Exhibit 99.1
Celeritek, Inc.
CELERITEK REPORTS FOURTH QUARTER AND YEAR
END RESULTS
(SANTA CLARA, CA), April 30, 2003,------Celeritek (NASDAQ National Market
System Symbol: CLTK), a manufacturer of GaAs semiconductor components for the
wireless communications market and GaAs-based subsystems for the defense market,
today reported financial results for its fourth quarter and fiscal year ended
March 31, 2003.
FINANCIAL RESULTS
For the fourth quarter of fiscal 2003, Celeritek reported revenues of $8.1
million, compared with $10.5 million in the third fiscal quarter of 2003 and
$13.2 million in the fourth quarter of fiscal 2002. The net loss for the fourth
quarter of fiscal 2003 was $4.5 million or $0.37 per share, compared with a net
loss of $2.8 million or $0.23 per share for the same period a year ago.
For fiscal 2003, revenues were $49.4 million, compared with revenues in
fiscal 2002 of $57.1 million. The net loss for the year was $17.0 million or
$1.39 per share, compared with $22.6 million or $1.87 per share for fiscal 2002.
The net loss for the year includes $4.6 million related to Celeritek's
acquisition of Tavanza, Inc. and special charges of $2.8 million for severance
costs, abandoned fixed assets and equipment leases. As part of Celeritek's
continued focus on aggressive cost controls, the company reduced overhead
expenses by $4.4 million in fiscal 2003, compared to fiscal 2002.
Semiconductor revenues were $3.0 million in the fourth quarter of fiscal
2003, compared to $5.5 million in the third quarter of fiscal 2003 and $6.7
million in the fourth quarter of fiscal 2002. The decrease in sales in the
fourth quarter compared to the third quarter of fiscal 2003 is due to the
previously announced decision of one of Celeritek's customers to discontinue its
strategy of dual sourcing power amplifier modules for handset applications.
Celeritek's sales to other semiconductor customers remained steady compared to
previous quarters.
Subsystem revenues were $5.1 million in the fourth quarter of fiscal 2003,
compared to $5.0 million in the third quarter of fiscal 2003 and $6.5 million in
the fourth quarter of fiscal 2002. Fourth quarter fiscal 2003 sales reflect
general uncertain economic conditions, particularly in the telecom market, which
continue to impact customer orders.
The Company used $3.0 million in cash in fiscal 2003 resulting in a
balance of cash and short-term investments of $95.6 million at March 31, 2003.
At the end of the fourth quarter of fiscal 2003, the accounts receivable and
inventory balances were $4.5 million and $3.6 million respectively, compared
with $3.4 million and $5.7 million respectively, at the end of the third quarter
of fiscal 2003.
COMMENTS FROM MANAGEMENT
Tamer Husseini, president and chief executive officer of Celeritek, said,
"We are executing on our plan to broaden our customer base and drive market
share gains and profitable growth."
"This quarter underscores the power of our Tavanza acquisition, which
combines leading edge technology with the manufacturing and sales support to
transform innovation into revenue opportunities. Our three new products
introduced in March add new features and functionality, while at the same time
address a broader customer base and significantly reduce Celeritek's
manufacturing costs. Further, as the first company to sample 3x3 mm power
amplifier modules, we are afforded an important time to market advantage over
our competitors. We have sampled this product with a number of customers and are
getting strong positive feedback that we believe will lead to market share gains
and revenue growth late this year."
"As part of our strategy to market standard products to a wider range of
customers in both the defense and wireless markets, we also recently announced a
global distribution partnership with Richardson Electronics. This is yet another
avenue that we believe will help Celeritek deliver year-over-year revenue growth
and value for our shareholders."
"While the economic environment has changed for our industry and our
company, I believe Celeritek is taking the right steps to adjust its business
and respond to market demand, and that we are on the path to profitability,"
concluded Mr. Husseini.
BUSINESS OUTLOOK
The Company currently expects revenues to be approximately $6.5 million to
$7.5 million in the first quarter of fiscal 2004 with gross margins of
approximately 7% to 9%. R&D expense is expected to be $2.7 million to $2.8
million for the quarter and SG&A expense, absent expenses related to the special
meeting, is expected to be $2.4 million to $2.6 million for the quarter. Cash
balances are projected to be approximately $91.0 million to $92 million at the
end of June 2003.
CONFERENCE CALL
Celeritek will host a conference call this afternoon at 2:00 PM Pacific
Time to discuss the results for the fourth quarter of fiscal 2003 and comment on
the Company's business outlook. The conference call will be broadcast live over
the Internet and can be accessed through the Investor Relations section of
Celeritek's web site: www.celeritek.com. The call will also be available live by
dialing (800) 634-1567 (within the US) and (212) 346-6474 (outside the US). A
replay of the call will be available through Monday, May 5th until 5:00 PM PT.
The replay number is (800) 633-8284 (within the US) and at (402) 977-9140
(outside the US). Enter reservation # 21142717 for the replay.
ABOUT CELERITEK
Celeritek designs and manufactures GaAs semiconductor components and
GaAs-based subsystems used in the transmission of voice, video and data traffic
over wireless communications networks. Its GaAs semiconductor components and
subsystems are designed to facilitate broadband voice and data transmission in
mobile handsets and wireless communications infrastructures. Its GaAs
semiconductor components primarily consist of transmit solutions, including
power amplifiers for cellular and PCS handsets. These products are focused on
the high growth CDMA and emerging WCDMA wireless market. Celeritek provides its
GaAs-based subsystems to leading companies in the defense industry.
SAFE HARBOR STATEMENT
This release contains forward-looking statements. These forward-looking
statements represent the Company's expectations or beliefs concerning future
events and include statements, among others, regarding: the expansion of our
customer base and the anticipated benefits therefrom; the expected increase in
revenue resulting from the introduction of our 3x3 mm power amplifier modules;
the anticipated benefits of the Tavanza acquisition; the expected benefits of
our partnership with Richardson Electronics; our current expectation that in the
first quarter of fiscal 2004 revenues will be approximately $6.5 million to $7.5
million and gross margins will be approximately 7% to 9%; our expectation that
SG&A expense will be approximately $2.7 million to $2.8 million for the quarter;
our expectation that SG&A expense will be approximately $2.4 million to $2.6
million for the quarter; and our expectation that the cash balances at the end
of June will be approximately $91.0 million to $92.0 million. The Company
undertakes no duty to update these forward-looking statements. Actual results
could differ materially from those projected in the forward-looking statements
as a result of known and unknown risk factors and uncertainties. Such factors
may include, but are not necessarily limited to: lost or delayed sales of our
power amplifier modules; uncertainties in the Korean telecommunications market;
possible management distraction and increased expenses resulting from the
consequences of Anaren Microwave's 13D filings; the potential effects from the
filings made by the Shareholder Protective Committee, including but not limited
to management distraction, increased expenses, decreased revenues, product
delays, and consequences that could result from a change in our management or
board of directors; the ability to achieve expected synergies from the Tavanza
acquisition; introduction by our competitors of amplifier products with features
similar or superior to ours; a decrease in manufacturing yields; and increased
expenses. Reference is made to the discussion of risk factors detailed in the
Company's filings with the Securities and Exchange Commission, including its
reports on Forms 10-K and 10-Q.
CELERITEK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, March 31,
2003 2002
-------- --------
(Note)
ASSETS
Current assets:
Cash and cash equivalents $ 28,909 $ 8,096
Short-term investments 66,727 90,597
Accounts receivable, net 4,483 10,001
Inventories 3,599 9,372
Prepaid expenses and other current assets 1,925 3,671
-------- --------
Total current assets 105,643 121,737
Property and equipment, net 11,029 14,839
Intangible assets 931 --
Other assets 4,857 3,112
-------- --------
Total assets $122,460 $139,688
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,355 $ 4,583
Accrued payroll 1,601 1,505
Accrued liabilities 4,201 3,098
Current portion of long-term debt 2,543 2,312
Current obligations under capital leases 597 669
-------- --------
Total current liabilities 13,297 12,167
Long-term debt, less current portion 2,126 4,675
Non-current obligations under capital leases 793 1,340
Shareholders' equity 106,244 121,506
-------- --------
Total liabilities and shareholders' equity $122,460 $139,688
======== ========
Note: The balance sheet at March 31, 2002 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required
by generally accepted accounting principles for complete financial statements.
CELERITEK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Fiscal Year Ended
March 31, March 31,
------------------------- -------------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net sales $ 8,075 $ 13,227 $ 49,423 $ 57,050
Cost of goods sold 7,510 10,533 39,101 1,839
-------- -------- -------- --------
Gross profit 565 2,694 10,322 5,211
Operating expenses:
Research and development 2,824 2,342 10,797 9,195
Selling, general and administrative 2,210 2,238 10,035 9,642
In-process research and development -- -- 4,414 --
Special charges 53 -- 2,836 10,960
Amortization of intangibles 129 -- 215 --
-------- -------- -------- --------
Total operating expenses 5,216 4,580 28,297 29,797
Loss from operations (4,651) (1,886) (17,975) (24,586)
Impairment of strategic investment (92) (1,702) (422) (1,702)
Impairment of short-term investment -- -- -- --
Interest income and other, net 336 560 1,506 3,490
-------- -------- -------- --------
Loss before income tax (4,407) (3,028) (16,891) (22,798)
Provision (benefit) for income taxes 135 (180) 136 (180)
-------- -------- -------- --------
Net loss ($ 4,542) ($ 2,848) ($17,027) ($22,618)
======== ======== ======== ========
Basic and diluted loss per share ($ 0.37) ($ 0.23) ($ 1.39) ($ 1.87)
======== ======== ======== ========
Weighted average common shares outstanding 12,328 12,174 12,285 12,076
Weighted average common shares outstanding,
assuming dilution 12,328 12,174 12,285 12,076