UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the period ended September 29, 2001, or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from
__________________________ to __________________________
Commission File No. 0-12719
GIGA-TRONICS INCORPORATED
(Exact name of Registrant as specified in its charter)
California 94-2656341
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4650 Norris Canyon Road, San Ramon, CA 94583
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (925) 328-4650
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common stock outstanding as of October 24, 2001: 4,624,788
PAGE 2
GIGA-TRONICS INCORPORATED
INDEX
PART I - FINANCIAL INFORMATION Page No.
------------------------------ --------
ITEM 1 Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of September 29, 2001
and March 31, 2001 (unaudited) ................................................................. 3
Condensed Consolidated Statements of Operations, three and six months
ended September 29, 2001 and September 30, 2000 (unaudited) .................................... 4
Condensed Consolidated Statements of Cash Flows, six months
ended September 29, 2001 and September 30, 2000 (unaudited) .................................... 5
Notes to Unaudited Condensed Consolidated Financial Statements ................................. 6
ITEM 2 Management's Discussion and Analysis of
Operations and Financial Condition ............................................................. 9
PART II - OTHER INFORMATION
---------------------------
ITEM 1 Legal Proceedings
As of October 30, 2001, Giga-tronics has no material pending legal proceedings.
From time to time, Giga-tronics is involved in various disputes and litigation
matters that arise in the ordinary course of business
ITEM 2 TO 3 Not applicable
ITEM 4 Submission of Matters to a Vote of Security Holders ............................ 12
ITEM 5 Not applicable
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K
Not applicable
SIGNATURES ......................................................................................................... 13
PAGE 3
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share data)
Sept. 29, 2001 March 31, 2001
-------------- --------------
ASSETS
Current assets
Cash and cash equivalents $ 3,489 $ 3,469
Trade accounts receivable, net of allowance
of $254 and $262 respectively 6,001 7,767
Inventories, net 14,303 15,185
Prepaid expenses 1,079 549
Deferred income taxes 3,603 3,560
------- -------
TOTAL CURRENT ASSETS 28,475 30,530
Property and equipment
Leasehold improvements 408 398
Machinery and equipment 16,274 16,123
Office furniture and fixtures 1,156 1,142
------- -------
Property and equipment, gross cost 17,838 17,663
Less accumulated depreciation and amortization 13,107 12,357
------- -------
PROPERTY AND EQUIPMENT, NET 4,731 5,306
PATENTS AND LICENSES 28 36
GOODWILL, NET 257 339
OTHER ASSETS 1,321 1,232
------- -------
TOTAL ASSETS $34,812 $37,443
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,935 $ 3,347
Accrued commissions 307 435
Accrued payroll and benefits 1,406 1,687
Accrued warranty 791 732
Customer advances 423 690
Obligation under capital lease 142 167
Other current liabilities 625 548
------- -------
TOTAL CURRENT LIABILITIES 5,629 7,606
OBLIGATIONS UNDER CAPITAL LEASE, NET OF CURRENT PORTION 133 115
DEFERRED INCOME TAXES 796 796
DEFERRED RENT 437 451
------- -------
TOTAL LIABILITIES 6,995 8,968
------- -------
SHAREHOLDERS' EQUITY
Preferred stock of no par value
Authorized 1,000,000 shares; no shares outstanding
at September 29, 2001 and March 31, 2001 -- --
Common stock of no par value;
Authorized 40,000,000 shares; 4,624,788 shares at
September 29, 2001 and 4,542,694 shares at
March 31, 2001 issued and outstanding 12,529 12,346
Retained earnings 15,288 16,129
------- -------
TOTAL SHAREHOLDERS' EQUITY 27,817 28,475
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $34,812 $37,443
======= =======
See accompanying notes to unaudited condensed consolidated financial statements.
PAGE 4
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
------------------ ----------------
Sept. 29, 2001 Sept. 30, 2000 Sept. 29, 2001 Sept 30, 2000
-------------- -------------- -------------- -------------
NET SALES $ 9,892 $ 13,642 $ 21,689 $ 27,279
Cost of sales 6,280 8,828 14,751 17,502
-------- -------- -------- --------
GROSS PROFIT 3,612 4,814 6,938 9,777
Product development 1,775 1,390 3,544 2,556
Selling, general and administrative 2,240 2,840 4,758 5,386
Amortization of intangibles 45 68 90 131
-------- -------- -------- --------
Operating expenses 4,060 4,298 8,392 8,073
OPERATING (LOSS) INCOME (448) 516 (1,454) 1,704
Other income (expense) (2) 114 42 146
Interest income, net 15 36 34 69
-------- -------- -------- --------
(LOSS) EARNINGS BEFORE (BENEFIT) PROVISION
FOR INCOME TAXES AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE (435) 666 (1,378) 1,919
(Benefit) provision for income taxes (160) 201 (537) 577
-------- -------- -------- --------
(LOSS) EARNINGS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE $ (275) $ 465 $ (841) $ 1,342
Cumulative effect of accounting
change -- -- -- 520
-------- -------- -------- --------
NET (LOSS) EARNINGS $ (275) $ 465 $ (841) $ 822
======== ======== ======== ========
Basic net (loss) earnings per share:
Before cumulative effect of
accounting change $ (0.06) $ 0.10 $ (0.18) $ 0.30
Cumulative effect of accounting
change -- -- -- (0.12)
-------- -------- -------- --------
Basic net (loss) earnings per share $ (0.06) $ 0.10 $ (0.18) $ 0.18
======== ======== ======== ========
Diluted net (loss) earnings per share:
Before cumulative effect of
accounting change $ (0.06) $ 0.10 $ (0.18) $ 0.28
Cumulative effect of accounting
change -- -- -- (0.11)
-------- -------- -------- --------
Diluted net (loss) earnings per share $ (0.06) $ 0.10 $ (0.18) $ 0.17
======== ======== ======== ========
Weighted average basic common
shares outstanding 4,591 4,460 4,578 4,449
======== ======== ======== ========
Weighted average diluted common
shares outstanding 4,591 4,796 4,578 4,806
======== ======== ======== ========
See accompanying notes to unaudited condensed consolidated financial statements.
PAGE 5
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
----------------
Sept. 29, 2001 Sept. 30, 2000
-------------- --------------
Cash flows provided from operations:
Net (loss) earnings $ (841) $ 822
Adjustments to reconcile net (loss) earnings to net cash provided by
operations:
Depreciation and amortization 1,072 1,058
Gain on sale of equipment (1) (21)
Deferred income taxes, net (43) (124)
Changes in operating assets and liabilities 175 432
------- -------
Net cash provided by operations 362 2,167
Cash flows from investing activities:
Additions to property and equipment (427) (586)
Proceeds from sale of equipment 12 26
Other assets (89) 582
------- -------
Net cash (used in) provided by investing activities (504) 22
Cash flows from financing activities:
Issuance of common stock 183 160
Payments on capital lease and other long term obligations (21) (86)
------- -------
Net cash provided by financing activities 162 74
Increase in cash and cash equivalents 20 2,263
------- -------
Beginning cash and cash equivalents 3,469 3,455
Ending cash and cash equivalents $ 3,489 $ 5,718
======= =======
Supplementary disclosure of cash flow information:
(1) No cash was paid for interest in the six month periods ended September
29, 2001 and September 30, 2000.
(2) Cash paid for income taxes in the six month period ended September 29,
2001 was $38,700. Cash paid for income taxes in the six month period
ended September 30, 2000 was $10,600.
See accompanying notes to unaudited condensed consolidated financial statements.
PAGE 6
GIGA-TRONICS INCORPORATED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The financial statements included herein have been prepared by the
Company, pursuant to the rules and regulations of the Securities and
Exchange Commission. The results of operations for the interim periods
shown in this report are not necessarily indicative of results to be
expected for the fiscal year. In the opinion of management, the
information contained herein reflects all adjustments necessary to make
the results of operations for the interim periods a fair statement of
such operations. For further information, refer to the financial
statements and footnotes thereto, included in the Annual Report on Form
10-K, filed with the Securities and Exchange Commission for the year
ended March 31, 2001.
Certain amounts in the accompanying March 2001 consolidated financial
statements have been reclassified in order to conform to the September
2001 consolidated financial statement presentation.
(2) Inventories
Inventories consist of the following (in thousands):
Sept. 29, 2001 March 31, 2001
-------------- --------------
Raw materials $ 8,477 $ 8,432
Work-in-process 4,104 4,833
Finished goods 1,009 1,020
Loaned Inventory 713 900
------- -------
Total inventory $14,303 $15,185
======= =======
(3) Earnings Per Share
Basic earnings per share is calculated by dividing net income or loss
by the weighted average common shares outstanding during the period.
Diluted earnings per share reflects the net incremental shares that
would be issued if dilutive outstanding stock options were exercised,
using the treasury stock method. In the case of a net loss, it is
assumed that no incremental shares would be issued because they would
be antidilutive. In addition, certain options are considered
antidilutive because the options' exercise price was above the average
market price during the period. The shares used in per share
computations for the three and six month periods ended September 29,
2001 and September 30, 2000 are as follows (in thousands):
PAGE 7
Three Months Ended Six Months Ended
------------------ ----------------
Sept. 29, 2001 Sept. 30, 2000 Sept. 29, 2001 Sept. 30, 2000
-------------- -------------- -------------- --------------
Net (loss) earnings $ (275) $ 465 $ (841) $ 822
Weighted average:
Common shares outstanding 4,591 4,460 4,578 4,449
Dilutive potential common shares -- 336 -- 357
Common shares assuming dilution 4,591 4,796 4,578 4,806
Number of stock options not included in
the computation 612 48 612 31
All stock options outstanding were excluded from the computation of
diluted EPS for the three and six month periods ended September 29,
2001 because the company experienced a loss from continuing operations
and the options are, therefore, antidilutive.
The number of stock options not included in the computation of diluted
EPS for the three and six month periods ended September 30, 2000
reflects stock options where the exercise prices were greater than the
average market price of the common shares and were, therefore,
antidilutive.
(4) Significant Customers and Industry Segment Information
The Company has five reportable segments: Giga-tronics Instrument
Division, ASCOR, Microsource, DYMATIX and Corporate. Giga-tronics
Instrument division produces a broad line of test and measurement
equipment used in the development, test and maintenance of wireless
communications products and systems, flight navigational equipment,
electronic defense systems and automatic testing systems. ASCOR
designs, manufactures, and markets a line of switching devices that
link together many specific purpose instruments that comprise automatic
test systems. Microsource develops and manufactures a broad line of YIG
(Yttrium, Iron, Garnet) tuned oscillators, filters and microwave
synthesizers, which are used in a wide variety of microwave instruments
and devices. DYMATIX manufactures and markets optical inspection
equipment used to test semiconductor devices and automation equipment
for the test and inspection of silicon wafers. The Corporate segment
handles the financing needs of each segment and lends funds to each
segment as required.
PAGE 8
Information on reportable segments is as follows (in thousands):
Three Months Ended
------------------
September 29, 2001 September 30, 2000
------------------ ------------------
Pre-tax Pre-tax
Net Sales Income (loss) Net Sales Income (loss)
--------- ------------- --------- -------------
Giga-tronics Instrument $ 5,349 $ (8) $ 6,069 $ 240
ASCOR 982 (44) 1,931 376
Microsource 2,543 (400) 4,071 (172)
DYMATIX 1,018 (222) 1,571 (117)
Corporate -- 239 -- 339
------- ------- ------- -------
Total $ 9,892 $ (435) $13,642 $ 666
======= ======= ======= =======
Six Months Ended
----------------
September 29, 2001 September 30, 2000
------------------ ------------------
Pre-tax Pre-tax
Net Sales Income (loss) Net Sales Income (loss)
--------- ------------- --------- -------------
Giga-tronics Instrument $12,083 $ (91) $11,293 $ 447
ASCOR 2,062 (62) 3,828 863
Microsource 4,983 (1,383) 8,104 (158)
DYMATIX 2,561 (391) 4,054 176
Corporate -- 549 -- 591
------- ------- ------- -------
Total $21,689 $(1,378) $27,279 $ 1,919
======= ======= ======= =======
(5) Recently Issued Accounting Standards
In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 141, Business Combinations, and Statement No. 142,
Goodwill and Other Intangible Assets. Statement 141 requires that the
purchase method of accounting be used for all business combinations
initiated after June 30, 2001 as well as all purchase method business
combinations completed after June 30, 2001. Statement 141 also
specifies criteria intangible assets acquired in a purchase method
business combination must meet to be recognized and reported apart from
goodwill. Statement 142 will require that goodwill and intangible
assets with indefinite useful lives no longer be amortized, but instead
tested for impairment at least annually in accordance with the
provisions of Statement 142. Statement 142 will also require that
intangible assets with definite useful lives be amortized over their
respective estimated useful lives, and reviewed for impairment in
accordance with SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.
The Company is required to adopt the provisions of Statement 141
immediately, except with regard to business combinations initiated
prior to July 1, 2001, which it expects to account for using the
pooling-of-interest method, and Statement 142 effective January 1,
2002.
The Company has not yet determined the impact the adoption of
Statements 141 and 142 will have on its financial position or results
of operations.
PAGE 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
The forward-looking statements included in this report including, without
limitation, statements containing the words "believes", "anticipates",
"estimates", "expects", "intends" and words of similar import, which reflect
management's best judgment based on factors currently known, involve risks and
uncertainties. Actual results could differ materially from those anticipated in
these forward-looking statements as a result of a number of factors, including
but not limited to those listed in the Giga-tronics' annual report on Form 10-K
for the fiscal year ended March 31, 2001 Part I, under the heading "Certain
factors which may adversely affect future operations or an investment in
Giga-tronics", and "Management's Discussion and Analysis of Financial Conditions
and Results of Operations".
GENERAL
Giga-tronics designs, manufactures, and markets microwave and radio frequency
signal generation and power measurement instruments, switching devices, and YIG
tuned oscillators. These products are used in the development, test and
maintenance of wireless communications products and systems, electronic defense
systems and automatic testing systems (ATE). Giga-tronics also manufactures a
line of inspection and handling devices used in the production of semiconductor
devices.
THREE AND SIX MONTHS ENDED SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000
Total orders for the three month period were $2,465,000 versus $15,118,000 for
the comparable period last year. The new orders declined primarily due to the
weakness in the overall wireless market coupled with the partial order
cancellation at the Instrument division of $3,703,000. Orders for the Instrument
division were 98% ($6,935,000) lower in the second quarter of FY 2002 versus the
prior year. Orders for ASCOR were 30% ($325,000) lower for the second quarter
versus last year. Orders for Microsource were 84% ($4,413,000) lower than the
comparable quarter last year. DYMATIX orders were 58% ($980,000) lower in the
three months ended September 29, 2001 versus the same period a year ago. For the
six months ended September 29, 2001, orders were $14,304,000 compared to
$32,294,000 for the same period last year. Backlog at September 29, 2001 was
$32,578,000 (about $13.7 million is expected to be shipped within one year) as
compared to $41,309,000 (about $27.0 million was expected to be shipped within
one year) on September 30, 2000.
Net sales for the three and six month periods ended September 29, 2001 decreased
28% ($3,750,000) and 21% ($5,590,000), respectively, compared with the same
periods last year. The reduction in sales was primarily due to fewer orders
booked because of the general slowdown in the wireless market and stretch outs
on existing orders in backlog. Giga-tronics Instrument sales decreased 12%
($720,000) for the quarter on weak orders and increased 7% ($790,000) for the
six months ended September 29, 2001 primarily due to strong backlog as compared
to the same periods a year ago. ASCOR sales decreased during the quarter 49%
($949,000) and for the six months decreased 46% ($1,766,000) primarily due to
less backlog than the respective periods of a year ago. Sales for Microsource
decreased 38% ($1,528,000) in the quarter and 39% ($3,121,000) for the six
months ended September 29, 2001 primarily due to their customers delaying new
product shipments. Sales for DYMATIX decreased 35% ($553,000) in the quarter and
declined 37% ($1,493,000) for the six months primarily due to customers delaying
orders until the new product is released, as well as less backlog than the
comparable periods a year ago.
Cost of sales decreased 29% ($2,548,000) in the quarter ended September 29, 2001
from the similar period a year ago primarily due to the 28% decline in sales, in
addition to lower manufacturing costs. For the six months ended September 29,
2001, cost of sales decreased 16% ($2,751,000). This decrease is attributable to
21% lower sales coupled with higher manufacturing material costs and
manufacturing labor for the products shipped.
PAGE 10
Operating expenses for the three month period decreased 6% ($238,000) due to
decreases of $601,000 in SG&A and $23,000 in total amortization offset by an
increase of $386,000 in product development. For the six month period, operating
expenses increased 4% ($319,000) due to decreases of $629,000 in SG&A and
$41,000 in total amortization offset by an increase of $989,000 in product
development. Product development expenses for the three and six month periods
increased 28% ($386,000) and 39% ($989,000), respectively, compared with the
prior year primarily due to increased product development at DYMATIX and the
Instrument division, as well as, increased YIG product development costs at
Microsource. Selling, general and administrative expenses decreased 21%
($601,000) for the three months ended September 29, 2001 compared to the prior
year. The decrease is a result of lower commission expense of $297,000 on lower
sales for the quarter, $257,000 less in administrative expenses and $47,000 less
in marketing expenses during the quarter. For the six months ended September 29,
2001 selling, general and administrative expenses decreased 12% ($629,000) as
compared to the same period a year ago. The decrease is primarily due to lower
commission expense of $474,000 related to lower sales levels and lower
administrative expenses of $243,000 primarily due to expense reduction measures
offset primarily by increased marketing expenses of $88,000 at the Instrument
division and DYMATIX. Amortization of intangibles decreased 34% ($23,000) for
the three months and 31% ($41,000) for the six months as compared to the prior
year. The decrease in the amortization of intangibles is a result of lower
amortization of patents and licenses.
Interest income for the three and six month periods decreased from the prior
year due to less cash available for investment. The lower cash availability is
primarily due to less cash generated from operations than the previous periods a
year ago.
Earnings before income taxes for the three month and six month periods decreased
$1,101,000 and $3,297,000, respectively, compared to the same periods last year.
The change was primarily due to lower revenue and higher research and
development expenses.
FINANCIAL CONDITION
Giga-tronics maintains a strong financial position, with working capital of
$22,846,000 and a ratio of current assets to current liabilities of 5.1 to 1.0
at September 29, 2001. Giga-tronics continues to fund all of its working capital
needs from cash provided by operations. Cash provided from operations, for the
six months ended September 29, 2001, was $362,000.
Cash and cash equivalents increased $20,000. Giga-tronics spent $427,000 on new
manufacturing and test equipment and other capital items. Giga-tronics intends
to continue investing in capital items that support growth and new product
development, raise productivity and improve the quality of its products.
Historically, the Company has satisfied its cash needs internally for both
operating and capital expenditures, and management expects to continue to do so
for the foreseeable future.
Management believes that cash reserves and investments remain adequate to meet
anticipated operating needs. In addition, Giga-tronics has an unsecured
revolving line of credit for $7 million, none of which has been utilized. This
line of credit expires September 30, 2002. It is also the Company's intention to
increase research and development expenditures for the purpose of broadening its
product base. From time to time, the Company considers a variety of acquisition
opportunities to also broaden its product lines and expand its market. Such
acquisition activity could also increase the Company's operating expenses and
require the additional use of capital resources.
OUTLOOK
With the broad softening in the wireless industry, Giga-tronics' outlook for
2002 is cautious. Giga-tronics is uncertain of the duration and severity of the
current economic downturn in the markets we serve and the ultimate impact this
will have on the Company. While there are some indications of increased strength
in defense, the economic downturn has impacted capital spending in many of our
commercial markets and has resulted in declining new product orders. However,
Giga-tronics will continue to invest in new product development in order to
expand our product line and update our existing line with additional features.
While its Microsource segment is
PAGE 11
expected to improve in the current year, its short-term growth will be less than
previously anticipated as there are timing delays associated with currently
booked orders.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this section of the report, including statements
regarding sales under "OUTLOOK" and statements under "FINANCIAL CONDITION", are
forward-looking. While Giga-tronics believes that these statements are accurate,
Giga-tronics' business is dependent upon general economic conditions and various
conditions specific to the test and measurement, wireless and semiconductor
industries. Future trends and these factors could cause actual results to differ
materially from the forward-looking statements that we have made. In particular:
Giga-tronics has a significant number of defense-related orders. If the defense
market should decline, shipments in the current year could be less than
anticipated and cause a decrease in earnings. The Company's commercial product
backlog has a number of risks and uncertainties such as the cancellation or
deferral of orders, dispute over performance and our ability to collect amounts
due. If this occurs, then shipments in the current year could fall short of plan
resulting in a decline in earnings.
The market for electronics equipment is characterized by rapidly changing
technology and evolving industry standards. Giga-tronics believes that its
future success will depend, in part, upon its ability to develop and
commercialize its existing products, develop new products and applications and
in part to develop, manufacture and successfully introduce new products and
product lines with improved capabilities and continue enhancing existing
products. There can be no assurance that Giga-tronics will successfully complete
the development of current or future products or that such products will achieve
market acceptance. Giga-tronics may also experience difficulty obtaining
critical parts or components required in the manufacturing of our products,
resulting in our inability to fulfill orders in a timely manner, which may have
a negative impact on our earnings. Also, the Company may not timely ramp
manufacturing capacity to meet order demand and quickly adapt cost structures to
changing market conditions.
As part of its business strategy, the Company intends to broaden its product
lines and expand its markets, in part through the acquisition of other business
entities. The Company acquired Microsource, Inc. in fiscal 1999 in a transaction
accounted for as a purchase. The Company is subject to various risks in
connection with past and any future acquisitions. Such risks include, among
other things, the difficulty of assimilating the operations and personnel of the
acquired companies, the potential disruption of the Company's business, the
inability of the Company's management to maximize the financial and strategic
position of the Company by the successful incorporation of acquired technology
and rights into the Company's product offerings, the maintenance of uniform
standards, controls, procedures and policies, and the potential loss of key
employees of acquired companies. No assurance can be given that any acquisition
by the Company will or will not occur, that if an acquisition does occur, that
it will not materially and adversely affect the Company or that any such
acquisition will be successful in enhancing the Company's business. The Company
currently contemplates that future acquisitions may involve the issuance of
additional shares of the Company's common stock. Any such issuance may result in
dilution to all shareholders of the Company, and sales of such shares in
significant volume by the shareholders of acquired companies may depress the
price of the Company's common stock.
Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of this form 10-Q contain forward-looking
statements that involve risks and uncertainties. The actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause such differences include, but are not limited to, those
discussed herein and in the Company's 2001 Report 10-K under "Item 1. Business"
and "Certain Factors Which May Affect Future Operations Or An Investment In
Giga-tronics" as filed with the Securities and Exchange Commission.
PAGE 12
Part II, Item 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(A.) Annual Meeting of stockholders was held on August 30, 2001.
(1) The vote for the nominated Directors was as follows:
Nominee In Favor Withheld
------- -------- --------
George H. Bruns, Jr. 3,931,061 30,568
James A. Cole 3,926,839 34,790
Robert C. Wilson 3,948,839 12,790
William E. Wilson 3,950,839 10,790
(2) Other matters voted upon at the meeting were as follows:
(a) Approval of an amendment to the Giga-tronics, Inc.
Employee Stock Purchase Plan is as follows:
Number of Votes on Proposal Percent of Votes Cast
--------------------------- ---------------------
For 3,915,483 98.84%
Against 37,675 .95%
Abstain 8,471 .21%
Quorum 3,961,629 100.00%
Broker non-voted Shares = 0
(b) Ratification of the selection of KPMG LLP as
independent public accountants for the fiscal year
2002 was approved as follows:
Number of Votes on Proposal Percent of Votes Cast
--------------------------- ---------------------
For 3,948,069 99.66%
Against 12,772 .32%
Abstain 788 .02%
Quorum 3,961,629 100.00%
Broker non-voted Shares = 0
Outstanding shares on Record Date = 4,573,694
PAGE 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GIGA-TRONICS INCORPORATED
(Registrant)
Date: 10/30/01 /s/MARK H. COSMEZ II
------------------- ------------------------------------
Mark H. Cosmez II
Vice President, Finance and
Chief Financial Officer
(Principal Accounting Officer)