EMCORE Corporation Announces Unaudited Results for Its First Quarter Ended December 31, 2009

ALBUQUERQUE, NM--(Marketwire - February 9, 2010) - EMCORE Corporation (NASDAQ: EMKR), aleading provider of compound semiconductor-based components, subsystems,and systems for the fiber optics and solar power markets, today announcedunaudited financial results for its first quarter ended December 31, 2009.

Revenue:

Revenue for the first quarter of fiscal 2010 ended December 31, 2009 was$42.4 million, an increase of $1.9 million, or 5%, from $40.5 millionreported in the immediately preceding quarter ended September 30, 2009.

On a segment basis, revenue for the Photovoltaics segment was $16.8million, an increase of $0.4 million, or 3%, from $16.4 million reported inthe immediately preceding quarter with the increase due to a 14% increasein revenue from satellite solar power products offset by a decrease inrevenue from terrestrial concentrated photovoltaic (CPV) products. ThePhotovoltaics segment accounted for 40% of the Company's consolidatedquarterly revenue for both the three months ended December 31, 2009 andSeptember 30, 2009.

Revenue for the Fiber Optics segment was $25.6 million, an increase of $1.5million, or 6%, from $24.1 million reported in the immediately precedingquarter with the increase concentrated primarily in the Company's cabletelevision (CATV) product lines. The Fiber Optics segment accounted for60% of the Company's consolidated quarterly revenue for both the threemonths ended December 31, 2009 and September 30, 2009.

Gross Profit:

On a GAAP basis, the consolidated gross profit was $8.0 million, animprovement of $3.9 million, or 97%, from a $4.1 million gross profitreported in the immediately preceding quarter and an improvement of $6.4million when compared to the prior year period. This represents theCompany's best gross profit performance since the quarter ended June 30,2008.

On a segment basis, the first quarter Photovoltaics GAAP gross margin was22.1%, a decrease from the 28.5% GAAP gross margin reported in thepreceding quarter, but an increase from the 13.6% GAAP gross marginreported in the prior year period. After excluding certain adjustments, asset forth in the attached non-GAAP tables, the Photovoltaics first quarternon-GAAP gross margin of 22.1% improved when compared to the 10.6% non-GAAPgross margin in the preceding quarter. As indicated in the attachednon-GAAP tables, the Company reversed $2.9 million of inventory reserves inthe preceding quarter relating to legacy CPV products that were sold duringthat period.

The Fiber Optics GAAP gross margin was 16.7%, a significant improvementfrom a negative 2.5% GAAP gross margin reported in the preceding quarterand a negative 1.1% GAAP gross margin reported in the prior year period.The improvement in the Fiber Optics gross margin was due to improved grossmargins across the majority of the Company's product lines as well as lowerinventory excess and obsolescence charges when compared to the precedingand prior year quarters.

Operating Loss:

On a GAAP basis, the consolidated operating loss was $11.9 million, animprovement of $2.0 million from an operating loss of $13.9 millionreported in the preceding quarter. This represents the Company's bestoperating performance since the quarter ended June 30, 2008. During thequarter, the Company incurred approximately $4.2 million in legal expensesrelated to patent litigation and other corporate legal charges arisingprincipally from two trials held in the first quarter and $1.3 million innon-cash stock-based compensation expense from the surrender of stockoptions. After excluding these expenses and certain other non-cash andother adjustments as set forth in the attached non-GAAP tables, the firstquarter consolidated non-GAAP operating loss was $7.0 million, animprovement of $2.0 million, or 23%, from the non-GAAP operating loss of$9.0 million reported in the preceding quarter.

Net Loss:

On a GAAP basis, the consolidated net loss was $13.6 million, slightlyabove the net loss of $13.5 million reported in the preceding quarter. OnOctober 1, 2009, the Company entered into a $25 million equity line ofcredit arrangement that met all the criteria of a financial derivativeinstrument. Non-cash costs incurred to enter into this derivativeinstrument of $1.4 million were expensed as incurred. After excluding thisexpense and certain other non-cash and other adjustments as set forth inthe attached non-GAAP tables, the first quarter consolidated non-GAAP netloss was $7.1 million, a $2.0 million improvement from the $9.1 millionnon-GAAP net loss reported in the preceding quarter.

On a GAAP basis, the first quarter net loss per share was $0.17,representing no change from the $0.17 net loss per share reported in thepreceding quarter. On a non-GAAP basis, the net loss per share was $0.09,an improvement of $0.02 per share from the $0.11 non-GAAP loss per sharereported in the preceding quarter.

Order Backlog:

As of December 31, 2009, the Company had a consolidated order backlog ofapproximately $61.2 million, a $1.4 million, or 2%, decrease from the $62.6million order backlog reported as of the end of the preceding quarter. Ona segment basis, the quarter-end Photovoltaics order backlog totaled $42.3million, a $5.4 million, or 11%, decrease from $47.7 million reported as ofthe end of the preceding quarter with the decrease due entirely to therescheduling of a portion of a major customer's shipments beyond theCompany's twelve month backlog reporting horizon. The quarter-end FiberOptics order backlog totaled $18.9 million, a $4.0 million, or 26%,increase from $14.9 million reported as of the end of the preceding quarterwith the increase being broad-based across customers and products. Theorder backlog is defined as purchase orders or supply agreements acceptedby the Company with expected product delivery and / or services to beperformed within the next twelve months.

Liquidity Update:

As of December 31, 2009, cash, cash equivalents, current restricted cash,and available-for-sale securities totaled approximately $16.5 million whichrepresents a $0.4 million, or 2%, decrease from $16.9 million as of the endof the preceding quarter. As of December 31, 2009, net working capitaltotaled $32.0 million.

During the three months ended December 31, 2009, the Company consumed $1.2million in cash from operations and, over the last three quarters, consumedonly $189,000 in cash from operations due primarily to improved workingcapital management. The first quarter represents the fourth consecutivequarter that the Company has generated cash from the reduction ofinventory. During the last twelve months, the Company monetizedapproximately $25.5 million of inventory, generated $16.9 million in cashfrom lowering its accounts receivable balances and achieved positive cashflow from operations during the quarters ended June 30, 2009 and September30, 2009.

The Company maintains a $14 million credit facility with Bank of Americaand, on October 1, 2009, closed a two-year $25 million committed equityline of credit facility with the Commerce Court Small Cap Value Fund, Ltd.In addition, the Company continues to evaluate its capital requirements andalternative sources of capital. With respect to the separation of itsFiber Optics and Photovoltaics businesses, the Company announced onFebruary 3, 2010 that it has entered into an agreement to sell 60% of itsFiber Optics business to and enter into a joint venture with the TangshanCaofeidian Investment Corporation.

Business Outlook:

For the second quarter of fiscal 2010 ending March 31, 2010, the Companyexpects consolidated revenue to be in the range of $45 to $47 million withincreases in both the Photovoltaics and Fiber Optics segments.

Conference Call:

EMCORE will discuss its unaudited results for its first quarter endedDecember 31, 2009 on a conference call to be held on Wednesday, February10, 2010 at 4:30 pm ET. To participate in the conference call, U.S.callers should dial (toll free) 888-587-0613 and international callersshould dial 719-325-2352. The access code for the call is 7863504. Areplay of the call will be available beginning February 10, 2010 at 8:00p.m. EST until February 17, 2010 at 11:59 p.m. EST. The replay call-innumber for U.S. callers is 888-203-1112, for international callers it is719-457-0820, and the access code is 7863504. The call also will be webcast via the Company's web site athttp://www.emcore.com. Please go to thesite beforehand to download any necessary software.

About EMCORE:

EMCORE Corporation offers a broad portfolio of compound semiconductor-basedproducts for the broadband, fiber optics, satellite and solar powermarkets. EMCORE's Fiber Optics segment offers optical components,subsystems and systems for high speed data and telecommunications networks,cable television (CATV) and fiber-to-the-premises (FTTP). EMCORE'sPhotovoltaics segment provides products for both satellite and terrestrialapplications. For satellite applications, EMCORE offers high efficiencygallium arsenide (GaAs) solar cells, covered interconnected cells (CICs)and panels. For terrestrial applications, EMCORE is adapting itshigh-efficiency GaAs solar cells for use in solar concentrator systems. Forfurther information about EMCORE, visithttp://www.emcore.com.

Forward-Looking Statements:

The information provided herein may include forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933, andSection 21E of the Exchange Act of 1934. These forward-looking statementsare largely based on our current expectations and projections about futureevents and financial trends affecting the financial condition of ourbusiness. Such forward-looking statements include, in particular,projections about our future results included in our Exchange Act reports,statements about our plans, strategies, business prospects, changes andtrends in our business and the markets in which we operate. Theseforward-looking statements may be identified by the use of terms andphrases such as "anticipates", "believes", "can", "could", "estimates","expects", "forecasts", "intends", "may", "plans", "projects", "targets","will", and similar expressions or variations of these terms and similarphrases. Additionally, statements concerning future matters such as thedevelopment of new products, enhancements or technologies, sales levels,expense levels and other statements regarding matters that are nothistorical are forward-looking statements. Management cautions that these forward-lookingstatements relate to future events or our future financial performance andare subject to business, economic, and other risks and uncertainties, bothknown and unknown, that may cause actual results, levels of activity,performance or achievements of our business or our industry to bematerially different from those expressed or implied by any forward-lookingstatements.

These forward-looking statements involve risks and uncertainties that couldcause actual results to differ materially from those projected, includingwithout limitation, the following: (a) the impact on the Company, ourcustomers and our suppliers from the current domestic and internationaleconomic and financial market conditions; (b) the success of our costreduction efforts in achieving their expected benefits, due to, among otherthings, shifts in product mix, selling price pressures, costs and delaysrelated to product transfers to lower cost manufacturing locations andassociated facility closures, integration difficulties, and executionconcerns; (c) delays and other difficulties in commercializing newproducts; (d) the failure of new products (i) to perform as expectedwithout material defects, (ii) to be manufactured at acceptable volumes,yields, and cost, (iii) to be qualified and accepted by our customers, and,(iv) to successfully compete with products offered by our competitors; (e)we may not be successful in undertaking the steps currently planned inorder to increase our liquidity; and (f) other risks and uncertaintiesdescribed in our filings with the Securities and Exchange Commission suchas cancellations, rescheduling or delays in product shipments;manufacturing capacity constraints; lengthy sales and qualification cycles;difficulties in the production process; changes in semiconductor industrygrowth; increased competition; delays in developing and commercializing newproducts; and other factors.

Neither management nor any other person assumes responsibility for theaccuracy and completeness of the forward-looking statements. Allforward-looking statements in this press release are made as of the datehereof, based on information available to us as of the date hereof, andsubsequent facts or circumstances may contradict, obviate, undermine, orotherwise fail to support or substantiate such statements. We caution younot to rely on these statements without also considering the risks anduncertainties associated with these statements and our business that areaddressed in our Annual Report on Form 10-K. Certain information includedin this press release may supersede or supplement forward-lookingstatements in our other Exchange Act reports filed with the Securities andExchange Commission. We assume no obligation to update any forward-lookingstatement to conform such statements to actual results or to changes in ourexpectations, except as required by applicable law or regulation.

EMCORE CORPORATION          Condensed Consolidated Statements of Operations        For the three months ended December 31, 2009 and 2008               (in thousands, except loss per share)                           (unaudited)                                                   For the Three Months                                                     Ended December 31,                                                 -------------------------                                                     2009          2008                                                 -----------   -----------Revenue                                          $    42,401   $    54,056Cost of revenue                                       34,397        52,467                                                 -----------   -----------  Gross profit                                         8,004         1,589Operating expenses:  Selling, general, and administrative                12,423        12,159  Research and development                             7,513         8,110  Impairments                                              -        33,781                                                 -----------   -----------    Total operating expenses                          19,936        54,050                                                 -----------   -----------      Operating loss                                 (11,932)      (52,461)Other (income) expense:  Interest income                                         (2)          (50)  Interest expense                                       116           195  Foreign exchange loss                                  232           472  Loss from financing derivative instrument            1,360             -  Impairment of investment                                 -           367                                                 -----------   -----------    Total other expense                                1,706           984                                                 -----------   -----------      Net loss                                   $   (13,638)  $   (53,445)                                                 ===========   ===========Per share data:Net loss per basic and diluted share             $     (0.17)  $     (0.69)                                                 ===========   ===========Weighted-average number of basic and diluted shares outstanding                                   81,113        77,816                                                 ===========   ===========                       EMCORE CORPORATION            Condensed Consolidated Balance Sheets         As of December 31, 2009 and September 30, 2009                       (in thousands)                        (unaudited)                                                    As of         As of                                                 December 31, September 30,                                                    2009          2009                                                 -----------   -----------                   ASSETSCurrent assets:  Cash and cash equivalents                      $    15,138   $    14,028  Restricted cash                                          4         1,521  Available-for-sale securities                        1,350         1,350  Accounts receivable, net of allowance of $6,640   and $7,125, respectively                           40,726        39,417  Inventory, net                                      31,454        34,221  Prepaid expenses and other current assets            4,550         4,712                                                 -----------   -----------    Total current assets                              93,222        95,249Property, plant and equipment, net                    52,719        55,028Goodwill                                              20,384        20,384Other intangible assets, net                          12,424        12,982Long-term restricted cash                                163           163Other non-current assets, net                            720           753                                                 -----------   -----------      Total assets                               $   179,632   $   184,559                                                 ===========   ===========         LIABILITIES and SHAREHOLDERS' EQUITYCurrent liabilities:  Borrowings from credit facility                $    10,678   $    10,332  Short-term debt                                        843           842  Accounts payable                                    28,632        24,931  Accrued expenses and other current liabilities      21,042        21,687                                                 -----------   -----------    Total current liabilities                         61,195        57,792Warrant liability                                      1,132             -Other long-term liabilities                              103           104                                                 -----------   -----------      Total liabilities                               62,430        57,896Commitments and contingenciesShareholders' equity:  Preferred stock, $0.0001 par, 5,882 shares   authorized; no shares outstanding                       -             -  Common stock, no par value, 200,000 shares   authorized; 81,900 shares issued and 81,741   shares outstanding as of December 31,   2009; 80,982 shares issued and 80,823 shares   outstanding as of September 30, 2009              692,942       688,844  Accumulated deficit                               (574,471)     (560,833)  Accumulated other comprehensive income                 814           735  Treasury stock, at cost; 159 shares as of   December 31, 2009 and September 30, 2009           (2,083)       (2,083)                                                 -----------   ----------- Total shareholders' equity                          117,202       126,663                                                 -----------   ----------- Total liabilities and shareholders' equity      $   179,632   $   184,559                                                 ===========   ===========

Use of Non-GAAP Measures:

The Company provides non-GAAP gross profit and gross margin, non-GAAPoperating loss, and non-GAAP net loss and net loss per share assupplemental measures to GAAP regarding our operational performance. Thesefinancial measures exclude the impact of certain items and, therefore, havenot been calculated in accordance with GAAP. This press release alsocontains a reconciliation of each of these non-GAAP financial measures toits most comparable GAAP financial measure.

The Company believes that the additional non-GAAP measures are useful toinvestors in assessing the Company's financial condition and performance.In particular, management believes it is appropriate in evaluating theCompany's operations to exclude gains or losses from specific accountsreceivable and inventory write-downs, loss from firm purchase commitments,patent litigation and other corporate legal-related charges; impairmentcharges; foreign exchange gains and losses, losses from financialderivative instruments, and warranty, severance and restructuring-relatedexpenses because these items would make results less comparable betweenperiods. Management also uses these measures internally to evaluate theCompany's operating performance, and the measures are used for planning andforecasting of future periods. In addition, financial analysts that followour Company may focus on and publish both historical results and futureprojections based on non-GAAP financial measures. We also believe that itis in the best interest of our investors to provide non-GAAP information.

While management believes that these non-GAAP financial measures provideuseful supplemental information to investors, there are limitationsassociated with the use of these non-GAAP financial measures. Our non-GAAPfinancial measures may not be reported by all of the Company's competitorsand they may not be directly comparable to similarly titled measures ofother companies due to potential differences in calculation. The Companycompensates for these limitations by using these non-GAAP financialmeasures as supplements to GAAP financial measures and by providingreconciliations of the non-GAAP financial measures to their most comparableGAAP financial measures.

Non-GAAP financial measures are not in accordance with, or an alternativefor, generally accepted accounting principles in the United States. TheCompany's non-GAAP financial measures are not meant to be considered inisolation or as a substitute for comparable GAAP financial measures, andshould be read only in conjunction with the Company's consolidatedfinancial statements prepared in accordance with GAAP.

The Company has provided a reconciliation of the non-GAAP financialmeasures to the most directly comparable GAAP financial measures asindicated in the tables below:

Non-GAAP TableGross profit and marginUnaudited               For the Three Months       For the Three Months(in thousands,         Ended December 31, 2009   Ended September 30, 2009except percentages)   -------------------------  -------------------------                       Fiber   Photo-             Fiber    Photo-                       Optics voltaics   Total    Optics  voltaics  Total                      -------  -------  -------  -------  -------  -------Gross profit (loss) - GAAP                 $ 4,288  $ 3,716  $ 8,004  $  (598) $ 4,668  $ 4,070Specific adjustments:  Inventory valuation       -        -        -    1,985   (2,937)    (952)  Product warranty          -        -        -     (245)       -     (245)  Loss on commitments       -        -        -    1,991        -    1,991                      -------  -------  -------  -------  -------  -------Gross profit - Non-GAAP             $ 4,288  $ 3,716  $ 8,004  $ 3,133  $ 1,731  $ 4,864                      =======  =======  =======  =======  =======  =======Gross margin - GAAP      16.7%    22.1%    18.9%    (2.5%)   28.5%    10.0%                      =======  =======  =======  =======  =======  =======Gross margin - Non-GAAP                16.7%    22.1%    18.9%    13.0%    10.6%    12.0%                      =======  =======  =======  =======  =======  =======Non-GAAP Table                                  For the Three For the ThreeOperating Loss                                   Months Ended  Months EndedUnaudited                                        December 31, September 30,(in thousands)                                      2009          2009                                                 ------------  ------------Operating loss - GAAP                            $   (11,932)  $   (13,915)Specific adjustments:  Surrender of stock options                           1,252             -  Provision for doubtful accounts                       (450)          225  Corporate legal expense                              4,163         2,779  Severance and restructuring-related expense              8         1,082  Inventory valuation                                      -          (952)  Product warranty                                         -          (245)  Loss on commitments                                      -         1,991                                                 -----------   -----------     Operating loss - Non-GAAP                   $    (6,959)  $    (9,035)                                                 ===========   ===========Non-GAAP Table                                  For the Three For the ThreeNet Loss                                         Months Ended  Months EndedUnaudited                                        December 31, September 30,(in thousands)                                      2009          2009                                                 ------------  ------------Net loss - GAAP                                  $   (13,638)  $   (13,532)Specific adjustments:  Surrender of stock options                           1,252             -  Provision for doubtful accounts                       (450)          225  Corporate legal expense                              4,163         2,779  Severance and restructuring-related expense              8         1,082  Inventory valuation                                      -          (952)  Product warranty                                         -          (245)  Loss on commitments                                      -         1,991  Foreign exchange loss (gain)                           232          (481)  Loss from financing derivative instrument            1,360             -                                                 -----------   -----------  Net loss - Non-GAAP                            $    (7,073)       (9,133)                                                 ===========   ===========  Net loss per basic and diluted share - GAAP    $     (0.17)  $     (0.17)                                                 ===========   ===========  Net loss per basic and diluted share -   Non-GAAP                                      $     (0.09)  $     (0.11)                                                 ===========   ===========

Contact:

EMCORE Corporation
Silvia M. Gentile
Executive Offices
(505) 323-3417
info@emcore.com

TTC Group
Victor Allgeier
(646) 290-6400
vic@ttcominc.com