EXHIBIT 99.1
NEWS RELEASE
For Release on October 31, 2006
4:00 p.m. (ET) (925) 328-4656 | | Contact: Mark H. Cosmez II
Vice President, Finance/Chief Financial Officer |
Giga-tronics Reports Second Quarter FY 2007 Results
San Ramon, CA —Giga-tronics Incorporated (NASDAQ:GIGA) reported today a net loss of $403,000 or $0.08 per fully diluted share for the quarter ending September 30, 2006. This compares with the net loss of $1,137,000 or $0.24 per fully diluted share for the same period a year ago. Net loss for the six months ending September 30, 2006 was $1,430,000 or $0.30 per fully diluted share compared with a net loss of $904,000 or $0.19 per fully diluted share for the same period last year.
Orders improved 215% in the second quarter of fiscal 2007 to $5,812,000 from $1,847,000 for the second quarter of fiscal 2006. Our book to bill ratio increased to 1.48 versus 0.51 for the same period a year ago.
Net sales from continuing operations increased 8.9% to $3,934,000 in the second quarter of fiscal 2007 versus $3,614,000 in the second quarter of fiscal 2006.
Backlog at quarter end was $11.8 million (approximately $8.0 million is shippable within one year) as compared to $13.7 million (approximately $7.0 million shippable within one year) at second quarter end of the prior year.
Cash and cash equivalents decreased 11.8% to $3,286,000 at September 30, 2006 compared to $3,726,000 as of June 24, 2006.
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 612-288-0329. 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 October 31, 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 Capital 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-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”.
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| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands except share data) | | September 30, 2006 | | | March 25, 2006 | |
| (Unaudited) | | | | | | | | |
Assets | | | | | | | | |
Current assets
Cash and cash equivalents | | $ | 3,286 | | | $ | 3,412 | |
| Notes receivable | | | — | | | | 3 | |
| Trade accounts receivable, net | | | 1,557 | | | | 3,435 | |
| Inventories | | | 5,767 | | | | 4,813 | |
| Prepaid expenses and other assets | | | 260 | | | | 219 | |
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Total current assets | | | 10,870 | | | | 11,882 | |
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| Property and equipment, net | | | 375 | | | | 337 | |
| Other assets | | | 103 | | | | 127 | |
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Total assets | | $ | 11,348 | | | $ | 12,346 | |
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Liabilities and shareholders’ equity | | | | | | | | |
Current liabilities
Accounts payable | | $ | 1,019 | | | $ | 870 | |
| Accrued commissions | | | 117 | | | | 171 | |
| Accrued payroll and benefits | | | 733 | | | | 781 | |
| Accrued warranty | | | 190 | | | | 250 | |
| Customer advances | | | 997 | | | | 521 | |
| Other current liabilities | | | 379 | | | | 433 | |
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Total current liabilities | | | 3,435 | | | | 3,026 | |
| Deferred rent | | | 173 | | | | 222 | |
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Total liabilities | | | 3,608 | | | | 3,248 | |
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Shareholders’ equity
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Preferred stock of no par value;
Authorized 1,000,000 shares; no shares outstanding at September 30, 2006 and March 25, 2006 | | | — | | | | — | |
Common stock of no par value;
Authorized 40,000,000 shares; 4,809,021 shares at September 30, 2006 and March 25, 2006 issued and outstanding | | | 13,075 | | | | 13,003 | |
| Accumulated deficit | | | (5,335 | ) | | | (3,905 | ) |
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Total shareholders’ equity | | | 7,740 | | | | 9,098 | |
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Total liabilities and shareholders’ equity | | $ | 11,348 | | | $ | 12,346 | |
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| CONSOLIDATED STATEMENTS OF OPERATIONS |
| | | Three Months Ended | | | Six Months Ended | |
| (In thousands except per share data) | | September 30, 2006 | | | September 24, 2005 | | | September 30, 2006 | | | September 24, 2005 | |
| (Unaudited) | | | | | | | | | | | | | | | | |
Net sales | | $ | 3,934 | | | $ | 3,614 | | | $ | 7,320 | | | | 9,397 | |
| |
| Cost of sales | | | 2,077 | | | | 2,391 | | | | 4,264 | | | | 5,529 | |
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Gross profit | | | 1,857 | | | | 1,223 | | | | 3,056 | | | | 3,868 | |
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| Product development | | | 938 | | | | 1,043 | | | | 1,899 | | | | 2,009 | |
| Selling, general and administrative | | | 1,368 | | | | 1,331 | | | | 2,665 | | | | 2,784 | |
| | | | | | | | | | | | | |
| Operating expenses | | | 2,306 | | | | 2,374 | | | | 4,564 | | | | 4,793 | |
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Operating loss | | | (449 | ) | | | (1,151 | ) | | | (1,508 | ) | | | (925 | ) |
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| Interest income, net | | | 37 | | | | 9 | | | | 66 | | | | 14 | |
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Loss from continuing operations before income taxes | | | (412 | ) | | | (1,142 | ) | | | (1,442 | ) | | | (911 | ) |
| Provision for income taxes | | | 1 | | | | — | | | | 1 | | | | 4 | |
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Loss from continuing operations | | | (413 | ) | | | (1,142 | ) | | | (1,443 | ) | | | (915 | ) |
| Income on discontinued operations, net of income taxes | | | 10 | | | | 5 | | | | 13 | | | | 11 | |
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Net loss | | $ | (403 | ) | | $ | (1,137 | ) | | $ | (1,430 | ) | | $ | (904 | ) |
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Basic net loss per share: | | | | | | | | | | | | | | | | |
| From continuing operations | | $ | (0.08 | ) | | $ | (0.24 | ) | | $ | (0.30 | ) | | $ | (0.19 | ) |
| On discontinued operations | | | (0.00 | ) | | | (0.00 | ) | | | (0.00 | ) | | | (0.00 | ) |
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| Basic net loss per share | | $ | (0.08 | ) | | $ | (0.24 | ) | | $ | (0.30 | ) | | $ | (0.19 | ) |
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Diluted net loss per share: | | | | | | | | | | | | | | | | |
| From continuing operations | | $ | (0.08 | ) | | $ | (0.24 | ) | | $ | (0.30 | ) | | $ | (0.19 | ) |
| On discontinued operations | | | (0.00 | ) | | | (0.00 | ) | | | (0.00 | ) | | | (0.00 | ) |
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| Diluted net loss per share | | $ | (0.08 | ) | | $ | (0.24 | ) | | $ | (0.30 | ) | | $ | (0.19 | ) |
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| Shares used in per share calculation: | | | | | | | | | | | | | | | | |
| Basic | | | 4,809 | | | | 4,778 | | | | 4,809 | | | | 4,755 | |
| Dilutive | | | 4,809 | | | | 4,778 | | | | 4,809 | | | | 4,755 | |
