Emcore retrenches with new CEO

15 Dec 2014

Fiber-optic component maker also shifts corporate headquarters to California following sale of its space photovoltaics business.

Photonic component manufacturer Emcore has made a raft of major changes to its business including a new CEO and new corporate headquarters, as it bids to get back on an even keel.

Following several years of substantial losses, the company has just sold its relatively lucrative space photovoltaics business unit to a private equity group, and is also in the process of selling its tunable laser and transceiver product lines to NeoPhotonics.

Now, following the departure of Hong Hou as part of the space PV unit sale, the company has appointed Jeff Rittichier as its new CEO. Rittichier worked in the optical communications sector for 16 years, including a six-year spell as the CEO of Xponent Photonics that ended in 2007, and senior management positions at both Ortel and Lucent.

According to his LinkedIn profile, for the past five years Rittichier has been CEO and president at Ohio-based Nanostatics Corporation, which specializes in "nanofiber" products used across industrial and medical applications.

At Emcore, Rittichier’s key target will be to achieve break-even financial performance on an earnings before interest, tax, depreciation and amortization (EBITDA) basis by September next year. His first day on the job at the newly focused company will be January 3.

In the meantime, Emcore has already begun culling some of its senior management as part of that aim, with “chief administration officer”, Monica Van Berkel set to leave in the new year, and general counsel and corporate secretary Alfredo Gomez scheduled to depart February 13.

New focus: InP fab
What will remain of Emcore following the NeoPhotonics transaction is largely the firm’s broadband fiber-optics business. That includes products for cable TV transmitters and modules, fiber-to-the-premises (FTTP) transceivers, as well as key components including indium phosphide (InP) lasers, photodiodes and modulators and what the company calls “specialty photonics products”.

For the current fiscal quarter, which ends on December 31, Emcore expects that remaining business to generate a small net loss on sales of between $17 million and $19 million.

In comparison, the company posted an operating loss of $19.1 million on sales of $174.8 million for the fiscal year ending September 30 – i.e. prior to the sale of the space PV and tunable laser units.

Figures showed that the space PV division’s operating profit of $6.3 million was wiped out by the $25.4 million loss incurred by Emcore’s fiber-optic unit.

Alongside the new leadership and slimmed-down portfolio, Emcore has also relocated its corporate headquarters from Albuquerque, New Mexico, to Alhambra in California, and the company will now be based around the InP fab located there.

Selling the tunable laser division will add another $17.5 million to Emcore’s coffers – on top of the $150 million cash it received from Veritas Capital-owned SolAero Technologies for the space PV unit.

In an investor call to discuss the various changes, outgoing CEO Hou said that the space PV business had had its “best year ever”, with sales of $73.2 million and the signing of several long-term supply deals.

He added that the company’s new cash-rich position, along with its “world-class” InP wafer manufacturing facility, would give Emcore a range of options as far as its future business strategy is concerned.

Strong opportunities for the slimmed-down firm look to be emerging in areas such as silicon photonics – where InP lasers are in great demand – and data center links, as well as fiber-optic gyroscopes used in the aerospace industry.