Giga-tronics Reports Third Quarter FY 2013 Results

Giga-tronics Reports Third Quarter FY 2013 Results

SAN RAMON, Calif., Feb. 8, 2013 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated
(Nasdaq:GIGA) reported today a net loss of $865,000 or $0.17 per fully diluted
share for the quarter ended December 29, 2012. This compares with a net loss
of $2,613,000 or $0.52 per fully diluted share for the comparable period a
year ago. Net sales increased 41% to $3,946,000 in the third quarter of fiscal
2013 compared to $2,799,000 in the third quarter of fiscal 2012. Gross margin
increased by $2,074,000 over the same quarter last year. Operating expenses
increased 15% or $323,000 in the third quarter of fiscal 2013 over fiscal 2012
primarily due to a $434,000 (or 58%) increase in product development expenses
to invest in new instrument products and expenses associated with a previously
announced restructuring totaling $99,000, which were partially offset by
reduced selling, general, and administrative expenses. Orders decreased 10% in
the third quarter of fiscal 2013 to $2,247,000 from $2,500,000 for the third
quarter of fiscal 2012. The decrease in orders is primarily related to a
decrease in switch orders which is a business characterized by large periodic
orders.

Net loss for the nine month period ended December 29, 2012 was $2,636,000 or
$0.52 per fully diluted share. This compares with a net loss of $3,952,000 or
$0.79 per fully diluted share for the comparable period a year ago. Net sales
increased 10% to $11,409,000 in the first nine months of fiscal 2013 compared
to $10,382,000 in the first nine months of fiscal 2012. Gross margin increased
by $2,012,000 over the comparable period last year. Operating expenses
increased 11% or $692,000 in the first nine months of fiscal 2013 over fiscal
2012 primarily due to a $1,099,000 increase (or 53%) in product development
expenses to more aggressively invest in new instrument products and expenses
associated with a restructuring totaling $283,000 . Orders increased 40% in
the first nine months of fiscal 2013 to $14,745,000 from $10,513,000 for the
first nine months of fiscal 2012. The increase in orders is primarily related
to orders received from the U.S. government and from prime contractors.

Backlog at December 29, 2012 was $7.2 million (approximately $6.1 million
shippable within one year) as compared to $3.8 million (approximately $3.8
million shippable within one year) at December 31, 2011.

Cash and cash equivalents at December 29, 2012 were $2,421,000 compared to
$2,096,000 as of September 29, 2012 and $2,365,000 at March 31, 2012.

Mr. John Regazzi, the Company's CEO stated, "The operating losses for the
third quarter and the first nine months of fiscal 2013 reflect our continued
commitment to investing in new product development. Nearly half of the
reported operating loss is due to these expenses, which we believe are
necessary in order to position the Company to achieve future revenue growth
and profitability."

Mr. Regazzi continued, "The balance of the reported loss is the result of
insufficient sales volume relative to our fixed infrastructure. To address
this issue, the company has committed to combining its Microsource division
within its San Ramon headquarters to achieve greater capacity utilization and
efficiencies. The move continues on schedule towards a May 1, 2013 completion
date with projected benefits of both significant future cost savings and
better alignment of our infrastructure costs with anticipated sales volume."

Mr. Regazzi concluded, "This has been a challenging period as we turn the
Company's primary focus toward new high performance synthesizer markets. We
have restructured the management team, worked continuously towards reducing
future expenses, and invested in a significant new product program all at the
same time.I believe we will begin to see the benefits of these changes
starting in May 2013 with improved gross margins following the relocation of
the Microsource division and I anticipate Giga-tronics will return to
profitability following the introduction of the new microwave product in
fiscal 2014."

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the
third quarter results. To participate in the call, dial (855) 410-0553 or
(646) 583-7389 and enter PIN Code 169920#.The call will also be broadcast
over the internet at www.gigatronics.com under "Investor Relations". The
conference call discussion reflects management's views as of February 8, 2013
only.

Giga-tronics is a publicly held company, traded on the NASDAQ Capital Market
under the symbol "GIGA". Giga-tronics produces instruments, subsystems and
sophisticated microwave components that have broad applications in defense
electronics, aeronautics and wireless telecommunications.

The Giga-tronics Incorporated logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6087

This press release contains forward-looking statements concerning
profitability, backlog, shipments, revenue growth, improved gross margins,
timing of move, and projected savings. Actual results may differ significantly
due to risks and uncertainties, such as future orders, cancellations or
deferrals, disputes over performance, the ability to collect receivables and
general market conditions. For further discussion, see Giga-tronics' most
recent annual report on Form 10-K for the fiscal year ended March 31, 2012,
Part I, under the heading "Certain Factors Which May Adversely Affect Future
Operations or an Investment in Giga-tronics" and Part II, under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".

GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands except share data)           December 29, 2012 March 31, 2012
Assets                                                        
Current assets:                                               
Cash and cash-equivalents                   $2,421           $2,365
Trade accounts receivable, net of allowance 1,776             1,270
of $53 and $96, respectively
Inventories, net                            4,151             4,700
Prepaid expenses and other current assets   294               328
Total current assets                        8,642             8,663
                                                             
Property and equipment, net                 667               611
Other assets                                --                16
Total assets                                $9,309           $9,290
                                                             
Liabilities and shareholders' equity                          
Current liabilities:                                          
Line of credit                              $975             $--
Accounts payable                            805               613
Accrued commission                          88                129
Accrued payroll and benefits                776               739
Accrued warranty                            137               210
Deferred revenue                            1,263             7
Deferred rent                               76                59
Capital lease obligations                   64                20
Other current liabilities                   312               318
Total current liabilities                   4,496             2,095
Long term obligations - deferred rent       365               433
Long term obligations - capital lease       106               15
Total liabilities                           4,967             2,543
Commitments                                                   
Shareholders' equity:                                         
Preferred stock of no par value;                              
Authorized - 1,000,000 shares                                 
Series A - designated 250,000 shares; 0
shares at December 29, 2012 and March 31,                     
2012 issued and outstanding
Series B - designated 10,000 shares; 9,997
shares at December 29, 2012 and March 31,   1,997             1,997
2012 issued and outstanding; (liquidation
preference of $2,309)
Common stock of no par value;                                 
Authorized - 40,000,000 shares; 5,029,747
shares at December 29, 2012 and March 31,   15,053            14,822
2012 issued and outstanding
Accumulated deficit                         (12,708)          (10,072)
Total shareholders' equity                  4,342             6,747
Total liabilities and shareholders' equity  $9,309           $9,290

                                                              
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                          Three Month Periods Ended Nine Month Periods Ended
(In thousands except per  December 29, December 31, December 29, December 31,
share data)               2012         2011         2012         2011
Net sales                  $ 3,946      $ 2,799      $ 11,409     $ 10,382
Cost of sales              2,342        3,269        6,892        7,877
Gross margin               1,604        (470)        4,517        2,505
                                                              
Operating expenses:                                            
Engineering                1,179        745          3,159        2,060
Selling, general and       1,187        1,397        3,703        4,393
administrative
Restructuring              99           --         283          --
Total operating expenses   2,465        2,142        7,145        6,453
                                                              
Operating loss             (861)        (2,612)      (2,628)      (3,948)
                                                              
Interest expense, net      (4)          (1)          (6)          (2)
Loss before income taxes   (865)        (2,613)      (2,634)      (3,950)
Provision for income taxes --         --         2            2
Net loss                   $ (865)      $ (2,613)    $ (2,636)    $ (3,952)
                                                              
Loss per share - basic     $ (0.17)     $ (0.52)     $ (0.52)     $ (0.79)
Loss per share - diluted   $ (0.17)     $ (0.52)     $ (0.52)     $ (0.79)
                                                              
Weighted average shares
used in per share                                              
calculation:
Basic                      5,029        5,024        5,029        5,008
Diluted                    5,029        5,024        5,029        5,008

CONTACT: Frank Romejko
         Vice President of Finance / Interim Chief Financial Officer
         (925) 302-1014

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