/x/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 1, 2011.
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Or
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/ /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
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Commission File No. 0-25662
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ANADIGICS, Inc.
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(Exact name of registrant as specified in its charter)
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Delaware
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22-2582106
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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141 Mt. Bethel Road, Warren, New Jersey
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07059
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(Address of principal executive offices)
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(Zip Code)
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(908) 668-5000
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(Registrant's telephone number, including area code)
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PART I
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Financial Information
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Item 1.
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Financial Statements (unaudited)
|
Condensed consolidated balance sheets – October 1, 2011 and December 31, 2010
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Condensed consolidated statements of operations and comprehensive (loss) income – Three and nine months ended October 1, 2011 and October 2, 2010
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Condensed consolidated statements of cash flows – Nine months ended October 1, 2011 and October 2, 2010
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Notes to condensed consolidated financial statements – October 1, 2011
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II.
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Other Information
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Item 1.
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Legal Proceedings
|
Item 1A.
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Risk Factors
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Item 6.
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Exhibits
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Signatures
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October 1, 2011
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December 31, 2010
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|||||||
(Unaudited)
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(Note 1)
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|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 43,573 | $ | 97,129 | ||||
Short-term marketable securities
|
28,845 | - | ||||||
Accounts receivable, net
|
18,689 | 35,299 | ||||||
Inventories
|
20,981 | 20,734 | ||||||
Prepaid expenses and other current assets
|
4,161 | 3,319 | ||||||
Total current assets
|
116,249 | 156,481 | ||||||
Marketable securities
|
28,163 | 8,964 | ||||||
Plant and equipment:
|
||||||||
Equipment and furniture
|
208,998 | 205,493 | ||||||
Leasehold improvements
|
46,583 | 46,482 | ||||||
Projects in process
|
690 | 3,693 | ||||||
256,271 | 255,668 | |||||||
Less accumulated depreciation and amortization
|
(198,645 | ) | (187,549 | ) | ||||
57,626 | 68,119 | |||||||
Other assets
|
239 | 248 | ||||||
Total assets
|
$ | 202,277 | $ | 233,812 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 14,242 | $ | 17,968 | ||||
Accrued liabilities
|
7,592 | 10,191 | ||||||
Accrued restructuring costs
|
83 | - | ||||||
Total current liabilities
|
21,917 | 28,159 | ||||||
Other long-term liabilities
|
2,491 | 2,689 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.01 par value, 144,000 shares authorized, 68,287 issued at October 1, 2011 and 66,916 issued at December 31, 2010
|
683 | 669 | ||||||
Additional paid-in capital
|
598,167 | 589,562 | ||||||
Accumulated deficit
|
(423,532 | ) | (389,790 | ) | ||||
Accumulated other comprehensive income
|
2,810 | 2,782 | ||||||
Treasury stock at cost: 115 shares
|
(259 | ) | (259 | ) | ||||
Total stockholders’ equity
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177,869 | 202,964 | ||||||
Total liabilities and stockholders’ equity
|
$ | 202,277 | $ | 233,812 |
Three months ended
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Nine months ended
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|||||||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
|||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
Net sales
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$ | 37,264 | $ | 61,288 | $ | 116,310 | $ | 156,485 | ||||||||
Cost of sales
|
30,229 | 39,049 | 90,576 | 102,949 | ||||||||||||
Gross profit
|
7,035 | 22,239 | 25,734 | 53,536 | ||||||||||||
Research and development expenses
|
9,938 | 13,326 | 34,851 | 37,321 | ||||||||||||
Selling and administrative expenses
|
7,360 | 7,101 | 24,125 | 20,985 | ||||||||||||
Restructuring and impairment (recovery) charges
|
- | - | 1,047 | (1,717 | ) | |||||||||||
Operating (loss) income
|
(10,263 | ) | 1,812 | (34,289 | ) | (3,053 | ) | |||||||||
Interest income
|
145 | 106 | 417 | 292 | ||||||||||||
Interest expense
|
- | (34 | ) | (25 | ) | (129 | ) | |||||||||
Other income, net
|
104 | 111 | 155 | 488 | ||||||||||||
(Loss) income before income taxes
|
$ | (10,014 | ) | 1,995 | $ | (33,742 | ) | (2,402 | ) | |||||||
Benefit from income taxes
|
- | (297 | ) | - | (297 | ) | ||||||||||
Net (loss) income
|
$ | (10,014 | ) | $ | 2,292 | $ | (33,742 | ) | $ | (2,105 | ) | |||||
Basic (loss) earnings per share
|
$ | (0.15 | ) | $ | 0.04 | $ | (0.50 | ) | $ | (0.03 | ) | |||||
Diluted (loss) earnings per share
|
$ | (0.15 | ) | $ | 0.03 | $ | (0.50 | ) | $ | (0.03 | ) | |||||
Weighted average common shares outstanding used in computing (loss) earnings per share
|
||||||||||||||||
Basic
|
67,997 | 65,320 | 67,550 | 64,808 | ||||||||||||
Diluted
|
67,997 | 67,488 | 67,550 | 64,808 |
Three months ended
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Nine months ended
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|||||||||||||||
October 1, 2011
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October 2, 2010
|
October 1, 2011
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October 2, 2010
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|||||||||||||
(unaudited)
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(unaudited)
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(unaudited)
|
(unaudited)
|
|||||||||||||
Net (loss) income
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$ | (10,014 | ) | $ | 2,292 | $ | (33,742 | ) | $ | (2,105 | ) | |||||
Other comprehensive income:
|
||||||||||||||||
Unrealized (loss) gain on marketable securities
|
(665 | ) | (14 | ) | 180 | 287 | ||||||||||
Foreign currency translation adjustment
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(9 | ) | 19 | (2 | ) | (35 | ) | |||||||||
Reclassification adjustment:
|
||||||||||||||||
Net recognized gain on marketable securities previously included in other comprehensive income
|
(44 | ) | (15 | ) | (150 | ) | (184 | ) | ||||||||
Comprehensive (loss) income
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$ | (10,732 | ) | $ | 2,282 | $ | (33,714 | ) | $ | (2,037 | ) |
Nine months ended
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||||||||
October 1, 2011
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October 2, 2010
|
|||||||
(unaudited)
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(unaudited)
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
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$ | (33,742 | ) | $ | (2,105 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||
Depreciation
|
13,892 | 14,403 | ||||||
Stock based compensation
|
8,296 | 7,284 | ||||||
Marketable securities recovery, accretion and other
|
39 | (379 | ) | |||||
Recovery on sale of China building
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- | (1,717 | ) | |||||
(Gain) loss on disposal of equipment
|
(120 | ) | 32 | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
16,610 | (15,207 | ) | |||||
Inventories
|
(247 | ) | (1,590 | ) | ||||
Prepaid expenses and other assets
|
(821 | ) | (2,034 | ) | ||||
Accounts payable
|
(3,168 | ) | 4,651 | |||||
Accrued liabilities and other liabilities
|
(2,716 | ) | 980 | |||||
Net cash (used in) provided by operating activities
|
(1,977 | ) | 4,318 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchases of plant and equipment
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(4,164 | ) | (4,055 | ) | ||||
Proceeds from sale of building and equipment
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313 | 1,768 | ||||||
Purchases of marketable securities
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(49,651 | ) | - | |||||
Proceeds from sales and redemptions of marketable securities
|
1,600 | 1,175 | ||||||
Net cash used in investing activities
|
(51,902 | ) | (1,112 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Issuance of common stock
|
323 | 941 | ||||||
Net cash provided by financing activities
|
323 | 941 | ||||||
Net (decrease) increase in cash and cash equivalents
|
(53,556 | ) | 4,147 | |||||
Cash and cash equivalents at beginning of period
|
97,129 | 83,172 | ||||||
Cash and cash equivalents at end of period
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$ | 43,573 | $ | 87,319 |
Nine months ended
|
||||||||
October 1, 2011
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October 2, 2010
|
|||||||
Beginning balance
|
571 | 994 | ||||||
Additions charged to costs and expenses
|
557 | 540 | ||||||
Claims processed
|
(780 | ) | (744 | ) | ||||
Ending balance
|
348 | 790 |
Three months ended
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Nine months ended
|
|||||||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
|||||||||||||
Weighted average common shares for basic (loss) earnings per share
|
67,997 | 65,320 | 67,550 | 64,808 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options (*)
|
- | 1,579 | - | - | ||||||||||||
Unvested restricted shares (*)
|
- | 589 | - | - | ||||||||||||
Adjusted weighted average shares for diluted (loss) earnings per share
|
67,997 | 67,488 | 67,550 | 64,808 |
*
|
Incremental shares from restricted shares and stock options are computed using the treasury stock method.
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Three months ended
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Nine months ended
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|||||||||||||||
October 1, 2011
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October 2, 2010
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October 1, 2011
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October 2, 2010
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Stock options
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4,937 | 1,760 | 4,937 | 4,640 | ||||||||||||
Unvested restricted shares and units
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2,353 | 160 | 2,353 | 1,811 |
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities
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Level 2
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Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
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Level 3
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Unobservable inputs for the asset or liability
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||||||
Security Type
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Amortized
Cost Basis
(1)
|
Fair Value
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Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||||
Former-auction corporate debt security (2)
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$ | 1,624 | $ | 2,960 | $ | 2,960 | $ | - | $ | - | ||||||||||
Auction Rate Securities
|
||||||||||||||||||||
Corporate Debt (2)
|
726 | 1,199 | - | - | 1,199 | |||||||||||||||
Preferred Equity
|
2,404 | 3,110 | - | - | 3,110 | |||||||||||||||
State and Municipal Debt (2)
|
1,419 | 1,695 | - | - | 1,695 | |||||||||||||||
Total at December 31, 2010
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$ | 6,173 | $ | 8,964 | $ | 2,960 | $ | - | $ | 6,004 | ||||||||||
Fixed Income Securities (3)
|
$ | 37,781 | $ | 37,714 | $ | 37,714 | $ | - | $ | - | ||||||||||
U.S. Government Agency debt securities (3)
|
10,165 | 10,155 | 10,155 | - | - | |||||||||||||||
Former-auction corporate debt security (2)
|
1,667 | 2,850 | 2,850 | - | - | |||||||||||||||
Auction Rate Securities
|
||||||||||||||||||||
Corporate Debt (2)
|
753 | 1,309 | - | - | 1,309 | |||||||||||||||
Preferred Equity
|
2,404 | 3,245 | - | 2,482 | 763 | |||||||||||||||
State and Municipal Debt (2)
|
1,415 | 1,735 | - | 1,735 | - | |||||||||||||||
Total at October 1, 2011
|
$ | 54,185 | $ | 57,008 | $ | 50,719 | $ | 4,217 | $ | 2,072 |
(1)
|
Difference between amortized cost basis and fair value represents gross unrealized gain or loss.
|
(2)
|
Available for sale debt securities with contractual maturities in excess of 10 years.
|
(3)
|
Available for sale debt securities with contractual maturities of 2 years or less.
|
($ in 000’s)
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Nine months ended October 1, 2011
|
|||||||||||||||
State & Municipal Security (a)
|
Corporate Debt Security (b)
|
Preferred Equity Securities (c)
|
Total
|
|||||||||||||
Balance at January 1, 2011
|
$ | 1,695 | $ | 1,199 | $ | 3,110 | $ | 6,004 | ||||||||
Total gains or losses realized/unrealized
|
||||||||||||||||
Included in earnings (loss)
|
||||||||||||||||
- quarter ended April 2, 2011
|
53 | 9 | - | 62 | ||||||||||||
- quarter ended July 2, 2011
|
22 | 9 | - | 31 | ||||||||||||
- quarter ended October 1, 2011
|
- | 9 | - | 9 | ||||||||||||
Included in other comprehensive income(loss)
|
||||||||||||||||
- quarter ended April 2, 2011
|
(22 | ) | 84 | 97 | 159 | |||||||||||
- quarter ended July 2, 2011
|
54 | 187 | 216 | 457 | ||||||||||||
- quarter ended October 1, 2011
|
- | (188 | ) | (95 | ) | (283 | ) | |||||||||
Purchases, redemptions, and settlements:
|
||||||||||||||||
Purchases
|
- | - | - | - | ||||||||||||
Redemptions
|
||||||||||||||||
- quarter ended April 2, 2011
|
(100 | ) | - | - | (100 | ) | ||||||||||
- quarter ended July 2, 2011
|
- | - | - | - | ||||||||||||
- quarter ended October 1, 2011
|
- | - | - | - | ||||||||||||
Settlements
|
- | - | - | - | ||||||||||||
Transfers in and/or out of Level 3 (d)
|
||||||||||||||||
- quarter ended April 2, 2011
|
- | - | - | - | ||||||||||||
- quarter ended July 2, 2011
|
(1,702 | ) | - | (2,565 | ) | (4,267 | ) | |||||||||
- quarter ended October 1, 2011
|
- | - | - | - | ||||||||||||
Balance at October 1, 2011
|
$ | - | $ | 1,309 | $ | 763 | $ | 2,072 | ||||||||
Amount of total gains or losses for the period included in earnings(loss) attributable to the change in unrealized gains or losses relating to Level 3 assets still held at the reporting date
|
||||||||||||||||
- as of April 2, 2011
|
23 | 9 | - | 32 | ||||||||||||
- as of July 2, 2011
|
- | 9 | - | 9 | ||||||||||||
- as of October 1, 2011
|
- | 9 | - | 9 | ||||||||||||
Level 3 securities held at October 1, 2011:
|
||||||||||||||||
Face value
|
- | $ | 2,500 | $ | 3,125 | $ | 5,625 | |||||||||
Financial ratings
|
- | A |
A2 & NR
|
|||||||||||||
Weighted average interest rate (*)
|
- | 2.0 | % | 1.9 | % | 2.0 | % | |||||||||
Maturity date
|
- | 2036 | N/A |
($ in 000’s)
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Nine months ended October 2, 2010
|
|||||||||||||||
State & Municipal Security (a)
|
Corporate Debt Security (b)
|
Preferred Equity Securities (c)
|
Total
|
|||||||||||||
Balance at January 1, 2010
|
$ | 1,805 | $ | 1,106 | $ | 3,703 | $ | 6,614 | ||||||||
Total gains or losses realized/unrealized
|
||||||||||||||||
Included in earnings (loss)
|
||||||||||||||||
- quarter ended April 3, 2010
|
38 | - | - | 38 | ||||||||||||
- quarter ended July 3, 2010
|
38 | - | 265 | 303 | ||||||||||||
- quarter ended October 2, 2010
|
38 | - | - | 38 | ||||||||||||
Included in other comprehensive income(loss)
|
||||||||||||||||
- quarter ended April 3, 2010
|
37 | 23 | 42 | 102 | ||||||||||||
- quarter ended July 3, 2010
|
23 | (11 | ) | (122 | ) | (110 | ) | |||||||||
- quarter ended October 2, 2010
|
108 | (22 | ) | (35 | ) | 51 | ||||||||||
Purchases, redemptions, and settlements:
|
||||||||||||||||
Purchases
|
- | - | - | - | ||||||||||||
Redemptions
|
||||||||||||||||
- quarter ended April 3, 2010
|
(100 | ) | - | - | (100 | ) | ||||||||||
- quarter ended July 3, 2010
|
(100 | ) | - | (875 | ) | (975 | ) | |||||||||
- quarter ended October 2, 2010
|
(100 | ) | - | - | (100 | ) | ||||||||||
Settlements
|
- | - | - | - | ||||||||||||
Transfers in and/or out of Level 3
|
- | - | - | - | ||||||||||||
Balance at October 2, 2010
|
$ | 1,787 | $ | 1,096 | $ | 2,978 | $ | 5,861 |
October 1, 2011
|
December 31, 2010
|
|||||||
Raw materials
|
$ | 4,190 | $ | 3,615 | ||||
Work in process
|
9,078 | 10,792 | ||||||
Finished goods
|
7,713 | 6,327 | ||||||
Total
|
$ | 20,981 | $ | 20,734 |
§
|
The 1995 Long-Term Incentive and Share Award Plan for Officers and Directors (terminated February 28, 2005) (1995 Plan);
|
§
|
The 1997 Long Term Incentive and Share Award Plan (1997 Plan);
|
§
|
The 2005 Long Term Incentive and Share Award Plan (2005 Plan, collectively with the 1995 Plan and the 1997 Plan, the Plans); and
|
§
|
The Employee Stock Purchase Plan (ESP Plan).
|
Three months ended
|
Nine months ended
|
|||||||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
|||||||||||||
Amortization of restricted stock
|
$ | 1,698 | $ | 1,948 | $ | 6,584 | $ | 5,609 | ||||||||
Amortization of ESP Plan
|
100 | 200 | 500 | 600 | ||||||||||||
Amortization of stock option awards
|
432 | 275 | 1,212 | 1,075 | ||||||||||||
Total stock based compensation
|
$ | 2,230 | $ | 2,423 | $ | 8,296 | $ | 7,284 | ||||||||
By Financial Statement line item
|
||||||||||||||||
Cost of sales
|
$ | 400 | $ | 590 | $ | 1,603 | $ | 1,752 | ||||||||
Research and development expenses
|
512 | 879 | 2,785 | 2,562 | ||||||||||||
Selling and administrative expenses
|
1,318 | 954 | 3,988 | 2,970 | ||||||||||||
Restructuring charge
|
- | - | (80 | ) | - |
Restricted Stock Shares
|
Restricted Stock Units
|
Stock Options
|
||||||||||||||||||||||
Shares
|
WA price/ share
|
Units
|
WA price/ unit
|
Issuable upon exercise
|
WA exercise price
|
|||||||||||||||||||
Outstanding at January 1, 2010
|
638 | $ | 9.90 | 828 | $ | 3.36 | 5,307 | $ | 5.32 | |||||||||||||||
Granted
|
- | - | 2,009 | 4.33 | 121 | 5.08 | ||||||||||||||||||
Shares vested/options exercised
|
(279 | ) | 9.74 | (1,338 | ) | 3.56 | (758 | ) | 1.99 | |||||||||||||||
Forfeited/expired
|
(179 | ) | 11.66 | (39 | ) | 4.16 | (527 | ) | 12.90 | |||||||||||||||
Balance at December 31, 2010
|
180 | $ | 8.39 | 1,460 | $ | 4.49 | 4,143 | $ | 4.96 | |||||||||||||||
Granted
|
- | - | 2,525 | 5.97 | 1,063 | 3.29 | ||||||||||||||||||
Shares vested/options exercised
|
(179 | ) | 8.38 | (1,233 | ) | 5.13 | (139 | ) | 2.32 | |||||||||||||||
Forfeited/expired
|
(1 | ) | 9.72 | (399 | ) | 6.03 | (130 | ) | 11.28 | |||||||||||||||
Balance at October 1, 2011
|
- | - | 2,353 | $ | 5.48 | 4,937 | $ | 4.50 |
As of October 1, 2011
|
||||
Unrecognized stock based compensation cost
|
||||
Option plans
|
$ | 2,358 | ||
Restricted stock
|
$ | 9,652 | ||
Weighted average remaining recognition period
|
||||
Option plans
|
2.1 years
|
|||
Restricted stock
|
2.2 years
|
Range of exercise prices
|
Outstanding Options at October 1, 2011
|
Weighted average remaining contractual life
|
Weighted average exercise price
|
Exercisable at
October 1, 2011
|
Weighted average exercise price
|
|||||||||||||||||
$ | 1.39 - $2.03 | 2,055 | 3.3 | $ | 1.99 | 1,876 | $ | 1.99 | ||||||||||||||
$ | 2.08 - $3.84 | 1,325 | 8.1 | $ | 3.17 | 271 | $ | 2.89 | ||||||||||||||
$ | 4.15 - $8.79 | 664 | 4.0 | $ | 6.61 | 569 | $ | 6.82 | ||||||||||||||
$ | 8.84 - $18.98 | 893 | 3.6 | $ | 10.71 | 893 | $ | 10.71 |
Nine months ended
|
||||||||
October 1, 2011
|
October 2, 2010
|
|||||||
Stock option awards:
|
||||||||
Risk-free interest rate
|
2.2 | % | 2.6 | % | ||||
Expected volatility
|
65 | % | 85 | % | ||||
Average expected term (in years)
|
5.0 | 5.0 | ||||||
Expected dividend yield
|
0.0 | % | 0.0 | % | ||||
Weighted average fair value of options granted
|
$ | 1.85 | $ | 3.26 | ||||
ESP Plan:
|
||||||||
Risk-free interest rate
|
0.1 | % | 0.3 | % | ||||
Expected volatility
|
61 | % | 61 | % | ||||
Average expected term (in years)
|
1.0 | 1.0 | ||||||
Expected dividend yield
|
0.0 | % | 0.0 | % | ||||
Weighted average fair value of purchase option
|
$ | 0.75 | $ | 1.44 |
Three months ended
|
Nine months ended
|
|||||||||||||||
October 1, 2011
|
October 2, 2010
|
October 1, 2011
|
October 2, 2010
|
|||||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of sales
|
81.1 | % | 63.7 | % | 77.9 | % | 65.8 | % | ||||||||
Gross margin
|
18.9 | % | 36.3 | % | 22.1 | % | 34.2 | % | ||||||||
Research and development expenses
|
26.7 | % | 21.7 | % | 30.0 | % | 23.8 | % | ||||||||
Selling and administrative expenses
|
19.8 | % | 11.6 | % | 20.7 | % | 13.4 | % | ||||||||
Restructuring and impairment (recovery) charges
|
- | - | 0.9 | % | (1.1 | )% | ||||||||||
Operating (loss) income
|
(27.6 | )% | 3.0 | % | (29.5 | )% | (1.9 | )% | ||||||||
Interest income
|
0.4 | % | 0.2 | % | 0.4 | % | 0.2 | % | ||||||||
Interest expense
|
- | (0.1 | )% | - | (0.1 | )% | ||||||||||
Other income, net
|
0.3 | % | 0.2 | % | 0.1 | % | 0.3 | % | ||||||||
(Loss) income before income taxes
|
(26.9 | )% | 3.3 | % | (29.0 | )% | (1.5 | )% | ||||||||
Benefit from income taxes
|
- | (0.4 | )% | - | (0.2 | )% | ||||||||||
Net (loss) income
|
(26.9 | )% | 3.7 | % | (29.0 | %) | (1.3 | )% |
|
31.2 Rule 13a-14(a)/15d-14(a) Certification of Thomas C. Shields, Chief Operating Officer, Executive Vice President and Chief Financial Officer of ANADIGICS, Inc.
|
|
32.1 Section 1350 Certification of Ronald Michels, President and Chief Executive Officer of ANADIGICS, Inc.
|
|
32.2 Section 1350 Certification of Thomas C. Shields, Chief Operating Officer, Executive Vice President and Chief Financial Officer of ANADIGICS, Inc.
|
By:
|
/s/ Thomas C. Shields
|
Thomas C. Shields
|
|
Chief Operating Officer, Executive Vice President and Chief Financial Officer
|
|
|
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.
|
By:
|
/s/ Ronald Michels
Ronald Michels
|
President and Chief Executive Officer
|
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.
|
By:
|
/s/ Thomas C. Shields
|
Thomas C. Shields
|
|
Chief Operating Officer, Executive Vice President
|
|
and Chief Financial Officer
|
By:
|
/s/ Ronald Michels
|
Ronald Michels
|
|
President and Chief Executive Officer
|
By:
|
/s/ Thomas C. Shields
|
Thomas C. Shields
|
|
Chief Operating Officer, Executive Vice President
|
|
and Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Oct. 01, 2011 | Dec. 31, 2010 |
---|---|---|
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 144,000 | 144,000 |
Common stock, issued (in shares) | 68,287 | 66,916 |
Treasury stock shares (in shares) | (259) | (259) |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 02, 2010 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 37,264 | $ 61,288 | $ 116,310 | $ 156,485 |
Cost of sales | 30,229 | 39,049 | 90,576 | 102,949 |
Gross profit | 7,035 | 22,239 | 25,734 | 53,536 |
Research and development expenses | 9,938 | 13,326 | 34,851 | 37,321 |
Selling and administrative expenses | 7,360 | 7,101 | 24,125 | 20,985 |
Restructuring and impairment (recovery) charges | 0 | 0 | 1,047 | (1,717) |
Operating (loss) income | (10,263) | 1,812 | (34,289) | (3,053) |
Interest income | 145 | 106 | 417 | 292 |
Interest expense | 0 | (34) | (25) | (129) |
Other income, net | 104 | 111 | 155 | 488 |
(Loss) income before income taxes | (10,014) | 1,995 | (33,742) | (2,402) |
Provision (benefit) for income taxes | 0 | (297) | 0 | (297) |
Net (loss) income | $ (10,014) | $ 2,292 | $ (33,742) | $ (2,105) |
Earnings (loss) per share | ||||
Basic (loss) earnings per share | $ (0.15) | $ 0.04 | $ (0.50) | $ (0.03) |
Diluted (loss) earnings per share | $ (0.15) | $ 0.03 | $ (0.50) | $ (0.03) |
Weighted average common shares outstanding used in computing earnings (loss) per share | ||||
Basic | 67,997 | 65,320 | 67,550 | 64,808 |
Document And Entity Information (USD $) | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Entity Registrant Name | ANADIGICS INC |
Entity Central Index Key | 0000940332 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Filer Category | Accelerated Filer |
Entity Public Float | $ 68,172,000 |
Entity Common Stock, Shares Outstanding | 68,172,388 |
Document Fiscal Year Focus | 2012 |
Document Fiscal Period Focus | Q3 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Oct. 01, 2011 |
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BENEFIT FROM INCOME TAXES | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Notes To Financial Statements [Abstract] | |
Benefit From Income Taxes | 6. BENEFIT FROM INCOME TAXES The Housing and Economic Recovery Act of 2008 included the partial refund of certain carried-forward Research and Experimental (R&E) tax credits. During the three month period ended October 2, 2010, the Company finalized and filed the R&E claim as part of its 2009 federal tax return and subsequently received cash of $297 for the R&E credits. Such refund was recorded as a benefit from income taxes during the third quarter of 2010. |
MANAGEMENT SEPARATION CHARGES AND SUBSEQUENT EVENT | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
RESTRUCTURING, MANAGEMENT SEPARATION CHARGES AND IMPAIRMENT (RECOVERY) | |
RESTRUCTURING, MANAGEMENT SEPARATION CHARGES AND IMPAIRMENT (RECOVERY) | 2. RESTRUCTURING, MANAGEMENT SEPARATION CHARGES, AND IMPAIRMENT RECOVERY RESTRUCTURING In May 2011, the Company implemented a workforce reduction that eliminated approximately 40 positions, resulting in a Restructuring charge of $1,047 for severance and related benefits during the second quarter of 2011. The unpaid balance at October 1, 2011 was $83 and was recorded within Accrued restructuring costs. MANAGEMENT SEPARATION CHARGES During the first quarter of 2011, the Company recorded certain management separation charges of $838 and $2,111, inclusive of accelerated stock-based compensation of $568 and $116, within Research and development and Selling and administrative expenses, respectively. The management separation charges arose from the resignations of our former Chief Executive Officer (CEO) and another Executive Officer, and included contractual separation pay, accelerated vesting of certain equity awards, and certain other costs. The unpaid balance at October 1, 2011 was $17 and was recorded within Accrued liabilities. IMPAIRMENT RECOVERY During the second quarter of 2010, the Company sold its wafer fabrication building in Kunshan, China for net proceeds of $1,717, resulting in the partial recovery of a related impairment charge. During 2008, the Company had written-off the value of its unfinished wafer fabrication building following an evaluation of alternatives in light of the then current circumstances, including: surplus industry production capacity, reduced demand experienced by the Company as well as the broader macroeconomic environment. As a result of its analysis of projected discounted cashflows, the Company recorded a $12,957 impairment charge in 2008 related to the China wafer fabrication facility. |
LEGAL PROCEEDINGS | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
LEGAL PROCEEDINGS | |
LEGAL PROCEEDINGS | 8. LEGAL PROCEEDINGS On or about November 11, 2008, plaintiff Charlie Attias filed a putative securities class action lawsuit in the United States District Court for the District of New Jersey, captioned Charlie Attias v. Anadigics, Inc., et al., No. 3:08-cv-05572, and, on or about November 21, 2008, plaintiff Paul Kuznetz filed a related class action lawsuit in the same court, captioned Paul J. Kuznetz v. Anadigics, Inc., et al., No. 3:08-cv-05750 (jointly, the "Class Actions"). The Complaints in the Class Actions, which were consolidated under the caption In re Anadigics, Inc. Securities Litigation, No. 3:08-cv-05572, by an Order of the District Court dated November 24, 2008, seek unspecified damages for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5 promulgated thereunder, in connection with alleged misrepresentations and omissions in connection with, among other things, Anadigics's manufacturing capabilities and the demand for its products. On October 23, 2009, plaintiffs filed a Consolidated Amended Class Action Complaint, (the "First Amended Complaint"), which names the Company, a current officer and a former officer-director, and alleges a proposed class period that runs from July 24, 2007 through August 7, 2008. On December 23, 2009, defendants filed a motion to dismiss the First Amended Complaint; that motion was fully briefed as of March 30, 2010. After holding extensive oral argument on defendants' motion on August 3, 2010, the District Court found plaintiffs' First Amended Complaint to be deficient, but afforded them another opportunity to amend their pleading. The District Court therefore denied defendants' motion to dismiss without prejudice to defendants' renewing the motion in response to plaintiffs' Second Amended Complaint, which plaintiffs filed on October 4, 2010. The Second Amended Complaint, which contains the same substantive claims that were alleged in the First Amended Complaint, alleges a proposed class period that runs from February 12, 2008 through August 7, 2008. Defendants filed a motion to dismiss the Second Amended Complaint on December 3, 2010. By an Opinion and an Order dated September 30, 2011, the District Court dismissed with prejudice plaintiffs' Second Amended Complaint. On October 27, 2011, plaintiffs filed with the District Court a notice of appeal to the United States Court of Appeals for the Third Circuit from the District Court's September 30, 2011 Opinion and Order. On or about January 14, 2009, a shareholder's derivative lawsuit, captioned Sicari v. Anadigics, Inc., et al., No. SOM-L-88-09, was filed in the Superior Court of New Jersey, and, on or about February 2, 2009, a related shareholder's derivative lawsuit, captioned Moradzadeh v. Anadigics, Inc., et al., No. SOM-L-198-09, was filed in the same court (jointly, the "Derivative Lawsuits"). The Derivative Lawsuits seek unspecified damages for alleged state law claims against certain of the Company's current and former directors arising out of the matters at issue in the Class Actions. By Order dated March 6, 2009, the New Jersey Superior Court consolidated the Derivative Lawsuits under the caption In re Anadigics, Inc. Derivative Litigation, No. SOM-L-88-09. By Order dated March 27, 2009, the Superior Court stayed the Derivative Lawsuits pending disposition of the defendants' motion to dismiss the First Amended Complaint in the Class Actions. By Order dated September 13, 2010, the Superior Court extended the stay of the Derivative Lawsuits until the disposition of defendants' motion to dismiss the Second Amended Complaint in the Class Actions. Because the Class Actions and the Derivative Lawsuits, which are in a preliminary stage, do not specify alleged monetary damages, the Company is unable to reasonably estimate a possible range of loss, if any, to the Company in connection therewith. The Company is also a party to ordinary course litigation arising out of the operation of our business. The Company believes that the ultimate resolution of such ordinary course litigation should not have a material adverse effect on its consolidated financial condition or results of operations. |
STOCK BASED COMPENSATION | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | 7. STOCK BASED COMPENSATION Equity Compensation Plans The Company had 4 equity compensation plans under which equity securities are authorized for issuance to employees and/or directors:
Employees and outside directors have been granted restricted stock shares or units (collectively, restricted stock) and options to purchase shares of common stock under stock option plans adopted in 1995, 1997 and 2005. An aggregate of 4,913, 5,100 and 16,050 shares of common stock were reserved for issuance under the 1995 Plan, the 1997 Plan and the 2005 Plan, respectively. The Plans provide for the granting of stock options, stock appreciation rights, restricted stock and other share based awards to eligible employees and directors, as defined in the Plans. Option grants have terms of ten years and become exercisable in varying amounts over periods of up to three years. To date, no stock appreciation rights have been granted under the Plans. On February 1, 2009, a CEO inducement award of 700 stock options was granted outside of the Plans and the unvested portion of that award contractually vested upon separation on March 28, 2011. In 1995, the Company adopted the ESP Plan under Section 423 of the Internal Revenue Code. All full-time employees of ANADIGICS, Inc. and part-time employees, as defined in the ESP Plan, are eligible to participate in the ESP Plan. An aggregate of 6,694 shares of common stock were reserved for offering under the ESP Plan. Offerings are made at the commencement of each calendar year and must be purchased by the end of that calendar year. Pursuant to the terms of the ESP Plan, shares purchased and the applicable per share price were 488 and $3.83, respectively for the year ended December 31, 2010. The table below summarizes stock based compensation by source and by financial statement line item for the three and nine month periods:
No tax benefits have been recorded due to the Company's full valuation allowance position. Stock based compensation for the nine months ended October 1, 2011 includes $684 for equity awards associated with the management separation charge recorded during the first quarter of 2011. Restricted Stock and Stock Option Awards The value of restricted stock grants are fixed upon the date of grant and amortized over the related vesting period of six months to three years. Restricted stock is subject to forfeiture if employment terminates prior to vesting. The Company estimates that approximately 2.5% of its restricted stock and stock option awards are forfeited annually (exclusive of LTI's, as described below). The restricted stock shares carry voting and certain forfeitable dividend rights commencing upon grant, whereas restricted stock units do not. Neither restricted stock shares nor restricted stock units may be traded or transferred prior to vesting. Grant, vest and forfeit activity and related weighted average (WA) price per share for restricted stock and for stock options during the period from January 1, 2010 to October 1, 2011 is presented in tabular form below:
In June 2011, the Company's Chief Executive Officer and Chief Financial Officer were awarded a base grant of 417 long-term incentive (LTI) stock options contingent upon the Company's shareholder return performance against the performance of the Philadelphia Semiconductor Index component companies. The award and performance will be evaluated annually in one-third increments measuring Company shareholder returns during the one, two and three year periods following the award. Depending upon performance, the number of shares issuable pursuant to the LTI stock options can range from 50% to 150% of the base option shares. Company performance below the 25th-percentile in a measurement period would result in no vesting for that period. The LTI stock options have an exercise price of $3.24, a ten year term to expiration, and an average fair value of $2.62. The fair value estimate was calculated with the assistance of a valuation consultant using a Monte Carlo Simulation model. Stock based compensation for the nine months ended October 1, 2011 includes $684 for equity awards associated with the management separation charge recorded during the nine months ended October 1, 2011.
Stock options outstanding at October 1, 2011 are summarized as follows:
Valuation Method for ESP Plan and Stock Option Awards The fair value of these equity awards was estimated at the date of grant using a Black-Scholes option pricing model. The weighted average assumptions and fair values for stock based compensation grants used for the nine month periods ended October 1, 2011 and October 2, 2010 were (excludes the aforementioned LTI option grants):
For equity awards with expected terms of greater than one year, the assumption for expected volatility is based on a combination of implied and historical volatility, whereas for equity awards with an expected term of one year or less, the assumption is solely based on the Company's historical volatility. |
LOSS PER SHARE | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE | 3. (LOSS) EARNINGS PER SHARE The reconciliation of shares used to calculate basic and diluted (loss) earnings per share consists of the following:
For the three and nine months ended October 1, 2011 and October 2, 2010, potential additional dilution arising from any of the Company's outstanding stock options or unvested restricted stock (shares or units) are detailed below. Such potential dilution was excluded as their effect was anti-dilutive.
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