Exhibit 99.1
| For Release on October 30, 2003 | Contact: Mark H. Cosmez II | |
| 4:00 PM (ET) (925) 328-4656 | Vice President, Finance/Chief Financial Officer |
Giga-tronics Reports Improved Results for the Second Quarter of FY 2004
San Ramon, CA —Giga-tronics Incorporated (NASDAQ/NMS: GIGA) reported today that continuing cost reduction efforts have resulted in a substantial decline in losses.
Net loss from continuing operations for the second quarter was $357,000 or $0.08 per fully diluted share, down 72% from $1,276,000 or $0.27 per fully diluted share of the preceding quarter, and down 61% from $918,000 or $0.20 per fully diluted share for the same period a year ago.
For the six month period, net loss from continuing operations was $1,633,000 or $0.35 per fully diluted share, down 26% from $2,204,000 or $0.47 per fully diluted share last year. Net sales from continuing operations were flat quarter to quarter and for the six months decreased 4% from the prior year. In the latter part of the first quarter of FY 2004, Giga-tronics elected to discontinue the operations at its Dymatix division.
When discontinued operations are included, the net loss in the second quarter decreased 63% to $483,000 or $0.10 per fully diluted share compared to $1,298,000 or $0.28 per fully diluted share for the second quarter last year as our actions to decrease our cost structure improved our results. For the six months, the net loss was $4,115,000 or $0.88 per share fully diluted versus $2,897,000 or $0.62 per fully diluted share for the same period a year ago.
Orders booked in the second quarter from continuing operations increased slightly to $3,930,000 from $3,872,000 last year and for the six months were $6,748,000 compared to $6,700,000 a year ago. Backlog at quarter end was $13.1 million (approximately $5.4 million is shippable within one year) as compared to $17.1 million (approximately $6.9 million shippable within one year) in the second quarter of the prior year.
Cash and cash equivalents at September 27, 2003 increased 8% or $321,000 to $4,132,000 versus $3,811,000 as of June 28, 2003.
Giga-tronics will host a conference call today at 4:30 PM ET to discuss the second quarter results. To participate in the call, dial 612-332-0418. The call will also be broadcast on the internet at www.gigatronics.com under “Corporate Info/Investor Relations”. The conference call discussion reflects management’s views as of October 30, 2003 only.
Giga-tronics produces instruments, subsystems and sophisticated microwave components that have broad applications in both defense electronics and wireless telecommunications.
Giga-tronics is a publicly held company, traded on the NASDAQ National Market under the symbol “GIGA”.
This press release contains forward-looking statements concerning profitability, backlog and shipments. Actual results may differ significantly due to risks and uncertainties, such as future orders, cancellations or deferrals, disputes over performance and the ability to collect receivables. For further discussion, see Giga-tronics’ annual report on Form 10-K for the fiscal year ended March 29, 2003 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 Conditions and Results of Operations”.
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||||
| Sept. 27, 2003 | Sept. 28, 2002 | Sept. 27, 2003 | Sept 28, 2002 | ||||||||||||||
Net sales | $ | 5,135 | $ | 5,112 | $ | 10,374 | $ | 10,843 | |||||||||
| Cost of sales | 3,220 | 3,384 | 7,096 | 7,314 | |||||||||||||
Gross profit | 1,915 | 1,728 | 3,278 | 3,529 | |||||||||||||
| Product development | 865 | 1,042 | 1,853 | 2,530 | |||||||||||||
| Selling, general and administrative | 1,420 | 1,571 | 3,064 | 3,252 | |||||||||||||
| Amortization of intangibles | — | 6 | — | 10 | |||||||||||||
| Operating expenses | 2,285 | 2,619 | 4,917 | 5,792 | |||||||||||||
Operating loss | (370 | ) | (891 | ) | (1,639 | ) | (2,263 | ) | |||||||||
| Other expense (income) | — | (45 | ) | — | (71 | ) | |||||||||||
| Interest income, net | 13 | 18 | 10 | 30 | |||||||||||||
Loss from continuing operations before income taxes | (357 | ) | (918 | ) | (1,629 | ) | (2,304 | ) | |||||||||
| Provision (benefit) for income taxes | — | — | 4 | (100 | ) | ||||||||||||
Loss from continuing operations | $ | (357 | ) | $ | (918 | ) | $ | (1,633 | ) | $ | (2,204 | ) | |||||
| Loss on discontinued operations, net of income taxes | (126 | ) | (380 | ) | (2,482 | ) | (693 | ) | |||||||||
Net loss | $ | (483 | ) | $ | (1,298 | ) | $ | (4,115 | ) | $ | (2,897 | ) | |||||
| Basic and diluted net loss per share: | |||||||||||||||||
| From continuing operations | $ | (0.08 | ) | $ | (0.20 | ) | $ | (0.35 | ) | $ | (0.47 | ) | |||||
| On discontinued operations | (0.02 | ) | (0.08 | ) | (0.53 | ) | (0.15 | ) | |||||||||
| Basic and diluted net loss per share | $ | (0.10 | ) | $ | (0.28 | ) | $ | (0.88 | ) | $ | (0.62 | ) | |||||
| Shares used in per share calculation: | |||||||||||||||||
| Basic and dilutive | 4,696 | 4,666 | 4,695 | 4,661 | |||||||||||||
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
| Sept. 27, 2003 | March 29, 2003 | ||||||||
Assets | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 4,132 | $ | 5,005 | |||||
| Trade accounts receivable, net | 2,292 | 3,245 | |||||||
| Inventories | 7,190 | 10,244 | |||||||
| Income tax refund receivable | — | 100 | |||||||
| Prepaid expenses | 347 | 488 | |||||||
Total current assets | 13,961 | 19,082 | |||||||
| Property and equipment, net | 1,689 | 2,274 | |||||||
| Other assets | 388 | 433 | |||||||
Total assets | $ | 16,038 | $ | 21,789 | |||||
Liabilities and shareholders’ equity | |||||||||
| Current liabilities | |||||||||
| Accounts payable | $ | 976 | $ | 1,723 | |||||
| Accrued commissions | 240 | 249 | |||||||
| Accrued payroll and benefits | 1,005 | 1,038 | |||||||
| Accrued warranty | 784 | 859 | |||||||
| Customer advances | 70 | 796 | |||||||
| Obligations under capital lease | 45 | 76 | |||||||
| Other current liabilities | 737 | 719 | |||||||
Total current liabilities | 3,857 | 5,460 | |||||||
| Obligations under capital lease, net of current portion | — | 10 | |||||||
| Deferred rent | 325 | 359 | |||||||
Total liabilities | 4,182 | 5,829 | |||||||
Shareholders’ equity | |||||||||
| Preferred stock of no par value Authorized 1,000,000 shares; no shares outstanding at Sept. 27, 2003 and March 29, 2003 | — | — | |||||||
| Common stock of no par value; Authorized 40,000,000 shares; 4,703,786 shares at Sept. 27, 2003 and 4,693,080 shares at March 29, 2003 issued and outstanding | 12,706 | 12,695 | |||||||
| Retained earnings | (850 | ) | 3,265 | ||||||
Total shareholders’ equity | 11,856 | 15,960 | |||||||
Total liabilities and shareholders’ equity | $ | 16,038 | $ | 21,789 | |||||