Exhibit 99.1
NEWS RELEASE
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For Release on May 8, 2003 Contact: Mark H. Cosmez II
4:00PM (ET) (925)328-4656 Vice President, Finance/Chief Financial Officer
GIGA-TRONICS REPORTS FOURTH QUARTER AND FISCAL YEAR 2003 RESULTS
SAN RAMON, CA - Giga-tronics Incorporated (NASDAQ/NMS: GIGA) today reported
sales of $22,281,000 for the fiscal year ended March 29, 2003 and $5,228,000 for
the 2003 fourth quarter compared to $39,036,000 and $7,627,000 respectively, for
the same periods a year earlier.
The Company experienced a net loss of $10,762,000 or $2.31 per fully
diluted share for the year compared with a net loss of $2,102,000 or $0.46 per
fully diluted share last year. The net loss for the year includes a $4,098,000
non-cash charge related to an increase in the allowance against the accrued tax
loss benefit, in addition to charges of approximately $1,450,000 in
restructuring and inventory write-offs primarily related to discontinued
products. For the fourth quarter of this year, Giga-tronics' net loss was
$2,387,000 or $0.51 per fully diluted share, which includes approximately
$950,000 in restructuring and inventory write-offs primarily related to
discontinued products at the DYMATiX division, versus a loss of $1,070,000 or
$0.23 per fully diluted share last year.
Bookings in the fourth quarter were $3,166,000 compared to the prior year
of $4,883,000 before the order reversal of $5,120,000 for a telecommunications
customer. Backlog at the end of the fourth quarter was $17.2 million, of which
approximately $8.1 million is shippable within one year as compared to $21.4
million, of which approximately $7.5 million was shippable within one year, in
the fourth quarter of the prior year.
Cash and cash equivalents at March 29, 2003 were $5,005,000 compared to
$7,180,000 at March 30, 2002.
The commercial wireless telecommunications market shows no signs of
improvement at this time, although military activity has increased for
Giga-tronics' products. The Company continues to monitor it's cost structure and
will take necessary actions to reduce expenses in all appropriate categories in
order to reduce losses and achieve profitability.
Giga-tronics maintains an optimistic long-term view and will remain fully
committed to the development of new products as essential for growth of our
business. For that reason, research and development expenses remain high in
proportion to sales and will continue so, as long as these new product programs
remain on schedule.
Giga-tronics will host a conference call today at 4:30 PM ET to discuss
the fourth quarter and full fiscal year results. To participate in the call,
dial 612-332-0418. The call will also be broadcast live on the internet at
www.gigatronics.com under "Corporate Info/Investor Relations". The conference
call discussion reflects management's views as of May 8, 2003 only.
Giga-tronics produces instruments, subsystems and sophisticated microwave
components that have broad applications in both defense electronics and wireless
telecommunications.
Giga-tronics is a publicly held company, traded over the counter on NASDAQ
National Market Systems under the symbol "GIGA".
This press release contains forward-looking statements concerning
reduction in expenses, profitability, backlog and shipments. Actual results may
differ significantly due to risks and uncertainties, such as future orders,
cancellations or deferrals, disputes over performance and the ability to collect
receivables. For further discussion, see Giga-tronics' annual report on Form
10-K for the fiscal year ended March 30, 2002 Part I, under the heading "Certain
Factors Which May Adversely Affect Future Operations or an Investment in
Giga-tronics" and Part II, under the heading "Management's Discussion and
Analysis of Results of Operations and Financial Condition".
GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
------------------- -------------------
Mar. 29, 2003 Mar. 30, 2002 Mar. 29, 2003 Mar. 30, 2002
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NET SALES $ 5,228 $ 7,627 $ 22,281 $ 39,036
Cost of sales 4,749 6,435 16,378 27,501
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GROSS PROFIT 479 1,192 5,903 11,535
Product development 1,351 1,845 5,644 7,001
Selling, general and administrative 1,587 1,805 6,800 8,729
Amortization of intangibles 4 219 20 355
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Operating expenses 2,942 3,869 12,464 16,085
OPERATING LOSS (2,463) (2,677) (6,561) (4,550)
Other income (expense) (38) (21) (163) 25
Interest income, net 14 16 60 63
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LOSS BEFORE INCOME TAXES (2,487) (2,682) (6,664) (4,462)
Provision (benefit) for income taxes (100) (1,612) 4,098 (2,360)
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NET LOSS $ (2,387) $ (1,070) $ (10,762) $ (2,102)
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Basic and diluted net loss per share $ (0.51) $ (0.23) $ (2.31) $ (0.46)
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Shares used in per share calculation:
Basic and dilutive 4,682 4,635 4,663 4,604
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GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share data)
March 29, 2003 March 30, 2002
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ASSETS
Current assets
Cash and cash equivalents $ 5,005 $ 7,180
Trade accounts receivable, net of allowance 3,245 3,881
of $353 and $358, respectively
Inventories 10,548 11,369
Income tax refund receivable 100 701
Prepaid expenses 488 320
Deferred income taxes -- 4,841
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TOTAL CURRENT ASSETS 19,386 28,292
Property and equipment
Leasehold improvements 674 408
Machinery and equipment 16,353 16,590
Office furniture and fixtures 1,162 1,162
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Property and equipment, gross cost 18,189 18,160
Less accumulated depreciation and amortization 15,915 14,098
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PROPERTY AND EQUIPMENT, NET 2,274 4,062
PATENTS AND LICENSES -- 20
OTHER ASSETS 129 506
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TOTAL ASSETS $21,789 $32,880
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,723 $ 1,426
Accrued commissions 249 224
Accrued payroll and benefits 1,038 1,249
Accrued warranty 859 779
Customer advances 796 780
Obligation under capital lease 76 89
Other current liabilities 719 610
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Total current liabilities 5,460 5,157
Obligations under capital lease, net of current portion 10 94
Deferred income taxes -- 546
Deferred rent 359 422
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Total liabilities 5,829 6,219
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Shareholders' equity
Preferred stock of no par value
Authorized 1,000,000 shares; no shares outstanding
at March 29, 2003 and March 30, 2002 -- --
Common stock of no par value;
Authorized 40,000,000 shares; 4,693,080 shares at
March 29, 2003 and 4,648,944 shares at
March 30, 2002 issued and outstanding 12,695 12,634
Retained earnings 3,265 14,027
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Total shareholders' equity 15,960 26,661
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Total liabilities and shareholders' equity $21,789 $32,880
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