WASHINGTON, D.C. 20549
Page | ||
PART I | ||
Item 1: | Business | 3 |
Item 2: | Properties | 16 |
Item 3: | Legal Proceedings | 17 |
Item 4: | Submission of Matters to a Vote of Security Holders | 17 |
PART II | ||
Item 5: | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 17 |
Item 6: | Selected Financial Data | 17 |
Item 7: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 |
Item 7A: | Quantitative and Qualitative Disclosures About Market Risk | 24 |
Item 8: | Financial Statements and Supplementary Data | 25 |
Item 9: | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 41 |
1tem 9A: | Controls and Procedures | 41 |
Item 9B: | Other Information | 42 |
PART III | ||
Item 10: | Directors and Executive Officers of the Registrant | 43 |
Item 11: | Executive Compensation | 43 |
Item 12: | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 43 |
Item 13: | Certain Relationships and Related Transactions | 43 |
Item 14: | Principal Accountant Fees and Services | 43 |
PART IV | ||
Item 15: | Exhibits, Financial Statement Schedules | 43 |
* | Shorter cycle times. In both the wireless and broadband communications markets, manufacturers must bring new subscriber products to market quickly in order to maintain their market position. The development of multi-chip modules, using advanced packaging techniques, and the development of relationships with providers of RF reference designs is imperative; |
* | Need for low-cost products. Wireless handsets and cable set-top boxes are increasingly becoming consumer-driven, commodity products. Component suppliers must be cost effective in order for their market customers to stay competitive; and |
* | Stronger supplier relationships. The digital, wireless, cable and fiber optic industries are standards-driven. Companies in the communications industry must work very closely with their suppliers in order to develop new products. Companies therefore limit themselves to a small number of suppliers in order to keep their competitive advantages. |
* | Portable voice, video and data communications; |
* | Smaller, lighter handsets offering increased functionality; |
* | Reliable access and voice quality comparable to land lines; |
* | Longer talk-time and standby time; and |
* | Wireless access to the Internet. |
Product | Application |
Handset Products | |
Power Amplifier (PA) | Used in RF transmit chain of wireless handset to amplify signal to base station. |
Single-band PA module | Encapsulates InGaP HBT PA die and certain passive components in multi-layer laminate module. Used primarily in CDMA handsets. |
Quad-band PA module | Encapsulates InGaP HBT PA die, CMOS bias control chip, and certain passive components in multi-layer laminate module. Used primarily in GSM handsets. |
PowerPlexerTM | Encapsulates two InGaP HBT PA die, CMOS, bias and power control chip, antenna switch, coupler, harmonic filter and passives in multi-layer laminate module. Used in GSM handsets. |
RF Switches | Used in wireless handsets and other wireless applications to switch between receive and transmit modes and multiple frequency bands. |
Infrastructure Products | |
Driver Amplifiers | Used in cellular base stations in the transmit chain. |
Gain Blocks | Used in cellular base stations in the transmit chain. |
Product | Application | ||
CATV Set-top Boxes Products | |||
Tuner Upconverters and Downconverters | Used to perform signal amplification and frequency conversion in double-conversion video and data tuners. | ||
Active Splitters | Used to split an incoming signal to feed multiple tuners. | ||
CATV Infrastructure Products | |||
Line Amplifiers | Used to distribute RF signals from headends to subscribers. | ||
Drop Amplifiers | Used to amplify RF signals at individual subscriber locations. | ||
Photodetector Diodes | Used to convert from optical to RF signals. |
* | Demand for wireless data access and portability of wireless access devices; |
* | Emergence of several wireless data networking mediums, primarily via personal computers; and |
* | New market applications such as consumer electronics and wireless voice over Internet protocol (VoIP). |
Product | Application |
Single band Products | |
2.4 GHz power amplifiers | Used in wireless network interface cards (NIC), embedded PC notebook (mini-PCI) and access point (AP) applications to boost the transmit signal for increased range and data throughput. |
5 GHz power amplifiers | Used in wireless rich-media applications, such as streaming audio/video, to boost the transmit signal for increased range and data throughput. |
Dual band power amplifiers | Used in wireless network systems that require seamless transition between frequencies to mitigate interference and congestion. |
· | defects in masks, which are used to transfer circuit patterns onto our wafers; |
· | impurities in the materials used; |
· | contamination of the manufacturing environment; and |
· | equipment failure. |
· | other gallium arsenide integrated circuit manufacturers who may replace us as a supplier to our market customers or otherwise dilute our sales to them; |
· | silicon analog integrated circuit manufacturers; and |
· | companies which may penetrate the radio frequency/microwave integrated circuit communications market with other breakthrough technologies. |
· | decreased prices of our integrated circuits; |
· | reduced demand for our products; and |
· | a reduction in our ability to recover development engineering costs. |
• our performance and prospects; • the performance and prospects of our major customers; • the depth and liquidity of the market for our common stock; • investor perception of us and the industry in which we operate; • changes in earnings estimates or buy/sell recommendations by analysts; • general financial and other market conditions; and • domestic and international economic conditions. |
High | Low | ||||||
Calendar 2004 | |||||||
Fourth Quarter | $3.92 | $2.65 | |||||
Third Quarter | 5.15 | 3.21 | |||||
Second Quarter | 7.04 | 4.17 | |||||
First Quarter | 9.11 | 5.65 | |||||
Calendar 2003 | |||||||
Fourth Quarter | $ | 7.38 | $ | 4.52 | |||
Third Quarter | 5.65 | 2.98 | |||||
Second Quarter | 3.72 | 1.81 | |||||
First Quarter | 2.95 | 1.69 |
2000 | 2001 | 2002 | 2003 | 2004 | ||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||
Net sales | $ | 172,268 | $ | 84,765 | $ | 82,564 | $ | 75,212 | $ | 91,350 | ||||||
Gross profit (loss) | 82,797 | (2,932 | ) | 7,262 | 3,285 | 13,995 | ||||||||||
Operating income (loss) | 16,796 | (85,986 | ) | (65,565 | ) | (50,998 | ) | (41,822 | ) | |||||||
Income (loss) before income taxes | 28,596 | (82,782 | ) | (52,183 | ) | (51,139 | ) | (43,082 | ) | |||||||
Net income (loss) | 18,892 | (107,120 | ) | (55,886 | ) | (50,757 | ) | (43,082 | ) | |||||||
Earnings (loss) per share: | ||||||||||||||||
Basic | $ | 0.64 | $ | (3.54 | ) | $ | (1.83 | ) | $ | (1.65 | ) | $ | (1.33 | ) | ||
Diluted | $ | 0.60 | $ | (3.54 | ) | $ | (1.83 | ) | $ | (1.65 | ) | $ | (1.33 | ) | ||
BALANCE SHEET DATA: | ||||||||||||||||
Total cash and marketable securities | $ | 166,161 | $ | 200,095 | $ | 155,518 | $ | 121,630 | $ | 104,051 | ||||||
Working capital | 179,987 | 132,062 | 110,151 | 81,100 | 89,517 | |||||||||||
Total assets | 352,473 | 346,914 | 255,671 | 207,898 | 185,895 | |||||||||||
Total capital lease obligations | 250 | 94 | - | 90 | 18 | |||||||||||
Long-term debt, including current portion | 3,000 | 100,244 | 66,700 | 66,700 | 84,700 | |||||||||||
Total stockholders’ equity | 328,832 | 226,636 | 171,088 | 121,046 | 84,615 |
2002 | 2003 | 2004 | ||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||
Cost of sales | 91.2 | 95.6 | 84.7 | |||||||
Gross profit | 8.8 | 4.4 | 15.3 | |||||||
Research and development expense | 36.0 | 42.7 | 36.5 | |||||||
Selling and administrative expenses | 25.9 | 25.8 | 24.6 | |||||||
Restructuring and other charges | 6.1 | 1.2 | - | |||||||
Asset impairment charges | 10.5 | - | - | |||||||
Goodwill impairment charge | 9.7 | - | - | |||||||
Purchased in-process R & D | - | 2.5 | - | |||||||
Operating loss | (79.4 | ) | (67.8 | ) | (45.8 | ) | ||||
Interest income | 7.7 | 4.4 | 2.4 | |||||||
Interest expense | (6.2 | ) | (5.0 | ) | (4.5 | ) | ||||
Impairment of investments | (0.5 | ) | - | - | ||||||
Gain on repurchase of Convertible notes | 15.2 | - | 0.4 | |||||||
Other income | - | 0.4 | 0.3 | |||||||
Loss before income taxes | (63.2 | ) | (68.0 | ) | (47.2 | ) | ||||
Benefit from income taxes | (5.2 | ) | (0.5 | ) | - | |||||
Loss before cumulative effect of accounting change | (58.0 | ) | (67.5 | ) | (47.2 | ) | ||||
Cumulative effect of accounting change | (9.7 | ) | - | - | ||||||
Net loss | (67.7 | %) | (67.5 | %) | (47.2 | %) |
Lease Related | Workforce Reductions | Total | ||||||||
Year ended December 31, 2003 | ||||||||||
Beginning balance | $ | 2.8 | $ | 0.2 | $ | 3.0 | ||||
Restructuring and other expenses | 0.3 | 0.6 | 0.9 | |||||||
Deductions | (1.1 | ) | (0.8 | ) | (1.9 | ) | ||||
December 31, 2003 restructuring balance | 2.0 | - | 2.0 | |||||||
Year ended December 31, 2004 | ||||||||||
Deductions | (1.3 | ) | - | (1.3 | ) | |||||
December 31, 2004 restructuring balance | $ | 0.7 | $ | - | $ | 0.7 |
Lease Related | Workforce Reductions | Total | ||||||||
Year ended December 31, 2002 | ||||||||||
Beginning balance | $ | 1.1 | $ | 0.8 | $ | 1.9 | ||||
Restructuring and other expenses | 3.4 | 1.6 | 5.0 | |||||||
Deductions | (1.7 | ) | (2.2 | ) | (3.9 | ) | ||||
December 31, 2002 restructuring balance | 2.8 | 0.2 | 3.0 | |||||||
Year ended December 31, 2003 | ||||||||||
Restructuring and other expenses | 0.3 | 0.6 | 0.9 | |||||||
Deductions | (1.1 | ) | (0.8 | ) | (1.9 | ) | ||||
December 31, 2003 restructuring balance | $ | 2.0 | $ | - | $ | 2.0 |
GOODWILL IMPAIRMENT CHARGE. During 2002, we monitored fiber market conditions in light of additional job cuts and difficult prospects announced by several of our end-market customers. In view of these weaker market conditions during the third quarter of 2002, we evaluated our goodwill and intangible assets for potential impairment. As a result of that evaluation, we recorded a goodwill impairment charge of $8.0 million. Also see cumulative effect of accounting change below. There was no impairment of goodwill in 2003.
CONTRACTUAL OBLIGATIONS | PAYMENTS DUE BY PERIOD (in thousands) | |||||||||||||||
Total | 1 year and less | 1 - 3 years | 4 - 5 years | After 5 years | ||||||||||||
Long-term debt, including interest | $ | 98,182 | $ | 4,235 | $ | 52,543 | $ | 41,404 | $ | - | ||||||
Operating leases | 23,628 | 2,641 | 3,392 | 3,480 | 14,115 | |||||||||||
Capital leases | 18 | 18 | - | - | - | |||||||||||
Unconditional purchase obligations | 2,445 | 2,445 | - | - | - | |||||||||||
Total contractual cash obligations | $ | 124,273 | $ | 9,339 | $ | 55,935 | $ | 44,884 | $ | 14,115 |
Estimated Principal Amount and Weighted Average Stated Rate by Expected Maturity Value | Fair Value | |||||||||||||||
($’s 000) | 2005 | 2006 | 2007 | Total | ($’s 000 | ) | ||||||||||
Principal | $ | 63,240 | $ | 28,839 | - | $ | 92,079 | $ | 92,880 | |||||||
Weighted Average Stated Rates | 3.79 | % | 4.43 | % | - | 3.99 | % | - |
December 31, | |||||||
2003 | 2004 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,525 | $ | 11,171 | |||
Marketable securities | 54,130 | 63,615 | |||||
Accounts receivable, net of allowance for doubtful accounts of $752 and $988 in 2003 and 2004, respectively | 12,074 | 10,770 | |||||
Inventories | 10,321 | 14,436 | |||||
Prepaid expenses and other current assets | 3,243 | 3,073 | |||||
Total current assets | 98,293 | 103,065 | |||||
Marketable securities | 48,975 | 29,265 | |||||
Plant and equipment | |||||||
Equipment and furniture | 130,815 | 132,864 | |||||
Leasehold improvements | 38,437 | 38,774 | |||||
Projects in process | 1,609 | 1,341 | |||||
170,861 | 172,979 | ||||||
Less accumulated depreciation and amortization | 115,619 | 129,941 | |||||
55,242 | 43,038 | ||||||
Goodwill and other intangibles, less accumulated amortization of $64 and $258 in 2003 and 2004, respectively | 1,788 | 6,297 | |||||
Other assets | 3,600 | 4,230 | |||||
$ | 207,898 | $ | 185,895 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,497 | $ | 8,021 | |||
Accrued liabilities | 5,618 | 4,783 | |||||
Accrued restructuring costs | 1,994 | 726 | |||||
Current maturities of capital lease obligations | 84 | 18 | |||||
Total current liabilities | 17,193 | 13,548 | |||||
Long-term debt | 66,700 | 84,700 | |||||
Other long-term liabilities | 2,959 | 3,032 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.01 par value, 5,000,000 shares authorized, none issued or outstanding | |||||||
Common stock, convertible, non-voting, $0.01 par value, 1,000,000 shares authorized, none issued or outstanding | |||||||
Common stock, $0.01 par value, 144,000,000 shares authorized at December 31, 2003 and 2004, and 31,225,888 and 33,072,438 issued and outstanding at December 31, 2003 and 2004, respectively | 312 | 331 | |||||
Additional paid-in capital | 335,477 | 343,594 | |||||
Deferred compensation | - | (861 | ) | ||||
Accumulated deficit | (214,881 | ) | (257,963 | ) | |||
Accumulated other comprehensive income | 138 | (486 | ) | ||||
Total stockholders’ equity | 121,046 | 84,615 | |||||
$ | 207,898 | $ | 185,895 |
CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Net sales | $ | 82,564 | $ | 75,212 | $ | 91,350 | ||||
Cost of sales | 75,302 | 71,927 | 77,355 | |||||||
Gross profit | 7,262 | 3,285 | 13,995 | |||||||
Research and development expenses | 29,742 | 32,075 | 33,306 | |||||||
Selling and administrative expenses | 21,400 | 19,420 | 22,511 | |||||||
Restructuring and other charges | 5,001 | 925 | - | |||||||
Asset impairment charges | 8,641 | - | - | |||||||
Goodwill impairment charges | 8,043 | - | - | |||||||
Purchased in-process R&D | - | 1,863 | - | |||||||
72,827 | 54,283 | 55,817 | ||||||||
Operating loss | (65,565 | ) | (50,998 | ) | (41,822 | ) | ||||
Interest income | 6,309 | 3,344 | 2,203 | |||||||
Interest expense | (5,119 | ) | (3,761 | ) | (4,085 | ) | ||||
Impairment of investments | (390 | ) | - | - | ||||||
Gain on repurchase of Convertible notes | 12,581 | - | 327 | |||||||
Other income | 1 | 276 | 295 | |||||||
Loss before income taxes | (52,183 | ) | (51,139 | ) | (43,082 | ) | ||||
Benefit from income taxes | (4,307 | ) | (382 | ) | - | |||||
Loss before cumulative effect of accounting change | (47,876 | ) | (50,757 | ) | (43,082 | ) | ||||
Cumulative effect of accounting change | (8,010 | ) | - | - | ||||||
Net loss | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Net loss per share | ||||||||||
Basic and diluted | ||||||||||
Loss before cumulative effect of accounting change | $ | (1.57 | ) | $ | (1.65 | ) | $ | (1.33 | ) | |
Net loss | $ | (1.83 | ) | $ | (1.65 | ) | $ | (1.33 | ) | |
Weighted average common and dilutive securities outstanding | 30,587,032 | 30,716,749 | 32,412,922 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Net loss | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Other comprehensive income (loss) | ||||||||||
Unrealized gain (loss) on marketable securities | 116 | (666 | ) | (617 | ) | |||||
Foreign currency translation adjustment | (10 | ) | 46 | 12 | ||||||
Reclassification adjustment: | ||||||||||
Net realized (gain) loss previously included in other comprehensive income | (71 | ) | 15 | (19 | ) | |||||
Comprehensive loss | $ | (55,851 | ) | $ | (51,362 | ) | $ | (43,706 | ) |
Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Deferred Compensation | Accumulated Deficit | Accumulated Other Comprehensive Income (loss | ) | Total Stockholders’ Equity | |||||||||||||||
Balance, December 31, 2001 | 30,569 | $ | 306 | $ | 333,860 | - | $ | (108,328 | ) | $ | 708 | $ | 226,636 | |||||||||
Stock options exercised | 17 | - | 108 | 108 | ||||||||||||||||||
Shares issued under employee stock purchase plan | 88 | 1 | 194 | 195 | ||||||||||||||||||
Unrealized gains on marketable securities | 116 | 116 | ||||||||||||||||||||
Foreign currency translation adjustment | (10 | ) | (10 | ) | ||||||||||||||||||
Net realized gain, previously included in other comprehensive income | (71 | ) | (71 | ) | ||||||||||||||||||
Net loss | (55,886 | ) | (55,886 | ) | ||||||||||||||||||
Balance, December 31, 2002 | 30,674 | 307 | 334,162 | - | (164,124 | ) | 743 | 171,088 | ||||||||||||||
Stock options exercised | 23 | - | 67 | 67 | ||||||||||||||||||
Shares issued under employee stock purchase plan | 529 | 5 | 1,222 | 1,227 | ||||||||||||||||||
Unrealized loss on marketable securities | (666 | ) | (666 | ) | ||||||||||||||||||
Foreign currency translation adjustment | 46 | 46 | ||||||||||||||||||||
Net realized loss, previously included in other comprehensive income | 15 | 15 | ||||||||||||||||||||
Stock-based compensation | 26 | 26 | ||||||||||||||||||||
Net loss | (50,757 | ) | (50,757 | ) | ||||||||||||||||||
Balance, December 31, 2003 | 31,226 | 312 | 335,477 | - | (214,881 | ) | 138 | 121,046 | ||||||||||||||
Stock options exercised | 536 | 5 | 1,355 | 1,360 | ||||||||||||||||||
Shares issued under employee stock purchase plan | 182 | 2 | 561 | 563 | ||||||||||||||||||
Shares issued as contingent acquisition consideration | 747 | 8 | 4,640 | 4,648 | ||||||||||||||||||
Restricted stock grant | 403 | 4 | 1,613 | $ | (1,617 | ) | - | |||||||||||||||
Restricted stock forfeitures | (22 | ) | - | (87 | ) | 87 | - | |||||||||||||||
Amortization of restricted stock | 669 | 669 | ||||||||||||||||||||
Unrealized loss on marketable securities | (617 | ) | (617 | ) | ||||||||||||||||||
Foreign currency translation adjustment | 12 | 12 | ||||||||||||||||||||
Net realized gain, previously included in other comprehensive income | (19 | ) | (19 | ) | ||||||||||||||||||
Stock-based compensation | 35 | 35 | ||||||||||||||||||||
Net loss | (43,082 | ) | (43,082 | ) | ||||||||||||||||||
Balance, December 31, 2004 | 33,072 | $ | 331 | $ | 343,594 | $ | (861 | ) | $ | (257,963 | ) | $ | (486 | ) | $ | 84,615 |
YEAR ENDED DECEMBER 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net loss | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Cumulative effect of accounting change | 8,010 | - | - | |||||||
Gain on repurchase of Convertible notes | (12,581 | ) | - | (327 | ) | |||||
Depreciation | 19,828 | 18,481 | 15,282 | |||||||
Amortization | 2,197 | 1,173 | 1,483 | |||||||
Stock based compensation | - | 26 | 704 | |||||||
Amortization of premium on marketable securities | 2,256 | 2,432 | 2,090 | |||||||
Impairments of long-lived assets and investments | 17,074 | - | - | |||||||
Purchased in-process R&D | - | 1,863 | - | |||||||
Loss on sale of equipment | - | 20 | 15 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 1,184 | (2,906 | ) | 1,304 | ||||||
Inventory | 1,384 | 2,957 | (4,115 | ) | ||||||
Prepaid expenses and other assets | 1,070 | 1,234 | 361 | |||||||
Accounts payable | (1,681 | ) | 1,730 | (1,476 | ) | |||||
Accrued and other liabilities | (386 | ) | 146 | (1,892 | ) | |||||
Net cash used in operating activities | (17,531 | ) | (23,601 | ) | (29,653 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Purchases of plant and equipment | (4,945 | ) | (4,178 | ) | (3,427 | ) | ||||
Purchases of marketable securities | (104,619 | ) | (97,605 | ) | (51,128 | ) | ||||
Proceeds from sales of marketable securities | 108,197 | 122,577 | 58,627 | |||||||
Business acquisitions | - | (4,217 | ) | (55 | ) | |||||
Proceeds from sale of equipment | 2 | - | 130 | |||||||
Net cash (used in) provided by investing activities | (1,365 | ) | 16,577 | 4,147 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Payment of obligations under capital leases | (94 | ) | (88 | ) | (66 | ) | ||||
Repayments of long-term debt | (244 | ) | - | - | ||||||
Proceeds from issuance of long-term debt net of offering costs | - | - | 35,695 | |||||||
Repurchase of Convertible notes | (19,828 | ) | - | (19,400 | ) | |||||
Issuances of common stock, net of related expenses | 303 | 1,294 | 1,923 | |||||||
Net cash (used in) provided by financing activities | (19,863 | ) | 1,206 | 18,152 | ||||||
Net decrease in cash and cash equivalents | (38,759 | ) | (5,818 | ) | (7,354 | ) | ||||
Cash and cash equivalents at beginning of period | 63,102 | 24,343 | 18,525 | |||||||
Cash and cash equivalents at end of period | $ | 24,343 | $ | 18,525 | $ | 11,171 | ||||
Supplemental disclosures of cash flow information: | ||||||||||
Interest paid | $ | 4,549 | $ | 3,335 | $ | 3,193 | ||||
Taxes paid | 200 | - | 117 |
YEAR ENDED DECEMBER 31 | |||||||||||||||||||
2002 | 2003 | 2004 | |||||||||||||||||
$ |
|
| % |
|
| $ |
|
| % |
|
| $ |
|
| % | ||||
Customer (application) | |||||||||||||||||||
Motorola (Broadband) | $ | 18,666 | 23 | % | $ | 10,422 | 14 | % | $ | 9,184 | 10 | % | |||||||
Kyocera (Wireless) | 29,231 | 35 | % | 21,263 | 28 | % | 9,751 | 11 | % | ||||||||||
Scientific Atlanta (Broadband) | <10 | % | <10 | % | <10 | % | <10 | % | 9,218 | 10 | % | ||||||||
LG Electronics (Wireless) | <10 | % | <10 | % | 10,346 | 14 | % | 13,628 | 15 | % |
2002 | 2003 | 2004 | ||||||||
Net loss, as reported | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Stock based compensation included in reported net loss | - | 26 | 704 | |||||||
Stock based compensation expense under fair value reporting | (10,863 | ) | (7,905 | ) | (9,978 | ) | ||||
Pro forma net loss | $ | (66,749 | ) | $ | (58,636 | ) | $ | (52,356 | ) | |
Basic and diluted loss per share | ||||||||||
Net loss, as reported | $ | (1.83 | ) | $ | (1.65 | ) | $ | (1.33 | ) | |
Pro forma net loss | $ | (2.18 | ) | $ | (1.91 | ) | $ | (1.62 | ) |
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 |
Balance at December 31, 2003 | $ | 1,227 | ||
Additions, primarily related to RFS share issuance | 4,703 | |||
Balance at December 31, 2004 | $ | 5,930 |
Year Ended December 31 | |||||||
2002 | 2003 | ||||||
Pro-forma revenue | $ | 83,020 | $ | 75,751 | |||
Pro-forma net loss before cumulative effect of accounting change | (57,034 | ) | (51,947 | ) | |||
Pro-forma net loss | (65,044 | ) | (51,947 | ) | |||
Basic and diluted net loss per share | |||||||
Pro-forma net loss before cumulative effect of accounting change | $ | (1.86 | ) | $ | (1.69 | ) | |
Pro-forma net loss | (2.13 | ) | (1.69 | ) |
Gross Carrying Amount | Accumulated Amortization | ||||||||||||
December 31, | December 31, | ||||||||||||
2003 | 2004 | 2003 | 2004 | ||||||||||
Goodwill | $ | 1,227 | $ | 5,930 | $ | - | $ | - | |||||
Process Technology | 210 | 210 | 35 | 91 | |||||||||
Covenant not to compete | 175 | 175 | 12 | 70 | |||||||||
Customer list | 240 | 240 | 17 | 97 | |||||||||
$ | 1,852 | $ | 6,555 | $ | 64 | $ | 258 |
2005 | 2006 | 2007 | ||||||||
Amortization expense | $ | 194 | $ | 162 | $ | 11 |
Lease Related | Workforce Reductions | Total | ||||||||
Year ended December 31, 2002 | ||||||||||
Beginning balance | $ | 1,189 | $ | 709 | $ | 1,898 | ||||
Restructuring and other expenses | 3,374 | 1,628 | 5,002 | |||||||
Deductions | (1,759 | ) | (2,185 | ) | (3,944 | ) | ||||
December 31, 2002 restructuring balance | 2,804 | 152 | 2,956 | |||||||
Year ended December 31, 2003 | ||||||||||
Restructuring and other expenses | 300 | 625 | 925 | |||||||
Deductions | (1,124 | ) | (763 | ) | (1,887 | ) | ||||
December 31, 2003 restructuring balance | 1,980 | 14 | 1,994 | |||||||
Deductions | (1,254 | ) | (14 | ) | (1,268 | ) | ||||
December 31, 2004 restructuring balance | $ | 726 | $ | - | $ | 726 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Wireless | $ | 44,689 | $ | 41,538 | $ | 45,379 | ||||
Broadband | 37,875 | 33,674 | 45,971 | |||||||
Total | $ | 82,564 | $ | 75,212 | $ | 91,350 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Asia | $ | 31,897 | $ | 31,014 | $ | 48,939 | ||||
USA and Canada | 44,193 | 38,024 | 35,982 | |||||||
Other | 6,474 | 6,174 | 6,429 | |||||||
Total | $ | 82,564 | $ | 75,212 | $ | 91,350 |
7. COMMITMENTS AND CONTINGENCIES
YEAR | Capital Leases | Operating Leases | |||||
2005 | $ | 18 | $ | 2,641 | |||
2006 | 1,693 | ||||||
2007 | 1,699 | ||||||
2008 | 1,704 | ||||||
2009 | 1,776 | ||||||
Thereafter | 14,115 | ||||||
Total minimum lease payments | 18 | 23,628 | |||||
Less: contractually-required sublease income | - | (268 | ) | ||||
$ | 18 | $ | 23,360 |
Available-for-Sale Securities | ||||||||||
Cost | Gross Unrealized Gains (Losses) | Estimated Fair Value | ||||||||
US Treasury & Agency Securities | $ | 9,966 | $ | (16 | ) | $ | 9,950 | |||
US Corporate Securities | 93,014 | 141 | 93,155 | |||||||
Total at December 31, 2003 | $ | 102,980 | $ | 125 | $ | 103,105 | ||||
US Treasury & Agency Securities | $ | 11,908 | $ | (81 | ) | $ | 11,827 | |||
US Corporate Securities | 81,483 | (430 | ) | 81,053 | ||||||
Total at December 31, 2003 | $ | 93,391 | $ | (511 | ) | $ | 92,880 |
Available-for-Sale Securities | |||||||
Cost | Estimated Fair Value | ||||||
Due in one year or less | $ | 63,827 | $ | 63,615 | |||
Due after one year through two years | 29,564 | 29,265 | |||||
Total | $ | 93,391 | $ | 92,880 |
December 31, | |||||||
2003 | 2004 | ||||||
Raw materials | $ | 3,302 | $ | 3,510 | |||
Work in progress | 7,200 | 9,026 | |||||
Finished goods | 4,564 | 5,974 | |||||
15,066 | 18,510 | ||||||
Reserves | (4,745 | ) | (4,074 | ) | |||
Total | $ | 10,321 | $ | 14,436 |
December 31, | |||||||
2003 | 2004 | ||||||
Accrued compensation | $ | 3,732 | $ | 2,005 | |||
Warranty reserve | 100 | 159 | |||||
Other | 1,786 | 2,619 | |||||
$ | 5,618 | $ | 4,783 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Current benefit: | ||||||||||
Federal | $ | (4,307 | ) | $ | (382 | ) | $ | - | ||
State and foreign | - | - | - | |||||||
Deferred provision: | ||||||||||
Federal | - | - | - | |||||||
State and foreign | - | - | - | |||||||
Total | $ | (4,307 | ) | $ | (382 | ) | $ | - |
December 31, | |||||||
2003 | 2004 | ||||||
Deferred tax balances | |||||||
Accurals/reserves | $ | 3,790 | $ | 3,642 | |||
Net operating loss carryforwards | 77,260 | 94,285 | |||||
General business and research and development credits | 4,634 | 5,073 | |||||
Deferred rent expense | 1,091 | 1,160 | |||||
Difference in basis of plant and equipment | 2,295 | 2,689 | |||||
Other | (71 | ) | - | ||||
Valuation reserve | (88,999 | ) | (106,849 | ) | |||
Net deferred tax assets | - | - |
Year Ended December 31, | |||||||||||||||||||
2002 | 2003 | 2004 | |||||||||||||||||
Tax at US statutory rate | $ | (18,264 | ) | (35.0 | )% | $ | (17,899 | ) | (35.0 | )% | $ | (15,079 | ) | (35.0 | )% | ||||
State and foreign tax (benefit), net of federal tax effect | (1,696 | ) | (3.2 | ) | (1,662 | ) | (3.2 | ) | (1,400 | ) | (3.2 | ) | |||||||
Research and experimentation tax credits | (337 | ) | (0.6 | ) | - | - | (516 | ) | (1.2 | ) | |||||||||
Valuation allowance, net of carryback | 11,232 | 21.5 | 20,098 | 39.3 | 17,850 | 41.4 | |||||||||||||
Intangibles amortization and other | 4,758 | 9.1 | (919 | ) | (1.8 | ) | (855 | ) | (2.0 | ) | |||||||||
Benefit from income taxes | $ | (4,307 | ) | (8.2 | )% | $ | (382 | ) | (0.7 | )% | $ | - | 0.0 | % |
2002 | 2003 | 2004 | |||||||||||||||||
Common Stock Options | Weighted Average Exercise Price | Common Stock Options | Weighted Average Exercise Price | Common Stock Options | Weighted Average Exercise Price | ||||||||||||||
Outstanding at beginning of year | 6,283,632 | $ | 17.52 | 7,132,034 | $ | 10.80 | 5,904,937 | $ | 7.30 | ||||||||||
Granted | 2,248,353 | 3.90 | 856,366 | 3.44 | 1,943,713 | 7.16 | |||||||||||||
Exercised | (16,773 | ) | 6.44 | (22,961 | ) | 2.93 | (536,633 | ) | 2.53 | ||||||||||
Forfeited | (545,021 | ) | 21.17 | (386,571 | ) | 10.78 | (520,311 | ) | 9.31 | ||||||||||
Cancelled | (838,157 | ) | 36.90 | (1,673,931 | ) | 19.49 | - | - | |||||||||||
Outstanding at end of year | 7,132,034 | 10.80 | 5,904,937 | 7.30 | 6,791,706 | 7.47 | |||||||||||||
Exercisable at end of year | 3,903,164 | 13.69 | 4,185,488 | 8.65 | 6,172,285 | 7.94 |
Range of exercise prices | Outstanding Options at Dec. 31, 2004 | Weighted average remaining contractual life | Weighted average exercise price | Exercisable at Dec. 31, 2004 | Weighted average exercise price | |||||||||||
$1.98 - $2.53 | 1,412,550 | 8.00 | $ | 2.49 | 1,058,948 | $ | 2.50 | |||||||||
$2.79 - $5.33 | 1,816,777 | 5.13 | $ | 4.21 | 1,566,058 | $ | 4.39 | |||||||||
$5.63 - $7.65 | 1,892,492 | 8.88 | $ | 7.18 | 1,877,392 | $ | 7.19 | |||||||||
$7.66 - $13.59 | 897,338 | 4.78 | $ | 11.95 | 897,338 | $ | 11.95 | |||||||||
$13.60 - $53.48 | 772,549 | 5.10 | $ | 19.77 | 772,549 | $ | 19.77 |
Year ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Weighted average common shares outstanding used to calculate basic earnings per share | 30,587,032 | 30,716,749 | 32,412,922 | |||||||
Net effect of dilutive securities - based on treasury stock method using average market price | -* | -* | -* | |||||||
Weighted average common and dilutive securities outstanding used to calculate diluted earnings per share | 30,587,032 | 30,716,749 | 32,412,922 |
Foreign Currency Translation Adjustments | Unrealized Gain (loss) on available-for-sale securities | Total | ||||||||
Balance at December 31, 2002 | $ | (33 | ) | $ | 776 | $ | 743 | |||
Unrealized gain on available-for-sale securities | - | (666 | ) | (666 | ) | |||||
Foreign currency translation adjustment | 46 | - | 46 | |||||||
Net loss recognized in other comprehensive income | - | 15 | 15 | |||||||
Balance at December 31, 2003 | 13 | 125 | 138 | |||||||
Unrealized gain on available-for-sale securities | - | (617 | ) | (617 | ) | |||||
Foreign currency translation adjustment | 12 | - | 12 | |||||||
Net gain recognized in other comprehensive income | - | (19 | ) | (19 | ) | |||||
Balance at December 31, 2004 | $ | 25 | $ | (511 | ) | $ | (486 | ) |
Quarter Ended | |||||||||||||||||||||||||
2003 | 2004 | ||||||||||||||||||||||||
Mar 29 | June 28 | Sept. 28 | Dec. 31 | April 3 | July 3 | Oct. 2 | Dec. 31 | ||||||||||||||||||
Net sales | $ | 16,087 | $ | 18,037 | $ | 17,750 | $ | 23,338 | $ | 21,195 | $ | 22,687 | $ | 25,053 | $ | 22,415 | |||||||||
Cost of sales | 16,079 | 17,250 | 17,538 | 21,060 | 19,175 | 19,207 | 19,811 | 19,162 | |||||||||||||||||
Gross profit | 8 | 787 | 212 | 2,278 | 2,020 | 3,480 | 5,242 | 3,253 | |||||||||||||||||
Research and development | 7,157 | 8,280 | 8,029 | 8,609 | 8,902 | 8,866 | 7,884 | 7,654 | |||||||||||||||||
Selling and administrative expense | 4,518 | 4,521 | 4,795 | 5,586 | 5,790 | 6,099 | 5,482 | 5,140 | |||||||||||||||||
Restructuring and other charges | 625 | - | - | 300 | - | - | - | - | |||||||||||||||||
Purchased in-process R&D | - | 1,690 | - | 173 | - | - | - | - | |||||||||||||||||
Operating loss | (12,292 | ) | (13,704 | ) | (12,612 | ) | (12,390 | ) | (12,672 | ) | (11,485 | ) | (8,124 | ) | (9,541 | ) | |||||||||
Interest income | 1,013 | 875 | 741 | 715 | 659 | 551 | 469 | 524 | |||||||||||||||||
Interest expense | (941 | ) | (940 | ) | (940 | ) | (940 | ) | (940 | ) | (940 | ) | (955 | ) | (1,250 | ) | |||||||||
Gain on notes repurchase | - | - | - | - | - | - | 327 | - | |||||||||||||||||
Other (expense) income | (21 | ) | (2 | ) | 183 | 116 | 201 | 143 | (36 | ) | (13 | ) | |||||||||||||
Loss before income taxes | (12,241 | ) | (13,771 | ) | (12,628 | ) | (12,499 | ) | (12,752 | ) | (11,731 | ) | (8,319 | ) | (10,280 | ) | |||||||||
Benefit from income taxes | - | - | - | (382 | ) | - | - | - | - | ||||||||||||||||
Net loss | $ | (12,241 | ) | $ | (13,771 | ) | $ | 12,628 | ) | $ | 12,117 | ) | $ | (12,752 | ) | $ | (11,731 | ) | $ | (8,319 | ) | $ | (10,280 | ) | |
Basic and diluted loss per share | $ | (0.40 | ) | $ | (0.45 | ) | $ | (0.41 | ) | $ | (0.39 | ) | $ | (0.40 | ) | $ | (0.36 | ) | $ | (0.25 | ) | $ | (0.31 | ) |
- | Report of Independent Registered Public Accounting Firm |
- | Consolidated Balance Sheets - December 31, 2003 and 2004 |
- | Consolidated Statements of Operations - Years ended December 31, 2002, 2003 and 2004 |
- | Consolidated Statements of Comprehensive Loss - Years ended December 31, 2002, 2003 and 2004 |
- | Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2002,2003 and 2004 |
- | Consolidated Statements of Cash Flows - Years ended December 31, 2002, 2003 and 2004 |
- | Notes to Consolidated Financial Statements |
2.1 | Stock Purchase Agreement dated April 2, 2001, among the Company, Telcom Devices Corp. and the sellers named therein. Filed as an exhibit to the Company’s Current Report on Form 8-K dated April 6, 2001, and incorporated herein by reference. |
3.1 | Amended and Restated Certificate of Incorporation of the Company, together with all amendments thereto. Filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
3.2 | Amended and Restated By-laws of the Company. Filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
4.1 | Form of Common Stock Certificate. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
4.2 | Indenture, dated as of November 27, 2001, between the Company, as Issuer, and State Street Bank & Trust Company, N.A., as Trustee for the 5% Convertible Senior Notes due November 15, 2006. Filed as an exhibit to the Company’s Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
4.3 | Form of Registration Rights Agreement. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
4.4 | Schedule to Form of Registration Rights Agreement. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 333-20783), and incorporated herein by reference. |
4.5 | Rights Agreement dated as of December 17, 1998 between the Company and Chase Mellon Shareholder Services L.L.C., as Rights Agent. Filed as an exhibit to the Company’s current report on Form 8-K filed on December 17, 1998, and incorporated herein by reference. |
4.6 | Amendment No. 1 as of November 20, 2000 to the Rights Agreement dated as of December 17, 1998 between the Company and Chase Mellon Shareholder Services L.L.C., as Rights Agent. Filed as an exhibit to the Company’s Current Report on Form 8-K filed on December 4, 2000. |
4.7 | Registration Rights Agreement, dated November 27, 2001, between the Company, as Issuer, and the Purchasers of the 5% Convertible Senior Notes due November 15, 2006. Filed as an exhibit to the Company’s Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
4.8 | Form of 5% Convertible Senior Note due November 15, 2006 (included in Exhibit 4.2). |
4.9 | Post-effective Amendment No. 1 to Form S-3 for 5% Convertible Senior Notes due November 15, 2006. Filed on Form POS AM dated November 6, 2002, and incorporated herein by reference. |
4.10 | Indenture, dated as September 24, 2004, between the Company, as Issuer and U.S. Bank Trust National Association, as Trustee for the 5% Convertible Senior Notes due October 15, 2009. Filed as an exhibit to the Company’s Current Report on Form 8-K dated September 28, 2004, and incorporated herein by reference. |
4.11 | Registration Rights Agreement, dated September 24, 2004, between the Company, as Issuer, and the Purchasers of 5% Convertible Senior Notes due October 15, 2009. Filed as an exhibit to the Company’s Current Report on Form 8-K dated September 28, 2004, and incorporated herein by reference. |
4.12 | Form of 5% Convertible Senior Note due October 15, 2009 (included in Exhibit 4.10). |
10.1 | 1994 Long-Term Incentive and Share Award Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.2 | 1995 Long-Term Incentive and Share Award Plan, as amended May 29, 1997 and May 24, 2000. Filed as an exhibit to the Company’s current report on Form S-8 (Registration No. 333-49632), and incorporated herein by reference. |
10.3 | Employee Savings and Protection Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.4 | Form of Employee Stock Purchase Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.5 | Lease Agreement between Mt. Bethel Corporate Center and the Company dated May 1, 1993. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.6 | Lease Agreement between United States Land Resources, L.P. and the Company dated as of April 26, 1996. Filed as an exhibit to the Company's Registration Statement on Form S-1(Registration No. 333-20783), and incorporated herein by reference. |
10.7 | First Amendment, dated as of November 20, 1996, to the Lease agreement between United States Land Resources, L.P. and the Company dated as of April 26, 1996. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.8 | Second Amendment, dated as of September 8, 1997, to the Lease agreement between Warren Hi-Tech Center, L.P. (successor in interest to United States Land Resources, L.P.) and the Company dated as of April 26, 1996. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.9 | Third Amendment, dated as of December 20, 2000, to the Lease agreement between Warren Hi-Tech Center, L.P. (successor in interest to United States Land Resources, L.P.) and the Company dated as of April 26, 1996. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.10 | Employment Agreement between the Company and Dr. Bamdad Bastani, dated September 17, 1998. Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 4, 1999, and incorporated herein by reference. |
10.11 | Employment Agreement between the Company and Ronald Rosenzweig, dated June 1, 1999. Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 4, 1999, and incorporated herein by reference. |
10.12 | Amendment No. 1 as of March 15, 2002, to the Employment Agreement dated June 1, 1999, between the Company and Ronald Rosenzweig. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.13 | Employment Agreement between the Company and Thomas Shields, dated July 25, 2000. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.14 | Employment Agreement between the Company and Charles Huang, dated July 25, 2000. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.15 | Amendment No. 2 as of May 27, 2003, to the Employment Agreement dated June 1, 1999, between the Company and Ronald Rosenzweig. Filed as an exhibit to the Company’s Annual Report on Form 10-K dated March 15, 2004, and incorporated herein by reference. |
10.16 | Amendment No. 3 as of August 20, 2004, to the Employment Agreement dated June 1, 1999, between the Company and Ronald Rosenzweig. Filed as an exhibit to the Company’s Quarterly report on Form 10-Q for the quarter ended October 2, 2004, and incorporated herein by reference. |
10.17 | Form of 1997 Long-Term Incentive and Share Award Plan. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated February 18, 1997, and incorporated herein by reference. |
*21 | Subsidiary Listing |
*23.1 | Consent of Ernst and Young LLP. |
24.1 | Power of Attorney (included on the signature page of this Annual Report on Form 10-K). |
*31.1 | Rule 13a-14(a)/15d-14(a) Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc. |
*31.2 | Rule 13a-14(a)/15d-14(a) Certification of Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc. |
*32.1 | Section 1350 Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc. |
*32.2 | Section 1350 Certification of Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc. |
* Filed herewith |
Name | Title | Date |
/s/ Bami Bastani | President, Chief Executive Officer and Director (Principal Executive Officer) | March 16, 2005 |
Dr. Bami Bastani | ||
/s/ Thomas C. Shields | Senior Vice President and Chief Financial Officer (Principal Financial Accounting Officer) | March 16, 2005 |
Thomas C. Shields | ||
/s/ Ronald Rosenzweig | Chairman of the Board of Directors | March 16, 2005 |
Ronald Rosenzweig | ||
/s/ Paul S. Bachow | Director | March 16, 2005 |
Paul S. Bachow | ||
/s/ Garry McGuire | Director | March 16, 2005 |
Gary McGuire | ||
/s/ Harry T. Rein | Director | March 16, 2005 |
Harry T. Rein | ||
/s/ Lewis Solomon | Director | March 16, 2005 |
Lewis Solomon | ||
/s/ Dennis F. Strigl | Director | March 16, 2005 |
Dennis F. Strigl |
Description (Dollars in Thousands) | Balance at Beginning of Period | Additions Charged to Costs and Expenses | Deductions | Balance at end of period | |||||||||||
Year ended December 31, 2004: | |||||||||||||||
Deducted from asset account: | |||||||||||||||
Allowance for doubtful accounts | $ | 752 | $ | 240 | $ | (4 | ) | (1) | $ | 988 | |||||
Reserve for excess and obsolete inventory | 4,745 | 1,636 | (2,307 | ) | (2) | 4,074 | |||||||||
Reserve for warranty claims | 100 | 390 | (331 | ) | (3) | 159 | |||||||||
Year ended December 31, 2003 | |||||||||||||||
Deducted from asset account: | |||||||||||||||
Allowance for doubtful accounts | $ | 781 | $ | - | $ | (29 | ) | (1) | $ | 752 | |||||
Reserve for excess and obsolete inventory | 7,134 | 287 | (2,676 | ) | (2) | 4,745 | |||||||||
Reserve for warranty claims | 368 | 10 | (278 | ) | (3) | 100 | |||||||||
Year ended December 31, 2002 | |||||||||||||||
Deducted from asset account: | |||||||||||||||
Allowance for doubtful accounts | $ | 715 | $ | 297 | $ | (231 | ) | (1) | $ | 781 | |||||
Reserve for excess and obsolete inventory | 8,502 | 4,188 | (5,556 | ) | (2) | 7,134 | |||||||||
Reserve for warranty claims | 960 | (259 | ) | (333 | ) | (3) | 368 |
(1) | Uncollectible accounts written-off to the allowance account. |
Name of Subsidiary | State of Jurisdiction of Incorporation | % Owned |
ANADIGICS (U.K.) Limited | United Kingdom | 100% |
ANADIGICS, Limited | Israel | 100% |
ANADIGICS Denmark ApS | Denmark | 100% |
ANADIGICS Acquisition Corp | Delaware | 100% |
ANADIGICS Holding Corp. | Delaware | 100% |
Broadband & Wireless Investors, Incorporated | Delaware | 100% |
Integral Pathway, Inc. | New Jersey | 100% |
Telcom Devices Corp. | California | 100% |
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-89928) pertaining to the ANADIGICS, Inc. Stock Option Plan, 1994 Long-Term Incentive and Share Award Plan, 1995 Long-Term Incentive Share Award Plan and Employee Stock Purchase Plan, in the Registration Statements (Form S-8 No. 33-32533 and Form S-8 No. 333-63836) pertaining to the ANADIGICS, Inc. 1997 Long-Term Incentive and Share Award Plan for Employees and in the Registration Statements (Form S-3 No. 333-75040, Form S-3 No. 333-110538 and Form S-3 No. 333-120947) of our reports dated March 2, 2005, with respect to the consolidated financial statements and schedule of ANADIGICS, Inc. and ANADIGICS, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of ANADIGICS, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2004.
MetroPark, New Jersey
March 11, 2005
1. | I have reviewed this Annual Report on Form 10-K of ANADIGICS, Inc.; |
2. | 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; |
3. | 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; |
4. | 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | 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; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | 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 |
d) | 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 |
5. | 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 the registrant’s board of directors (or persons performing the equivalent functions): |
a) | 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 |
b) | 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 |
1. | I have reviewed this Annual Report on Form 10-K of ANADIGICS, Inc.; |
2. | 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; |
3. | 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; |
4. | 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | 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; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | 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 |
d) | 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 |
5. | 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 the registrant’s board of directors (or persons performing the equivalent functions): |
a) | 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 |
b) | 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 |
/s/ Thomas C. Shields | |
Thomas C. Shields | |
Senior Vice President | |
and Chief Financial Officer |
December 31, | |||||||
2003 | 2004 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,525 | $ | 11,171 | |||
Marketable securities | 54,130 | 63,615 | |||||
Accounts receivable, net of allowance for doubtful accounts of $752 and $988 in 2003 and 2004, respectively | 12,074 | 10,770 | |||||
Inventories | 10,321 | 14,436 | |||||
Prepaid expenses and other current assets | 3,243 | 3,073 | |||||
Total current assets | 98,293 | 103,065 | |||||
Marketable securities | 48,975 | 29,265 | |||||
Plant and equipment | |||||||
Equipment and furniture | 130,815 | 132,864 | |||||
Leasehold improvements | 38,437 | 38,774 | |||||
Projects in process | 1,609 | 1,341 | |||||
170,861 | 172,979 | ||||||
Less accumulated depreciation and amortization | 115,619 | 129,941 | |||||
55,242 | 43,038 | ||||||
Goodwill and other intangibles, less accumulated amortization of $64 and $258 in 2003 and 2004, respectively | 1,788 | 6,297 | |||||
Other assets | 3,600 | 4,230 | |||||
$ | 207,898 | $ | 185,895 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,497 | $ | 8,021 | |||
Accrued liabilities | 5,618 | 4,783 | |||||
Accrued restructuring costs | 1,994 | 726 | |||||
Current maturities of capital lease obligations | 84 | 18 | |||||
Total current liabilities | 17,193 | 13,548 | |||||
Long-term debt | 66,700 | 84,700 | |||||
Other long-term liabilities | 2,959 | 3,032 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.01 par value, 5,000,000 shares authorized, none issued or outstanding | |||||||
Common stock, convertible, non-voting, $0.01 par value, 1,000,000 shares authorized, none issued or outstanding | |||||||
Common stock, $0.01 par value, 144,000,000 shares authorized at December 31, 2003 and 2004, and 31,225,888 and 33,072,438 issued and outstanding at December 31, 2003 and 2004, respectively | 312 | 331 | |||||
Additional paid-in capital | 335,477 | 343,594 | |||||
Deferred compensation | - | (861 | ) | ||||
Accumulated deficit | (214,881 | ) | (257,963 | ) | |||
Accumulated other comprehensive income | 138 | (486 | ) | ||||
Total stockholders’ equity | 121,046 | 84,615 | |||||
$ | 207,898 | $ | 185,895 |
CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Net sales | $ | 82,564 | $ | 75,212 | $ | 91,350 | ||||
Cost of sales | 75,302 | 71,927 | 77,355 | |||||||
Gross profit | 7,262 | 3,285 | 13,995 | |||||||
Research and development expenses | 29,742 | 32,075 | 33,306 | |||||||
Selling and administrative expenses | 21,400 | 19,420 | 22,511 | |||||||
Restructuring and other charges | 5,001 | 925 | - | |||||||
Asset impairment charges | 8,641 | - | - | |||||||
Goodwill impairment charges | 8,043 | - | - | |||||||
Purchased in-process R&D | - | 1,863 | - | |||||||
72,827 | 54,283 | 55,817 | ||||||||
Operating loss | (65,565 | ) | (50,998 | ) | (41,822 | ) | ||||
Interest income | 6,309 | 3,344 | 2,203 | |||||||
Interest expense | (5,119 | ) | (3,761 | ) | (4,085 | ) | ||||
Impairment of investments | (390 | ) | - | - | ||||||
Gain on repurchase of Convertible notes | 12,581 | - | 327 | |||||||
Other income | 1 | 276 | 295 | |||||||
Loss before income taxes | (52,183 | ) | (51,139 | ) | (43,082 | ) | ||||
Benefit from income taxes | (4,307 | ) | (382 | ) | - | |||||
Loss before cumulative effect of accounting change | (47,876 | ) | (50,757 | ) | (43,082 | ) | ||||
Cumulative effect of accounting change | (8,010 | ) | - | - | ||||||
Net loss | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Net loss per share | ||||||||||
Basic and diluted | ||||||||||
Loss before cumulative effect of accounting change | $ | (1.57 | ) | $ | (1.65 | ) | $ | (1.33 | ) | |
Net loss | $ | (1.83 | ) | $ | (1.65 | ) | $ | (1.33 | ) | |
Weighted average common and dilutive securities outstanding | 30,587,032 | 30,716,749 | 32,412,922 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Net loss | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Other comprehensive income (loss) | ||||||||||
Unrealized gain (loss) on marketable securities | 116 | (666 | ) | (617 | ) | |||||
Foreign currency translation adjustment | (10 | ) | 46 | 12 | ||||||
Reclassification adjustment: | ||||||||||
Net realized (gain) loss previously included in other comprehensive income | (71 | ) | 15 | (19 | ) | |||||
Comprehensive loss | $ | (55,851 | ) | $ | (51,362 | ) | $ | (43,706 | ) |
Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Deferred Compensation | Accumulated Deficit | Accumulated Other Comprehensive Income (loss | ) | Total Stockholders’ Equity | |||||||||||||||
Balance, December 31, 2001 | 30,569 | $ | 306 | $ | 333,860 | - | $ | (108,328 | ) | $ | 708 | $ | 226,636 | |||||||||
Stock options exercised | 17 | - | 108 | 108 | ||||||||||||||||||
Shares issued under employee stock purchase plan | 88 | 1 | 194 | 195 | ||||||||||||||||||
Unrealized gains on marketable securities | 116 | 116 | ||||||||||||||||||||
Foreign currency translation adjustment | (10 | ) | (10 | ) | ||||||||||||||||||
Net realized gain, previously included in other comprehensive income | (71 | ) | (71 | ) | ||||||||||||||||||
Net loss | (55,886 | ) | (55,886 | ) | ||||||||||||||||||
Balance, December 31, 2002 | 30,674 | 307 | 334,162 | - | (164,124 | ) | 743 | 171,088 | ||||||||||||||
Stock options exercised | 23 | - | 67 | 67 | ||||||||||||||||||
Shares issued under employee stock purchase plan | 529 | 5 | 1,222 | 1,227 | ||||||||||||||||||
Unrealized loss on marketable securities | (666 | ) | (666 | ) | ||||||||||||||||||
Foreign currency translation adjustment | 46 | 46 | ||||||||||||||||||||
Net realized loss, previously included in other comprehensive income | 15 | 15 | ||||||||||||||||||||
Stock-based compensation | 26 | 26 | ||||||||||||||||||||
Net loss | (50,757 | ) | (50,757 | ) | ||||||||||||||||||
Balance, December 31, 2003 | 31,226 | 312 | 335,477 | - | (214,881 | ) | 138 | 121,046 | ||||||||||||||
Stock options exercised | 536 | 5 | 1,355 | 1,360 | ||||||||||||||||||
Shares issued under employee stock purchase plan | 182 | 2 | 561 | 563 | ||||||||||||||||||
Shares issued as contingent acquisition consideration | 747 | 8 | 4,640 | 4,648 | ||||||||||||||||||
Restricted stock grant | 403 | 4 | 1,613 | $ | (1,617 | ) | - | |||||||||||||||
Restricted stock forfeitures | (22 | ) | - | (87 | ) | 87 | - | |||||||||||||||
Amortization of restricted stock | 669 | 669 | ||||||||||||||||||||
Unrealized loss on marketable securities | (617 | ) | (617 | ) | ||||||||||||||||||
Foreign currency translation adjustment | 12 | 12 | ||||||||||||||||||||
Net realized gain, previously included in other comprehensive income | (19 | ) | (19 | ) | ||||||||||||||||||
Stock-based compensation | 35 | 35 | ||||||||||||||||||||
Net loss | (43,082 | ) | (43,082 | ) | ||||||||||||||||||
Balance, December 31, 2004 | 33,072 | $ | 331 | $ | 343,594 | $ | (861 | ) | $ | (257,963 | ) | $ | (486 | ) | $ | 84,615 |
YEAR ENDED DECEMBER 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net loss | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Cumulative effect of accounting change | 8,010 | - | - | |||||||
Gain on repurchase of Convertible notes | (12,581 | ) | - | (327 | ) | |||||
Depreciation | 19,828 | 18,481 | 15,282 | |||||||
Amortization | 2,197 | 1,173 | 1,483 | |||||||
Stock based compensation | - | 26 | 704 | |||||||
Amortization of premium on marketable securities | 2,256 | 2,432 | 2,090 | |||||||
Impairments of long-lived assets and investments | 17,074 | - | - | |||||||
Purchased in-process R&D | - | 1,863 | - | |||||||
Loss on sale of equipment | - | 20 | 15 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 1,184 | (2,906 | ) | 1,304 | ||||||
Inventory | 1,384 | 2,957 | (4,115 | ) | ||||||
Prepaid expenses and other assets | 1,070 | 1,234 | 361 | |||||||
Accounts payable | (1,681 | ) | 1,730 | (1,476 | ) | |||||
Accrued and other liabilities | (386 | ) | 146 | (1,892 | ) | |||||
Net cash used in operating activities | (17,531 | ) | (23,601 | ) | (29,653 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Purchases of plant and equipment | (4,945 | ) | (4,178 | ) | (3,427 | ) | ||||
Purchases of marketable securities | (104,619 | ) | (97,605 | ) | (51,128 | ) | ||||
Proceeds from sales of marketable securities | 108,197 | 122,577 | 58,627 | |||||||
Business acquisitions | - | (4,217 | ) | (55 | ) | |||||
Proceeds from sale of equipment | 2 | - | 130 | |||||||
Net cash (used in) provided by investing activities | (1,365 | ) | 16,577 | 4,147 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Payment of obligations under capital leases | (94 | ) | (88 | ) | (66 | ) | ||||
Repayments of long-term debt | (244 | ) | - | - | ||||||
Proceeds from issuance of long-term debt net of offering costs | - | - | 35,695 | |||||||
Repurchase of Convertible notes | (19,828 | ) | - | (19,400 | ) | |||||
Issuances of common stock, net of related expenses | 303 | 1,294 | 1,923 | |||||||
Net cash (used in) provided by financing activities | (19,863 | ) | 1,206 | 18,152 | ||||||
Net decrease in cash and cash equivalents | (38,759 | ) | (5,818 | ) | (7,354 | ) | ||||
Cash and cash equivalents at beginning of period | 63,102 | 24,343 | 18,525 | |||||||
Cash and cash equivalents at end of period | $ | 24,343 | $ | 18,525 | $ | 11,171 | ||||
Supplemental disclosures of cash flow information: | ||||||||||
Interest paid | $ | 4,549 | $ | 3,335 | $ | 3,193 | ||||
Taxes paid | 200 | - | 117 |
YEAR ENDED DECEMBER 31 | |||||||||||||||||||
2002 | 2003 | 2004 | |||||||||||||||||
$ |
|
| % |
|
| $ |
|
| % |
|
| $ |
|
| % | ||||
Customer (application) | |||||||||||||||||||
Motorola (Broadband) | $ | 18,666 | 23 | % | $ | 10,422 | 14 | % | $ | 9,184 | 10 | % | |||||||
Kyocera (Wireless) | 29,231 | 35 | % | 21,263 | 28 | % | 9,751 | 11 | % | ||||||||||
Scientific Atlanta (Broadband) | <10 | % | <10 | % | <10 | % | <10 | % | 9,218 | 10 | % | ||||||||
LG Electronics (Wireless) | <10 | % | <10 | % | 10,346 | 14 | % | 13,628 | 15 | % |
2002 | 2003 | 2004 | ||||||||
Net loss, as reported | $ | (55,886 | ) | $ | (50,757 | ) | $ | (43,082 | ) | |
Stock based compensation included in reported net loss | - | 26 | 704 | |||||||
Stock based compensation expense under fair value reporting | (10,863 | ) | (7,905 | ) | (9,978 | ) | ||||
Pro forma net loss | $ | (66,749 | ) | $ | (58,636 | ) | $ | (52,356 | ) | |
Basic and diluted loss per share | ||||||||||
Net loss, as reported | $ | (1.83 | ) | $ | (1.65 | ) | $ | (1.33 | ) | |
Pro forma net loss | $ | (2.18 | ) | $ | (1.91 | ) | $ | (1.62 | ) |
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 |
Balance at December 31, 2003 | $ | 1,227 | ||
Additions, primarily related to RFS share issuance | 4,703 | |||
Balance at December 31, 2004 | $ | 5,930 |
Year Ended December 31 | |||||||
2002 | 2003 | ||||||
Pro-forma revenue | $ | 83,020 | $ | 75,751 | |||
Pro-forma net loss before cumulative effect of accounting change | (57,034 | ) | (51,947 | ) | |||
Pro-forma net loss | (65,044 | ) | (51,947 | ) | |||
Basic and diluted net loss per share | |||||||
Pro-forma net loss before cumulative effect of accounting change | $ | (1.86 | ) | $ | (1.69 | ) | |
Pro-forma net loss | (2.13 | ) | (1.69 | ) |
Gross Carrying Amount | Accumulated Amortization | ||||||||||||
December 31, | December 31, | ||||||||||||
2003 | 2004 | 2003 | 2004 | ||||||||||
Goodwill | $ | 1,227 | $ | 5,930 | $ | - | $ | - | |||||
Process Technology | 210 | 210 | 35 | 91 | |||||||||
Covenant not to compete | 175 | 175 | 12 | 70 | |||||||||
Customer list | 240 | 240 | 17 | 97 | |||||||||
$ | 1,852 | $ | 6,555 | $ | 64 | $ | 258 |
2005 | 2006 | 2007 | ||||||||
Amortization expense | $ | 194 | $ | 162 | $ | 11 |
Lease Related | Workforce Reductions | Total | ||||||||
Year ended December 31, 2002 | ||||||||||
Beginning balance | $ | 1,189 | $ | 709 | $ | 1,898 | ||||
Restructuring and other expenses | 3,374 | 1,628 | 5,002 | |||||||
Deductions | (1,759 | ) | (2,185 | ) | (3,944 | ) | ||||
December 31, 2002 restructuring balance | 2,804 | 152 | 2,956 | |||||||
Year ended December 31, 2003 | ||||||||||
Restructuring and other expenses | 300 | 625 | 925 | |||||||
Deductions | (1,124 | ) | (763 | ) | (1,887 | ) | ||||
December 31, 2003 restructuring balance | 1,980 | 14 | 1,994 | |||||||
Deductions | (1,254 | ) | (14 | ) | (1,268 | ) | ||||
December 31, 2004 restructuring balance | $ | 726 | $ | - | $ | 726 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Wireless | $ | 44,689 | $ | 41,538 | $ | 45,379 | ||||
Broadband | 37,875 | 33,674 | 45,971 | |||||||
Total | $ | 82,564 | $ | 75,212 | $ | 91,350 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Asia | $ | 31,897 | $ | 31,014 | $ | 48,939 | ||||
USA and Canada | 44,193 | 38,024 | 35,982 | |||||||
Other | 6,474 | 6,174 | 6,429 | |||||||
Total | $ | 82,564 | $ | 75,212 | $ | 91,350 |
7. COMMITMENTS AND CONTINGENCIES
YEAR | Capital Leases | Operating Leases | |||||
2005 | $ | 18 | $ | 2,641 | |||
2006 | 1,693 | ||||||
2007 | 1,699 | ||||||
2008 | 1,704 | ||||||
2009 | 1,776 | ||||||
Thereafter | 14,115 | ||||||
Total minimum lease payments | 18 | 23,628 | |||||
Less: contractually-required sublease income | - | (268 | ) | ||||
$ | 18 | $ | 23,360 |
Available-for-Sale Securities | ||||||||||
Cost | Gross Unrealized Gains (Losses) | Estimated Fair Value | ||||||||
US Treasury & Agency Securities | $ | 9,966 | $ | (16 | ) | $ | 9,950 | |||
US Corporate Securities | 93,014 | 141 | 93,155 | |||||||
Total at December 31, 2003 | $ | 102,980 | $ | 125 | $ | 103,105 | ||||
US Treasury & Agency Securities | $ | 11,908 | $ | (81 | ) | $ | 11,827 | |||
US Corporate Securities | 81,483 | (430 | ) | 81,053 | ||||||
Total at December 31, 2003 | $ | 93,391 | $ | (511 | ) | $ | 92,880 |
Available-for-Sale Securities | |||||||
Cost | Estimated Fair Value | ||||||
Due in one year or less | $ | 63,827 | $ | 63,615 | |||
Due after one year through two years | 29,564 | 29,265 | |||||
Total | $ | 93,391 | $ | 92,880 |
December 31, | |||||||
2003 | 2004 | ||||||
Raw materials | $ | 3,302 | $ | 3,510 | |||
Work in progress | 7,200 | 9,026 | |||||
Finished goods | 4,564 | 5,974 | |||||
15,066 | 18,510 | ||||||
Reserves | (4,745 | ) | (4,074 | ) | |||
Total | $ | 10,321 | $ | 14,436 |
December 31, | |||||||
2003 | 2004 | ||||||
Accrued compensation | $ | 3,732 | $ | 2,005 | |||
Warranty reserve | 100 | 159 | |||||
Other | 1,786 | 2,619 | |||||
$ | 5,618 | $ | 4,783 |
Year Ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Current benefit: | ||||||||||
Federal | $ | (4,307 | ) | $ | (382 | ) | $ | - | ||
State and foreign | - | - | - | |||||||
Deferred provision: | ||||||||||
Federal | - | - | - | |||||||
State and foreign | - | - | - | |||||||
Total | $ | (4,307 | ) | $ | (382 | ) | $ | - |
December 31, | |||||||
2003 | 2004 | ||||||
Deferred tax balances | |||||||
Accurals/reserves | $ | 3,790 | $ | 3,642 | |||
Net operating loss carryforwards | 77,260 | 94,285 | |||||
General business and research and development credits | 4,634 | 5,073 | |||||
Deferred rent expense | 1,091 | 1,160 | |||||
Difference in basis of plant and equipment | 2,295 | 2,689 | |||||
Other | (71 | ) | - | ||||
Valuation reserve | (88,999 | ) | (106,849 | ) | |||
Net deferred tax assets | - | - |
Year Ended December 31, | |||||||||||||||||||
2002 | 2003 | 2004 | |||||||||||||||||
Tax at US statutory rate | $ | (18,264 | ) | (35.0 | )% | $ | (17,899 | ) | (35.0 | )% | $ | (15,079 | ) | (35.0 | )% | ||||
State and foreign tax (benefit), net of federal tax effect | (1,696 | ) | (3.2 | ) | (1,662 | ) | (3.2 | ) | (1,400 | ) | (3.2 | ) | |||||||
Research and experimentation tax credits | (337 | ) | (0.6 | ) | - | - | (516 | ) | (1.2 | ) | |||||||||
Valuation allowance, net of carryback | 11,232 | 21.5 | 20,098 | 39.3 | 17,850 | 41.4 | |||||||||||||
Intangibles amortization and other | 4,758 | 9.1 | (919 | ) | (1.8 | ) | (855 | ) | (2.0 | ) | |||||||||
Benefit from income taxes | $ | (4,307 | ) | (8.2 | )% | $ | (382 | ) | (0.7 | )% | $ | - | 0.0 | % |
2002 | 2003 | 2004 | |||||||||||||||||
Common Stock Options | Weighted Average Exercise Price | Common Stock Options | Weighted Average Exercise Price | Common Stock Options | Weighted Average Exercise Price | ||||||||||||||
Outstanding at beginning of year | 6,283,632 | $ | 17.52 | 7,132,034 | $ | 10.80 | 5,904,937 | $ | 7.30 | ||||||||||
Granted | 2,248,353 | 3.90 | 856,366 | 3.44 | 1,943,713 | 7.16 | |||||||||||||
Exercised | (16,773 | ) | 6.44 | (22,961 | ) | 2.93 | (536,633 | ) | 2.53 | ||||||||||
Forfeited | (545,021 | ) | 21.17 | (386,571 | ) | 10.78 | (520,311 | ) | 9.31 | ||||||||||
Cancelled | (838,157 | ) | 36.90 | (1,673,931 | ) | 19.49 | - | - | |||||||||||
Outstanding at end of year | 7,132,034 | 10.80 | 5,904,937 | 7.30 | 6,791,706 | 7.47 | |||||||||||||
Exercisable at end of year | 3,903,164 | 13.69 | 4,185,488 | 8.65 | 6,172,285 | 7.94 |
Range of exercise prices | Outstanding Options at Dec. 31, 2004 | Weighted average remaining contractual life | Weighted average exercise price | Exercisable at Dec. 31, 2004 | Weighted average exercise price | |||||||||||
$1.98 - $2.53 | 1,412,550 | 8.00 | $ | 2.49 | 1,058,948 | $ | 2.50 | |||||||||
$2.79 - $5.33 | 1,816,777 | 5.13 | $ | 4.21 | 1,566,058 | $ | 4.39 | |||||||||
$5.63 - $7.65 | 1,892,492 | 8.88 | $ | 7.18 | 1,877,392 | $ | 7.19 | |||||||||
$7.66 - $13.59 | 897,338 | 4.78 | $ | 11.95 | 897,338 | $ | 11.95 | |||||||||
$13.60 - $53.48 | 772,549 | 5.10 | $ | 19.77 | 772,549 | $ | 19.77 |
Year ended December 31, | ||||||||||
2002 | 2003 | 2004 | ||||||||
Weighted average common shares outstanding used to calculate basic earnings per share | 30,587,032 | 30,716,749 | 32,412,922 | |||||||
Net effect of dilutive securities - based on treasury stock method using average market price | -* | -* | -* | |||||||
Weighted average common and dilutive securities outstanding used to calculate diluted earnings per share | 30,587,032 | 30,716,749 | 32,412,922 |
Foreign Currency Translation Adjustments | Unrealized Gain (loss) on available-for-sale securities | Total | ||||||||
Balance at December 31, 2002 | $ | (33 | ) | $ | 776 | $ | 743 | |||
Unrealized gain on available-for-sale securities | - | (666 | ) | (666 | ) | |||||
Foreign currency translation adjustment | 46 | - | 46 | |||||||
Net loss recognized in other comprehensive income | - | 15 | 15 | |||||||
Balance at December 31, 2003 | 13 | 125 | 138 | |||||||
Unrealized gain on available-for-sale securities | - | (617 | ) | (617 | ) | |||||
Foreign currency translation adjustment | 12 | - | 12 | |||||||
Net gain recognized in other comprehensive income | - | (19 | ) | (19 | ) | |||||
Balance at December 31, 2004 | $ | 25 | $ | (511 | ) | $ | (486 | ) |
Quarter Ended | |||||||||||||||||||||||||
2003 | 2004 | ||||||||||||||||||||||||
Mar 29 | June 28 | Sept. 28 | Dec. 31 | April 3 | July 3 | Oct. 2 | Dec. 31 | ||||||||||||||||||
Net sales | $ | 16,087 | $ | 18,037 | $ | 17,750 | $ | 23,338 | $ | 21,195 | $ | 22,687 | $ | 25,053 | $ | 22,415 | |||||||||
Cost of sales | 16,079 | 17,250 | 17,538 | 21,060 | 19,175 | 19,207 | 19,811 | 19,162 | |||||||||||||||||
Gross profit | 8 | 787 | 212 | 2,278 | 2,020 | 3,480 | 5,242 | 3,253 | |||||||||||||||||
Research and development | 7,157 | 8,280 | 8,029 | 8,609 | 8,902 | 8,866 | 7,884 | 7,654 | |||||||||||||||||
Selling and administrative expense | 4,518 | 4,521 | 4,795 | 5,586 | 5,790 | 6,099 | 5,482 | 5,140 | |||||||||||||||||
Restructuring and other charges | 625 | - | - | 300 | - | - | - | - | |||||||||||||||||
Purchased in-process R&D | - | 1,690 | - | 173 | - | - | - | - | |||||||||||||||||
Operating loss | (12,292 | ) | (13,704 | ) | (12,612 | ) | (12,390 | ) | (12,672 | ) | (11,485 | ) | (8,124 | ) | (9,541 | ) | |||||||||
Interest income | 1,013 | 875 | 741 | 715 | 659 | 551 | 469 | 524 | |||||||||||||||||
Interest expense | (941 | ) | (940 | ) | (940 | ) | (940 | ) | (940 | ) | (940 | ) | (955 | ) | (1,250 | ) | |||||||||
Gain on notes repurchase | - | - | - | - | - | - | 327 | - | |||||||||||||||||
Other (expense) income | (21 | ) | (2 | ) | 183 | 116 | 201 | 143 | (36 | ) | (13 | ) | |||||||||||||
Loss before income taxes | (12,241 | ) | (13,771 | ) | (12,628 | ) | (12,499 | ) | (12,752 | ) | (11,731 | ) | (8,319 | ) | (10,280 | ) | |||||||||
Benefit from income taxes | - | - | - | (382 | ) | - | - | - | - | ||||||||||||||||
Net loss | $ | (12,241 | ) | $ | (13,771 | ) | $ | 12,628 | ) | $ | 12,117 | ) | $ | (12,752 | ) | $ | (11,731 | ) | $ | (8,319 | ) | $ | (10,280 | ) | |
Basic and diluted loss per share | $ | (0.40 | ) | $ | (0.45 | ) | $ | (0.41 | ) | $ | (0.39 | ) | $ | (0.40 | ) | $ | (0.36 | ) | $ | (0.25 | ) | $ | (0.31 | ) |
- | Report of Independent Registered Public Accounting Firm |
- | Consolidated Balance Sheets - December 31, 2003 and 2004 |
- | Consolidated Statements of Operations - Years ended December 31, 2002, 2003 and 2004 |
- | Consolidated Statements of Comprehensive Loss - Years ended December 31, 2002, 2003 and 2004 |
- | Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2002,2003 and 2004 |
- | Consolidated Statements of Cash Flows - Years ended December 31, 2002, 2003 and 2004 |
- | Notes to Consolidated Financial Statements |
2.1 | Stock Purchase Agreement dated April 2, 2001, among the Company, Telcom Devices Corp. and the sellers named therein. Filed as an exhibit to the Company’s Current Report on Form 8-K dated April 6, 2001, and incorporated herein by reference. |
3.1 | Amended and Restated Certificate of Incorporation of the Company, together with all amendments thereto. Filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
3.2 | Amended and Restated By-laws of the Company. Filed as an exhibit to the Company's Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
4.1 | Form of Common Stock Certificate. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
4.2 | Indenture, dated as of November 27, 2001, between the Company, as Issuer, and State Street Bank & Trust Company, N.A., as Trustee for the 5% Convertible Senior Notes due November 15, 2006. Filed as an exhibit to the Company’s Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
4.3 | Form of Registration Rights Agreement. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
4.4 | Schedule to Form of Registration Rights Agreement. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 333-20783), and incorporated herein by reference. |
4.5 | Rights Agreement dated as of December 17, 1998 between the Company and Chase Mellon Shareholder Services L.L.C., as Rights Agent. Filed as an exhibit to the Company’s current report on Form 8-K filed on December 17, 1998, and incorporated herein by reference. |
4.6 | Amendment No. 1 as of November 20, 2000 to the Rights Agreement dated as of December 17, 1998 between the Company and Chase Mellon Shareholder Services L.L.C., as Rights Agent. Filed as an exhibit to the Company’s Current Report on Form 8-K filed on December 4, 2000. |
4.7 | Registration Rights Agreement, dated November 27, 2001, between the Company, as Issuer, and the Purchasers of the 5% Convertible Senior Notes due November 15, 2006. Filed as an exhibit to the Company’s Registration Statement on Form S-3 (Registration No. 333-75040), and incorporated herein by reference. |
4.8 | Form of 5% Convertible Senior Note due November 15, 2006 (included in Exhibit 4.2). |
4.9 | Post-effective Amendment No. 1 to Form S-3 for 5% Convertible Senior Notes due November 15, 2006. Filed on Form POS AM dated November 6, 2002, and incorporated herein by reference. |
4.10 | Indenture, dated as September 24, 2004, between the Company, as Issuer and U.S. Bank Trust National Association, as Trustee for the 5% Convertible Senior Notes due October 15, 2009. Filed as an exhibit to the Company’s Current Report on Form 8-K dated September 28, 2004, and incorporated herein by reference. |
4.11 | Registration Rights Agreement, dated September 24, 2004, between the Company, as Issuer, and the Purchasers of 5% Convertible Senior Notes due October 15, 2009. Filed as an exhibit to the Company’s Current Report on Form 8-K dated September 28, 2004, and incorporated herein by reference. |
4.12 | Form of 5% Convertible Senior Note due October 15, 2009 (included in Exhibit 4.10). |
10.1 | 1994 Long-Term Incentive and Share Award Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.2 | 1995 Long-Term Incentive and Share Award Plan, as amended May 29, 1997 and May 24, 2000. Filed as an exhibit to the Company’s current report on Form S-8 (Registration No. 333-49632), and incorporated herein by reference. |
10.3 | Employee Savings and Protection Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.4 | Form of Employee Stock Purchase Plan. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.5 | Lease Agreement between Mt. Bethel Corporate Center and the Company dated May 1, 1993. Filed as an exhibit to the Company's Registration Statement on Form S-1 (Registration No. 33-89928), and incorporated herein by reference. |
10.6 | Lease Agreement between United States Land Resources, L.P. and the Company dated as of April 26, 1996. Filed as an exhibit to the Company's Registration Statement on Form S-1(Registration No. 333-20783), and incorporated herein by reference. |
10.7 | First Amendment, dated as of November 20, 1996, to the Lease agreement between United States Land Resources, L.P. and the Company dated as of April 26, 1996. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.8 | Second Amendment, dated as of September 8, 1997, to the Lease agreement between Warren Hi-Tech Center, L.P. (successor in interest to United States Land Resources, L.P.) and the Company dated as of April 26, 1996. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.9 | Third Amendment, dated as of December 20, 2000, to the Lease agreement between Warren Hi-Tech Center, L.P. (successor in interest to United States Land Resources, L.P.) and the Company dated as of April 26, 1996. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.10 | Employment Agreement between the Company and Dr. Bamdad Bastani, dated September 17, 1998. Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 4, 1999, and incorporated herein by reference. |
10.11 | Employment Agreement between the Company and Ronald Rosenzweig, dated June 1, 1999. Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 4, 1999, and incorporated herein by reference. |
10.12 | Amendment No. 1 as of March 15, 2002, to the Employment Agreement dated June 1, 1999, between the Company and Ronald Rosenzweig. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.13 | Employment Agreement between the Company and Thomas Shields, dated July 25, 2000. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.14 | Employment Agreement between the Company and Charles Huang, dated July 25, 2000. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated March 29, 2002, and incorporated herein by reference. |
10.15 | Amendment No. 2 as of May 27, 2003, to the Employment Agreement dated June 1, 1999, between the Company and Ronald Rosenzweig. Filed as an exhibit to the Company’s Annual Report on Form 10-K dated March 15, 2004, and incorporated herein by reference. |
10.16 | Amendment No. 3 as of August 20, 2004, to the Employment Agreement dated June 1, 1999, between the Company and Ronald Rosenzweig. Filed as an exhibit to the Company’s Quarterly report on Form 10-Q for the quarter ended October 2, 2004, and incorporated herein by reference. |
10.17 | Form of 1997 Long-Term Incentive and Share Award Plan. Filed as an exhibit to the Company’s Annual Report on Form 10-K405 dated February 18, 1997, and incorporated herein by reference. |
*21 | Subsidiary Listing |
*23.1 | Consent of Ernst and Young LLP. |
24.1 | Power of Attorney (included on the signature page of this Annual Report on Form 10-K). |
*31.1 | Rule 13a-14(a)/15d-14(a) Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc. |
*31.2 | Rule 13a-14(a)/15d-14(a) Certification of Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc. |
*32.1 | Section 1350 Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc. |
*32.2 | Section 1350 Certification of Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc. |
* Filed herewith |
Name | Title | Date |
/s/ Bami Bastani | President, Chief Executive Officer and Director (Principal Executive Officer) | March 16, 2005 |
Dr. Bami Bastani | ||
/s/ Thomas C. Shields | Senior Vice President and Chief Financial Officer (Principal Financial Accounting Officer) | March 16, 2005 |
Thomas C. Shields | ||
/s/ Ronald Rosenzweig | Chairman of the Board of Directors | March 16, 2005 |
Ronald Rosenzweig | ||
/s/ Paul S. Bachow | Director | March 16, 2005 |
Paul S. Bachow | ||
/s/ Garry McGuire | Director | March 16, 2005 |
Gary McGuire | ||
/s/ Harry T. Rein | Director | March 16, 2005 |
Harry T. Rein | ||
/s/ Lewis Solomon | Director | March 16, 2005 |
Lewis Solomon | ||
/s/ Dennis F. Strigl | Director | March 16, 2005 |
Dennis F. Strigl |
Description (Dollars in Thousands) | Balance at Beginning of Period | Additions Charged to Costs and Expenses | Deductions | Balance at end of period | |||||||||||
Year ended December 31, 2004: | |||||||||||||||
Deducted from asset account: | |||||||||||||||
Allowance for doubtful accounts | $ | 752 | $ | 240 | $ | (4 | ) | (1) | $ | 988 | |||||
Reserve for excess and obsolete inventory | 4,745 | 1,636 | (2,307 | ) | (2) | 4,074 | |||||||||
Reserve for warranty claims | 100 | 390 | (331 | ) | (3) | 159 | |||||||||
Year ended December 31, 2003 | |||||||||||||||
Deducted from asset account: | |||||||||||||||
Allowance for doubtful accounts | $ | 781 | $ | - | $ | (29 | ) | (1) | $ | 752 | |||||
Reserve for excess and obsolete inventory | 7,134 | 287 | (2,676 | ) | (2) | 4,745 | |||||||||
Reserve for warranty claims | 368 | 10 | (278 | ) | (3) | 100 | |||||||||
Year ended December 31, 2002 | |||||||||||||||
Deducted from asset account: | |||||||||||||||
Allowance for doubtful accounts | $ | 715 | $ | 297 | $ | (231 | ) | (1) | $ | 781 | |||||
Reserve for excess and obsolete inventory | 8,502 | 4,188 | (5,556 | ) | (2) | 7,134 | |||||||||
Reserve for warranty claims | 960 | (259 | ) | (333 | ) | (3) | 368 |
(1) | Uncollectible accounts written-off to the allowance account. |
Name of Subsidiary | State of Jurisdiction of Incorporation | % Owned |
ANADIGICS (U.K.) Limited | United Kingdom | 100% |
ANADIGICS, Limited | Israel | 100% |
ANADIGICS Denmark ApS | Denmark | 100% |
ANADIGICS Acquisition Corp | Delaware | 100% |
ANADIGICS Holding Corp. | Delaware | 100% |
Broadband & Wireless Investors, Incorporated | Delaware | 100% |
Integral Pathway, Inc. | New Jersey | 100% |
Telcom Devices Corp. | California | 100% |
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-89928) pertaining to the ANADIGICS, Inc. Stock Option Plan, 1994 Long-Term Incentive and Share Award Plan, 1995 Long-Term Incentive Share Award Plan and Employee Stock Purchase Plan, in the Registration Statements (Form S-8 No. 33-32533 and Form S-8 No. 333-63836) pertaining to the ANADIGICS, Inc. 1997 Long-Term Incentive and Share Award Plan for Employees and in the Registration Statements (Form S-3 No. 333-75040, Form S-3 No. 333-110538 and Form S-3 No. 333-120947) of our reports dated March 2, 2005, with respect to the consolidated financial statements and schedule of ANADIGICS, Inc. and ANADIGICS, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of ANADIGICS, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2004.
MetroPark, New Jersey
March 11, 2005
1. | I have reviewed this Annual Report on Form 10-K of ANADIGICS, Inc.; |
2. | 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; |
3. | 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; |
4. | 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | 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; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | 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 |
d) | 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 |
5. | 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 the registrant’s board of directors (or persons performing the equivalent functions): |
a) | 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 |
b) | 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 |
1. | I have reviewed this Annual Report on Form 10-K of ANADIGICS, Inc.; |
2. | 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; |
3. | 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; |
4. | 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | 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; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | 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 |
d) | 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 |
5. | 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 the registrant’s board of directors (or persons performing the equivalent functions): |
a) | 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 |
b) | 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 |
/s/ Thomas C. Shields | |
Thomas C. Shields | |
Senior Vice President | |
and Chief Financial Officer |