ANADIGICS Reports Fourth Quarter 2001 Results; Revenue and EPS Loss Better than Anticipated at $21.0 million and $0.43, Respectively.Business Editors WARREN, N.J.--(BUSINESS WIRE)--Jan. 30, 2002 ANADIGICS, Inc. (Nasdaq: ANAD ANAD Anorexia Nervosa and Associated Disorders ANAD National Association of Anorexia Nervosa and Associated Disorders ANAD Anniston Army Depot ANAD Asociación Nacional de Abogados Democráticos (National Association of Democratic Lawyers, Mexico) ), a leading supplier of wireless and broadband communications solutions, today reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $21.0 million and a loss of $0.43 per share (excluding special charges and amortization of intangibles) for the fourth quarter ended December 31, 2001. These results were better than anticipated on the strength of increased demand in the 2001 fourth quarter for its wireless products and through continued cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. measures. Net sales and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. loss in the 2000 fourth quarter were $30.7 million and $0.01, respectively. The Company is on track with its initiatives to decrease manufacturing costs and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . In the 2001 fourth quarter, adjusted total operating expenses were reduced to $13.1 million, a continued improvement from the second and third quarter totals of $16.4 million and $15.4 million, respectively. As announced yesterday, ANADIGICS has formed a strategic alliance with Universal Communication Technology, Inc. of Taiwan for the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of its production RF testing operations to Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. , which will add considerable efficiencies to the Company's device manufacturing and further reduce product cycle times and manufacturing costs. In the fourth quarter, special charges of $10.7 million were recorded, including non-cash related charges of $9.5 million, resulting from the write-down of impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair and certain equity investments, and cash-related charges of $1.2 million. Including these special charges and amortization of intangibles, the net loss for the fourth quarter was $24.7 million or $0.81 per share. "We are very pleased to report a 29% sequential increase in our revenues and a sequential EPS improvement of nine cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in the fourth quarter," remarked Dr. Bami Bastani, President and Chief Executive Officer of ANADIGICS. "Our efforts to grow our wireless business while controlling costs has positioned ANADIGICS for a recovery in 2002. Additionally, we are heartened to see signs of a recovery in the cable and broadcast markets and are fully booked to meet our first quarter cable revenue target." In the fourth quarter, wireless product line revenues were $13.9 million, up a record 128% sequentially from the third quarter and double the year-ago fourth quarter. Broadband revenues were $7.1 million, primarily reflecting lower orders for infrastructure ICs compared to the prior quarter. The Company's balance sheet was further strengthened with the completion of a convertible debt offering on November 27, 2001. Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $200 million at December 31, 2001. "We continued to increase our customer base and have secured a number of new CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. design wins which should lead to production ramp and revenue in 2002," continued Dr. Bastani. "We are making inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ into the GSM/GPRS market with our highly integrated PowerPlexer(TM) module and we are addressing new wireless infrastructure opportunities with our gain block products. We continue to expand share at our leading cable customers through new design wins; further solidifying so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our market leadership position." OUTLOOK The Company is 100% booked to meet a first quarter revenue forecast of approximately $17.5 million. Wireless revenues of $8.0 million are expected, a greater than 25% increase year-on-year, reflecting the Company's new CDMA customer base. Broadband revenues are estimated at $9.5 million. The EPS loss for the first quarter, excluding any special charges, is anticipated to improve from the fourth quarter to ($0.40) per share. HIGHLIGHTS OF THE QUARTER - DESIGN WIN - Wireless PA Modules for Sewon Telecom On January 16, 2002, the Company announced a production order from Sewon Telecom, one of Korea's leading wireless manufacturers, for the recently introduced AWT (Abstract Windowing Toolkit) A class library from Sun that provides an application framework and graphical user interface (GUI) routines for Java programmers. AWT was the first user interface development system included in the Java Foundation Classes (JFC). 6109 power amplifier Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. module. The AWT6109 is compliant with all IS95/98 and 1XRTT CDMA system data standards, and is optimized for use in Korean band PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. CDMA products. Sewon Telecom is using the PA module in its new wireless modem A modem and antenna that transmits and receives over the air. Wireless modems support several technologies, including 802.11, Bluetooth, CDPD, DataTAC, Mobitex and Ricochet. There are wireless modems for laptops, handhelds and cellphones. card for Mobile Media Tech's Strata stra·ta n. A plural of stratum. strata Noun the plural of stratum USAGE: Strata is sometimes wrongly used as a singular noun: this stratum (not strata) PDA (Personal Digital Assistant) A handheld computer for managing contacts, appointments and tasks. It typically includes a name and address database, calendar, to-do list and note taker, which are the functions in a personal information manager (see PIM). . - DESIGN WIN - Wireless PA Modules for Standard Telecom On January 7, 2002, the Company announced that one of Korea's leading wireless equipment manufacturers, Standard Telecom, will be incorporating the AWT6106 power amplifier module in its new NCP (1) (Network Control Program) See SNA and network control program. (2) (NetWare Core Protocol) The file sharing protocol used in a NetWare network. 7100 PCS mode handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. for the U.S. marketplace. - DESIGN WINS - Power Amplifier Chipsets for Ericsson On November 12, 2001 and December 3, 2001, respectively, the Company announced production volume shipments of power amplifier chipsets to Ericsson for the new WAP-enabled R300d and T60d handsets for TDMA (Time Division Multiple Access) A satellite and cellular phone technology that interleaves multiple digital signals onto a single high-speed channel. For cellular, TDMA triples the capacity of the original analog method (FDMA). networks. Each phone will be powered with two custom-designed ANADIGICS' power amplifiers and one PA driver. - STRATEGIC ALLIANCE - Universal Communications Technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry , Inc. On January 29, 2002, the Company announced an agreement with UCOMM of Taiwan for the outsourcing of its production RF testing operations. Under the agreement, ANADIGICS will transfer the majority of its production RF testing operation closer to the Company's module assembly plant in S.E Asia, which will add considerable efficiencies to ANADIGICS' device manufacturing and further reduce product cycle times and manufacturing costs. All GaAs wafer fabrication Wafer Fabrication is a procedure composed of many repeated sequential processes to produce complete electrical or photonic circuits. Examples include production of radio frequency (RF) amplifiers, LEDs, optical computer components, and CPUs for computers. will remain at the Company's headquarters in Warren, NJ, along with in-house RF testing and assembly capabilities for fast turnaround of engineering prototypes. - NEW PRODUCT - Gain Block Amplifier for Infrastructure Systems On December 17, 2001, the Company introduced a new high linearity gain block amplifier designed for use in wireless infrastructure equipment applications. Designed to operate across 250-3000MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. , the AGB AGB Game Boy Advance AGB Allgemeine Geschäftsbedingungen (German: General terms and conditions / Standard business conditions) AGB Ice Breaker (USCG) AGB Asymptotic Giant Branch 3300 can be used for transmit and receive paths in a wide range of applications including W-CDMA See WCDMA. , CDMA, TDMA, GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. , PCS, PHS (Personal Handyphone System) A TDMA-based cellular phone system introduced in Japan in mid-1995. Operating in the 1880-1930 MHz band, PHS uses microcells that cover an area only 100 to 500 meters in diameter, resulting in lower equipment costs but requiring more base , Bluetooth, WLL See wireless local loop and PHS-WLL. , 802.11b and MMDS (Multichannel Multipoint Distribution Service or Microwave Multipoint Distribution Service) A digital wireless transmission system that works in the 2.2-2.4 GHz range. . The AGB3300 is ANADIGICS' latest addition to its growing family of gain block products serving cable and wireless infrastructure markets. - NEW PRODUCT - Next-Generation GSM/GPRS Module- PowerPlexer(TM) On December 10, 2001, the Company introduced the AWT6200 PowerPlexer(TM), the first in a new family of integrated RF modules for GSM/GPRS wireless handsets. The PowerPlexer(TM) integrates ANADIGICS' leading InGaP HBT HBT Heterojunction Bipolar Transistor HBT HyCult Biotechnology (Uden, The Netherlands) HBT Hanbury-Brown-Twiss (interferometer) HBT Herring Bone Twill HBT Heflex Bioengineering Test power amplifiers, GaAs pHEMT multi-throw RF antenna switch as well as integrated passives and analog control integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. in a small module package. By delivering all of these RF functions in one compact module, the PowerPlexer(TM) significantly simplifies handset designs while providing excellent power efficiency and reducing handset sizes, lowering costs and reducing time-to-market. CONFERENCE CALL ANADIGICS' senior management will conduct a conference call today at 8:30 AM Eastern time. A live audio Webcast will be available at www.anadigics.com. A recording of the call will be available approximately two hours after the end of the call on the ANADIGICS Web site or by dialing (402) 220-9186 (available until February 6th) ANADIGICS, Inc. (Nasdaq: ANAD) designs and manufactures radio frequency integrated circuit integrated circuit (IC), electronic circuit built on a semiconductor substrate, usually one of single-crystal silicon. The circuit, often called a chip, is packaged in a hermetically sealed case or a nonhermetic plastic capsule, with leads extending from it for (RFIC RFIC Radio Frequency Integrated Circuit RFIC Radio Frequency Interface Chip ) solutions for growing broadband and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. markets. The Company's innovative high frequency RFICs enable manufacturers of communications equipment to enhance overall system performance, and reduce manufacturing cost and time to market. By utilizing state-of-the-art manufacturing processes for its RFICs, ANADIGICS achieves the high-volume and cost-effective products required by leading companies in its targeted high-growth communications markets. ANADIGICS was the first GaAs IC manufacturer to receive ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certification. Except for historical information contained herein, this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including, but not limited to, order rescheduling or cancellation, changes in estimated product lives, timely product and process development, individual product pricing pressure, variation in production yield, difficulties in obtaining components and assembly services needed for production of integrated circuits, change in economic conditions of the various markets the Company and its customers serve, as well as other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission, including the report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000. Actual results could differ materially from the Company's forward-looking statements. Forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes", "anticipates", "expects", or words of similar import. Similarly, statements that describe the Company's future plans, objectives, estimates, or goals, including the statements in this press release regarding revenue expectations, cost reduction initiatives, and strategic alternatives, are forward-looking statements.
ANADIGICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
(unaudited)
Three Months Ended December 31, 2001
-----------------------------------------------------
As Reported Adjustments Adjusted
------------ --------------- -------------
Net sales $ 21,008 $ - $ 21,008
Cost of sales 22,060 (208)(1,2) 21,852
------------ --------------- ------------
Gross (loss) profit (1,052) (208) (844)
Research and
development
expenses 8,263 (420) (2) 7,843
Selling and
administrative
expenses 6,401 (1,192) (1,2) 5,209
Restructuring and
other charges 1,680 (1,680) (3) -
Asset impairment
charges 5,127 (5,127) (4) -
------------ --------------- ------------
Operating loss (22,523) (8,627) (13,896)
Interest
income, net 843 - 843
Impairment on
investments (3,061) (3,061) (5) -
Gain on sale
of equipment 7 - 7
------------ --------------- ------------
Loss before
income taxes (24,734) (11,688) (13,046)
Provision for
income taxes - - -
------------ --------------- ------------
Net loss $ (24,734) $ (11,688) $ (13,046)
============ =============== ============
Basic and diluted
loss per share $ (0.81) $ (0.43)
============ ==========
Weighted average
common shares
outstanding 30,419,948 30,419,948
============ ===========
(1) Includes the amortization of acquisition-related goodwill and
intangible assets ($58 in COGS and $912 in S&A).
(2) Comprised of certain professional fees and employee compensation
related to cost reduction initiatives ($150 in COGS, $420 in R&D and
$280 in SG&A).
(3) Comprised of lease-related charges and workforce reduction-related
severance costs.
(4) Comprised of asset impairments on certain manufacturing and
research equipment.
(5) Comprised of write-downs to market of certain equity investments.
ANADIGICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Ended Year Ended
------------------------------- -----------------------------
Dec. 31, 2001 Dec. 31, 2000 Dec. 31, 2001 Dec. 31, 2000
-------------- --------------- ------------- -------------
(unaudited) (unaudited)
Net sales $21,008 $ 30,671 $ 84,765 $ 172,268
Cost of
sales 22,060 19,693 87,697 89,471
----------- ---------- ---------- ------------
Gross (loss)
profit (1,052) 10,978 (2,932) 82,797
Research and
development
expenses 8,263 8,977 37,764 39,799
Selling and
administrative
expenses 6,401 6,317 27,282 26,202
Restructuring
and other
charges 1,680 - 3,775 -
Asset impairment
charges 5,127 - 10,433 -
Purchased
in-process R&D - - 3,800 -
----------- ---------- ---------- ------------
Operating
(loss)
income (22,523) (4,316) (85,986) 16,796
Interest
income, net 843 2,645 6,304 10,521
Impairment on
investments (3,061) - (3,061) -
Gain (loss)
on sale of
equipment - (75) (39) 1,279
----------- ---------- ---------- ------------
(Loss) income
before income
taxes (24,741) (1,746) (82,782) 28,596
Provision
(benefit) for
income taxes - (1,415) 24,338 9,704
----------- ---------- ---------- ------------
Net (loss)
income $(24,741) $ (331) $ (107,120) $ 18,892
============ =========== =========== ============
Basic (loss)
earnings
per share $ (0.81) $ (0.01) $ (3.54) $ 0.64
============ =========== =========== ============
Weighted
average common
shares
outstanding 30,419,948 29,952,717 30,248,476 29,712,879
=========== =========== ========== ===========
Diluted (loss)
earnings
per share $ (0.81) $ (0.01) $ (3.54) $ 0.60
=========== ============ ========== ===========
Weighted
average
common and
dilutive
securities
outstanding 30,419,948 29,952,717 30,248,476 31,519,889
=========== =========== ========== ===========
ANADIGICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December 31, 2001 December 31, 2000
---------------------- ------------------
Assets
Current assets:
Cash and cash equivalents $63,102 $95,116
Marketable securities 55,364 53,254
Accounts receivable 10,200 21,794
Inventory 14,661 22,969
Prepaid expenses and
other current assets 5,635 3,475
Deferred taxes - 3,035
--------------- ------------------
Total current assets 148,962 199,643
Marketable securities 81,629 17,791
Property and equipment:
Equipment and furniture 128,903 137,819
Leasehold improvements 34,207 32,767
Projects in process 17,702 19,083
Less accumulated depreciation
and amortization 89,329 83,034
--------------- ---------------
91,483 106,635
Goodwill and other intangibles,
net of amortization 19,443 -
Other assets 5,397 5,302
Deferred taxes - 23,102
--------------- ---------------
$346,914 $352,473
=============== ===============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $9,115 $10,985
Accrued liabilities 6,549 6,824
Accrued restructuring costs 1,898 597
Current maturities
of long-term debt 244 1,000
Current maturities of
capital lease obligations 94 250
--------------- ---------------
Total current liabilities 17,900 19,656
Other long-term liabilities 2,378 1,985
Long-term debt,
less current portion 100,000 2,000
Stockholders' equity 226,636 328,832
--------------- ---------------
Total stockholders' equity
and liabilities $346,914 $352,473
=============== ===============
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