Giga-tronics Reports First Quarter Results

Giga-tronics Reports First Quarter Results

SAN RAMON, Calif., Aug. 8, 2013 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated
(Nasdaq:GIGA) reported today net sales of $3.0 million for the first quarter
of fiscal 2014, an increase of 9% when compared to net sales of $2.8 million
in the fourth quarter of fiscal 2013. The increase in net sales is primarily
due to the Micosource business units' progress on long term contracts from a
large aerospace company. Net sales decreased 25% in the first quarter of
fiscal 2014 when compared to $4.1 million for the first quarter of fiscal
2013. The decrease in net sales is primarily due to the timing of orders
associated with the Signal Generator product line.

Gross margins for the first quarter of fiscal 2014 were $1.1 million, an
increase of 17% when compared to gross margins of $960,000 in the fourth
quarter of fiscal 2013. The increase in gross margins is primarily due to the
increase in higher margin sales from the Micosource business unit. Gross
margins decreased 31% from the first quarter of fiscal 2013 to the first
quarter of fiscal 2014 due to lower net sales and lower utilization of fixed
factory overhead.

In April 2013 the Company completed the sale of the Giga-tronics Division
product line known as SCPM for $1.0 million to Teradyne Inc., and recorded a
net gain on sale of $816,000 in the first quarter of fiscal 2014. The Company
received initial cash proceeds of $800,000 of from the sale in the first
quarter of fiscal 2014, and an additional $50,000 (less associated costs of
$34,000) was earned during the first quarter. Also, the Company expects to
receive an additional $150,000 later in the year after satisfaction of certain
hold back requirements under the terms of the agreement.

Net loss for the first quarter of fiscal 2014 was $681,000, compared to a net
loss of $1.6 million in the fourth quarter of fiscal 2013. The decrease in net
loss is primarily due to the gain from the SCPM product line sale to Teradyne
Inc. Net loss decreased 4% from the first quarter of fiscal 2013 to the first
quarter of fiscal 2014 primarily due to the SCPM product line sale to Teradyne
Inc., which was mostly offset by lower net sales in the first quarter of
fiscal 2014.

In July 2014 Giga-tronics completed a securities purchase agreement with Alara
Capital AVI II, LLC ("Alara") that yielded gross proceeds of $858,000. Alara
purchased approximately 5,112 shares of a new Class D convertible voting
perpetual preferred stock at a price of $143.00 per share. Alara also acquired
a warrant to purchase up to 511,186 additional shares of common stock in the
future at an exercise price of $1.43 per share. In addition, an existing
warrant to purchase 506,219 shares of common was cancelled, and a new warrant
to acquire the same number of shares in the future at an exercise price of
$1.43 per share was issued.

Mr. John Regazzi, the Company's CEO stated, "I'm pleased to see the quarter to
quarter growth in net sales and gross margin, due in large part to the
progress we are making with Microsourse's long term aerospace contracts.

Mr. Regazzi concluded, "The recent cash raised from the product line sale to
Teradyne Inc. and the preferred stock to Alara allows us to continue to invest
heavily in engineering associated with our new product platform, which we
believe is essential for the company to achieve future top line growth and
ultimately profitability."

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the
first quarter results. To participate in the call, dial (855) 410-0553 or
(646) 583-7389, and enter PIN Code 740505#.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 August 8, 2013.

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.

This press release contains forward-looking statements concerning
profitability, future expense reductions, development of products, future
growth, shareholder value, backlog and shipments.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 30, 2013, 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".

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands except share data)            June 29, 2013 March 30, 2013
Assets                                                       
Current assets:                                              
Cash and cash-equivalents                     $778            $1,882
Trade accounts receivable, net of allowance   1,787           1,666
of $37 and $35, respectively
Inventories, net                              4,493           4,560
Prepaid expenses and other current assets     460             501
Total current assets                          7,518           8,609
Property and equipment, net                   788             751
Total assets                                  $8,306          $9,360
Liabilities and shareholders' equity                         
Current liabilities:                                         
Line of credit                                $--          $577
Accounts payable                              938             788
Accrued commission                            41              93
Accrued payroll and benefits                  966             1,047
Accrued warranty                              93              114
Deferred revenue                              1,795           2,278
Deferred rent                                 87              81
Capital lease obligations                     67              66
Other current liabilities                     254             298
Total current liabilities                     4,241           5,342
Long term obligation - line of credit         891             280
Long term obligations - deferred rent         320             341
Long term obligations - capital lease         72              89
Total liabilities                             5,524           6,052
Commitments and contingencies                 --            --
Shareholders' equity:                                        
Convertible Preferred stock of no par value;                 
Authorized - 1,000,000 shares                                
Series A - designated 250,000 shares; 0
shares at June 29, 2013 and March 30, 2013    --            --
issued and outstanding
Series B - designated 10,000 shares; 9,997
shares at June 29, 2013 and March 30, 2013    1,997           1,997
issued and outstanding; (liquidation
preference of $2,309)
Series C - designated 3,500 shares; 3,424.65
shares at June 29, 2013 and March 30, 2013    457             457
issued and outstanding; (liquidation
preference of $500)
Series D - designated 6,000 shares; 0 shares
at June 29, 2013 and March 30, 2013 issued    --            --
and outstanding; (liquidation preference of
$143 per share)
Common stock of no par value;                                
Authorized - 40,000,000 shares; 5,181,247
shares at June 29, 2013 and 5,079,747 at      15,287          15,132
March 30, 2013 issued and outstanding
Accumulated deficit                           (14,959)        (14,278)
Total shareholders' equity                    2,782           3,308
Total liabilities and shareholders' equity    $8,306          $9,360


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                             Three Months Ended
(In thousands except per share data)        June 29, 2013 March 30, 2013
Net sales                                     $3,037          $2,778
Cost of sales                                 1,913           1,818
Gross margin                                  1,124           960
                                                            
Engineering                                   1,106           1,123
Selling, general and administrative           1,313           1,273
Restructuring                                 195             135
Total operating expenses                      2,614           2,531
                                                            
Operating loss                                (1,490)         (1,571)
                                                            
Gain on sale of product line                  816             --
Other income                                  8               11
Interest expense, net                         (13)            (10)
Loss before income taxes                      (679)           (1,570)
Provision for income taxes                    2               --
Net loss                                      $(681)        $(1,570)
                                                            
Loss per common share - basic                 $(0.13)       $(0.31)
Loss per common share - diluted               $(0.13)       $(0.31)
                                                            
Weighted average shares used in per share                    
calculation:
Basic                                         5,052           5,030
Diluted                                       5,052           5,030


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                      Three Months Ended
(In thousands except per share data) June 29, 2013 June 30, 2012
Net sales                              $3,037          $4,058
Cost of sales                          1,913           2,428
Gross margin                           1,124           1,630
                                                     
Engineering                            1,106           933
Selling, general and administrative    1,313           1,310
Restructuring                          195             92
Total operating expenses               2,614           2,335
                                                     
Operating loss                         (1,490)         (705)
                                                     
Gain on sale of product line           816             --
Other income                           8               --
Interest expense, net                  (13)            --
Loss before income taxes               (679)           (705)
Provision for income taxes             2               2
Net loss                               $(681)        $(707)
                                                     
Loss per common share – basic          $(0.13)       $(0.14)
Loss per common share – diluted        $(0.13)       $(0.14)
                                                     
Weighted average shares used in per share calculation: 
Basic                                  5,052           5,030
Diluted                                5,052           5,030

CONTACT: Steven D. Lance
         Vice President of Finance/Chief Financial Officer
         slance@gigatronics.com
         (925) 302-1056

company logo
 
Press spacebar to pause and continue. Press esc to stop.