EMCORE Corporation

Thank you for standing by, and welcome to MCOR Corporation's fiscal 2023 fourth quarter results conference call. At this time, all participants are on listen-only mode. After the speaker's presentations, there will be a question and answer session. To ask a question at that time, please press star 11 on your telephone. As a reminder, today's call is being recorded. I would now like to turn the conference over to your host, Mr. Tom Minichiello, Chief Financial Officer. Please go ahead.

Thank you, and good afternoon, everyone, and welcome to our conference call. to discuss MCOR's fiscal 2023 fourth quarter results. The news release we issued this afternoon is posted on our website, MCOR.com. On this call, Jeff Ritticher, MCOR's president and chief executive officer, will begin with the discussion of our business highlights, and then I'll be updating you on our financial results, and we'll conclude by taking questions. Before we begin, we would like to remind you that the information provided herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. These forward-looking statements are largely based on our current expectations and projections about future events and trends affecting the business. Such forward-looking statements include projections about future results, statements about plans, strategies, business prospects, and changes and trends in the business and in the markets in which we operate. Management cautions that these forward-looking statements relate to future events or future financial performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements of the business or in our industry to be materially different from those expressed or implied by any forward-looking statements. We caution you not to rely on these statements and to also consider the risks and uncertainties associated with these statements and the business, which are included in the company's filings available on the SEC's website located at sec.gov, including the sections entitled Risk Factors in the company's annual report on Form 10-K. The company assumes no obligation to update any forward-looking statements to conform such statements to actual results or to changes in our expectations, except as required by applicable law or regulation. In addition, references will be made during this call to non-GAAP financial measures, which we believe provide meaningful supplemental information to both management and investors. The non-GAAP measures reflect the company's core ongoing operating performance and facilitates comparisons across reporting periods. Investors are encouraged to review these non-GAAP measures, as well as the explanation and reconciliation of these measures to the most comparable gap measures included in our news release. With that, I'll now turn the call over to Jeff.

Thank you, Tom, and good afternoon, everyone. In the fourth quarter, our inertial navigation business continued to show progress with another strong top line performance at 26.8 million and gross margin at 31% non-gap. Tom will provide additional financial details in his remarks. Look to Bill came in under 1.0 due to concerns about the government shutdown. However, the majority of those expected orders were received in October. Therefore, the backlog in the business remained steady at approximately 67 million. With the closing of the sale of the linear business to Photonic Foundries in early October and the shutdown of the Indium Phosphide Wafer Fab, the operational components of the restructuring plan that we announced in April are complete. MCOR is now a pure play aerospace and defense business. In our press release, we announced that we have entered into a non-binding letter of intent to sell the indium phosphide wafer fab. This agreement is secured with a deposit and also includes an obligation for the buyer to assume the lease obligations of two buildings on the Alhambra campus resulting in a reduction in long-term liabilities and cash outflow for MCOR. We expect to complete this sale by the end of the December quarter. Moving on to the business, I'll begin my comments by stating that we had strong performance from Space and Navigation and Tinley Park. Concord and Alhambra operations came in low, but largely due to mixed changes and timing of orders. In the current quarter, we expect that the book to bill will recover and believe that Q2 will be stronger yet. Operating expenses came in below budget for R&D and sales and marketing. We are mindful of our high internally funded research and development spending, otherwise known as IRAD, and are working to drive this down substantially. Excuse me.