UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended July 3, 2004 | |
or | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________________________ to ____________________________ | |
Commission File Number: 0-25662 | |
ANADIGICS, Inc. (Exact name of registrant as specified in its charter) | |
Delaware (State or other jurisdiction of incorporation or organization) | 22-2582106 (I.R.S. Employer Identification No.) |
141 Mt. Bethel Road, Warren, NJ (Address of principal executive offices) | 07059 (Zip Code) |
908-668-5000 (Registrant's telephone number, including area code) | |
35 Technology Drive, Warren, NJ 07059 (Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [x] No [ ]
The number of shares outstanding of the Registrant's common stock as of July 3, 2004 was 32,457,561.
INDEX
Part I. | Financial Information |
Item 1. | Financial Statements (unaudited) |
Condensed consolidated balance sheets – July 3, 2004 and December 31, 2003 | |
Condensed consolidated statements of operations and comprehensive loss – Three and six months ended July 3, 2004 and June 28, 2003. | |
Condensed consolidated statements of cash flows – Six months ended July 3, 2004 and June 28, 2003. | |
Notes to condensed consolidated financial statements – July 3, 2004. | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Part II. | Other Information |
Item 1. | Legal Proceedings |
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 6. | Exhibits and Reports on Form 8-K |
Signatures | |
July 3, 2004 | December 31, 2003 | ||||||
(unaudited) | (Note 1 | ) | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 19,313 | $ | 18,525 | |||
Marketable securities | 41,680 | 54,130 | |||||
Accounts receivable | 13,029 | 12,074 | |||||
Inventories | 13,960 | 10,321 | |||||
Prepaid expenses and other current assets | 4,231 | 3,243 | |||||
Total current assets | 92,213 | 98,293 | |||||
Marketable securities | 39,767 | 48,975 | |||||
Property and equipment: | |||||||
Equipment and furniture | 132,875 | 130,815 | |||||
Leasehold improvements | 38,437 | 38,437 | |||||
Projects in process | 1,466 | 1,609 | |||||
172,778 | 170,861 | ||||||
Less accumulated depreciation and amortization | (124,117 | ) | (115,619 | ) | |||
48,661 | 55,242 | ||||||
Goodwill and other intangibles, net of amortization | 6,394 | 1,788 | |||||
Other assets | 3,055 | 3,600 | |||||
Total assets | $ | 190,090 | $ | 207,898 | |||
Liabilities and stockholders equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 10,690 | $ | 9,497 | |||
Accrued liabilities | 6,374 | 5,618 | |||||
Accrued restructuring costs | 1,281 | 1,994 | |||||
Capital lease obligations | 49 | 84 | |||||
Total current liabilities | 18,394 | 17,193 | |||||
Long-term debt | 66,700 | 66,700 | |||||
Other long-term liabilities | 3,079 | 2,959 | |||||
Commitments and contingencies | |||||||
Stockholders equity: | |||||||
Common stock, $0.01 par value, 144,000,000 shares authorized, 32,457,561 and 31,225,888 issued and outstanding at July 3, 2004 and December 31, 2003 | 325 | 312 | |||||
Additional paid-in capital | 341,360 | 335,477 | |||||
Accumulated deficit | (239,364 | ) | (214,881 | ) | |||
Accumulated other comprehensive (loss) income | (404 | ) | 138 | ||||
Total stockholders’ equity | 101,917 | 121,046 | |||||
Total liabilities and stockholders’ equity | $ | 190,090 | $ | 207,898 |
Three Months Ended | Six Months Ended | ||||||||||||
July 3, 2004 | June 28, 2003 | July 3, 2004 | June 28, 2003 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Net sales | $ | 22,687 | $ | 18,037 | $ | 43,882 | $ | 34,124 | |||||
Cost of sales | 19,207 | 17,250 | 38,382 | 33,329 | |||||||||
Gross profit | 3,480 | 787 | 5,500 | 795 | |||||||||
Research and development expenses | 8,866 | 8,280 | 17,768 | 15,437 | |||||||||
Selling and administrative expenses | 6,099 | 4,521 | 11,889 | 9,039 | |||||||||
Restructuring and other charges | - | - | - | 625 | |||||||||
Purchased in-process R&D | - | 1,690 | - | 1,690 | |||||||||
Operating loss | (11,485 | ) | (13,704 | ) | (24,157 | ) | (25,996 | ) | |||||
Interest income | 551 | 875 | 1,210 | 1,888 | |||||||||
Interest expense | (940 | ) | (940 | ) | (1,880 | ) | (1,881 | ) | |||||
Other income (expense) | 143 | (2 | ) | 344 | (23 | ) | |||||||
Net loss | $ | (11,731 | ) | $ | (13,771 | ) | $ | (24,483 | ) | $ | (26,012 | ) | |
Net loss per share | $ | (0.36 | ) | $ | (0.45 | ) | $ | (0.77 | ) | $ | (0.85 | ) | |
Weighted average common shares outstanding | 32,404,755 | 30,674,033 | 31,984,714 | 30,674,033 |
Three months ended | Six months ended | ||||||||||||
July 3, 2004 | June 28, 2003 | July 3, 2004 | June 28, 2003 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Net loss | $ | (11,731 | ) | $ | (13,771 | ) | $ | (24,483 | ) | $ | (26,012 | ) | |
Unrealized loss on marketable securities | (522 | ) | (98 | ) | (507 | ) | (127 | ) | |||||
Foreign currency translation adjustment | (1 | ) | 7 | (16 | ) | 13 | |||||||
Reclassification adjustment: | |||||||||||||
Net realized loss (gain) previously in other comprehensive income | - | 3 | (19 | ) | 15 | ||||||||
Comprehensive loss | $ | (12,254 | ) | $ | (13,859 | ) | $ | (25,025 | ) | $ | (26,111 | ) |
ANADIGICS, Inc.
Six months ended | |||||||
July 3, 2004 | June 28, 2003 | ||||||
(unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITITIES | |||||||
Net loss | $ | (24,483 | ) | $ | (26,012 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 8,375 | 9,361 | |||||
Amortization | 780 | 631 | |||||
Amortization of premium on marketable securities | 1,166 | 1,146 | |||||
Purchased in-process R&D | - | 1,690 | |||||
Loss on disposal of equipment | - | 27 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (955 | ) | (851 | ) | |||
Inventory | (3,639 | ) | 618 | ||||
Prepaid expenses and other assets | (986 | ) | 836 | ||||
Accounts payable | 1,193 | (1,291 | ) | ||||
Accrued liabilities and other liabilities | 290 | (405 | ) | ||||
Net cash used in operating activities | (18,259 | ) | (14,250 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchases of plant and equipment | (2,058 | ) | (1,912 | ) | |||
Business acquisitions | (55 | ) | (2,933 | ) | |||
Purchases of marketable securities | (17,396 | ) | (58,205 | ) | |||
Proceeds from sale of marketable securities | 37,362 | 77,993 | |||||
Net cash provided by investing activities | 17,853 | 14,943 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Payment of capital lease obligations | (35 | ) | (44 | ) | |||
Issuance of common stock | 1,229 | - | |||||
Net cash provided by (used in) financing activities | 1,194 | (44 | ) | ||||
Net increase in cash and cash equivalents | 788 | 649 | |||||
Cash and cash equivalents at beginning of period | 18,525 | 24,343 | |||||
Cash and cash equivalents at end of period | $ | 19,313 | $ | 24,992 |
Three months ended | Six months ended | ||||||||||||
July 3, 2004 | June 28, 2003 | July 3, 2004 | June 28, 2003 | ||||||||||
Net loss, as reported | $ | (11,731 | ) | $ | (13,771 | ) | $ | (24,483 | ) | $ | (26,012 | ) | |
Stock based compensation included in reported net loss | 9 | 7 | 19 | 7 | |||||||||
Stock based compensation expense under fair value reporting | (1,803 | ) | (1,781 | ) | (3,345 | ) | (3,678 | ) | |||||
Pro-forma net loss | $ | (13,525 | ) | $ | (15,545 | ) | $ | (27,809 | ) | $ | (29,683 | ) | |
Net loss per share | |||||||||||||
As reported | $ | (0.36 | ) | $ | (0.45 | ) | $ | (0.77 | ) | $ | (0.85 | ) | |
Pro-forma | $ | (0.42 | ) | $ | (0.51 | ) | $ | (0.87 | ) | $ | (0.97 | ) |
Total | ||||
Fair value of tangible assets | $ | 1,029 | ||
Fair value of liabilities assumed | (527 | ) | ||
In-process research and development | 1,863 | |||
Process technology | 210 | |||
Covenant-not-to-compete | 175 | |||
Customer list | 240 | |||
Goodwill | 5,930 | |||
Total purchase price | $ | 8,920 |
Three months ended | Six months ended | ||||||
June 28, 2003 | |||||||
Pro-forma revenue | $ | 18,037 | $ | 34,483 | |||
Pro-forma net loss | (12,583 | ) | (26,792 | ) | |||
Pro-forma net loss per share | $ | (0.41 | ) | $ | (0.87 | ) |
July 3, 2004 | December 31, 2003 | ||||||
Raw materials | $ | 3,383 | $ | 3,302 | |||
Work in process | 9,524 | 7,200 | |||||
Finished goods | 4,981 | 4,564 | |||||
Reserves | (3,928 | ) | (4,745 | ) | |||
Total | $ | 13,960 | $ | 10,321 |
Three months ended | Six months ended | ||||||||||||
July 3, 2004 |
|
| June 28, 2003 |
|
| July 3, 2004 |
|
| June 28, 2003 | ||||
Weighted average common shares outstanding used to calculate basic loss per share | 32,404,755 | 30,674,033 | 31,984,714 | 30,674,033 | |||||||||
Net effect of dilutive securities based upon the treasury stock method using an average market price | -* | -* | -* | -* | |||||||||
Weighted average common and dilutive securities outstanding used to calculate diluted loss per share | 32,404,755 | 30,674,033 | 31,984,714 | 30,674,033 |
Three months ended | Six months ended | ||||||||||||
July 3, 2004 | June 28, 2003 | July 3, 2004 | June 28, 2003 | ||||||||||
Broadband | $ | 12,173 | $ | 9,038 | $ | 22,091 | $ | 16,550 | |||||
Wireless | 10,514 | 8,999 | 21,791 | 17,574 | |||||||||
Total | $ | 22,687 | $ | 18,037 | $ | 43,882 | $ | 34,124 |
Three months ended | Six months ended | ||||||||||||
July 3, 2004 |
|
| June 28, 2003 |
|
| July 3, 2004 |
|
| June 28, 2003 | ||||
Asia | $ | 12,098 | $ | 6,261 | $ | 24,315 | $ | 10,980 | |||||
USA and Canada | 9,131 | 10,369 | 16,526 | 20,833 | |||||||||
Other | 1,458 | 1,407 | 3,041 | 2,311 | |||||||||
Total | $ | 22,687 | $ | 18,037 | $ | 43,882 | $ | 34,124 |
Three months ended | Six months ended | ||||||||||||
July 3, 2004 |
|
| June 28, 2003 |
|
| July 3, 2004 |
|
| June 28, 2003 | ||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
Cost of sales | 84.6 | 95.6 | 87.5 | 97.7 | |||||||||
Gross profit | 15.4 | 4.4 | 12.5 | 2.3 | |||||||||
Research and development expenses | 39.1 | 45.9 | 40.5 | 45.2 | |||||||||
Selling and administrative expenses | 26.9 | 25.1 | 27.1 | 26.5 | |||||||||
Restructuring and other charges | - | - | - | 1.8 | |||||||||
Purchased in-process R&D | - | 9.4 | - | 5.0 | |||||||||
Operating loss | (50.6 | ) | (76.0 | ) | (55.1 | ) | (76.2 | ) | |||||
Interest income | 2.4 | 4.8 | 2.8 | 5.5 | |||||||||
Interest expense | (4.1 | ) | (5.2 | ) | (4.3 | ) | (5.5 | ) | |||||
Other income (expense) | 0.6 | - | 0.8 | - | |||||||||
Net loss | (51.7 | %) | (76.4 | %) | (55.8 | %) | (76.2 | %) |
Under the supervision and with the participation of certain members of the Company’s management, including the President and Chief Executive Officer and Chief Financial Officer, the Company completed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) to the Securities Exchange Act of 1934, as amended, (the "Exchange Act")). Based on this evaluation, the Company’s President and Chief Executive Officer and Chief Financial Officer believe that the disclosure controls and procedures were effective as of July 3, 2004.
There was no change in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
- The election of three Class III Directors of the Company to hold office until 2007.
- The ratification of the appointment of Ernst & Young, LLP as independent auditors of the Company for the fiscal year ending December 31, 2004
- The election of Ronald Rosenzweig as a Class III Director was approved by holders of 27,679,428 shares of the Company’s outstanding capital stock. Holders of 1,114,845 shares withheld from voting on such election. The election of Lewis Solomon as a Class III Director was approved by holders of 26,302,482 shares of the Company’s outstanding capital stock. Holders of 2,491,791 shares withheld from voting on such election. The election of Garry McGuire as a Class III Director was approved by holders of 27,788,291 shares of the Company’s outstanding capital stock. Holders of 1,005,982 shares withheld from voting on such election.
- The ratification of the appointment of Ernst & Young LLP as independent auditors was approved by holders of 27,621,501 shares of the Company’s outstanding capital stock. Holders of 1,150,767 shares voted against the ratification, and holders of 22,005 shares abstained from voting on such ratification.
- Exhibits:
- Reports on Form 8-K during the quarter ended July 3, 2004.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
By: | /s/ Thomas C. Shields |
Thomas C. Shields | |
Senior Vice President | |
and Chief Financial Officer |
- I have reviewed this quarterly report on Form 10-Q of ANADIGICS, Inc.;
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
- Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
- Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986;
- Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
- Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
- The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
- All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
- Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By: | /s/ Bami Bastani |
Bami Bastani | |
President and | |
Chief Executive Officer |
- I have reviewed this quarterly report on Form 10-Q of ANADIGICS, Inc.;
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
- Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
- Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986;
- Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
- Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
- The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
- All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
- Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By: | /s/ Thomas C. Shields |
Thomas C. Shields | |
Senior Vice President | |
and Chief Financial Officer |
By: | /s/ Bami Bastani |
Bami Bastani | |
President and | |
Chief Executive Officer |
By: | /s/ Thomas C. Shields |
Thomas C. Shields | |
Senior Vice President | |
and Chief Financial Officer |