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Giga-tronics Reports Third Quarter FY 2014 Results

Giga-tronics Reports Third Quarter FY 2014 Results

SAN RAMON, Calif., Feb. 6, 2014 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated
(Nasdaq:GIGA) reported today net sales of $3.4 million for the third quarter
of fiscal 2014, compared to $3.9 million for the third quarter of fiscal 2013.
Net sales for the nine month period ended December 28, 2013 were $10.4
million, compared to $11.4 million for the nine month period ended December
29, 2012. The decreases in net sales were primarily due to fiscal 2013 order
fulfillment for the legacy SCPM switch product which was subsequently sold to
Teradyne in the first month of fiscal 2014.

Gross margin percentage for the third quarter of fiscal 2014 was 38%, compared
to 41% for the third quarter of fiscal 2013. Gross margin percentage for the
nine month period ended December 28, 2013 was 36% compared to 40% for the nine
month period ended December 29, 2012. The decreases in gross margin percentage
are primarily due to a less favorable product mix associated with additional
shipments of a lower margin Giga-tronics division legacy products.

Operating expenses for the third quarter of fiscal 2014 were $2.1 million,
compared to $2.5 million for the third quarter of fiscal 2013. Operating
expenses for both nine month periods ended December 28, 2013 and December 29,
2012 were $7.1 million. The Company is currently spending approximately $1.0
million to $1.1 million in research and development per quarter. The majority
of these expenses are associated with the development of the new product
platform that is currently forecasted to start shipping in the first quarter
of fiscal 2015.

Net loss for the third quarters of fiscal 2014 and 2013 were $718,000 and
$865,000, or $0.14 and $0.17 per fully diluted share, respectively. Net loss
for the nine month periods ended December 28, 2013 and December 29, 2012 were
$2.5 million and $2.6 million, or $0.49 and $0.52 per fully diluted share,
respectively.

During the quarter ended December 28, 2013 the Microsource business unit
received a $1.1 million program extension associated with its radar filter
components used in military aircraft. The Giga-tronics division also received
a $190,000 follow on order from a large aerospace company associated with its
new product platform.

Mr. John Regazzi, the Company's CEO stated, "In connection with the
substantial investment we have made in developing our new product platform, we
are starting to see tangible results. Along with several beta units being
assembled, we received $510,000 in orders for our new product platform through
December 28, 2013 and customer interest continues to look promising."

Mr. Regazzi concluded, "We believe the continued success of Microsource and
our new product platform are essential elements for the Company to achieve
future top line growth and improved operating performance."

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the
second quarter results. To participate in the call, dial (888) 424-8151 or
(847) 585-4422, and enter PIN Code 9178731#. 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 6, 2014.

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, 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, availability of capital and capital resources, 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 "Risk Factors" 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 28, March 30,
                                                        2013         2013
Assets                                                              
Current assets:                                                     
Cash and cash-equivalents                               $956       $1,882
Trade accounts receivable, net of allowance of $60 and  1,707       1,666
$35, respectively
Inventories, net                                        3,272       4,560
Prepaid expenses and other current assets               294         501
Total current assets                                    6,229       8,609
Property and equipment, net                             933         751
Total assets                                            $7,162     $9,360
Liabilities and shareholders' equity                                
Current liabilities:                                                
Line of credit                                          $953       $577
Accounts payable                                        1,237       788
Accrued payroll and benefits                            677         1,047
Deferred revenue                                        1,324       2,278
Deferred rent                                           98          81
Capital lease obligations                               88          66
Other current liabilities                               383         505
Total current liabilities                               4,760       5,342
Long term obligation - line of credit                   --         280
Long term obligations - deferred rent                   265         341
Long term obligations - capital lease                   93          89
Total liabilities                                       5,118       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
December 28, 2013 and March 30, 2013 issued and         --          --
outstanding
Series B - designated 10,000 shares; 9,997 shares at
December 28, 2013 and March 30, 2013 issued and         1,997       1,997
outstanding; (liquidation preference of $2,309)
Series C - designated 3,500 shares; 3,424.65 shares at
December 28, 2013 and March 30, 2013 issued and         457         457
outstanding; (liquidation preference of $500)
Series D - designated 6,000 shares; 5,111.86 shares at
December 28, 2013 and no shares at March 30, 2013       457         --
issued and outstanding; (liquidation preference of
$731)
Common stock of no par value;                                       
Authorized - 40,000,000 shares; 5,181,247 shares at
December 28, 2013 and 5,079,747 at March 30, 2013       16,125      15,132
issued and outstanding
Accumulated deficit                                     (16,992)    (14,278)
Total shareholders' equity                              2,044       3,308
Total liabilities and shareholders' equity              $7,162     $9,360

                                      



GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                          Three Month Periods Ended Nine Month Periods Ended
                          December 28, December 29, December 28, December 29,
(In thousands except per  2013        2012        2013        2012
share data)
Net sales                  $3,417     $3,946     $10,404    $11,409
Cost of sales              2,130       2,342       6,672       6,892
Gross margin               1,287       1,604       3,732       4,517
                                                              
Operating expenses:                                            
Engineering                979         1,179       3,040       3,159
Selling, general and       1,066       1,187       3,674       3,703
administrative
Restructuring              36         99          360         283
Total operating expenses   2,081       2,465       7,074       7,145
                                                              
Operating loss             (794)       (861)       (3,342)     (2,628)
                                                              
Gain on sale of product    97           --           913          --
line
Other income               --           --           7            --
Interest expense, net      (21)        (4)         (52)        (6)
Loss before income taxes   (718)       (865)       (2,474)     (2,634)
Provision for income taxes --          --          2           2
Net loss                   $ (718) $(865)    $(2,476)   $(2,636)
                                                              
Loss per common share –    $(0.14)    $(0.17)    $(0.49)    $(0.52)
basic
Loss per common share –    $(0.14)    $(0.17)    $(0.49)    $ (0.52)
diluted
                                                              
Weighted average common
shares used in per share                                       
calculation:
Basic                      5,060       5,029       5,057       5,029
Diluted                    5,060       5,029       5,057       5,029
                                                              

                                      



GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                            Three Month Periods Ended
                            
                            December 28, September 28, June 29, March 30,
(In thousands except per    2013         2013          2013     2013
share data)
Net sales                    $3,417      $3,950       $3,037  $2,778
Cost of sales                2,130        2,629         1,913    1,818
Gross margin                 1,287        1,321         1,124    960
                                                                
Operating expenses:                                              
Engineering                  979          955           1,106    1,123
Selling, general and         1,066        1,295         1,313    1,273
administrative
Restructuring                36           129           195      135
Total operating expenses     2,081        2,379         2,614    2,531
                                                                
Operating loss               (794)        (1,058)       (1,490)  (1,571)
                                                                
Gain on sale of product line 97            --             816       --
Other income                 --            --             8         11
Interest expense, net        (21)         (19)          (13)     (10)
Loss before income taxes     (718)        (1,077)       (679)    (1,570)
Provision for income taxes   --           --            2        --
Net loss                     $(718)      $(1,077)     $(681)  $(1,570)
                                                                
Loss per common share –      $(0.14)     $(0.21)      $(0.13) $(0.31)
basic
Loss per common share –      $(0.14)     $(0.21)      $(0.13) $(0.31)
diluted
                                                                
Weighted average common
shares used in per share                                         
calculation:
Basic                        5,060        5,060         5,052    5,030
Diluted                      5,060        5,060         5,052    5,030
                                                                

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

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