EMCORE Reports Fiscal 2022 Third Quarter Results and Announces the Acquisition of the KVH FOG and Inertial Navigation Systems Business

EMCORE Corporation, a leading provider of advanced mixed-signal products that serve the aerospace and defense, communications, and sensing markets, announced results for the fiscal 2022 third quarter ended June 30, 2022 (3Q22) and that it acquired the Fiber Optic Gyroscope (FOG) and Inertial Navigation Systems business segment of KVH Industries, Inc. for approximately $55.0 million, subject to working capital adjustments, in an all-cash transaction.

Through the KVH transaction, EMCORE acquired all the intellectual property and outstanding assets and liabilities of KVH’s FOG and Inertial Navigation Systems business segment, including the 100,384-square-foot production facility located in Tinley Park, Illinois. Cowen served as financial advisor to EMCORE and Pillsbury Winthrop Shaw Pittman LLP served as legal advisor to EMCORE in connection with the KVH transaction. Highlights of the deal include:

  • Adds a new business generating over $30.0 million in revenue on an annual basis
  • EBITDA-positive addition with synergies anticipated for the next two years
  • Value creation opportunities for both businesses at every level of the P&L
  • Established customer base in the Army and a variety of terrestrial applications
  • Opens new opportunities in the growing industrial autonomy market

EMCORE’s consolidated revenue for 3Q22 was $23.7 million, comprised of $13.4 million from the Aerospace and Defense (A&D) segment and $10.3 million from the Broadband segment. Net loss was $7.6 million and $6.3 million on a GAAP and non-GAAP basis, respectively. Adjusted EBITDA was negative $5.1 million. Please refer to the schedules at the end of this press release for GAAP to non-GAAP reconciliations and other information related to non-GAAP financial measures.

“During 3Q22, our Space and Navigation operations performed very well, driving sequential A&D revenue up in 3Q22. However, our QMEMS product line was affected by multiple supply chain delays and shortages, as well as a COVID outbreak at our Concord facility,” said Jeff Rittichier, President and Chief Executive Officer of EMCORE. “Demand in our A&D business segment is strong and we expect our QMEMS operational issues to improve with a rebound in the September quarter. Unfortunately, since our last call, the Cable TV business has become more turbulent, with a major customer deciding to exit CATV entirely. On a positive note, we began low volume shipments of data center chips as projected, signaling a new growth phase in Broadband.”

“We are also very excited to add not only a strong and growing business with KVH’s inertial navigation team, but also best-in-class manufacturing capabilities, low-cost technology development, and an exemplary sales team. When we combine these with EMCORE’s closed loop and transceiver technologies, we see substantial opportunities for both businesses across revenue, gross margins, and net income. The addition of the KVH inertial navigation product line further expands our reach into the tactical grade segment of the market and solidifies EMCORE’s position as one of the largest independent inertial navigation providers in the industry,” added Mr. Rittichier.