x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 29, 2014.
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or
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o 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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Large accelerated filer o
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Accelerated filer x
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Non-accelerated filer (Do not check if a smaller reporting company) o
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Smaller reporting company o
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PART I
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Financial Information
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Item 1.
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3 | |
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3 | |
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4 | |
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5 | |
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6 | |
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Item 2.
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14 | |
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Item 3.
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16 | |
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Item 4.
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16 | |
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PART II.
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Other Information
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18 |
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Item 1A.
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18 | |
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Item 5.
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18 | |
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Item 6.
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18 | |
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19 |
March 29, 2014 | December 31, 2013 | |||||||
(Unaudited)
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(Note 1)
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|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents
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$
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13,607
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$
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20,947
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||||
Short-term marketable securities
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450
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3,447
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||||||
Accounts receivable, net
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12,421
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15,156
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||||||
Inventories
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22,522
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21,114
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||||||
Prepaid expenses and other current assets
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5,110
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3,628
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||||||
Total current assets
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54,110
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64,292
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||||||
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||||||||
Plant and equipment:
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||||||||
Equipment and furniture
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204,741
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203,797
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||||||
Leasehold improvements
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46,850
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46,850
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||||||
Projects in process
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4,295
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4,832
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||||||
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255,886
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255,479
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||||||
Less accumulated depreciation and amortization
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225,635
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222,303
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||||||
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30,251
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33,176
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||||||
Other assets
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213
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213
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||||||
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||||||||
Total assets
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$
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84,574
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$
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97,681
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||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$
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10,837
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$
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13,043
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||||
Accrued liabilities
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4,392
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4,380
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||||||
Accrued restructuring costs
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529
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245
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||||||
Total current liabilities
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15,758
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17,668
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||||||
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||||||||
Other long-term liabilities
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1,501
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1,604
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Commitments and contingencies
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||||||||
Stockholders’ equity:
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||||||||
Common stock, $0.01 par value, 144,000 shares authorized, 85,676 issued at March 29, 2014 and 84,437 issued at December 31, 2013
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857
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844
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||||||
Additional paid-in capital
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639,762
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637,922
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||||||
Accumulated deficit
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(573,495
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)
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(561,745
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)
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Accumulated other comprehensive income
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450
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1,647
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||||||
Treasury stock at cost: 115 shares
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(259
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)
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(259
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)
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||||
Total stockholders’ equity
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67,315
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78,409
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||||||
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||||||||
Total liabilities and stockholders’ equity
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$
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84,574
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$
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97,681
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Three months ended
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||||||||
March 29, 2014
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March 30, 2013
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|||||||
(unaudited)
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(unaudited)
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|||||||
Net sales
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$
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23,271
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$
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26,380
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Cost of sales
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21,000
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27,101
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||||||
Gross profit (loss)
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2,271
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(721
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)
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|||||
Research and development expenses
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8,576
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10,280
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Selling and administrative expenses
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5,126
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6,242
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Restructuring charge
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1,451
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1,915
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Operating loss
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(12,882
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)
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(19,158
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)
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Interest income
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5
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93
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||||||
Interest expense
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(33
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)
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-
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Other income, net
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1,160
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46
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||||||
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Net loss
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$
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(11,750
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)
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$
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(19,019
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)
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Basic and diluted loss per share
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$
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(0.14
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)
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$
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(0.26
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)
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||||||||
Weighted average common shares outstanding used in computing loss per share
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||||||||
Basic and diluted
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84,763
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73,158
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Three months ended
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||||||||
March 29, 2014
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March 30, 2013
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|||||||
(unaudited)
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(unaudited)
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|||||||
Net loss
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$
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(11,750
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)
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$
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(19,019
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)
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||||||||
Other comprehensive income
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||||||||
Unrealized (loss) gain on marketable securities
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(37
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)
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1,118
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Reclassification adjustment:
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||||||||
Net recognized gain on marketable securities previously included in Accumulated other comprehensive income
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(1,160
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)
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(29
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Comprehensive loss
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$
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(12,947
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)
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$
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(17,930
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)
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Three months ended
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March 29, 2014
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March 30, 2013
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|||||||
(unaudited)
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(unaudited)
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|||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss
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$
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(11,750
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)
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$
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(19,019
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation
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3,332
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3,827
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Amortization
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17
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21
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Stock based compensation
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1,843
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1,501
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Marketable securities recovery and accretion
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(1,160
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)
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(29
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Gain on disposal of equipment
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-
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(46
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Changes in operating assets and liabilities:
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Accounts receivable
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2,735
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(446
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)
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Inventories
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(1,408
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)
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(1,473
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)
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Prepaid expenses and other assets
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(1,499
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)
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(1,388
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Accounts payable
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(2,206
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)
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(2,776
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)
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Accrued liabilities and other liabilities
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193
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1,195
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Net cash used in operating activities
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(9,903
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)
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(18,633
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)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Purchases of plant and equipment
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(407
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)
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(1,466
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)
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Purchases of marketable securities
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-
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(5,911
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)
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Proceeds from sale of marketable securities
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2,960
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17,724
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||||||
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Net cash provided by investing activities
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2,553
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10,347
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CASH FLOWS FROM FINANCING ACTIVITIES
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Issuance of common stock
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10
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18,419
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Net cash provided by financing activities
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10
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18,419
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||||||
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||||||||
Net (decrease) increase in cash and cash equivalents
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(7,340
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)
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10,133
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|||||
Cash and cash equivalents at beginning of period
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20,947
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24,949
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||||||
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||||||||
Cash and cash equivalents at end of period
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$
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13,607
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$
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35,082
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1.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Three months ended
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|||||||
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March 29, 2014
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March 30, 2013
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||||||
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||||||
Beginning balance
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$
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383
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$
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770
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Additions charged to costs and expenses
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51
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108
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||||||
Claims processed
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(101
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)
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(482
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)
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Ending balance
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$
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333
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$
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396
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2.
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RESTRUCTURING
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Accrued
Restructuring
Costs
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|||
December 31, 2012 balance
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$
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395
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Restructuring expense
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1,915
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Payments
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(2,065
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)
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December 31, 2013 balance
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$
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245
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Restructuring expense
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1,451
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Payments
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(1,167
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)
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March 29, 2014 balance
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$
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529
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3.
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FAIR VALUE AND MARKETABLE SECURITIES
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Level 1
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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
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Fair Value Measurements at Reporting Date
Using
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||||||||||||||||||||
Security Type
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Amortized
Cost Basis
(1)
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Fair
Value
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Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
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Significant
Other
Observable
Inputs
(Level 2)
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Significant
Unobservable
Inputs
(Level 3)
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|||||||||||||||
Former-auction corporate debt security (2)
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$
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1,800
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$
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2,997
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$
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-
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$
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2,997
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$
|
-
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||||||||||
Auction Rate Security - Preferred Equity
|
-
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450
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-
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-
|
450
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|||||||||||||||
Total at December 31, 2013
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$
|
1,800
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$
|
3,447
|
$
|
-
|
$
|
2,997
|
$
|
450
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||||||||||
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||||||||||||||||||||
Auction Rate Security - Preferred Equity
|
-
|
450
|
-
|
-
|
450
|
|||||||||||||||
Total at March 29, 2014
|
$
|
-
|
$
|
450
|
$
|
-
|
$
|
-
|
$
|
450
|
(1) | Difference between amortized cost basis and fair value represents gross unrealized gains. |
(2) | Available for sale debt security with a contractual maturity in excess of 10 years. |
($ in 000’s)
|
Fair Value
Measurements Using
Significant
Unobservable
Inputs (Level 3)
Three months ended
March 30, 2013
|
|||
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Preferred Equity
Securities (a)
|
|||
Balance at January 1, 2013
|
$
|
1,568
|
||
Total gains or losses realized/unrealized
|
||||
Included in earnings (loss)
|
-
|
|||
Included in other comprehensive income(loss)
|
477
|
|||
Purchases, redemptions, and settlements
|
-
|
|||
Transfers in and/or out of Level 3
|
-
|
|||
Balance at March 30, 2013
|
$
|
2,045
|
||
|
||||
Amount of total gains or losses for the period included in earnings(loss) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date
|
-
|
4.
|
INVENTORIES
|
|
March 29, 2014
|
December 31, 2013
|
||||||
|
||||||||
Raw materials
|
$
|
6,941
|
$
|
7,323
|
||||
Work in process
|
9,753
|
8,424
|
||||||
Finished goods
|
5,828
|
5,367
|
||||||
Total
|
$
|
22,522
|
$
|
21,114
|
5.
|
STOCKHOLDERS’ EQUITY
|
6.
|
STOCK BASED COMPENSATION
|
§ | 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 (terminated February 28, 2005) (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
|
||||||||
March 29, 2014
|
March 30, 2013
|
|||||||
Amortization of restricted stock
|
$ |
1,734
|
$
|
1,230
|
||||
Amortization of ESP Plan
|
60
|
150
|
||||||
Amortization of stock option awards
|
49
|
121
|
||||||
Total stock based compensation
|
$ |
1,843
|
$
|
1,501
|
||||
|
||||||||
By Financial Statement line item
|
||||||||
Cost of sales
|
$ |
276
|
$
|
179
|
||||
Research and development expenses
|
554
|
345
|
||||||
Selling and administrative expenses
|
1,013
|
1,048
|
||||||
Restructuring charge
|
-
|
(71
|
)
|
Restricted Stock Units
|
Stock Options
|
|||||||||||||||
Units
|
WA
price/
unit
|
Issuable
upon
exercise
|
WA
exercise
price
|
|||||||||||||
Outstanding at January 1, 2013
|
1,430
|
$
|
4.63
|
2,495
|
$
|
4.89
|
||||||||||
Granted (1)
|
3,509
|
2.11
|
13
|
2.26
|
||||||||||||
Shares vested/options exercised
|
(1,539
|
)
|
3.34
|
(69
|
)
|
1.93
|
||||||||||
Forfeited/expired (2,3)
|
(528
|
)
|
2.50
|
(480
|
)
|
3.99
|
||||||||||
Balance at December 31, 2013
|
2,872
|
$
|
2.63
|
1,959
|
$
|
5.20
|
||||||||||
Granted (1)
|
2,070
|
1.85
|
3
|
1.91
|
||||||||||||
Shares vested/options exercised
|
(1,234
|
)
|
3.36
|
(5
|
)
|
1.83
|
||||||||||
Forfeited/expired
|
(62
|
)
|
2.21
|
(617
|
)
|
5.88
|
||||||||||
Balance at March 29, 2014
|
3,646
|
$ |
1.95
|
1,340
|
$ |
4.89
|
(1) | Years 2013 and 2014 restricted stock units granted include 560 and 412.5 performance-based restricted stock units, respectively. |
(2) | Year 2013 restricted stock units forfeited include 384 performance-based units; Year 2013 stock options forfeited include 42 performance-based option shares. |
(3) | In the second quarter of 2013, 125 time-based and 83 (125 at maximum performance achievement) performance-based stock options were rescinded with the consent of and without payment to the CEO due to the fact that the original grants with respect to which these options were a part of exceeded the sub-limits of the applicable plan by the number of shares as to which the options were rescinded. |
As of March 29, 2014
|
||||
Unrecognized stock based compensation cost
|
||||
Option plans
|
$
|
58
|
||
Restricted stock
|
$
|
4,675
|
||
Weighted average remaining recognition period
|
||||
Option plans
|
0.7 Years
|
|||
Restricted stock
|
1.8 Years
|
Range of exercise prices |
Outstanding
Options at
March 29, 2014
|
Weighted
average
remaining
contractual
life
|
Weighted
average
exercise
price
|
Exercisable
at March 29,
2014
|
Weighted
average
exercise
price
|
||||||||||||||||
$1.23 - $1.93
|
474
|
4.5
|
$
|
1.92
|
466
|
$
|
1.93
|
||||||||||||||
$2.00 - $3.24
|
317
|
6.9
|
$
|
3.19
|
240
|
$
|
3.20
|
||||||||||||||
$3.30 - $8.79
|
147
|
2.7
|
$
|
5.49
|
147
|
$
|
5.49
|
||||||||||||||
$8.84 - $18.98
|
402
|
2.5
|
$
|
9.49
|
402
|
$
|
9.49
|
Three months ended
|
||||||||
March 29, 2014
|
March 30, 2013
|
|||||||
Stock option awards: | ||||||||
Risk-free interest rate
|
1.7
|
%
|
0.8
|
%
|
||||
Expected volatility
|
58
|
%
|
72
|
%
|
||||
Average expected term (in years)
|
5.0
|
5.0
|
||||||
Expected dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Weighted average fair value of options granted
|
$
|
0.97
|
$
|
1.53
|
||||
|
||||||||
ESP Plan:
|
||||||||
Risk-free interest rate
|
0.1
|
%
|
0.1
|
%
|
||||
Expected volatility
|
45
|
%
|
66
|
%
|
||||
Average expected term (in years)
|
1.0
|
1.0
|
||||||
Expected dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Weighted average fair value of purchase option
|
$
|
0.49
|
$
|
0.72
|
7.
|
LOSS PER SHARE
|
Three months ended
|
||||||||
March 29, 2014
|
March 30, 2013
|
|||||||
Weighted average common shares for basic loss per share
|
84,763
|
73,158
|
||||||
|
||||||||
Effect of dilutive securities:
|
||||||||
Stock options (*)
|
-
|
-
|
||||||
Unvested restricted shares (*)
|
-
|
-
|
||||||
|
||||||||
Adjusted weighted average shares for diluted loss per share
|
84,763
|
73,158
|
* | Incremental shares from restricted shares and stock options are computed using the treasury stock method. |
|
Three months ended
|
|||||||
|
March 29, 2014
|
March 30, 2013
|
||||||
|
|
|
||||||
Stock options
|
1,340
|
2,437
|
||||||
Unvested restricted shares and units
|
3,646
|
1,627
|
8.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
Net Unrealized
Gain (Loss) on
Marketable
Securities
|
Foreign
Currency
Translation
|
Total
|
||||||||||
Balance at January 1, 2013
|
$
|
3,255
|
$
|
(3
|
)
|
$
|
3,252
|
|||||
Other comprehensive income before reclassifications
|
1,118
|
-
|
1,118
|
|||||||||
Amounts reclassified from accumulated other comprehensive income *
|
(29
|
)
|
-
|
(29
|
)
|
|||||||
Net current period other comprehensive income
|
1,089
|
-
|
1,089
|
|||||||||
Balance at March 30, 2013
|
$
|
4,344
|
$
|
(3
|
)
|
$
|
4,341
|
|||||
|
||||||||||||
Balance at January 1, 2014
|
$
|
1,647
|
$
|
-
|
$
|
1,647
|
||||||
Other comprehensive income before reclassifications
|
(37
|
)
|
-
|
(37
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive income *
|
(1,160
|
)
|
-
|
(1,160
|
)
|
|||||||
Net current period other comprehensive income
|
(1,197
|
)
|
-
|
(1,197
|
)
|
|||||||
Balance at March 29, 2014
|
$
|
450
|
$
|
-
|
$
|
450
|
9.
|
LEGAL PROCEEDINGS
|
10.
|
LINE OF CREDIT
|
Three months ended
|
||||||||
March 29, 2014
|
March 30, 2013
|
|||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
||||
Cost of sales
|
90.2
|
%
|
102.7
|
%
|
||||
|
||||||||
Gross margin
|
9.8
|
%
|
(2.7
|
)%
|
||||
Research and development expenses
|
36.9
|
%
|
39.0
|
%
|
||||
Selling and administrative expenses
|
22.0
|
%
|
23.7
|
%
|
||||
Restructuring charges
|
6.2
|
%
|
7.3
|
%
|
||||
|
||||||||
Operating loss
|
(55.3
|
)%
|
(72.7
|
)%
|
||||
Interest income
|
-
|
0.4
|
%
|
|||||
Interest expense
|
(0.2
|
)%
|
-
|
|||||
Other income, net
|
5.0
|
%
|
0.2
|
%
|
||||
|
||||||||
Net loss
|
(50.5
|
)%
|
(72.1
|
)%
|
|
Number of Shares
|
|
||
|
For
|
Against
|
Abstain
|
Broker Non-Vote
|
|
|
|
|
|
Harry T. Rein
|
25,417,344
|
2,249,806
|
65,340
|
43,402,311
|
Dennis F. Strigl
|
21,606,574
|
6,060,576
|
65,340
|
43,402,311
|
Number of Shares
|
||
For
|
Against
|
Abstain
|
|
|
|
70,070,301
|
880,018
|
184,482
|
|
Number of Shares
|
||
For
|
Against
|
Abstain
|
Broker Non-Vote
|
|
|
|
|
20,114,469
|
7,489,723
|
128,298
|
43,402,311
|
Rule 13a-14(a)/15d-14(a) Certification of Ronald Michels, Chairman and Chief Executive Officer of ANADIGICS, Inc.
|
Rule 13a-14(a)/15d-14(a) Certification of Terrence G. Gallagher, Vice President and Chief Financial Officer of ANADIGICS, Inc.
|
Section 1350 Certification of Ronald Michels, Chairman and Chief Executive Officer of ANADIGICS, Inc.
|
Section 1350 Certification of Terrence G. Gallagher, Vice President and Chief Financial Officer of ANADIGICS, Inc.
|
ANADIGICS, INC. | ||||
By:
|
/s/ Terrence G. Gallagher
|
|||
|
Terrence G. Gallagher
|
|||
|
Vice President and Chief Financial Officer
|
|||
|
|
|||
Dated: May 7, 2014 |
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: | May 7, 2014 |
By:
|
/s/ Ronald Michels
|
|
Ronald Michels
|
||||
|
Chairman 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. |
Date: | May 7, 2014 |
By:
|
/s/ Terrence G. Gallagher
|
|
|
Terrence G. Gallagher
|
|||
|
Vice President and Chief Financial Officer
|
Dated: | May 7, 2014 |
By:
|
/s/ Ronald Michels
|
|
|
Ronald Michels
|
|||
|
Chairman and Chief Executive Officer
|
Dated:
|
May 7, 2014 |
By:
|
/s/ Terrence G. Gallagher
|
|
|
Terrence G. Gallagher
|
|||
|
Vice President and Chief Financial Officer
|
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