Exhibit 99.1
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| For Release on May 10, 2006 | | Contact: Mark H. Cosmez II |
| 4:00 PM (ET) (925) 328-4656 | | Vice President, Finance/Chief Financial Officer |
Giga-tronics Reports Fourth Quarter and FY 2006 Results
San Ramon, CA —Giga-tronics, Incorporated (NASDAQ: GIGA) reported today that net sales for fiscal year 2006 were $20,620,000, down 4% from $21,477,000 a year ago. Net loss from continuing operations was $988,000 or $0.21 per fully diluted share versus a net profit from continuing operations of $845,000 or $0.18 per fully diluted share last year.
For the fiscal year ended March 25, 2006, net loss was $961,000 or $0.20 per fully diluted share versus a net profit of $612,000 or $0.13 per fully diluted share for the same period a year ago.
In the fourth quarter, net sales were $5,686,000, up 8% from $5,268,000 in the same quarter for the prior year. Net loss for the period was $87,000 or $0.02 per fully diluted share compared with a net profit of $203,000 or $0.04 per fully diluted share for the same period a year ago. Loss from continuing operations for the fourth quarter was $100,000 or $0.02 per fully diluted share compared to income from continuing operations of $222,000 or $0.05 per fully diluted share for the same period a year ago.
Our book-to-bill ratio in the fourth quarter of fiscal 2006 was .67 compared to 2.31 in the fourth quarter of fiscal 2005.
Orders booked in the fourth quarter from continuing operations were $3,822,000 compared to $12,162,000 last year and for the 2006 fiscal year were $15,157,000 compared to $20,914,000 a year ago. Backlog at quarter end was $10.3 million (approximately $5.9 million is shippable within one year) as compared to $15.8 million (approximately $8.1 million shippable within one year) at the end of the fourth quarter of the prior year.
Cash and cash equivalents at March 25, 2006 were $3,412,000 compared to $2,540,000 as of March 26, 2005.
Giga-tronics will host a conference call today at 4:30 PM ET to discuss the fourth quarter and full fiscal year results. To participate in the call, dial 612-332-0923. 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 May 10, 2006 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 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-KSB for the fiscal year ended March 25, 2006 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
| | | | | | | | | |
| (In thousands except share data) | | March 25, 2006 | | | March 26, 2005 | |
Assets
| | | | | | | | |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 3,412 | | | $ | 2,540 | |
| Notes receivable, net of allowance of $250 and $250, respectively | | | 3 | | | | 7 | |
| Trade accounts receivable, net of allowance of $63 and $77, respectively | | | 3,435 | | | | 3,145 | |
| Inventories | | | 4,813 | | | | 6,257 | |
| Prepaid expenses and other assets | | | 219 | | | | 227 | |
| | | | | | | |
Total current assets | | $ | 11,882 | | | $ | 12,176 | |
| | | | | | | |
| | | | | | | | | |
| Property and equipment | | | | | | | | |
| Leasehold improvements | | $ | 373 | | | $ | 373 | |
| Machinery and equipment | | | 15,592 | | | | 15,786 | |
| Office furniture and fixtures | | | 723 | | | | 721 | |
| | | | | | | |
| Property and equipment | | | 16,688 | | | | 16,880 | |
| Less accumulated depreciation and amortization | | | 16,351 | | | | 16,206 | |
| | | | | | | |
| Property and equipment, net | | | 337 | | | | 674 | |
| Other assets | | | 127 | | | | 111 | |
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| Total assets | | $ | 12,346 | | | $ | 12,961 | |
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Liabilities and shareholders’ equity | | | | | | | | |
Current liabilities
| | | | | | | | |
| Accounts payable | | $ | 870 | | | $ | 1,075 | |
| Accrued commissions | | | 171 | | | | 200 | |
| Accrued payroll and benefits | | | 781 | | | | 720 | |
| Accrued warranty | | | 250 | | | | 378 | |
| Customer advances | | | 521 | | | | 2 | |
| Other current liabilities | | | 433 | | | | 464 | |
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Total current liabilities | | $ | 3,026 | | | $ | 2,839 | |
| Deferred rent | | | 222 | | | | 310 | |
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Total liabilities | | $ | 3,248 | | | $ | 3,149 | |
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| Shareholders’ equity | | | — | | | | — | |
Preferred stock of no par value
Authorized 1,000,000 shares; no shares outstanding
at March 25, 2006 and March 26, 2005 | | | — | | | | — | |
| Common stock of no par value; | | | | | | | | |
Authorized 40,000,000 shares; 4,809,021 shares at
March 25, 2006 and 4,728,646 shares at
March 26, 2005 issued and outstanding | | | 13,003 | | | | 12,756 | |
| Accumulated Deficit | | | (3,905 | ) | | | (2,944 | ) |
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Total shareholders’ equity | | | 9,098 | | | | 9,812 | |
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Total liabilities and shareholders’ equity | | $ | 12,346 | | | $ | 12,961 | |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| (In thousands except share data) | | March 25, 2006 | | | March 26, 2005 | | | March 25, 2006 | | | March 26, 2005 | |
Net sales | | $ | 5,686 | | | $ | 5,268 | | | $ | 20,620 | | | $ | 21,477 | |
| Cost of sales | | | 3,588 | | | | 2,945 | | | | 12,320 | | | | 11,879 | |
Gross profit | | | 2,098 | | | | 2,323 | | | | 8,300 | | | | 9,598 | |
| | | | | | | | | | | | | | | | | |
| Product development | | | 868 | | | | 905 | | | | 3,760 | | | | 3,370 | |
| Selling, general and administrative | | | 1,338 | | | | 1,208 | | | | 5,556 | | | | 5,390 | |
| Operating expenses | | | 2,206 | | | | 2,113 | | | | 9,316 | | | | 8,760 | |
| | | | | | | | | | | | | | | | | |
Operating (loss) income from continuing operations | | | (108 | ) | | | 210 | | | | (1,016 | ) | | | 838 | |
| Other income | | | — | | | | 15 | | | | — | | | | 11 | |
| Interest income, net | | | 8 | | | | (3 | ) | | | 32 | | | | — | |
(Loss) income from continuing operations before income taxes | | | (100 | ) | | | 222 | | | | (984 | ) | | | 849 | |
| Provision for income taxes | | | — | | | | — | | | | 4 | | | | 4 | |
(Loss) income from continuing operations | | $ | (100 | ) | | $ | 222 | | | $ | (988 | ) | | $ | 845 | |
| Income (loss) on discontinued operations, net of income taxes of nil for 2006 and 2005 | | | 13 | | | | (19 | ) | | | 27 | | | | (233 | ) |
Net (loss) income | | $ | (87 | ) | | $ | 203 | | | $ | (961 | ) | | $ | 612 | |
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Basic net (loss) income per share: | | | | | | | | | | | | | | | | |
| From continuing operations | | $ | (0.02 | ) | | $ | 0.05 | | | $ | (0.21 | ) | | $ | 0.18 | |
| On discontinued operations | | | 0.00 | | | | (0.01 | ) | | | 0.01 | | | | (0.05 | ) |
| Basic net (loss) income per share | | $ | (0.02 | ) | | $ | 0.04 | | | $ | (0.20 | ) | | $ | 0.13 | |
| | | | | | | | | | | | | | | | | |
Diluted net (loss) income per share: | | | | | | | | | | | | | | | | |
| From continuing operations | | $ | (0.02 | ) | | $ | 0.05 | | | $ | (0.21 | ) | | $ | 0.18 | |
| On discontinued operations | | | 0.00 | | | | (0.01 | ) | | | 0.01 | | | | (0.05 | ) |
| Diluted net (loss) income per share | | $ | (0.02 | ) | | $ | 0.04 | | | $ | (0.20 | ) | | $ | 0.13 | |
| | | | | | | | | | | | | | | | | |
| Shares used in per share calculation: | | | | | | | | | | | | | | | | |
| Basic | | | 4,809 | | | | 4,727 | | | | 4,782 | | | | 4,725 | |
| Diluted | | | 4,809 | | | | 4,802 | | | | 4,782 | | | | 4,741 | |
