EX-99.1 3 f90022exv99w1.txt EXHIBIT 99.1 Exhibit 99.1 NEWS RELEASE -------------------------------------------------------------------------------- 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 ------------- ------------- ------------- ------------- NET SALES $ 5,228 $ 7,627 $ 22,281 $ 39,036 Cost of sales 4,749 6,435 16,378 27,501 ---------- ---------- ---------- ---------- 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 ---------- ---------- ---------- ---------- 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 ---------- ---------- ---------- ---------- LOSS BEFORE INCOME TAXES (2,487) (2,682) (6,664) (4,462) Provision (benefit) for income taxes (100) (1,612) 4,098 (2,360) ---------- ---------- ---------- ---------- NET LOSS $ (2,387) $ (1,070) $ (10,762) $ (2,102) ========== ========== ========== ========== Basic and diluted net loss per share $ (0.51) $ (0.23) $ (2.31) $ (0.46) ========== ========== ========== ========== Shares used in per share calculation: Basic and dilutive 4,682 4,635 4,663 4,604 ========== ========== ========== ==========
GIGA-TRONICS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands, except share data)
March 29, 2003 March 30, 2002 -------------- -------------- 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 ------- ------- 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 ------- ------- Property and equipment, gross cost 18,189 18,160 Less accumulated depreciation and amortization 15,915 14,098 ------- ------- PROPERTY AND EQUIPMENT, NET 2,274 4,062 PATENTS AND LICENSES -- 20 OTHER ASSETS 129 506 ------- ------- TOTAL ASSETS $21,789 $32,880 ======= ======= 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 ------- ------- 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 ------- ------- Total liabilities 5,829 6,219 ------- ------- 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 ------- ------- Total shareholders' equity 15,960 26,661 ------- ------- Total liabilities and shareholders' equity $21,789 $32,880 ======= =======