10-Q 1 anadthirdquarter200510q.htm ANADIGICS THIRD QUARTER 10Q ANADIGICS Third Quarter 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q
 
/x/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 1, 2005.
   
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. 0-25662
   
ANADIGICS, Inc.
(Exact name of registrant as specified in its charter)
   
Delaware
22-2582106
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
141 Mt. Bethel Road, Warren, New Jersey
07059
(Address of principal executive offices)
(Zip Code)
   
(908) 668-5000
(Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 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 [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ X ] No [ ]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [ X ]

The number of shares outstanding of the Registrant’s common stock as of October 1, 2005 was 34,189,180 (excluding 113,761 shares held in treasury).




INDEX

ANADIGICS, Inc.

PART I
Financial Information
   
Item 1.
Financial Statements (unaudited)
   
 
Condensed consolidated balance sheets - October 1, 2005 and December 31, 2004.
   
 
Condensed consolidated statements of operations and comprehensive loss - Three and nine months ended October 1, 2005 and October 2, 2004.
   
 
Condensed consolidated statements of cash flows - Nine months ended October 1, 2005 and October 2, 2004.
   
 
Notes to condensed consolidated financial statements - October 1, 2005.
   
Item 2. 
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
   
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
   
Item 4.
Controls and Procedures
   
PART II. 
Other Information
   
Item 1.
Legal Proceedings
   
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
   
Item 5.
Other Information
   
Item 6.
Exhibits
   
 
Signatures





















PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

ANADIGICS, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS)

   
October 1, 2005
    
December 31, 2004
  
   
(unaudited)
    
(Note 1
)
ASSETS
              
               
Current assets:
              
Cash and cash equivalents
 
$
10,727
  
$
11,171
  
Marketable securities
   
71,829
    
63,615
  
Accounts receivable, net
   
17,816
    
10,770
  
Inventories
    
13,073
    
14,436
  
Prepaid expenses and other current assets
    
2,674
    
3,073
  
Total current assets
    
116,119
    
103,065
  
               
Marketable securities
    
4,614
    
29,265
  
Property and equipment:
              
Equipment and furniture
   
130,915
    
132,864
  
Leasehold improvements
   
38,748
    
38,774
  
Projects in process
   
63
    
1,341
  
     
169,726
    
172,979
  
Less accumulated depreciation and amortization
    
(134,714
)
  
(129,941
)
     
35,012
    
43,038
  
Goodwill and other intangibles, net of amortization
    
6,079
    
6,297
  
Other assets
   
3,188
    
4,230
  
               
Total assets
 
$
165,012
  
$
185,895
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
               
Current liabilities:
              
Accounts payable
 
$
14,170
  
$
8,021
  
Accrued liabilities
   
3,681
    
4,783
  
Accrued restructuring costs
   
52
    
726
  
Capital lease obligations
   
-
    
18
  
               
Total current liabilities
   
17,903
    
13,548
  
               
Long-term debt
   
84,700
    
84,700
  
Other long-term liabilities
   
3,132
    
3,032
  
               
Commitments and contingencies
              
Stockholders’ equity:
              
Common stock, $0.01 par value, 144,000 shares authorized, 34,303 and 33,072 issued at October 1, 2005 and December 31, 2004
    
343
    
331
  
Additional paid-in capital
    
346,927
    
343,594
  
Deferred compensation
   
(2,054
)
  
(861
)
Accumulated deficit
    
(285,283
)
  
(257,963
)
Accumulated other comprehensive loss
    
(398
)
  
(486
)
Treasury stock at cost: 114 shares
    
(258
)
  
-
  
Total stockholders’ equity
   
59,277
    
84,615
  
               
Total liabilities and stockholders’ equity
 
$
165,012
  
$
185,895
  

 








See accompanying notes.




ANADIGICS, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


   
Three months ended
  
Nine months ended
  
   
October 1, 2005
    
October 2, 2004
    
October 1, 2005
    
October 2, 2004
  
   
(unaudited)
    
(unaudited
)
  
(unaudited
)
  
(unaudited
)
                           
Net sales
  
$
29,264
  
$
25,053
  
$
74,980
  
$
68,935
  
Cost of sales
    
22,691
    
19,811
    
61,454
    
58,193
  
Gross profit
    
6,573
    
5,242
    
13,526
    
10,742
  
Research and development expenses
    
7,491
    
7,884
    
22,727
    
25,652
  
Selling and administrative expenses
    
5,234
    
5,482
    
16,292
    
17,371
  
Restructuring and other charges
    
-
    
-
    
(120
)
  
-
  
                           
Operating loss
    
(6,152
)
  
(8,124
)
  
(25,373
)
  
(32,281
)
Interest income
    
607
    
469
    
1,783
    
1,679
  
Interest expense
    
(1,250
)
  
(955
)
  
(3,748
)
  
(2,835
)
Gain on repurchase of Convertible notes
    
-
    
327
    
-
    
327
  
Other income (expense)
    
15
    
(36
)
  
18
    
308
  
                           
Net loss
  
$
(6,780
)
$
(8,319
)
$
(27,320
)
$
(32,802
)
                           
Basic and diluted loss per share
 
$
(0.20
)
$
(0.25
)
$
(0.81
)
$
(1.02
)
                           
Weighted average common and dilutive securities outstanding
    
34,067
    
32,770
    
33,872
    
32,252
  



CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(AMOUNTS IN THOUSANDS)

 
Three months ended 
Nine months ended
   
October 1, 2005 
    
October 2, 2004
    
October 1, 2005
    
October 2, 2004
  
   
(unaudited) 
    
(unaudited
)
  
(unaudited
)
  
(unaudited
)
                           
Net loss
  
$
(6,780
)
$
(8,319
)
$
(27,320
)
$
(32,802
)
Unrealized gain (loss) on marketable securities
   
66
    
86
    
152
    
(421
)
Foreign currency translation adjustment
    
(4
)
  
3
    
(64
)
  
(13
)
Reclassification adjustment:
                          
Net realized (gain) loss previously recognized in other comprehensive income
    
-
    
-
    
-
    
(19
)
Comprehensive loss
  
$
(6,718
)
$
(8,230
)
$
(27,232
)
$
(33,255
)








See accompanying notes.





ANADIGICS, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

   
Nine months ended
  
   
October 1, 2005 
 
 
October 2, 2004
 
 
 
(unaudited) 
    
(unaudited
)
CASH FLOWS FROM OPERATING ACTIVITIES
              
Net loss
  
$
(27,320
)
$
(32,802
)
Adjustments to reconcile net loss to net cash used in operating activities:
              
Depreciation
    
8,332
    
11,904
  
Amortization
    
1,308
    
1,126
  
Stock-based compensation
    
2,053
    
313
  
Gain on repurchase of Convertible notes
    
-
    
(327
)
Amortization of premium on marketable securities
    
999
    
1,654
  
Gain on disposal of equipment
    
(1
)
  
-
  
Changes in operating assets and liabilities:
              
Accounts receivable
   
(7,046
)
  
(2,455
)
Inventories
    
1,363
    
(6,422
)
Prepaid expenses and other assets
   
389
    
(295
)
Accounts payable
   
6,149
    
2,662
  
Accrued liabilities and other liabilities
    
(1,715
)
  
(1,880
)
               
Net cash used in operating activities
    
(15,489
)
  
(26,522
)
               
CASH FLOWS FROM INVESTING ACTIVITIES
              
Purchases of plant and equipment
   
(420
)
  
(2,889
)
Proceeds from sale of equipment
    
53
    
50
  
Purchases of marketable securities
   
(43,291
)
  
(32,636
)
Proceeds from sale of marketable securities
   
58,880
    
50,109
  
Business acquisitions
   
-
    
(55
)
               
Net cash provided by investing activities
    
15,222
    
14,579
  
               
CASH FLOWS FROM FINANCING ACTIVITIES
              
Payment of capital lease obligations
   
(18
)
  
(50
)
Proceeds from issuance of long-term debt, net of offering costs
     -     
35,895
  
Repurchase of Convertible notes
     -     
(19,400
)
Issuance of common stock
   
99
    
1,299
  
Repurchase of common stock into treasury
    
(258
)
  
-
  
               
Net cash (used in) provided by financing activities
    
(177
)
  
17,744
  
               
Net (decrease)increase in cash and cash equivalents
    
(444
)
  
5,801
  
Cash and cash equivalents at beginning of period
   
11,171
    
18,525
  
               
Cash and cash equivalents at end of period
 
$
10,727
  
$
24,326
  
























See accompanying notes.


 
 
 


ANADIGICS, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - OCTOBER 1, 2005

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended October 1, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005.

The condensed consolidated balance sheet at December 31, 2004 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

INCOME TAXES

The Company maintains a full valuation allowance on its deferred tax assets. Accordingly, the Company has not recorded a benefit for income taxes.
 
   IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

   In November 2004, the Financial Accounting Standards Board issued Statement No. 151 (FAS 151), Inventory Costs, an amendment of Accounting Research Bulletin No. 43 (ARB No. 43), Chapter 4. FAS 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current period charges. In addition, FAS 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. FAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company currently believes that the adoption of FAS 151 will not have a material impact on its consolidated financial statements.

   In December 2004, the Financial Accounting Standards Board issued Statement No. 123(R) (FAS 123R), Share-Based Payment, amending FAS 123 and requiring that all share-based payments to employees be recognized in the financial statements. Generally, the approach to accounting for share-based payments in FAS 123R is similar to the approach described in FAS 123, however, pro forma footnote disclosure will no longer be an alternative to financial statement recognition. In April 2005, the SEC deferred the implementation date of FAS 123R. As a result, the Company plans to adopt FAS 123R effective January 1, 2006 rather than the initial implementation date of July 1, 2005, using the modified-prospective transition method described in FAS 123R. Under this method, the Company will be required to recognize compensation expense over the remaining vesting period for all awards that remain unvested as of January 1, 2006. As permitted by FAS 123, the Company currently accounts for share-based payments to employees using the intrinsic value method of APB 25 (as defined below) and, as such, generally recognizes no compensation cost for employee stock options. The Company believes based on the level of share-based payments previously granted and unvested and Employee stock purchase plan (ESPP) participation, that the adoption of FAS 123R will not have a material effect on its financial position, results of operations or cash flows. However, the level of future equity based compensation grants and ESPP participation could have a material effect on amounts recorded in the statement of operations.

STOCK-BASED COMPENSATION
 
   As permitted by FAS 123, the Company has elected to follow the intrinsic value method under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for its employee stock option plans. Under APB 25, no compensation expense is recognized at the time of option grant if the exercise price of the Company’s employee stock option is fixed and equals or exceeds the fair market value of the underlying common stock on the date of grant.
 
   The following table illustrates the effect on net loss and loss per common share as if the Company had applied the fair value method to measure stock-based compensation, required under the disclosure provisions of FAS 123:



 
Three months ended 
Nine months ended
 
 
 
October 1, 2005 
 
 
October 2, 2004
 
 
October 1, 2005
 
 
October 2, 2004
  
Net loss, as reported
  
$
(6,780
)
$
(8,319
)
$
(27,320
)
$
(32,802
)
Stock based compensation included in reported net loss
    
622
    
294
    
2,053
    
313
  
Stock based compensation expense under fair value reporting
    
(1,049
)
  
(2,051
)
  
(2,958
)
  
(5,628
)
Pro-forma net loss
   $
(7,207
)
$
(10,076
)
$
(28,225
)
$
(38,117
)
                           
Basic and diluted loss per share:
                          
As reported
  
$
(0.20
)
$
(0.25
)
$
(0.81
)
$
(1.02
)
Pro-forma
  
$
(0.21
)
$
(0.31
)
$
(0.83
)
$
(1.18
)

  On July 3, 2003, the Company announced a voluntary stock option exchange program for employees and officers. Directors of the Company were not eligible for the exchange program. Pursuant to the terms and conditions of the offer, which expired on August 4, 2003, the Company accepted for cancellation options to purchase 1,674 shares of common stock having a weighted average exercise price of $19.49. On February 6, 2004, participating employees were issued 552 stock options, under this one for three exchange program, for the cancelled options. The new options have an exercise price equal to $7.27, which represented the fair market value at the date of grant and are now fully vested.

  On December 22, 2004, the Company authorized the immediate vesting of eligible employees’ unvested share options with an exercise price greater than $5.00 per share. Directors were not eligible. In total, 1,772 options with an average exercise price of $7.26 immediately vested and have an average remaining contractual life of 9.1 years. The unamortized fair value associated with these accelerated-vest shares in the amount of $2,654 amortized immediately. Had the accelerated-vest program not occurred, the related cost in the years ended December 31, 2005, 2006 and 2007 would have included $1,846, $751 and $57, respectively. In addition to its employee-retention value, the Company’s decision to accelerate the vesting of these “out-of-the-money” options was based upon the accounting of such costs moving from disclosure-only in 2004 to being included in the Company’s statement of operations in 2005 based upon the Company’s expected adoption of FAS 123R prior to its required adoption date being deferred.
 
  In year 2004 and nine months ended October 1, 2005, the Company granted restricted shares under the 1995 Long Term Incentive and Share Award Plan (the “1995 Plan”), 1997 Long Term Incentive and Share Award Plan for Employees (the “1997 Plan”) and the 2005 Long Term Incentive and Share Award Plan (the “2005 Plan”, and together with the 1995 Plan and the 1997 Plan, the “Plans”). The value of the grants have been recorded as deferred compensation, a component of Stockholders’ Equity and amortized over their respective vest life. Restricted share grant activity is illustrated below:
 

 
                          
As of October 1, 2005 
Grant date
   
Plan Type
 
 
Shares granted
 
 
Grant market price
 
 
Vest condition
 
 
Shares forfeited
to date
 
 
Shares vested*
                                     
July 23, 2004
    
1995 Plan
    
67
  
$
4.01
    
1 year
    
-
    
67
July 23, 2004
    
1997 Plan
    
336
    
4.01
    
1 year
    
47
    
289
January 21, 2005
    
1995 Plan
    
191
    
3.26
    
3 years
    
-
    
-
January 25, 2005
    
1995 Plan
    
11
    
3.03
    
1 year
    
-
    
-
February 4, 2005
    
1995 Plan
    
149
    
2.65
    
1 year
    
17
    
-
February 4, 2005
    
1995 Plan
    
666
    
2.65
    
3 years
    
68
    
-
August 1, 2005
    
2005 Plan
    
15
    
2.54
    
3 years
    
-
    
-
August 4, 2005
    
2005 Plan
    
271
    
2.60
    
1 year
    
1
    
-

* Of the 356 restricted shares which have fully vested, 114 shares were repurchased by the Company, as Treasury stock, from the employees and officers to fund withholding tax obligations.

  WARRANTY

Based on the examination of historical returns and other information it deems critical, the Company estimates that a current charge to income will need to be provided in order to cover future warranty obligations for products sold during the year. The accrued liability for warranty costs is included in Accrued liabilities in the condensed consolidated balance sheets. Warranty reserve movements in the nine months ended October 1, 2005 included $278 in actual charges and $455 in provisions resulting in the balance of $336 at October 1, 2005. Warranty reserve movements in the nine months ended October 2, 2004 included $301 in actual charges and $363 in additional provisions.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year presentation.
 
2. BUSINESS ACQUISITIONS

   On March 31, 2003, the Company acquired certain assets and liabilities of the WLAN power amplifier business of RF Solutions (“RFS”). The RFS acquisition was a strategic initiative that allows the Company to participate in the WLAN market with a depth of experienced design personnel and cutting-edge products. The Company paid cash purchase consideration on March 31, 2003 of $2,800 and issued 747 shares effective March 31, 2004, valued at $4,648 after RFS achieved certain revenue milestones. In addition, the Company incurred $217 in acquisition-related costs.

3. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or market. Inventories consist of the following:

   
October 1, 2005
 
December 31, 2004
  
               
Raw materials
  
$
3,250
  
$
3,510
  
Work in process
    
8,874
    
9,026
  
Finished goods
   
3,976
    
5,974
  
     
16,100
    
18,510
  
Reserves
    
(3,027
)
  
(4,074
)
               
Total
 
$
13,073
  
$
14,436
  
 
4. LOSS PER SHARE

The reconciliation of shares used to calculate basic and diluted loss per share consists of the following:

 
Three months ended 
Nine months ended
 
 
 
October 1, 2005 
 
 
October 2, 2004
 
 
October 1, 2005
 
 
October 2, 2004
  
Weighted average common shares outstanding used to calculate basic loss per share
    
34,067
    
32,770
    
33,872
    
32,252
  
Net effect of dilutive securities based upon the treasury stock method using an average market price
    
-*
    
-*
    
-*
    
-*
  
Weighted average common and dilutive securities outstanding used to calculate diluted loss per share
    
34,067
    
32,770
    
33,872
    
32,252
  

* Any dilution arising from the Company's outstanding stock options or shares potentially issuable upon conversion of the 2006 Notes (see Note 7) and 2009 Notes (see Note 7) are not included as their effect is anti-dilutive.
 
5. REVENUE SOURCES

The Company classifies its revenues based upon the end application of the product in which its integrated circuits are used. Net sales by end application are regularly reviewed by the chief operating decision maker and are as follows:

 
  
Three months ended 
Nine months ended
 
 
 
October 1, 2005 
 
 
October 2, 2004
 
 
October 1, 2005
 
 
October 2, 2004
 
                           
Broadband
  
$
14,846
  
$
13,055
  
$
40,087
  
$
35,146
  
Wireless
    
14,418
    
11,998
    
34,893
    
33,789
  
                           
Total
  
$
29,264
  
$
25,053
  
$
74,980
  
$
68,935
  
 
The Company primarily sells to three geographic regions: Asia, USA and Canada, and Other. The geographic region is determined by the destination of the shipped product. Net sales to each of the three geographic regions are as follows:

   
Three months ended
 
Nine months ended
 
 
 
October 1, 2005 
 
 
October 2, 2004
 
 
October 1, 2005
 
 
October 2, 2004
 
                           
Asia
  
$
14,960
  
$
13,080
  
$
40,317
  
$
37,395
  
USA and Canada
    
11,559
    
9,923
    
28,550
    
26,448
  
Other
    
2,745
    
2,050
    
6,113
    
5,092
  
                           
Total
  
$
29,264
  
$
25,053
  
$
74,980
  
$
68,935
  
 

6. RESTRUCTURING AND OTHER CHARGES

  During the fourth quarter of 2003, the Company recorded restructuring and other charges of $300 associated with obligations for certain redundant leasehold premises. Those obligations were settled during the first quarter of 2005 resulting in a savings to the Company of $120. During the first nine months of 2005, the Company recognized costs of $554 for lease-related restructuring costs in addition to the aforementioned $120 reduction to the accrued restructuring balance. As of October 1, 2005, the accrued restructuring balance of $52 relates to lease-related obligations.
 
7. LONG-TERM DEBT

  On September 24, 2004, the Company issued $38,000 aggregate principal amount of 5% Convertible Senior Notes (“2009 Notes”) due October 15, 2009. The 2009 Notes are convertible into shares of the Company’s common stock at any time prior to their maturity, at an initial conversion rate, subject to adjustment, of 200 shares for each $1,000 principal amount, which is equivalent to a conversion price of $5.00 per share. Interest on the 2009 Notes is payable semi-annually in arrears on April 15 and October 15 of each year.

  On November 27, 2001, the Company issued $100,000 aggregate principal amount of 5% Convertible Senior Notes ("2006 Notes") due November 15, 2006. During the third quarter of 2002, the Company repurchased and retired $33,300 principal amount of the Convertible notes. In addition, in the third quarter of 2004 and concurrent with the issuance of the 2009 Notes, the Company repurchased and retired $20,000 aggregate principal amount of the 2006 Notes for $19,758 in cash, inclusive of accrued interest of $358. The Company recognized a gain of $327 on the repurchase after adjusting for the write-off of a proportionate share of unamortized offering costs. The $46,700 balance of 2006 Notes outstanding are convertible into shares of common stock at any time prior to their maturity or prior redemption by the Company. The notes are convertible into shares of common stock at a rate of 47.619 shares for each $1,000 principal amount (convertible at a price of $21.00 per share), subject to adjustment. Interest is payable semi-annually on May 15 and November 15 of each year.

8. OTHER INCOME

  Other income for the nine months ended October 2, 2004 includes income from a $368 gain on the sale of securities and a $490 settlement received in connection with a claim against a former supplier, partially offset by a charge of $750 relating to the settlement of a contractual claim.



ANADIGICS, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

ANADIGICS, Inc. (“we” or the "Company") was incorporated in Delaware in 1984. Our corporate headquarters are located at 141 Mt. Bethel Road, Warren, New Jersey 07059, and our telephone number at that address is 908-668-5000.

We design and manufacture radio frequency integrated circuit (RFIC) solutions for the wireless and broadband communications markets. Our high frequency RFIC products enable manufacturers of communications equipment to enhance overall system performance and reduce manufacturing cost and time to market. Our products are primarily included in cellular and personal communications service (PCS) phones and base stations, wireless local area networks (WLANs), and cable television infrastructure and set-top boxes. We offer a broad array of products including amplifiers, switches, tuner integrated circuits, photodiodes and integrated RF modules. These integrated circuits perform the transmit and receive functions that are critical to the performance of wireless and broadband communication systems.

In the wireless market, we focus on RFIC solutions for wireless communication handset applications operating over various air interface standards, including Code Division Multiple Access (CDMA), Global System for Mobile communication (GSM), Wideband CDMA (WCDMA), General Packet Radio Service (GPRS) and Enhanced Data rate for GSM Evolution (EDGE). In the broadband markets, our focus is on applications for WLAN systems, cable television (CATV) subscriber products, CATV infrastructure systems, and fiber optic communications systems. We believe we have a competitive advantage in the markets we serve due to our design, development and applications expertise, our superior compound semiconductor technologies, our high-volume, low-cost state-of-the-art manufacturing processes and expertise, and our strong working relationships with leading original equipment manufacturers (OEMs), original design manufacturers (ODMs) and reference design houses.

We design, develop and manufacture RFICs primarily using Gallium Arsenide (GaAs) compound semiconductor substrates with various process technologies, Metal Semiconductor Field Effect Transistors (MESFET), Pseudomorphic High Electron Mobility Transistors (pHEMT), and Heterojunction Bipolar Transistors (HBT).

The quality and reliability of our products results from a comprehensive design, characterization, qualification, and robust manufacturing process. In addition to the manufacturing facility and design team located at our corporate headquarters in Warren, New Jersey, we operate a development center and manufacturing facility in Camarillo, California and development centers in Richardson, Texas; Atlanta, Georgia; Aalborg, Denmark; Taipei, Taiwan; Seoul, Korea and Shanghai, China.

Our design and applications engineering staff is strategically active and engaged with customers during all phases of design and production. This strategy helps our customers streamline their design process and time to market, achieve cost-effective and manufacturable designs, and ensure a smooth transition into high-volume production.

We have two company-owned fabrication facilities (fabs): a state-of-the-art six-inch diameter analog GaAs fab located at our corporate headquarters in Warren, New Jersey, and a two-inch diameter indium phosphide (InP) fab located in Camarillo, California. Our six-inch wafer fab allows us to produce, at a small incremental cost, more than twice the RF die per wafer compared with a four-inch wafer, still used by some of our competition. We believe our strong manufacturing fabrication capability, combined with logistics expertise and innovative product designs, allow us to quickly develop and manufacture products in line with market and customer requirements.

The Strategic Planning Committee of the Company's board of directors continues to assist the board in reviewing the Company’s long-term strategic plan and objectives, propose acquisition or joint venture candidates and propose possible divestitures, each with a view toward enhancing stockholder value.
 
RESULTS OF OPERATIONS

The following table sets forth unaudited consolidated statements of operations data as a percent of net sales for the periods presented:
 
Three months ended 
Nine months ended
 
 
 
October 1, 2005 
 
 
October 2, 2004
 
 
October 1, 2005
 
 
October 2, 2004
  
                           
Net sales
    
100.0
%
  
100.0
%
  
100.0
%
  
100.0
%
Cost of sales
    
77.5
%
  
79.1
%
  
82.0
%
  
84.4
%
                           
Gross margin
    
22.5
%
  
20.9
%
  
18.0
%
  
15.6
%
Research and development expenses
    
25.6
%
  
31.4
%
  
30.3
%
  
37.2
%
Selling and administrative expenses
    
17.9
%
  
21.9
%
  
21.7
%
  
25.2
%
Restructuring and other charges
    
-
    
-
    
(0.2
%)
  
-
  
                           
Operating loss
    
(21.0
%)
  
(32.4
%)
  
(33.8
%)
  
(46.8
%)
                           
Interest income
    
2.0
%
  
1.9
%
  
2.4
%
  
2.4
%
Interest expense
    
(4.3
%)
  
(3.8
%)
  
(5.0
%)
  
(4.1
)%
Gain on repurchase of Convertible notes
     -    
1.3
%
   -    
0.5
%
Other income (expense)
    
0.1
%
  
(0.2
)%
  
-
    
0.4
%
                           
Net loss
    
(23.2
%)
  
(33.2
%)
  
(36.4
%)
  
(47.6
%)

THIRD QUARTER 2005 (ENDED OCTOBER 1, 2005) COMPARED TO THIRD QUARTER 2004 (ENDED OCTOBER 2, 2004)

NET SALES. Net sales increased 16.8% during the third quarter of 2005 to $29.3 million from $25.1 million in the third quarter of 2004. For the nine months ended October 1, 2005, net sales were $75.0 million, an 8.8% increase from net sales of $68.9 million for the nine months ended October 2, 2004.

Sales of integrated circuits for Broadband applications increased 13.7% during the third quarter of 2005 to $14.8 million from $13.1 million in the third quarter of 2004. For the nine months ended October 1, 2005, net sales of integrated circuits for Broadband applications increased 14.1% to $40.1 million from $35.1 million in the nine-month period ended October 2, 2004. The increase in sales in the three and nine month periods ended October 1, 2005 as compared to prior periods was primarily due to an increase in demand for WLAN power amplifiers of $2.8 and $5.6 million, respectively. Partially offsetting the sales increase for the three month period ended October 1, 2005 as compared to the year-ago period were lower sales of integrated circuits shipped into cable infrastructure applications. 

Sales of integrated circuits for Wireless applications increased 20.2% during the third quarter of 2005 to $14.4 million from $12.0 million in the third quarter of 2004. For the nine months ended October 1, 2005, net sales of integrated circuits for Wireless applications increased 3.3% to $34.9 million from $33.8 million in the nine-month period ended October 2, 2004. The increase in sales of integrated circuits for Wireless applications in the third quarter of 2005 compared with the third quarter of 2004 was primarily due to higher GSM power amplifier sales of $4.6 million, which were partially offset by lower sales in CDMA power amplifiers of $1.7 million and switch products of $0.8 million. The increase in sales of integrated circuits for Wireless applications for the nine months ended October 1, 2005 compared with the nine months ended October 2, 2004 was primarily due to higher GSM power amplifier sales of $9.3 million, which were partially offset by lower sales in CDMA power amplifiers of $6.2 million and switch products of $1.7 million. The lower sales of CDMA power amplifiers in the three-and nine-month periods ended October 1, 2005 were due to lower average selling prices and the transition to lower priced next-generation CDMA products, while lower sales in switch products reflect the Company’s decision to reduce its research and development efforts in this product line.

GROSS MARGIN. Gross margin during the third quarter of 2005 increased to 22.5% from 20.9% in the third quarter of 2004. For the nine months ended October 1, 2005, gross margin increased to 18.0% from 15.6% for the nine months ended October 2, 2004. The increase in gross margin in the three month period ended October 1, 2005 was primarily due to increased sales and production volumes with the consequent absorption of fixed costs. The increase in gross margin in the nine month period ended October 1, 2005 was primarily due to a shift in product mix to higher margin products favoring Broadband applications and our improved absorption of fixed costs. During the three and nine month periods ended October 1, 2005, decreases in depreciation expense of $0.9 and $3.5 million, respectively, offset declines in average selling prices.

RESEARCH AND DEVELOPMENT. Company sponsored research and development expense decreased 5% during the third quarter of 2005 to $7.5 million from $7.9 million during the third quarter of 2004. Company sponsored research and development expense for the nine months ended October 1, 2005 decreased 11.4% to $22.7 million from $25.6 million during the nine-month period ended October 2, 2004. The decrease in the three and nine month periods ended October 1, 2005 was primarily attributable to decreased headcount and related compensation expense.

SELLING AND ADMINISTRATIVE. Selling and administrative expenses decreased 4.5% during the third quarter of 2005 to $5.2 million from $5.5 million in the third quarter of 2004. Selling and administrative expenses decreased 6.2% during the nine-month period ended October 1, 2005 to $16.3 million from $17.4 million in the nine-month period ended October 2, 2004. The decreases in selling and administrative expenses in the three and nine months ended October 1, 2005 were primarily due to decreased headcount, compensation expense and related costs within sales and marketing.

RESTRUCTURING AND OTHER CHARGES. During the first quarter of 2005, the Company settled an exit obligation for certain redundant leasehold premises resulting in a savings of $0.1 million against a previously recorded restructuring charge.

INTEREST INCOME. Interest income increased 29.4% to $0.6 million during the third quarter of 2005 from $0.5 million during the third quarter of 2004. For the nine months ended October 1, 2005, interest income increased 6.2% to $1.8 million from $1.7 million in the nine-month period ended October 2, 2004. The increases in the three and nine months ended October 1, 2005 were primarily due to improved interest rates.

INTEREST EXPENSE. Interest expense increased 30.9% to $1.3 million during the third quarter of 2005 from $1.0 million during the third quarter of 2004. For the nine months ended October 1, 2005, interest expense increased 32.2% to $3.7 million from $2.8 million in the nine-month period ended October 2, 2004. The interest relates to the $46.7 million outstanding balance of our 5% Convertible Senior Notes due in 2006 (the “2006 Notes”) and the $38.0 million outstanding balance of our 5% Convertible Senior Notes due in 2009 (the “2009 Notes”).

GAIN ON REPURCHASE OF CONVERTIBLE NOTES. During the third quarter of 2004 and concurrent with the issuance of the 2009 Notes, we repurchased and retired $20.0 million aggregate principal amount of the 2006 Notes for $19.8 million in cash, inclusive of accrued interest of $0.4 million. We recognized a gain on the repurchase of $0.3 million after adjusting the write-off of a proportionate share of unamortized offering costs.

LIQUIDITY AND CAPITAL RESOURCES

As of October 1, 2005, we had $10.7 million in cash and cash equivalents and $76.4 million in marketable securities. In addition, as of October 1, 2005, we had outstanding $46.7 million aggregate principal amount of our 2006 Notes and $38.0 million aggregate principal amount of our 2009 Notes.
 
  Operating activities used $15.5 million in cash during the nine-month period ended October 1, 2005. Investing activities, consisting principally of net sales of marketable securities of $15.6 million, provided $15.2 million of cash during the nine-month period ended October 1, 2005.

As of October 31, 2005, we had unconditional purchase obligations of approximately $5.1 million of which $3.7 million relates to capital equipment purchase requirements over the next six months to increase the installed equipment capacity of the Company's manufacturing operations resulting from anticipated increases in customer demand for the Company's products in 2006.

We believe that our existing sources of capital, including our existing cash and marketable securities, will be adequate to satisfy operational needs and anticipated capital needs for the next twelve months as well as the repayment of our 2006 Notes due in November 2006. Our anticipated capital needs may include acquisitions of complimentary businesses or technologies, or investments in other companies or repurchases of our outstanding debt or equity. However, we may elect to finance all or part of our future capital requirements through additional equity or debt financing. There can be no assurance that such additional financing would be available on satisfactory terms. Our ability to pay principal and interest on our outstanding 2006 Notes due in November of 2006 and our outstanding 2009 Notes due in October 2009, and our other debt and to fund our planned capital expenditures depends on our future operating performance.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In November 2004, the Financial Accounting Standards Board issued Statement No. 151 (FAS 151), Inventory Costs, an amendment of ARB No. 43, Chapter 4. FAS 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted materials should be recognized as current period charges. In addition, FAS 151 requires that allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. FAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company currently believes that the adoption of FAS 151 will not have a material impact on its consolidated financial statements.

In December 2004, the Financial Accounting Standards Board issued Statement No. 123(R) (FAS 123R), Share-Based Payment, amending FAS 123 and requiring that all share-based payments to employees be recognized in the financial statements. Generally, the approach to accounting for share-based payments in FAS 123R is similar to the approach described in FAS 123, however, pro forma footnote disclosure will no longer be an alternative to financial statement recognition. In April 2005, the SEC deferred the implementation date of FAS 123R. As a result, the Company plans to adopt FAS 123R effective January 1, 2006 rather than the initial implementation date of July 1, 2005, using the modified-prospective transition method described in FAS 123R. Under this method, the Company will be required to recognize compensation expense over the remaining vesting period for all awards that remain unvested as of January 1, 2006. As permitted by FAS 123, the Company currently accounts for share-based payments to employees using APB 25's intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. The Company believes based on the level of share-based payments previously granted and unvested and Employee stock purchase plan (ESPP) participation, that the adoption of FAS 123R will not have a material effect on its financial position, results of operations or cash flows. However, the level of future equity based compensation grants and ESPP participation could have a material effect on amounts recorded in the statement of operations.
On December 22, 2004, the Company authorized an immediate vesting of eligible employees’ unvested share options with an exercise price greater than $5.00 per share. Directors were not eligible. In total, 1.8 million options with an average exercise price of $7.26 immediately vested and have an average remaining contractual life of 9.1 years. The unamortized fair value associated with these accelerated-vest shares of approximately $2.65 million amortized immediately. In addition to its employee-retention value, the Company’s decision to accelerate the vesting of these “out-of-the-money” options was based upon the accounting of such costs moving from disclosure-only in 2004 to being included in the Company’s statement of operations in 2005 based upon the Company’s expected adoption of FAS 123R prior to its required adoption date being deferred.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains projections and other forward-looking statements (as that term is defined in the Securities Exchange Act of 1934, as amended). These projections and forward-looking statements reflect the Company’s current views with respect to future events and financial performance and can generally be identified as such because the context of the statement will include words such as “believe”, “anticipate”, “expect”, or words of similar import. Similarly, statements that describe our future plans, objectives, estimates or goals are forward-looking statements. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results and developments could differ materially from those projected as a result of certain factors. Important factors that could cause actual results and developments to be materially different from those expressed or implied by such projections and forward-looking statements include, but are not limited to, the following risks which are described in greater detail in the Company’s Annual Report on Form 10-K referred to below: (i) our history of recent losses and expectation that we will continue to incur losses; (ii) our underutilized manufacturing capacity has adversely affected our gross margins and profitability; (iii) our dependence on a small number of customers; (iv) our need to keep pace with rapid product and process development and technological changes as well as product cost reductions to be competitive; (v) our products have experienced rapidly declining unit prices; (vi) the manufacturing of our products could be delayed as a result of the outsourcing of our test operations; (vii) the short life cycles of some of our products may leave us with obsolete or excess inventories; (viii) we face intense competition, which could result in a decrease in our products’ prices and sales; (ix) we may not have sufficient cash flow to make payments on our 2006 Notes and 2009 Notes and any other debt we may incur; (x) capital required for our business may not be available when we need it; (xi) we may pursue selective acquisitions and alliances which dilute the ownership of our current shareholders and the management and integration of additional operations may be expensive and divert management time; (xii) we may face interruptions in our manufacturing processes; and (xiii) provisions in our governing documents and our shareholders rights agreement could discourage takeovers and prevent shareholders from realizing an investment premium. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein or detailed from time to time in our reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The Company's market risk has not changed significantly for the risks disclosed in Item 7A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004. 

ITEM 4. CONTROLS AND PROCEDURES 
 
  Under the supervision and with the participation of our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of October 1, 2005. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported as specified within the SEC’s rules and forms.

  There was no change in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

  Because of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.






ANADIGICS, Inc.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

  We are a party to litigation arising in the ordinary course out of the operation of our business. We believe that the ultimate resolution of such litigation should not have a material adverse effect on our financial condition, results of operations or liquidity.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


Issuer Purchases of Equity Securities
 
Period
    
Total Number of Shares Purchased
    
Average Price Paid per Share
    
Total Number of Shares Purchased as Part of Publicly Announced Plans
    
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans
  
July 3, 2005 to July 30, 2005 (1)
    
113,761 (2
)
$
2.27
    
N/A
    
N/A
  

(1) All share repurchases during the third quarter of 2005 occurred on July 27, 2005.
(2) The Company repurchased 113,761 restricted shares from employees and officers of the Company to fund withholding tax obligations incurred upon the vesting of certain restricted shares granted to such employees and officers.
 
ITEM 5. OTHER INFORMATION

  On August 1, 2005, the Company and Ronald Rosenzweig, the Chairman of the Board of Directors of the Company, executed an amendment to Mr. Rosenzweig’s employment agreement dated June 1, 1999, as amended (the “Agreement”). The amendment provides for a one-year extension of Mr. Rosenzweig’s Agreement and was authorized by the Company’s Board of Directors on July 29, 2005. All of the original material terms not described herein of Mr. Rosenzweig’s Agreement remain in full force and effect. This description of the amendment to the Agreement is qualified in its entirety by reference to the Agreement and the amendment attached as Exhibit 10.1 hereto.


10.1 Amendment No. 4 as of August 1, 2005 to the Employment Agreement dated June 1, 1999, as amended, between the Company and Ronald Rosenzweig.
 
31.1 Rule 13a-14(a)/15d-14(a) Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc.
 
      31.2 Rule 13a-14(a)/15d-14(a) Certification of Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc.
 
      32.1 Section 1350 Certification of Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc.
     
        32.2 Section 1350 Certification of Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc.


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.


      ANADIGICS, INC.


By:
/s/ Thomas C. Shields
 
Thomas C. Shields
 
Senior Vice President
 
and Chief Financial Officer


Dated: November 4, 2005

































































                                                       Exhibit 10.1




Ronald Rosenzweig                                                           1 August 2005
[Address]


Subject: Amendment - Agreement June 1, 1999 - Revision



Dear Ron;

This is to confirm the revision made by the Board of Directors at the July 29, 2005 meeting in the extension of the Agreement dated June 1, 1999 between you and ANADIGICS, Inc. (and extended from July 2, 2002 through July 2, 2003, from July 2, 2003 through July 2, 2004, and from July 2, 2004 through July 2, 2005), regarding your employment by the Company. The existing agreement set to expire July 2, 2005, will be extended with the following terms and conditions:

1.  
Your employment is extended for the period from July 2, 2005 through July 2, 2006 at 25% time as ANADIGICS employee.
2.  
Your base salary compensation shall be at the annual rate of $100,000 paid biweekly.
3.  
All other terms of your agreement dated June 1, 1999 remain intact as part of this extension.


If you are in agreement with the foregoing, please sign and return to John Warren, a copy of this letter.

Very truly yours,

/s/ Bami Bastani

Bami Bastani
President & Chief Executive Officer
ANADIGICS, Inc.


Accepted and agreed to as stated.

/s/Ronald Rosenzweig

Ronald Rosenzweig



                                                      Exhibit 31.1
CERTIFICATION

I, Bami Bastani, certify that:

1.  
I have reviewed this quarterly report on Form 10-Q of ANADIGICS, Inc.;

2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)  
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 4, 2005             
By:
/s/ Bami Bastani
 
Bami Bastani
 
President and
 
Chief Executive Officer
 


 



                                                                                                    Exhibit 31.2
CERTIFICATION

I, Thomas C. Shields, certify that:

1.  
I have reviewed this quarterly report on Form 10-Q of ANADIGICS, Inc.;

2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)  
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 4, 2005  
By:
/s/ Thomas C. Shields
 
Thomas C. Shields
 
Senior Vice President
 
and Chief Financial Officer




                                                                                                Exhibit 32.1

CERTIFICATION

The undersigned, Bami Bastani, President and Chief Executive Officer of ANADIGICS, Inc. (the "Company") hereby certifies that the Quarterly Report of the Company on Form 10-Q for the period ended October 1, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: November 4, 2005 
By:
/s/ Bami Bastani
 
Bami Bastani
 
President and
 
Chief Executive Officer

 
This certification shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to ANADIGICS, Inc. and will be retained by ANADIGICS, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

Exhibit 32.2

CERTIFICATION

The undersigned, Thomas C. Shields, Senior Vice President and Chief Financial Officer of ANADIGICS, Inc. (the "Company") hereby certifies that the Quarterly Report of the Company on Form 10-Q for the period ended October 1, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
Dated: November 4, 2005 
By:
/s/ Thomas C. Shields
 
Thomas C. Shields
 
Senior Vice President
 
and Chief Financial Officer

 
This certification shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to ANADIGICS, Inc. and will be retained by ANADIGICS, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.