Exhibit 99.1
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NEWS RELEASE
For Release on July 20, 2004
4:00 PM (ET) (925) 328-4656 | | Contact: Mark H. Cosmez II
Vice President, Finance/Chief Financial Officer |
Giga-tronics Reports First Quarter Profit.
Lists on Nasdaq Small Cap.
San Ramon, CA —Giga-tronics Incorporated (NASDAQ/NMS: GIGA) reported today a net profit of $357,000 or $0.08 per fully diluted share for the quarter ending June 26, 2004. This compares with a net loss of $3,632,000 or $0.77 per fully diluted share for the same period a year ago.
Profit from continuing operations for the first quarter was $314,000 or $0.07 per fully diluted share compared to a loss from continuing operations of $1,276,000 or $0.27 per fully diluted share for the same period a year ago.
Net sales from continuing operations increased 9% to $5,700,000 in the first quarter of fiscal 2005 versus $5,239,000 in the first quarter of fiscal 2004.
Orders from continuing operations increased 23% in the first quarter of FY 2005 from the same quarter a year ago. Our book-to-bill ratio in the first quarter of fiscal 2005 was 0.61 compared to 0.54 in the first quarter of last year.
Orders booked in the first quarter from continuing operations were $3,467,000 compared to $2,818,000 last year. Backlog at quarter end was $14.1 million (approximately $5.8 million is shippable within one year) as compared to $14.3 million (approximately $5.7 million was shippable within one year) at the end of the first quarter of the prior year.
Cash and cash equivalents at June 26, 2004 were $2,376,000 compared to $2,752,000 as of March 27, 2004.
During the fourth quarter of fiscal 2004, Giga-tronics consummated the sale of Dymatix, which had been discontinued during the first quarter of fiscal 2004.
The Company also announced that its stock would commence listing on the Nasdaq Small Cap Market on July 22, 2004. Nasdaq previously informed the Company that it no longer met the National Market listing requirement of $10,000,000 in minimum shareholders’ equity. Because the Company does not expect to be able to increase its shareholders’ equity to this amount in the near term, it has applied for and been accepted for listing of its common stock on the Nasdaq Small Cap Market. Its ticker symbol will remain “GIGA”.
Giga-tronics will host a conference call today at 4:30 PM ET to discuss the first quarter results. To participate in the call, dial 612-332-0345. The call will also be broadcast over the internet at www.gigatronics.com under “Corporate Info/Investor Relations”. The conference call discussion reflects management’s views as of July 20, 2004 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 (on and after July 22 on the Nasdaq Small Cap 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 27, 2004 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”.
CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands except share data)
| | June 26, 2004
| | March 27, 2004
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(Unaudited)
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Assets | | | | | | | | |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 2,376 | | | $ | 2,752 | |
| Notes receivable | | | 257 | | | | 253 | |
| Trade accounts receivable, net | | | 2,610 | | | | 1,959 | |
| Inventories | | | 6,875 | | | | 6,920 | |
| Prepaid expenses | | | 350 | | | | 271 | |
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Total current assets | | | 12,468 | | | | 12,155 | |
| Property and equipment, net | | | 1,089 | | | | 1,251 | |
| Other assets | | | 313 | | | | 327 | |
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Total assets | | $ | 13,870 | | | $ | 13,733 | |
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Liabilities and shareholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable | | $ | 1,421 | | | $ | 1,686 | |
| Accrued commissions | | | 243 | | | | 293 | |
| Accrued payroll and benefits | | | 875 | | | | 889 | |
| Accrued warranty | | | 512 | | | | 548 | |
| Customer advances | | | 358 | | | | 58 | |
| Obligations under capital lease | | | 2 | | | | 10 | |
| Income taxes payable | | | 4 | | | | — | |
| Other current liabilities | | | 539 | | | | 674 | |
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Total current liabilities | | | 3,954 | | | | 4,158 | |
| Deferred rent | | | 363 | | | | 379 | |
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Total liabilities | | | 4,317 | | | | 4,537 | |
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| Shareholders’ equity | | | | | | | | |
| Preferred stock of no par value; Authorized 1,000,000 shares; no shares outstanding at June 26, 2004 and March 27, 2004 | | | — | | | | — | |
| Common stock of no par value; | | | | | | | | |
| Authorized 40,000,000 shares; 4,724,896 shares at June 26, 2004 and 4,724,896 shares at March 27, 2004 issued and outstanding | | | 12,752 | | | | 12,752 | |
| Retained earnings (accumulated deficit) | | | (3,199 | ) | | | (3,556 | ) |
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Total shareholders’ equity | | | 9,553 | | | | 9,196 | |
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Total liabilities and shareholders’ equity | | $ | 13,870 | | | $ | 13,733 | |
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CONSOLIDATED STATEMENTS OF OPERATIONS
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| | | Three Months Ended
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(In thousands except share data)
| | June 26, 2004
| | June 28, 2003
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(Unaudited)
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Net sales | | $ | 5,700 | | | $ | 5,239 | |
| Cost of sales | | | 3,129 | | | | 3,876 | |
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Gross profit | | | 2,571 | | | | 1,363 | |
| Product development | | | 844 | | | | 988 | |
| Selling, general and administrative | | | 1,413 | | | | 1,644 | |
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| Operating expenses | | | 2,257 | | | | 2,632 | |
Operating income (loss) | | | 314 | | | | (1,269 | ) |
| Other expense | | | — | | | | — | |
| Interest income, net | | | 4 | | | | (3 | ) |
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Income (loss) from continuing operations before income taxes | | | 318 | | | | (1,272 | ) |
| Provision for income taxes | | | 4 | | | | 4 | |
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Income (loss) from continuing operations | | $ | 314 | | | $ | (1,276 | ) |
| Income (loss) on discontinued operations, net of income taxes | | | 43 | | | | (2,356 | ) |
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Net income (loss) | | $ | 357 | | | $ | (3,632 | ) |
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Basic net income (loss) per share: | | | | | | | | |
| From continuing operations | | $ | 0.07 | | | $ | (0.27 | ) |
| On discontinued operations | | | 0.01 | | | | (0.50 | ) |
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| Basic net income (loss) per share | | $ | 0.08 | | | $ | (0.77 | ) |
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Diluted net income (loss) per share: | | | | | | | | |
| From continuing operations | | $ | 0.07 | | | $ | (0.27 | ) |
| On discontinued operations | | | 0.01 | | | | (0.50 | ) |
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| Diluted net income (loss) per share | | $ | 0.08 | | | $ | (0.77 | ) |
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| Shares used in per share calculation: | | | | | | | | |
| Basic | | | 4,725 | | | | 4,693 | |
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| Dilutive | | | 4,745 | | | | 4,693 | |
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