.8 million to recognition of previously deferred gain on sale of assets within discontinued operations of the Digital Products Business.
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Common Stock Repurchase: In April 2015, EMCORE's Board of Directors authorized the Company to repurchase $45.0 million of shares of its common stock. On May 15, 2015, we announced the commencement of a modified "Dutch auction" tender offer to purchase for cash shares of our common stock (the "Tender Offer"). On June 15, 2015, we completed the Tender Offer and purchased 6.9 million shares of our common stock at a purchase price of $6.55 per share, for an aggregate cost of $45.0 million excluding fees and expenses. Repurchased common stock was recorded to treasury stock. The Company incurred costs of $0.7 million in connection with the Tender Offer, which were recorded to treasury stock.
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AROs: As a result of the revision in the estimated amount and timing of cash flows for AROs during the fiscal year ended September 30, 2015, the Company reduced ARO liability by $2.9 million with an offsetting reduction
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•
|
Photovoltaic and Digital Products Asset Sales: On December 10, 2014, SolAero Technologies Corporation (“SolAero”) purchased substantially all of the assets, and assumed substantially all of the liabilities, related to or used in connection with the Company’s photovoltaics business, including EMCORE’s subsidiaries EMCORE Solar Power, Inc. and EMCORE IRB Company, LLC (collectively, the “Photovoltaics Business”), for $149.9 million in cash, after giving effect to a $0.1 million working capital adjustment finalized and paid during the fiscal year ended September 30, 2015. On January 2, 2015, NeoPhotonics Corporation acquired certain assets, and assumed certain liabilities, of the Company’s telecommunications business (the “Digital Products Business”), for $17.0 million in cash and a notes receivable that was paid in April 2015. These asset sales are reported as discontinued operations, which require retrospective restatement of prior periods to classify the results of operations for the businesses sold as discontinued operations. No assets or liabilities that were sold from either the Photovoltaic Business or Digital Products Business remain on the consolidated balance sheet as of September 30, 2019, 2018, 2017 and 2016.
|
(in thousands, except percentages)
|
For the Fiscal Years ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
||||||
Revenue
|
$
|
87,265
|
|
|
$
|
85,617
|
|
|
$
|
1,648
|
|
|
1.9%
|
Cost of revenue
|
72,176
|
|
|
67,130
|
|
|
5,046
|
|
|
7.5%
|
|||
Gross profit
|
15,089
|
|
|
18,487
|
|
|
(3,398
|
)
|
|
(18.4)%
|
|||
Operating expense:
|
|
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
32,094
|
|
|
21,232
|
|
|
10,862
|
|
|
51.2%
|
|||
Research and development
|
19,443
|
|
|
15,387
|
|
|
4,056
|
|
|
26.4%
|
|||
Gain from change in estimate on ARO
|
(14
|
)
|
|
145
|
|
|
(159
|
)
|
|
(109.7)%
|
|||
Loss on sale of assets
|
(302
|
)
|
|
34
|
|
|
(336
|
)
|
|
(988.2)%
|
|||
Total operating expense
|
51,221
|
|
|
36,798
|
|
|
14,423
|
|
|
39.2%
|
|||
Operating loss
|
(36,132
|
)
|
|
(18,311
|
)
|
|
(17,821
|
)
|
|
(97.3)%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
||||||
Interest income, net
|
629
|
|
|
733
|
|
|
(104
|
)
|
|
(14.2)%
|
|||
Foreign exchange gain
|
(427
|
)
|
|
(434
|
)
|
|
7
|
|
|
1.6%
|
|||
Total other income
|
202
|
|
|
409
|
|
|
(207
|
)
|
|
(50.6)%
|
|||
Loss before income tax (expense) benefit
|
(35,930
|
)
|
|
(17,902
|
)
|
|
(18,028
|
)
|
|
(100.7)%
|
|||
Income tax (expense) benefit
|
(54
|
)
|
|
449
|
|
|
(503
|
)
|
|
(112.0)%
|
|||
Net loss
|
$
|
(35,984
|
)
|
|
$
|
(17,453
|
)
|
|
$
|
(18,531
|
)
|
|
(106.2)%
|
(in thousands, except percentages)
|
For the Fiscal Years ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||
Revenue
|
$
|
85,617
|
|
|
$
|
122,895
|
|
|
$
|
(37,278
|
)
|
|
(30.3)%
|
Cost of revenue
|
67,130
|
|
|
80,361
|
|
|
(13,231
|
)
|
|
(16.5)%
|
|||
Gross profit
|
18,487
|
|
|
42,534
|
|
|
(24,047
|
)
|
|
(56.5)%
|
|||
Operating expense (income):
|
|
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
21,232
|
|
|
22,246
|
|
|
(1,014
|
)
|
|
(4.6)%
|
|||
Research and development
|
15,387
|
|
|
12,542
|
|
|
2,845
|
|
|
22.7%
|
|||
Impairments
|
—
|
|
|
506
|
|
|
(506
|
)
|
|
(100.0)%
|
|||
Loss (gain) from change in estimate on ARO
|
145
|
|
|
(45
|
)
|
|
190
|
|
|
422.2%
|
|||
Loss (gain) on sale of assets
|
34
|
|
|
(456
|
)
|
|
490
|
|
|
107.5%
|
|||
Total operating expense
|
36,798
|
|
|
34,793
|
|
|
2,005
|
|
|
5.8%
|
|||
Operating (loss) income
|
(18,311
|
)
|
|
7,741
|
|
|
(26,052
|
)
|
|
(336.5)%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
||||||
Interest income, net
|
733
|
|
|
245
|
|
|
488
|
|
|
199.2%
|
|||
Foreign exchange (loss) gain
|
(434
|
)
|
|
82
|
|
|
(516
|
)
|
|
(629.3)%
|
|||
Other income
|
110
|
|
|
316
|
|
|
(206
|
)
|
|
(65.2)%
|
|||
Total other income
|
409
|
|
|
643
|
|
|
(234
|
)
|
|
(36.4)%
|
|||
(Loss) income from continuing operations before income tax benefit (expense)
|
(17,902
|
)
|
|
8,384
|
|
|
(26,286
|
)
|
|
(313.5)%
|
|||
Income tax benefit (expense)
|
449
|
|
|
(163
|
)
|
|
612
|
|
|
375.5%
|
|||
(Loss) income from continuing operations
|
(17,453
|
)
|
|
8,221
|
|
|
(25,674
|
)
|
|
(312.3)%
|
|||
Income from discontinued operations, net of tax
|
—
|
|
|
14
|
|
|
(14
|
)
|
|
(100.0)%
|
|||
Net (loss) income
|
$
|
(17,453
|
)
|
|
$
|
8,235
|
|
|
$
|
(25,688
|
)
|
|
(311.9)%
|
•
|
Credit Facility: On November 11, 2010, we entered into a Credit and Security Agreement (as amended to date, th“Credit Facility”) with Wells Fargo Bank, N.A. (“Wells Fargo”). The Credit Facility currently provides us with a revolving credit line of up to $15.0 million that can be used for working capital requirements, letters of credit, acquisitions, and other general corporate purposes subject to requirements, (a) that the Company have (i) liquidity of at least $7.5 million, and (ii) for certain specific uses, liquidity of at least $25.0 million after such use and (b) that the Company maintain excess availability of at least $1.0 million. The Credit Facility has a maturity date expiring in November 2021 and is secured by the Company's assets and is subject to a borrowing base formula based on the Company's eligible accounts receivable, inventory, and machinery and equipment accounts. See Note 11 - Credit Facilities in the notes to the consolidated financial statements for additional disclosures. As of December 6, 2019, there was an outstanding balance under this Credit Facility of $3.2 million, $0.5 million reserved for one outstanding stand-by letter of credit and $1.3 million available for borrowing.
|
Operating Activities
(in thousands, except percentages)
|
For the Fiscal Years ended September 30,
|
|
Fiscal 2019 vs Fiscal 2018
|
|
Fiscal 2018 vs Fiscal 2017
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||
Net cash (used in) provided by operating activities (net of acquired assets and assumed liabilities)
|
$
|
(15,151
|
)
|
|
$
|
1,470
|
|
|
$
|
11,701
|
|
|
$
|
(16,621
|
)
|
|
(1,130.7)%
|
|
$
|
(10,231
|
)
|
|
(87.4)%
|
Investing Activities
(in thousands, except percentages)
|
For the Fiscal Years ended September 30,
|
|
Fiscal 2019 vs Fiscal 2018
|
|
Fiscal 2018 vs Fiscal 2017
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||
Net cash used in investing activities
|
$
|
(31,803
|
)
|
|
$
|
(6,501
|
)
|
|
$
|
(9,126
|
)
|
|
$
|
(25,302
|
)
|
|
(389.2)%
|
|
$
|
2,625
|
|
|
28.8%
|
Financing Activities
(in thousands, except percentages)
|
For the Fiscal Years ended September 30,
|
|
Fiscal 2018 vs Fiscal 2017
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||
Net cash provided by (used in) financing activities
|
$
|
5,799
|
|
|
$
|
(487
|
)
|
|
$
|
1,306
|
|
|
$
|
6,286
|
|
|
1,290.8%
|
|
$
|
(1,793
|
)
|
|
(137.3)%
|
(in thousands)
|
|
|
|
||||||||||||||||
|
Total
|
|
Less than a year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
Over 5 years
|
||||||||||
Purchase obligations
|
$
|
19,532
|
|
|
$
|
9,636
|
|
|
$
|
9,816
|
|
|
$
|
80
|
|
|
$
|
—
|
|
Asset retirement obligations
|
2,125
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
2,066
|
|
|||||
Operating lease obligations
|
5,509
|
|
|
988
|
|
|
1,663
|
|
|
1,508
|
|
|
1,350
|
|
|||||
Total contractual obligations and commitments
|
$
|
27,166
|
|
|
$
|
10,624
|
|
|
$
|
11,479
|
|
|
$
|
1,647
|
|
|
$
|
3,416
|
|
|
|
For the Fiscal Year ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
|
$
|
87,265
|
|
|
$
|
85,617
|
|
|
$
|
122,895
|
|
Cost of revenue
|
|
72,176
|
|
|
67,130
|
|
|
80,361
|
|
|||
Gross profit
|
|
15,089
|
|
|
18,487
|
|
|
42,534
|
|
|||
Operating expense:
|
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
|
32,094
|
|
|
21,232
|
|
|
22,246
|
|
|||
Research and development
|
|
19,443
|
|
|
15,387
|
|
|
12,542
|
|
|||
Impairments
|
|
—
|
|
|
—
|
|
|
506
|
|
|||
(Gain) loss from change in estimate on ARO obligation
|
|
(14
|
)
|
|
145
|
|
|
(45
|
)
|
|||
(Gain) loss on sale of assets
|
|
(302
|
)
|
|
34
|
|
|
(456
|
)
|
|||
Total operating expense
|
|
51,221
|
|
|
36,798
|
|
|
34,793
|
|
|||
Operating loss
|
|
(36,132
|
)
|
|
(18,311
|
)
|
|
7,741
|
|
|||
Other income:
|
|
|
|
|
|
|
||||||
Interest income, net
|
|
629
|
|
|
733
|
|
|
245
|
|
|||
Foreign exchange (loss) gain
|
|
(427
|
)
|
|
(434
|
)
|
|
82
|
|
|||
Other income
|
|
—
|
|
|
110
|
|
|
316
|
|
|||
Total other (loss) income
|
|
202
|
|
|
409
|
|
|
643
|
|
|||
Loss before income tax (expense) benefit
|
|
(35,930
|
)
|
|
(17,902
|
)
|
|
8,384
|
|
|||
Income tax (expense) benefit
|
|
(54
|
)
|
|
449
|
|
|
(163
|
)
|
|||
(Loss) income from continuing operations
|
|
(35,984
|
)
|
|
(17,453
|
)
|
|
8,221
|
|
|||
Income from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
14
|
|
|||
Net loss
|
|
$
|
(35,984
|
)
|
|
$
|
(17,453
|
)
|
|
$
|
8,235
|
|
Foreign exchange translation adjustment
|
|
65
|
|
|
324
|
|
|
(18
|
)
|
|||
Comprehensive (loss) income
|
|
$
|
(35,919
|
)
|
|
$
|
(17,129
|
)
|
|
$
|
8,217
|
|
Per share data:
|
|
|
|
|
|
|
||||||
Net (loss) income per basic share:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(1.29
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.31
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.00
|
|
|||
Net loss per basic share
|
|
$
|
(1.29
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.31
|
|
Net (loss) income per diluted share:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(1.29
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.30
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.00
|
|
|||
Net (loss) income per diluted share
|
|
$
|
(1.29
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.30
|
|
Weighted-average number of basic and diluted shares outstanding
|
|
27,983
|
|
|
27,266
|
|
|
26,659
|
|
|||
Weighted-average number of diluted shares outstanding
|
|
27,983
|
|
|
27,266
|
|
|
27,544
|
|
|
As of September 30,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
21,574
|
|
|
$
|
63,117
|
|
Restricted cash
|
403
|
|
|
78
|
|
||
Accounts receivable, net of allowance of $148 and $548, respectively
|
18,497
|
|
|
19,275
|
|
||
Contract assets
|
1,055
|
|
|
—
|
|
||
Inventory
|
24,051
|
|
|
20,850
|
|
||
Prepaid expenses and other current assets
|
6,389
|
|
|
6,098
|
|
||
Total current assets
|
71,969
|
|
|
109,418
|
|
||
Property, plant, and equipment, net
|
37,223
|
|
|
18,216
|
|
||
Goodwill
|
69
|
|
|
—
|
|
||
Intangible assets, net
|
239
|
|
|
—
|
|
||
Non-current inventory
|
—
|
|
|
1,433
|
|
||
Other non-current assets
|
62
|
|
|
199
|
|
||
Total assets
|
$
|
109,562
|
|
|
$
|
129,266
|
|
LIABILITIES and SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Borrowings from credit facility
|
$
|
5,497
|
|
|
$
|
—
|
|
Accounts payable
|
10,701
|
|
|
12,997
|
|
||
Accrued expenses and other current liabilities
|
14,521
|
|
|
7,573
|
|
||
Total current liabilities
|
30,719
|
|
|
20,570
|
|
||
Asset retirement obligations
|
1,890
|
|
|
1,809
|
|
||
Other long-term liabilities
|
207
|
|
|
82
|
|
||
Total liabilities
|
32,816
|
|
|
22,461
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common stock, no par value, 50,000 shares authorized; 35,803 shares issued and 28,893 shares outstanding as of September 30, 2019; 34,487 shares issued and 27,577 shares outstanding as of September 30, 2018
|
739,926
|
|
|
734,066
|
|
||
Treasury stock at cost; 6,910 shares
|
(47,721
|
)
|
|
(47,721
|
)
|
||
Accumulated other comprehensive income
|
950
|
|
|
885
|
|
||
Accumulated deficit
|
(616,409
|
)
|
|
(580,425
|
)
|
||
Total shareholders’ equity
|
76,746
|
|
|
106,805
|
|
||
Total liabilities and shareholders’ equity
|
$
|
109,562
|
|
|
$
|
129,266
|
|
|
|
For the Fiscal Year ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Shares of Common Stock
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
27,577
|
|
|
27,028
|
|
|
26,244
|
|
|||
Stock-based compensation
|
|
307
|
|
|
372
|
|
|
432
|
|
|||
Stock option exercises
|
|
1
|
|
|
6
|
|
|
158
|
|
|||
Issuance of common stock for acquisition
|
|
811
|
|
|
—
|
|
|
—
|
|
|||
Issuance of common stock - Board of Directors
|
|
—
|
|
|
—
|
|
|
61
|
|
|||
Issuance of common stock - ESPP
|
|
197
|
|
|
171
|
|
|
133
|
|
|||
Balance, end of period
|
|
28,893
|
|
|
27,577
|
|
|
27,028
|
|
|||
Value of Common Stock
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
$
|
734,066
|
|
|
$
|
730,906
|
|
|
725,666
|
|
|
Stock-based compensation
|
|
2,607
|
|
|
3,648
|
|
|
3,602
|
|
|||
Stock option exercises
|
|
1
|
|
|
28
|
|
|
534
|
|
|||
Tax withholding paid on behalf of employees for stock-based awards
|
|
(203
|
)
|
|
(1,257
|
)
|
|
—
|
|
|||
Issuance of common stock for acquisition
|
|
2,951
|
|
|
—
|
|
|
—
|
|
|||
Issuance of common stock - Board of Directors
|
|
—
|
|
|
—
|
|
|
331
|
|
|||
Issuance of common stock - ESPP
|
|
504
|
|
|
741
|
|
|
773
|
|
|||
Balance, end of period
|
|
739,926
|
|
|
734,066
|
|
|
730,906
|
|
|||
Treasury stock, beginning and ending of period
|
|
(47,721
|
)
|
|
(47,721
|
)
|
|
(47,721
|
)
|
|||
Accumulated Other Comprehensive Income
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
885
|
|
|
561
|
|
|
579
|
|
|||
Translation adjustment
|
|
65
|
|
|
324
|
|
|
(18
|
)
|
|||
Balance, end of period
|
|
950
|
|
|
885
|
|
|
561
|
|
|||
Accumulated Deficit
|
|
|
|
|
|
—
|
|
|||||
Balance, beginning of period
|
|
(580,425
|
)
|
|
(562,972
|
)
|
|
(571,207
|
)
|
|||
Net loss
|
|
(35,984
|
)
|
|
(17,453
|
)
|
|
8,235
|
|
|||
Balance, end of period
|
|
(616,409
|
)
|
|
(580,425
|
)
|
|
(562,972
|
)
|
|||
Total Shareholders' Equity
|
|
$
|
76,746
|
|
|
$
|
106,805
|
|
|
$
|
120,774
|
|
|
For the Fiscal Year ended September 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(35,984
|
)
|
|
$
|
(17,453
|
)
|
|
$
|
8,235
|
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
7,142
|
|
|
5,617
|
|
|
3,757
|
|
|||
Stock-based compensation expense
|
2,607
|
|
|
3,648
|
|
|
3,602
|
|
|||
Provision adjustments related to doubtful accounts
|
62
|
|
|
599
|
|
|
23
|
|
|||
Provision adjustments related to product warranty
|
186
|
|
|
431
|
|
|
573
|
|
|||
Impairments of equipment
|
—
|
|
|
—
|
|
|
506
|
|
|||
Net (gain) loss on disposal of equipment
|
(302
|
)
|
|
34
|
|
|
(456
|
)
|
|||
Other
|
464
|
|
|
412
|
|
|
(50
|
)
|
|||
Total non-cash adjustments
|
10,159
|
|
|
10,741
|
|
|
7,955
|
|
|||
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
|
|
|
|
|
|
||||||
Accounts receivable and contract assets
|
3,980
|
|
|
2,372
|
|
|
(3,859
|
)
|
|||
Inventory
|
6,486
|
|
|
5,067
|
|
|
(140
|
)
|
|||
Prepaid expenses and other assets
|
(238
|
)
|
|
784
|
|
|
(2,397
|
)
|
|||
Accounts payable
|
(4,539
|
)
|
|
477
|
|
|
2,095
|
|
|||
Accrued expenses and other current liabilities
|
4,985
|
|
|
(518
|
)
|
|
(188
|
)
|
|||
Total change in operating assets and liabilities
|
10,674
|
|
|
8,182
|
|
|
(4,489
|
)
|
|||
Net cash (used in) provided by operating activities
|
(15,151
|
)
|
|
1,470
|
|
|
11,701
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of equipment
|
(10,790
|
)
|
|
(6,583
|
)
|
|
(9,600
|
)
|
|||
Acquisition of business, net of cash acquired
|
(21,483
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from disposal of property, plant and equipment
|
470
|
|
|
82
|
|
|
474
|
|
|||
Net cash used in investing activities
|
(31,803
|
)
|
|
(6,501
|
)
|
|
(9,126
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from borrowings of credit facilities
|
5,497
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of equity awards
|
505
|
|
|
770
|
|
|
1,306
|
|
|||
Taxes paid related to net share settlement of equity awards
|
(203
|
)
|
|
(1,257
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
5,799
|
|
|
(487
|
)
|
|
1,306
|
|
|||
Effect of exchange rate changes provided by foreign currency
|
(63
|
)
|
|
(41
|
)
|
|
3
|
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(41,218
|
)
|
|
(5,559
|
)
|
|
3,884
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
63,195
|
|
|
68,754
|
|
|
64,870
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
21,977
|
|
|
$
|
63,195
|
|
|
$
|
68,754
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
126
|
|
|
$
|
63
|
|
|
$
|
71
|
|
Cash paid during the period for income taxes
|
$
|
68
|
|
|
$
|
131
|
|
|
$
|
114
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Changes in accounts payable related to purchases of equipment
|
$
|
(180
|
)
|
|
$
|
755
|
|
|
$
|
(861
|
)
|
Issuance of common stock to Board of Directors
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
331
|
|
NOTE 1.
|
Description of Business
|
NOTE 2.
|
Summary of Significant Accounting Policies
|
Description
|
|
Estimated Useful Life
|
Building
|
|
twenty years
|
Equipment
|
|
three to ten years
|
Furniture and fixtures
|
|
five years
|
Computer hardware and software
|
|
five to seven years
|
Leasehold improvements
|
|
three to six years
|
|
|
For the Fiscal Years ended September 30,
|
|||||||||||||||||||
(in thousands)
|
|
2019
|
|
% of Revenue
|
|
2018
|
|
% of Revenue
|
|
2017
|
|
% of Revenue
|
|||||||||
Broadband
|
|
$
|
53,233
|
|
|
61
|
%
|
|
$
|
68,418
|
|
|
80
|
%
|
|
$
|
109,633
|
|
|
89
|
%
|
Chips
|
|
10,828
|
|
|
12
|
%
|
|
10,050
|
|
|
12
|
%
|
|
9,170
|
|
|
8
|
%
|
|||
Navigation
|
|
23,204
|
|
|
27
|
%
|
|
7,149
|
|
|
8
|
%
|
|
4,092
|
|
|
3
|
%
|
|||
Total revenue
|
|
$
|
87,265
|
|
|
100
|
%
|
|
$
|
85,617
|
|
|
100
|
%
|
|
$
|
122,895
|
|
|
100
|
%
|
NOTE 3.
|
Recent Accounting Pronouncements
|
•
|
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. Under the new standard, recognition of revenue occurs when the seller satisfies a performance obligation by transferring to the customer promised goods or services in an amount that reflects the consideration the entity expects to receive for those goods or services. Effective October 1, 2018, we adopted the requirements of Topic 606 using the modified retrospective method. The adoption of Topic 606 did not have a material impact on the Company’s consolidated financial statements and related disclosures.
|
•
|
In May 2017, the FASB issued ASU 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance is intended to reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as a modification. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The new standard was effective for our fiscal year beginning October 1, 2018. The adoption of ASU 2017-09 did not have an impact on the Company’s consolidated financial statements and related disclosures.
|
•
|
In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, and supersedes the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. This new standard was effective for our fiscal year beginning October 1, 2018. The adoption of ASU 2016-01 did not have an impact on our consolidated financial statements and related disclosures.
|
•
|
In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. The new standard is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. The new standard will be effective for our fiscal year beginning October 1, 2020 and early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures.
|
•
|
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 introduces a lessee model that requires recognition of assets and liabilities arising from qualified leases on the consolidated balance sheets and disclosure of qualitative and quantitative information about lease transactions. This guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. We are in the process of implementing changes to our systems and processes in conjunction with our review of lease agreements. Topic 842 will be effective for our fiscal year beginning October 1, 2019 and we expect to elect certain available transitional practical expedients.
|
NOTE 4.
|
Acquisition
|
(in thousands)
|
|
Amount
|
|
Weighted Average Useful Life (years)
|
||
Purchase Price
|
|
$
|
24,978
|
|
|
|
Developed technology
|
|
250
|
|
|
7
|
|
Cash acquired
|
|
541
|
|
|
|
|
Inventories
|
|
8,522
|
|
|
|
|
Accounts receivable
|
|
4,291
|
|
|
|
|
Other assets
|
|
355
|
|
|
|
|
Land and building
|
|
12,890
|
|
|
|
|
Equipment
|
|
2,913
|
|
|
|
|
Net liabilities assumed
|
|
(4,853
|
)
|
|
|
|
|
|
|
|
|
||
Goodwill
|
|
$
|
69
|
|
|
|
(in thousands, except per share data)
|
|
For the Fiscal Years ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Revenue
|
|
$
|
107,199
|
|
|
$
|
113,398
|
|
Net loss
|
|
$
|
(42,013
|
)
|
|
$
|
(18,136
|
)
|
Net loss per basic and diluted share
|
|
$
|
(1.50
|
)
|
|
$
|
(0.67
|
)
|
Weighted-average number of basic and diluted shares outstanding
|
|
27,983
|
|
|
27,266
|
|
NOTE 5.
|
Cash, Cash Equivalents and Restricted Cash
|
|
As of September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash
|
$
|
4,338
|
|
|
$
|
2,965
|
|
|
$
|
8,054
|
|
Cash equivalents
|
$
|
17,236
|
|
|
$
|
60,152
|
|
|
$
|
60,279
|
|
Restricted cash
|
403
|
|
|
78
|
|
|
421
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
21,977
|
|
|
63,195
|
|
|
68,754
|
|
NOTE 6.
|
Fair Value Accounting
|
•
|
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly, through market corroboration, for substantially the full term of the financial instrument.
|
•
|
Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets or liabilities at fair value.
|
NOTE 7.
|
Accounts Receivable
|
|
|
As of
|
||||||
(in thousands)
|
|
September 30, 2019
|
|
September 30, 2018
|
||||
Accounts receivable, gross
|
|
$
|
18,645
|
|
|
$
|
19,823
|
|
Allowance for doubtful accounts
|
|
(148
|
)
|
|
(548
|
)
|
||
Accounts receivable, net
|
|
$
|
18,497
|
|
|
$
|
19,275
|
|
Allowance for Doubtful Accounts
(in thousands)
|
|
For the Fiscal Years ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
|
$
|
548
|
|
|
$
|
22
|
|
|
$
|
36
|
|
Provision adjustment - expense, net of recoveries
|
|
62
|
|
|
599
|
|
|
23
|
|
|||
Write-offs and other adjustments - deductions to receivable balances
|
|
(462
|
)
|
|
(73
|
)
|
|
(37
|
)
|
|||
Balance at end of period
|
|
$
|
148
|
|
|
$
|
548
|
|
|
$
|
22
|
|
NOTE 8.
|
Inventory
|
|
As of
|
||||||
(in thousands)
|
September 30, 2019
|
|
September 30, 2018
|
||||
Raw materials
|
$
|
11,510
|
|
|
$
|
11,857
|
|
Work in-process
|
8,176
|
|
|
5,402
|
|
||
Finished goods
|
4,365
|
|
|
5,024
|
|
||
Inventory balance at end of period
|
$
|
24,051
|
|
|
$
|
22,283
|
|
Current portion
|
$
|
24,051
|
|
|
$
|
20,850
|
|
Non-Current portion
|
$
|
—
|
|
|
$
|
1,433
|
|
NOTE 9.
|
Property, Plant, and Equipment, net
|
|
As of
|
||||||
(in thousands)
|
September 30, 2019
|
|
September 30, 2018
|
||||
Land
|
$
|
3,484
|
|
|
$
|
—
|
|
Building and improvements
|
9,405
|
|
|
—
|
|
||
Equipment
|
42,308
|
|
|
36,625
|
|
||
Furniture and fixtures
|
1,109
|
|
|
1,109
|
|
||
Computer hardware and software
|
3,554
|
|
|
2,928
|
|
||
Leasehold improvements
|
2,676
|
|
|
2,049
|
|
||
Construction in progress
|
9,330
|
|
|
3,648
|
|
||
Property, plant, and equipment, gross
|
$
|
71,866
|
|
|
$
|
46,359
|
|
Accumulated depreciation
|
(34,643
|
)
|
|
(28,143
|
)
|
||
Property, plant, and equipment, net
|
$
|
37,223
|
|
|
$
|
18,216
|
|
NOTE 10.
|
Accrued Expenses and Other Current Liabilities
|
|
As of
|
||||||
(in thousands)
|
September 30, 2019
|
|
September 30, 2018
|
||||
Compensation
|
$
|
5,185
|
|
|
$
|
3,065
|
|
Warranty
|
654
|
|
|
642
|
|
||
Legal expenses and other professional fees
|
4,407
|
|
|
604
|
|
||
Contract liabilities
|
541
|
|
|
390
|
|
||
Income and other taxes
|
1,135
|
|
|
961
|
|
||
Severance and restructuring accruals
|
172
|
|
|
82
|
|
||
Other
|
2,427
|
|
|
1,829
|
|
||
Accrued expenses and other current liabilities
|
$
|
14,521
|
|
|
$
|
7,573
|
|
Product Warranty Accruals
|
For the fiscal year ended September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2018
|
||||||
Balance at beginning of period
|
$
|
642
|
|
|
$
|
684
|
|
|
$
|
871
|
|
Provision for product warranty - expense
|
186
|
|
|
431
|
|
|
573
|
|
|||
Warranty liability assumed in acquisition liability
|
80
|
|
|
—
|
|
|
—
|
|
|||
Utilization of warranty accrual
|
(254
|
)
|
|
(473
|
)
|
|
(760
|
)
|
|||
Balance at end of period
|
$
|
654
|
|
|
$
|
642
|
|
|
$
|
684
|
|
(in thousands)
|
Severance-related accruals
|
|
Restructuring- related accruals
|
|
Total
|
||||||
Balance as of September 30, 2018
|
$
|
7
|
|
|
$
|
75
|
|
|
$
|
82
|
|
Expense - charged to accrual
|
531
|
|
|
—
|
|
|
531
|
|
|||
Payments and accrual adjustments
|
(366
|
)
|
|
(75
|
)
|
|
(441
|
)
|
|||
Balance as of September 30, 2019
|
$
|
172
|
|
|
$
|
—
|
|
|
$
|
172
|
|
NOTE 11.
|
Credit Facilities
|
NOTE 12.
|
Income and Other Taxes
|
Income (loss) from continuing operations before income taxes
|
For the Fiscal Years ended September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
(35,100
|
)
|
|
$
|
(16,752
|
)
|
|
$
|
10,632
|
|
Foreign
|
(830
|
)
|
|
(1,150
|
)
|
|
(2,248
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
$
|
(35,930
|
)
|
|
$
|
(17,902
|
)
|
|
$
|
8,384
|
|
Income tax (benefit) expense
|
For the Fiscal Years Ended September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Federal:
|
|
|
|
|
|
||||||
Current
|
$
|
—
|
|
|
$
|
(502
|
)
|
|
$
|
135
|
|
Deferred
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
—
|
|
|
(502
|
)
|
|
135
|
|
|||
State:
|
|
|
|
|
|
||||||
Current
|
54
|
|
|
53
|
|
|
28
|
|
|||
Deferred
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
54
|
|
|
53
|
|
|
28
|
|
|||
Foreign:
|
|
|
|
|
|
||||||
Current
|
—
|
|
|
—
|
|
|
—
|
|
|||
Deferred
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total income tax (benefit) expense
|
$
|
54
|
|
|
$
|
(449
|
)
|
|
$
|
163
|
|
Provision for Income Taxes
|
For the Fiscal Years Ended September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Income tax (benefit) expense computed at U.S. federal statutory rate
|
$
|
(7,540
|
)
|
|
$
|
(4,346
|
)
|
|
$
|
2,841
|
|
State tax expense benefit, net of U.S. federal effect
|
(906
|
)
|
|
(168
|
)
|
|
414
|
|
|||
Foreign tax rate differential
|
(28
|
)
|
|
36
|
|
|
229
|
|
|||
Effect due to change in tax rate
|
(183
|
)
|
|
57,988
|
|
|
2,528
|
|
|||
Shortfall (windfall) from stock based compensation
|
248
|
|
|
681
|
|
|
(150
|
)
|
|||
Other
|
223
|
|
|
216
|
|
|
126
|
|
|||
State net operating loss carryforward adjustment
|
139
|
|
|
(305
|
)
|
|
933
|
|
|||
Change in valuation allowance
|
8,101
|
|
|
(54,551
|
)
|
|
(6,758
|
)
|
|||
Income tax expense (benefit)
|
$
|
54
|
|
|
$
|
(449
|
)
|
|
$
|
163
|
|
Effective tax rate
|
0.2
|
%
|
|
(2.5
|
)%
|
|
1.9
|
%
|
Deferred Tax Assets
|
|
As of September 30
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Federal net operating loss carryforwards
|
|
$
|
99,298
|
|
|
$
|
91,639
|
|
Foreign net operating loss carryforwards
|
|
1,271
|
|
|
1,301
|
|
||
Income tax credit carryforwards
|
|
2,671
|
|
|
2,671
|
|
||
Inventory reserves
|
|
3,535
|
|
|
2,065
|
|
||
Accounts receivable reserves
|
|
50
|
|
|
123
|
|
||
Accrued warranty reserve
|
|
153
|
|
|
144
|
|
||
State net operating loss carryforwards
|
|
6,174
|
|
|
4,624
|
|
||
Stock compensation
|
|
704
|
|
|
728
|
|
||
Deferred compensation
|
|
404
|
|
|
200
|
|
||
Fixed assets and intangibles
|
|
(2,693
|
)
|
|
(33
|
)
|
||
Other
|
|
2,255
|
|
|
838
|
|
||
Total deferred tax assets
|
|
113,822
|
|
|
104,300
|
|
||
Valuation allowance
|
|
(113,891
|
)
|
|
(104,300
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(69
|
)
|
|
$
|
—
|
|
Unrecognized Gross Tax Benefit
(in thousands)
|
|
|
||
Balance as of September 30, 2017
|
|
$
|
419
|
|
Adjustments based on tax positions related to the current year
|
|
—
|
|
|
Adjustments based on tax positions of prior years
|
|
—
|
|
|
Balance as of September 30, 2018
|
|
419
|
|
|
Adjustments based on tax positions related to the current year
|
|
—
|
|
|
Adjustments based on tax positions of prior years
|
|
—
|
|
|
Balance as of September 30, 2019
|
|
$
|
419
|
|
NOTE 13.
|
Commitments and Contingencies
|
Asset Retirement Obligations
|
September 30,
|
||
(in thousands)
|
2019
|
||
Balance at September 30, 2018
|
$
|
1,809
|
|
Accretion expense
|
55
|
|
|
Revision in estimated cash flows
|
26
|
|
|
Balance at September 30, 2019
|
$
|
1,890
|
|
NOTE 14.
|
Equity
|
•
|
the 2000 Stock Option Plan,
|
•
|
the 2010 Equity Incentive Plan (“2010 Plan”),
|
•
|
the 2012 Equity Incentive Plan (“2012 Plan”), and
|
•
|
the 2019 Equity Incentive Plan (“2019 Plan”).
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average
Remaining Contractual Life
(in years)
|
|
Aggregate Intrinsic Value (*) (in thousands)
|
||||
Outstanding as of September 30, 2018
|
69,980
|
|
|
$4.74
|
|
|
|
|
|||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
||
Exercised
|
(208
|
)
|
|
$3.97
|
|
|
|
—
|
|
||
Forfeited
|
(2,199
|
)
|
|
$4.16
|
|
|
|
|
|||
Expired
|
(15,719
|
)
|
|
$3.97
|
|
|
|
|
|||
Outstanding as of September 30, 2019
|
51,854
|
|
|
$5.00
|
|
4.79
|
|
$
|
0
|
|
|
Exercisable as of September 30, 2019
|
41,200
|
|
|
$5.07
|
|
4.43
|
|
$
|
0
|
|
|
Vested and expected to vest as of September 30, 2019
|
51,854
|
|
|
$5.00
|
|
4.79
|
|
$
|
0
|
|
Restricted Stock Activity
|
|
Restricted Stock Units
|
|
Restricted Stock Awards
|
||||||
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Non-vested as of September 30, 2018
|
|
1,011,621
|
|
|
$6.04
|
|
8,154
|
|
|
$8.20
|
Granted
|
|
752,416
|
|
|
$3.68
|
|
—
|
|
|
$0.00
|
Vested
|
|
(321,335
|
)
|
|
$5.94
|
|
—
|
|
|
$0.00
|
Forfeited
|
|
(443,455
|
)
|
|
$5.22
|
|
—
|
|
|
$0.00
|
Non-vested as of September 30, 2019
|
|
999,247
|
|
|
$4.66
|
|
8,154
|
|
|
$8.20
|
Performance Stock Activity
|
|
Performance Stock Units
|
|
Performance Stock Awards
|
||||||
|
Number of Shares (at Target)
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares (at Target)
|
|
Weighted Average Grant Date Fair Value
|
|||
Non-vested as of September 30, 2018
|
|
397,777
|
|
|
$8.48
|
|
33,333
|
|
|
$12.25
|
Granted
|
|
280,000
|
|
|
$5.19
|
|
—
|
|
|
$0.00
|
Vested
|
|
(30,874
|
)
|
|
$7.14
|
|
—
|
|
|
$0.00
|
Forfeited
|
|
(175,079
|
)
|
|
$7.36
|
|
—
|
|
|
$0.00
|
Non-vested as of September 30, 2019
|
|
471,824
|
|
|
$7.03
|
|
33,333
|
|
|
$12.25
|
Stock-based Compensation Expense - by award type
|
For the Fiscal Years ended September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Employee stock options
|
$
|
25
|
|
|
$
|
32
|
|
|
$
|
45
|
|
Restricted stock units and awards
|
1,495
|
|
|
1,742
|
|
|
1,643
|
|
|||
Performance stock units and awards
|
685
|
|
|
1,343
|
|
|
1,367
|
|
|||
Employee stock purchase plan
|
180
|
|
|
276
|
|
|
300
|
|
|||
Outside director equity awards and fees in common stock
|
221
|
|
|
255
|
|
|
247
|
|
|||
Total stock-based compensation expense
|
$
|
2,606
|
|
|
$
|
3,648
|
|
|
$
|
3,602
|
|
Stock-based Compensation Expense - by expense type
|
For the Fiscal Years ended September 30,
|
||||||||||
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenue
|
$
|
482
|
|
|
$
|
450
|
|
|
$
|
492
|
|
Selling, general, and administrative
|
1,478
|
|
|
2,584
|
|
|
2,605
|
|
|||
Research and development
|
646
|
|
|
614
|
|
|
505
|
|
|||
Total stock-based compensation expense
|
$
|
2,606
|
|
|
$
|
3,648
|
|
|
$
|
3,602
|
|
Basic and Diluted Net Loss Per Share
|
|
For the Fiscal Years ended September 30,
|
||||||||||
(in thousands, except per share)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
(Loss) income from continuing operations
|
|
$
|
(35,984
|
)
|
|
$
|
(17,453
|
)
|
|
$
|
8,221
|
|
Undistributed (loss) earnings allocated to common shareholders for basic and diluted net (loss) income per share
|
|
(35,984
|
)
|
|
(17,453
|
)
|
|
8,235
|
|
|||
Denominator:
|
|
|
|
|
|
|
||||||
Denominator for basic and fully diluted net (loss) income per share - weighted average shares outstanding
|
|
27,983
|
|
|
27,266
|
|
|
26,659
|
|
|||
Dilutive options outstanding, unvested stock units, unvested stock awards and ESPP
|
|
—
|
|
|
—
|
|
|
885
|
|
|||
Denominator for diluted net (loss) income per share - adjusted weighted average shares outstanding
|
|
27,983
|
|
|
27,266
|
|
|
27,544
|
|
|||
|
|
|
|
|
|
|
||||||
Net (loss) income per basic and fully diluted share
|
|
$
|
(1.29
|
)
|
|
$
|
(0.64
|
)
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
||||||
Weighted average antidilutive options, unvested restricted stock units and awards, unvested performance stock units and ESPP shares excluded from the computation
|
|
810
|
|
|
949
|
|
|
398
|
|
|||
|
|
|
|
|
|
|
||||||
Average market price of common stock
|
|
$
|
3.91
|
|
|
$
|
5.87
|
|
|
$
|
8.92
|
|
Future Issuances
|
Number of Common Stock Shares Available for Future Issuances
|
|
Exercise of outstanding stock options
|
51,854
|
|
Unvested restricted stock units and awards
|
1,007,401
|
|
Unvested performance stock units and awards (at 200% maximum payout)
|
1,010,314
|
|
Purchases under the employee stock purchase plan
|
543,731
|
|
Issuance of stock-based awards under the Equity Plans
|
2,753,829
|
|
Purchases under the officer and director share purchase plan
|
88,741
|
|
Total reserved
|
5,455,870
|
|
NOTE 15.
|
Geographical Information
|
Revenue by Geographic Region
|
|
For the Fiscal Years ended September 30,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States and Canada
|
|
$
|
68,607
|
|
|
$
|
69,543
|
|
|
$
|
98,520
|
|
Asia
|
|
11,637
|
|
|
10,386
|
|
|
16,713
|
|
|||
Europe
|
|
6,209
|
|
|
5,422
|
|
|
7,015
|
|
|||
Other
|
|
812
|
|
|
266
|
|
|
647
|
|
|||
Total revenue
|
|
$
|
87,265
|
|
|
$
|
85,617
|
|
|
$
|
122,895
|
|
NOTE 17.
|
Selected Quarterly Financial Information (unaudited)
|
|
For the Three Months ended
|
||||||||||||||
|
December 31,
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
||||||||
|
2018
|
|
2019
|
|
2019
|
|
2019
|
||||||||
Revenue
|
$
|
24,001
|
|
|
$
|
21,745
|
|
|
$
|
17,219
|
|
|
$
|
24,300
|
|
Cost of revenue
|
18,193
|
|
|
15,936
|
|
|
13,515
|
|
|
24,532
|
|
||||
Gross profit
|
5,808
|
|
|
5,809
|
|
|
3,704
|
|
|
(232
|
)
|
||||
Operating expense (income):
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative
|
7,593
|
|
|
6,996
|
|
|
9,288
|
|
|
8,217
|
|
||||
Research and development
|
4,019
|
|
|
4,360
|
|
|
4,629
|
|
|
6,435
|
|
||||
Gain from change in estimate on ARO obligation
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
26
|
|
||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(302
|
)
|
||||
Total operating expense
|
11,612
|
|
|
11,316
|
|
|
13,917
|
|
|
14,376
|
|
||||
Operating loss
|
(5,804
|
)
|
|
(5,507
|
)
|
|
(10,213
|
)
|
|
(14,608
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income, net
|
267
|
|
|
224
|
|
|
99
|
|
|
39
|
|
||||
Foreign exchange gain (loss)
|
14
|
|
|
304
|
|
|
(349
|
)
|
|
(396
|
)
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total other income (expense)
|
281
|
|
|
528
|
|
|
(250
|
)
|
|
(357
|
)
|
||||
Loss from operations before income tax expense
|
(5,523
|
)
|
|
(4,979
|
)
|
|
(10,463
|
)
|
|
(14,965
|
)
|
||||
Income tax expense
|
(15
|
)
|
|
(15
|
)
|
|
(14
|
)
|
|
(10
|
)
|
||||
Net loss
|
$
|
(5,538
|
)
|
|
$
|
(4,994
|
)
|
|
$
|
(10,477
|
)
|
|
$
|
(14,975
|
)
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Net loss per basic and diluted share
|
$
|
(0.20
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.37
|
)
|
|
$
|
(0.52
|
)
|
Weighted-average number of basic and diluted shares outstanding
|
27,534
|
|
|
27,652
|
|
|
28,005
|
|
|
28,734
|
|
|
For the Three Months ended
|
||||||||||||||
|
December 31,
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
||||||||
|
2017
|
|
2018
|
|
2018
|
|
2018
|
||||||||
Revenue
|
$
|
24,036
|
|
|
$
|
18,623
|
|
|
$
|
17,717
|
|
|
$
|
25,241
|
|
Cost of revenue
|
16,122
|
|
|
13,676
|
|
|
16,519
|
|
|
20,813
|
|
||||
Gross profit
|
7,914
|
|
|
4,947
|
|
|
1,198
|
|
|
4,428
|
|
||||
Operating expense (income):
|
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative
|
4,819
|
|
|
5,644
|
|
|
5,237
|
|
|
5,532
|
|
||||
Research and development
|
3,800
|
|
|
3,300
|
|
|
3,915
|
|
|
4,372
|
|
||||
Loss from change in estimate on ARO obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
145
|
|
||||
Loss (gain) on sale of assets
|
107
|
|
|
(68
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Total operating expense
|
8,726
|
|
|
8,876
|
|
|
9,152
|
|
|
10,044
|
|
||||
Operating loss
|
(812
|
)
|
|
(3,929
|
)
|
|
(7,954
|
)
|
|
(5,616
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income, net
|
111
|
|
|
163
|
|
|
216
|
|
|
243
|
|
||||
Foreign exchange gain (loss)
|
286
|
|
|
526
|
|
|
(676
|
)
|
|
(570
|
)
|
||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
||||
Total other income (expense)
|
397
|
|
|
689
|
|
|
(460
|
)
|
|
(217
|
)
|
||||
Loss from operations before income tax benefit (expense)
|
(415
|
)
|
|
(3,240
|
)
|
|
(8,414
|
)
|
|
(5,833
|
)
|
||||
Income tax benefit (expense)
|
333
|
|
|
169
|
|
|
—
|
|
|
(53
|
)
|
||||
Net loss
|
$
|
(82
|
)
|
|
$
|
(3,071
|
)
|
|
$
|
(8,414
|
)
|
|
$
|
(5,886
|
)
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Net loss per basic and diluted share
|
$
|
(0.00
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.21
|
)
|
Weighted-average number of basic and diluted shares outstanding
|
27,032
|
|
|
27,197
|
|
|
27,387
|
|
|
27,424
|
|
(a)(1)
|
Financial Statements
|
•
|
Consolidated Statements of Operations and Comprehensive (Loss) Income for the fiscal years ended September 30, 2019, 2018, and 2017
|
•
|
Consolidated Balance Sheets as of September 30, 2019 and 2018
|
•
|
Consolidated Statements of Shareholders' Equity for the fiscal years ended September 30, 2019, 2018, and 2017
|
•
|
Consolidated Statements of Cash Flows for the fiscal years ended September 30, 2019, 2018, and 2017
|
•
|
Notes to Consolidated Financial Statements
|
•
|
Report of Independent Registered Public Accounting Firm
|
(a)(2)
|
Financial Statement Schedules
|
2.1
|
|
2.2
|
|
3.1
|
|
3.2
|
|
3.3
|
|
3.4
|
|
3.5
|
|
3.6
|
|
4.1
|
|
4.2**
|
|
10.1
|
|
10.2†
|
|
10.3†
|
|
10.4†
|
|
10.5†
|
|
10.6†
|
|
10.7†
|
|
10.8†
|
|
10.9†
|
|
10.10†
|
|
10.11†
|
|
10.12†
|
|
10.13†
|
|
10.14†
|
|
10.15†
|
|
10.16†
|
|
10.17†
|
|
10.18†
|
|
10.19†
|
|
10.20
|
|
10.21†
|
|
10.22
|
|
21.1**
|
|
23.1**
|
|
24.1
|
Power of Attorney (see the signature page of this Annual Report on Form 10-K).
|
31.1**
|
|
31.2**
|
|
32.1***
|
|
32.2***
|
101.INS**
|
XBRL Instance Document.
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
EMCORE CORPORATION
|
|
|
|
|
|
Date:
|
December 10, 2019
|
By:
|
/s/ Jeffrey Rittichier
|
|
|
|
Jeffrey Rittichier
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Date:
|
December 10, 2019
|
By:
|
/s/ Tom Minichiello
|
|
|
|
Tom Minichiello
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
Signature
|
Title
|
|
|
|
|
/s/ Jeffrey Rittichier
|
Chief Executive Officer and Director
|
|
Jeffrey Rittichier
|
(Principal Executive Officer)
|
|
|
|
|
/s/ Tom Minichiello
|
Chief Financial Officer
|
|
Tom Minichiello
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
/s/ Stephen L. Domenik
|
Director
|
|
Stephen L. Domenik
|
|
|
|
|
|
/s/ Gerald J. Fine, Ph.D.
|
Chairman of the Board
|
|
Gerald J. Fine, Ph.D.
|
|
|
|
|
|
/s/ Bruce Grooms
|
Director
|
|
Bruce Grooms
|
|
|
|
|
|
/s/ Noel Heiks
|
Director
|
|
Noel Heiks
|
|
|
|
|
|
/s/ Rex S. Jackson
|
Director
|
|
Rex S. Jackson
|
|
|
|
|
●
|
50,000,000 shares of common stock, no par value (“Common Stock”); and
|
●
|
5,882,352 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”).
|
•
|
provided for the classification of our Board into three classes, with staggered three-year terms and, until recent respective amendments to our Certificate of Incorporation and Bylaws to declassify our Board that became effective in March 2018 are fully phased in beginning with our 2021 annual meeting of shareholders, the current three-year term of certain of our directors will remain in effect until their current term expires;
|
•
|
authorize the issuance by our Board of Preferred Stock, without any requirement of vote or class vote of shareholders, commonly referred to as “blank check” preferred stock, which shares of Preferred Stock may have rights senior to those of our Common Stock;
|
•
|
do not provide for cumulative voting by shareholders in the election of directors. Under cumulative voting, a minority stockholder holding a sufficient percentage of a class of shares may be able to ensure the election of one or more directors;
|
•
|
provide that directors may be removed at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of our outstanding shares of capital stock entitled to vote generally in the election of directors cast at a meeting of the shareholders called for that purpose;
|
•
|
provide that a supermajority vote of our shareholders is required to amend some portions of our Certificate of Incorporation and Bylaws, including requiring approval by the holders of 80% or more of the outstanding shares of our capital stock entitled to vote generally in the election of directors for certain business combinations unless these transactions meet certain fair price criteria and procedural requirements or are approved by two-thirds of our continuing directors;
|
•
|
limit the persons who can call special shareholder meetings; shareholders do not have authority to call a special meeting of shareholders;
|
•
|
establish advance notice requirements that must be complied with by shareholders to nominate persons for election to our Board or to propose matters that can be acted on by shareholders at shareholder meetings;
|
•
|
provide for the filling of vacancies on our Board by action of 66 2/3% of the directors and not by the shareholders; and
|
•
|
provide that the authorized number of directors may be changed only by resolution of the Board.
|
●
|
the merger or consolidation of the corporation with the interested stockholder or any corporation that is or after the merger or consolidation would be an affiliate or associate of the interested stockholder,
|
●
|
the sale, lease, exchange, mortgage, pledge, transfer or other disposition to an interested stockholder or any affiliate or associate of the interested stockholder of 10% or more of the corporation’s assets, or
|
●
|
the issuance or transfer to an interested stockholder or any affiliate or associate of the interested stockholder of 5% or more of the aggregate market value of the stock of the corporation.
|
1.
|
I have reviewed this Annual Report on Form 10-K of EMCORE Corporation ("Report");
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
d.
|
Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
December 10, 2019
|
By: /s/ Jeffrey Rittichier
|
|
|
Jeffrey Rittichier
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of EMCORE Corporation ("Report");
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
d.
|
Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
December 10, 2019
|
By: /s/ Tom Minichiello
|
|
|
Tom Minichiello
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
December 10, 2019
|
By: /s/ Jeffrey Rittichier
|
|
|
Jeffrey Rittichier
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
December 10, 2019
|
By: /s/ Tom Minichiello
|
|
|
Tom Minichiello
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|