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):  February 1, 2011

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, including zip code)
	(925) 328-4650
	(Registrant’s telephone number, including area code)

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 February 1, 2011, Giga-tronics Incorporated reported its third quarter fiscal year 2011 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:  February 1, 2011
	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 February 1, 2011

EX-99.1

EXHIBIT 99.1

NEWS RELEASE
For Release on February 1, 2011	Contact:  Patrick J. Lawlor
4:00 PM (ET)  (925) 328-4656	Vice President Finance/Chief Financial Officer

Giga-tronics Reports Third Quarter FY 2011 Results

San Ramon, CA – February 1, 2011 –Giga-tronics Incorporated (NASDAQ: GIGA) reported today a net loss of $11,000 or $0.00 per fully diluted share for the quarter ended December 25, 2010.  This compares with a net profit of $309,000 or $0.06 per fully diluted share for the same period a year ago.  Net sales decreased 3% to $4,640,000 in the third quarter of fiscal 2011 compared to $4,784,000 in the third quarter of fiscal 2010.   Gross margin of $2,066,000 increased by $12,000 over the same quarter last year.  Gross margin as a percentage of net sales increased by 1.6% to 44.5% in the third quarter of fiscal 2011 as compared to 42.9% in the third quarter of fiscal 2010 due to a more favorable product mix on new switching business.  Operating expenses increased 18% or $315,000 in the third quarter of fiscal 2011 over the third quarter of fiscal 2010 primarily due to an increase of $246,000 in product development expenses.  The increase in product development expenses is due to lower customer funded projects.  Orders decreased 19% in the third quarter of fiscal 2011 to $6,221,000 from $7,715,000 for the third quarter of fiscal 2010.

Net profit for the nine month period ended December 25, 2010 was $13,536,000 or $2.70 per fully diluted share.  This compares with a net profit of $1,015,000 or $0.21 per fully diluted share for the same period a year ago.  It should be noted that in the first quarter of FY 2011 the Company reversed the valuation allowance against the deferred tax asset, resulting in an income tax benefit of $13,569,000.  Net sales increased 2% to $14,090,000 in the nine month period ended December 25, 2010 compared to $13,876,000 for the same period a year ago.  Gross margin of $5,909,000 decreased by $372,000 over the same nine month period last year.  Gross margin as a percentage of net sales decreased by 3.3% to 42.0% in the first nine months of fiscal 2011 as compared to 45.3% in the first nine mo nths of fiscal 2010.  Operating expenses increased by 15% or $768,000 in the first nine months of fiscal 2011 due to an increase of $551,000 in product development expenses and an increase of $217,000 in selling, general and administrative expenses.  Orders decreased 14% for the nine months ended December 25, 2010 to $12,910,000 compared to $15,098,000 for the same period last year.

Non-GAAP net income, which excludes the after-tax effect of share based compensation, for the three month period ended December 25, 2010 would have been $86,000 higher or $75,000.  Non-GAAP basic and diluted earnings per share would have been $0.02 compared to a loss of $0.00 as reported.  For the same period last year, the Company’s non-GAAP net income 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.

Non-GAAP net income, which excludes the after-tax effect of share based compensation, for the nine month period ended December 25, 2010 would have been $199,000 higher or $13,735,000.  Non-GAAP basic earnings per share would have been $2.79 compared to $2.75 as reported.  Non-GAAP diluted earnings per share would have been $2.74 compared to $2.70 as reported. For the same period last year, the Company’s non-GAAP net income 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.

Management has included this information as this expense is a non-cash item with no net equity impact.

Backlog for the quarter ended December 25, 2010 was $7.3 million (approximately $6.6 million shippable within one year) as compared to $10.3 million (approximately $8.6 million shippable within one year) for the quarter ended December 26, 2009.

Cash and cash equivalents at December 25, 2010 were $2,786,000 compared to $3,529,000 as of September 25, 2010.

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the third quarter results. To participate in the call, dial (866) 551-3680 domestically or (212) 401-6760 for international, and enter PIN Code 6480790#.  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 February 1, 2011only.

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, the ability to collect receivables and general market conditions.  For further discussion, see Giga-tronics’ most recent annual report on Form 10-K for the fiscal year ended March 27, 2010, 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)
(In thousands except share data)	December 25, 2010		March 27, 2010
Assets
Current assets
Cash and cash-equivalents	$	2,786	$	3,074
Trade accounts receivable, net of allowance
of $207 and $95, respectively		3,318		4,332
Inventories, net		5,686		5,803
Prepaid expenses and other current assets		195		383
Deferred income tax		2,017		-
Total current assets		14,002		13,592
Property and equipment, net		566		311
Deferred income tax - long term		11,620		-
Other assets		16		16
Total assets	$	26,204	$	13,919
Liabilities and shareholders' equity
Current liabilities
Accounts payable		904		881
Accrued commission		99		227
Accrued payroll and benefits		565		698
Accrued warranty		154		139
Deferred revenue		1,037		2,682
Deferred rent		144		-
Capital lease obligation		107		57
Other current liabilities		147		225
Total current liabilities		3,157		4,909
Long term obligations - deferred rent		170		31
Long term obligations - capital lease		24		36
Total liabilities		3,351		4,976
Commitments
Shareholders' equity
Preferred stock of no par value;
Authorized 1,000,000 shares; no shares outstanding
at December 25, 2010 and March 27, 2010		-		-
Common stock of no par value;
Authorized 40,000,000 shares; 4,966,682 shares at December 25, 2010
and 4,891,394 shares at March 27, 2010 issued and outstanding		14,353		13,979
Retained earnings (accumulated deficit)		8,500		(5,036	)
Total shareholders' equity		22,853		8,943
Total liabilities and shareholders' equity	$	26,204	$	13,919

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended						Nine Months Ended
	December 25,			December 26,			December 25,			December 26,
(In thousands except per-share data)	2010			2009			2010			2009
Net sales	$	4,640		$	4,784		$	14,090		$	13,876
Cost of sales		2,574			2,730			8,181			7,595
Gross margin		2,066			2,054			5,909			6,281
Engineering		559			313			1,608			1,057
Selling, general and administrative		1,493			1,424			4,406			4,189
Total operating expenses		2,052			1,737			6,014			5,246
Operating income (loss)		14			317			(105	)		1,035
Other expense, net		-			-			-			(1	)
Interest income (expense), net		4			(7	)		4			(16	)
Income (loss) before income taxes		18			310			(101	)		1,018
Provision (benefit) for income taxes		29			1			(13,637	)		3
Net (loss) income	$	(11	)	$	309		$	13,536		$	1,015
(Loss) earnings per share - basic	$	(0.00	)	$	0.06		$	2.75		$	0.21
(Loss) earnings per share - diluted	$	(0.00	)	$	0.06		$	2.70		$	0.21
Shares used in per share calculation:
Basic		4,946			4,846			4,920			4,833
Diluted		4,946			4,940			5,014			4,865