SAN JOSE, Calif. Compound semiconductor specialist Emcore Corp. Thursday (August 31) sold its 49 percent interest in loss-ridden GELcore LLC to the lighting operations of GE Consumer & Industrial, a division of General Electric (GE), for $100 million in cash.
GE owned a 51 percent membership interest in GELcore prior to acquiring the remaining 49 percent from Emcore (Somerset, N.J.). In 1999, GE and Emcore formed GELcore, a joint venture to address the solid-state lighting market with high brightness, light emitting diode-based (HB-LED) lighting systems.
Emcore expects to realize a gain on the sale of GELcore in the range of $85-to-$90 million.
In 2005, GELcore recorded a net loss of $0.8 million, compared to a $2.5 million net income recorded in 2004. For the six months ended June 30, GELcore recorded a net loss of $1.3 million.
"The sale of GELcore has come at an opportune time for Emcore as we enter the terrestrial solar market which represents an enormous end market for Emcore," said Reuben Richards, Emcore's CEO, in a statement. "This sale provides us with one of the strongest balance sheets in our industry and positions us extremely well to advance our industry leading technology in both fiber optics and photovoltaics."
Recently, Emcore, a provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite, solar power and wireless communications markets, said revenues for the third quarter of fiscal 2006 were $42.0 million, an increase of 26 percent from the $33.2 million reported in the third quarter of fiscal 2005, and an increase of $0.8 million, or 2 percent from the $41.2 million in the previous quarter.
Emcore reported a net loss for the third quarter of fiscal 2006 of $5.9 million or minus $0.12 per basic and diluted share. In the previous year, Emcore's quarterly net loss was $6.9 million, or minus $0.15 per share.