8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 28, 2010

GIGA-TRONICS INCORPORATED
(Exact name of registrant as specified in its charter)
California	0-12719		94-2656341
(State or other jurisdiction of incorporation)	(Commission File No.)		(IRS Employer Identification Number)
4650 Norris Canyon Road, San Ramon, CA		94583
(Address of principal executive offices)		(Zip Code)
(925) 328-4650
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 28, 2010, Giga-tronics Incorporated reported its third quarter fiscal year 2010 results.  A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The list of exhibits called for by this Item is incorporated by reference to the exhibit index to this report.

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 hereunto duly authorized.

	GIGA-TRONICS INCORPORATED
Date:  January 28, 2010
	By:  /s/ Patrick J. Lawlor
	Patrick J. Lawlor
	VP Finance, Chief Financial Officer and Secretary

EXHIBIT INDEX
Exhibit No.	Description
99.1	Press Release dated January 28, 2010

EX-99.1

EXHIBIT 99.1

NEWS RELEASE
For Release on January 28, 2010	Contact:  Pat Lawlor
4:00 PM (ET)    (925) 328-4656	Vice President, Finance/Chief Financial Officer

Giga-tronics Reports Fifth Straight Quarterly Profit

San Ramon, CA - Giga-tronics Incorporated (NASDAQ:GIGA) reported today its fifth consecutive quarterly net profit of $309,000 or $0.06 per fully diluted share for the quarter ended December 26, 2009.  This compares with a net profit of $349,000 or $0.07 per fully diluted share for the same period a year ago.  Net sales decreased 6% to $4,784,000 in the third quarter of fiscal 2010 compared to $5,099,000 in the third quarter of fiscal 2009.  Gross margin of $2,054,000 decreased by $366,000 over the same quarter last year.  Gross margin as a percentage of net sales decreased by 4.6% to 42.9% in the third quarter of fiscal 2010 as compared to 47.5% in the third quarter of fiscal 2009.   Operating expenses improved by 16% or $332,000 in the third quarter of fiscal 2010 due to a reduction in product development expenses of $166,000 and a reduction in selling, general and administrative expenses of $166,000.  The reduction in product development expenses was primarily due to $184,000 of customer funded development.  Orders decreased 18% in the third quarter of fiscal 2010 to $7,715,000 from $9,461,000 for the third quarter of fiscal 2009.

Net profit for the nine months ended December 26, 2009 was $1,015,000 or $0.21 per fully diluted share compared with a net loss of $713,000 or $0.15 per fully diluted share for the same period last year.  Net sales improved by 13% to $13,876,000 in the nine month period ended December 26, 2009 compared to $12,276,000 for the same period a year ago.  Gross margin of $6,281,000 improved by $1,126,000 over the same nine month period last year.  Gross margin as a percentage of net sales improved by 3.3% to 45.3% in the first nine months of fiscal 2010 as compared to 42.0% in the first nine months of fiscal 2009.  Operating expenses improved by 12% or $702,000 in the first nine months of fiscal 2010 due to a reduction in product development expenses of $500,000 and a reduction in selling, general and administrative expenses of $202,000.  The reduction in product development expenses was primarily due to $407,000 of customer funded development.  Orders decreased for the nine months ended December 26, 2009 to $15,098,000 compared to $16,774,000 for the same period of fiscal 2009.

Non-GAAP net income, which excludes share based compensation, for the three month period ended December 26, 2009 would have been $50,000 higher, or $359,000.  Non-GAAP basic and diluted earnings per share would have been $0.07 compared to $0.06 as reported.  For the same period last year, the Company’s non-GAAP net income would have been $55,000 higher or $404,000 and the basic and diluted earnings per share would have been $0.08 compared to $0.07 as reported.

Non-GAAP net income for the nine month period ended December 26, 2009 would have been $130,000 higher, or $1,145,000.  Non-GAAP basic and diluted earnings per share would have been $0.24 compared to $0.21 as reported.  For the same period last year, the Company’s non-GAAP net loss would have been $173,000 lower or $540,000 and the basic and diluted share loss would have been $0.11 compared to $0.15 as reported.

Backlog at December 26, 2009 was $10.3 million (approximately $8.6 million is shippable within one year) as compared to $12.0 million (approximately $8.9 million was shippable within one year) at December 27, 2008.

Cash and cash equivalents at December 26, 2009 were $2,457,000 compared to $1,345,000 as of September 26, 2009.  The Company continues to utilize $500,000 of its line of credit in the current quarter.

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the third quarter results. To participate in this call, dial (877) 407-8035 domestically or (201) 689-8035 for international.  The call will also be broadcast over the internet at www.gigatronics.com under “Investor Relations”.  The conference call discussion reflects management’s views as of January 28, 2010 only.

Giga-tronics is a publicly held company, traded on the NASDAQ Capital Market under the symbol “GIGA”.  Giga-tronics produces instruments, subsystems and sophisticated microwave components that have broad applications in defense electronics, aeronautics and wireless telecommunications.

This press release contains forward-looking statements concerning 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’ most recent annual report on Form 10-K for the fiscal year ended March 28, 2009, 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 Financial Condition and Results of Operations”.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
	December 26,			March 28,
(In thousands except share data)	2009			2009
Assets
Current assets
Cash and cash-equivalents	$	2,457		$	1,518
Trade accounts receivable, net of allowance
of $146 and $102, respectively		4,187			3,110
Inventories, net		6,229			5,409
Prepaid expenses and other current assets		234			430
Total current assets		13,107			10,467
Property and equipment, net		264			306
Other assets		16			16
Total assets	$	13,387		$	10,789
Liabilities and shareholders' equity
Current liabilities
Line of credit	$	500		$	-
Accounts payable		569			1,219
Accrued commission		193			144
Accrued payroll and benefits		688			397
Accrued warranty		169			177
Deferred revenue		2,276			959
Deferred rent		32			118
Capital lease obligation		16			16
Other current liabilities		274			306
Total current liabilities		4,717			3,336
Long term obligations - Deferred rent		65			96
Long term obligations - Capital lease		13			25
Total liabilities		4,795			3,457
Commitments and contingencies		-			-
Shareholders' equity
Preferred stock of no par value;
Authorized 1,000,000 shares; no shares outstanding
at December 26, 2009 and March 28, 2009		-			-
Common stock of no par value;
Authorized 40,000,000 shares; 4,885,271 shares at December 26, 2009
and 4,824,021 at March 28, 2009 issued and outstanding		13,913			13,668
Accumulated deficit		(5,321	)		(6,336	)
Total shareholders' equity		8,592			7,332
Total liabilities and shareholders' equity	$	13,387		$	10,789

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended						Nine Months Ended
	December 26,			December 27,			December 26,			December 27,
(In thousands except per-share data)	2009			2008			2009			2008
Net sales	$	4,784		$	5,099		$	13,876		$	12,276
Cost of sales		2,730			2,679			7,595			7,121
Gross profit		2,054			2,420			6,281			5,155
Engineering		313			479			1,057			1,557
Selling, general and administrative		1,424			1,590			4,189			4,391
Total operating expenses		1,737			2,069			5,246			5,948
Operating income (loss) from
continuing operations		317			351			1,035			(793	)
Other expense		-			-			(1	)		-
Interest (expense) income, net		(7	)		(2	)		(16	)		7
Income (loss) from continuing
operations before income taxes		310			349			1,018			(786	)
Provision for income taxes		1			-			3			2
Income (loss) from continuing operations		309			349			1,015			(788	)
Income on discontinued operations,
net of income taxes		-			-			-			75
Net income (loss)	$	309		$	349		$	1,015		$	(713	)
Basic and diluted earnings (loss) per share
From continuing operations	$	0.06		$	0.07		$	0.21		$	(0.16	)
On discontinued operations		-			-			-			0.01
Basic and diluted earnings (loss) per share	$	0.06		$	0.07		$	0.21		$	(0.15	)
Shares used in per share calculation:
Basic		4,846			4,824			4,833			4,824
Diluted		4,940			4,824			4,865			4,824