ANADIGICS Reports Record Sales; Company Reports 39% Sequential Growth in Wireless; 6-Inch Wafer Production Shipments Approved by Company's Largest Customers.WARREN, N.J.--(BUSINESS WIRE)--July 23, 1999-- 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) ) today reported financial results for the second quarter ended July 4, 1999. 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 for the 1999 second quarter increased 35% to $30.5 million, compared to $22.7 million in the second quarter of 1998. Sales growth for the quarter was primarily driven by the Company's strong performance in sales of 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. for wireless applications, where sales increased 75% from last year's second quarter to $13.1 million. Fiber Optic 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 sales growth for the quarter also contributed significantly, up 43% to $6.9 million. The on-going portion of Cable and Broadcast increased 21% to $10.3 million. The Direct Broadcast Low Noise Block Converter (1) A device that changes one set of codes, modes, sequences or frequencies to a different set. See A/D converter. (2) A device that changes current from 60Hz to 50Hz and vice versa. integrated circuit sales declined to $306,000. Consequently, in total, Cable and Broadcast integrated circuits sales increased 5% from the 1998 second quarter to $10.6 million. The Company announced in the fourth quarter of 1998 that it was discontinuing production of Low Noise Block Converter integrated circuits for the Direct Broadcast market, although it continues to sell Broadcast Tuner An electronic part of a radio or TV that locks on to a selected carrier frequency (station, channel) and filters out the audio and video signals for amplification and display. integrated circuits in this market. Net sales rose 22% sequentially from $25.0 million in the first quarter of 1999, and again wireless growth of 39% was the strongest of the Company's three primary markets. ANADIGICS announced today that the Company has signed a Memorandum of Understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. with the plaintiffs' counsel to settle the shareholder class action and derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. lawsuits, subject to court approval, that were filed against the Company and certain of its officers and directors in 1998. In connection with the settlement of these lawsuits, the Company recorded a $6.9 million charge in the 1999 second quarter. Net income during the second quarter of 1999 was $2.0 million, or $0.12 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share before special charges of $2.7 million of accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. expenses associated with the planned closing of the Company's 4-inch wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. fab, and the provision for the settlement of the lawsuits, as compared to net income of $320,000, or $0.02 per diluted share, in the second quarter of 1998 and $1.2 million, or $0.08 per diluted share before special charges, in the first quarter of 1999. Including the special charges, the Company reported a loss of $4.1 million, or $0.27 per basic share during the second quarter of 1999. "Our impressive results for the second quarter clearly demonstrate ANADIGICS' strong financial and competitive position. The Company's performance has even outpaced our aggressive targets for the first half of the year. New product introductions and bookings are at record levels, we're ahead of our timetable for the opening of Fab 2, and our enhanced manufacturing process efficiencies are in full play," said Dr. Bami Bastani, President and Chief Executive Officer. "Now that the class action and derivative lawsuits are behind us, management can focus all of its resources and energies on the business. We plan to continue to make investments that should position us for sales growth in the wireless and broadband markets." Gross margin before special charges for accelerated depreciation improved in the second quarter of 1999 to 45.7% from 35.8% in the second quarter of 1998, and 43.1% in the first quarter of 1999. The sequential improvement in gross margin is attributable to higher sales volumes. Research and development expenses were $6.4 million for the second quarter as compared to $5.1 million in last year's second quarter. SG&A expenses were $4.9 million for the quarter compared to $3.1 million for last year's second quarter. The Company plans to accelerate investments in R&D for new product and process technology. For the six months ended July 4, 1999, net sales were $55.6 million, as compared to $41.5 million for the year ago six-month period. The Company reported a net loss for the six-month period of $4.5 million, or $0.31 per basic share , as compared to a net loss of $752,000, or $0.05 per basic share in the same period of 1998. Quarter Highlights Fab 2 Approved for Production Shipping. As the Company announced today, its two top customers have accepted and will receive production shipments of key high-volume products from its newly completed 6-inch gallium arsenide An alloy of gallium and arsenic compound (GaAs) that is used as the base material for chips. Several times faster than silicon, it is used in high frequency applications such as cellphones, DVD players and fiber optics. (GaAs) fab. The facility, which was brought on line ahead of the original schedule, is in use now for GaAs MESFET See FET. and PHEMT See FET. processing. Designed to handle multiple types of processing, Fab 2 is integral to ANADIGICS' plan to develop internal HBT HBT Heterojunction Bipolar Transistor HBT HyCult Biotechnology (Uden, The Netherlands) HBT Hanbury-Brown-Twiss (interferometer) HBT Herring Bone Twill HBT Heflex Bioengineering Test (heterojunction bipolar transistor The heterojunction bipolar transistor (HBT) is an improvement of the bipolar junction transistor (BJT) that can handle signals of very high frequencies up to several hundred GHz. It is common in modern ultrafast circuits, mostly radio-frequency (RF) systems. ) manufacturing capabilities. HBT Capabilities Announced. During the quarter, ANADIGICS announced an agreement with Global Communication Semiconductors, Inc. (GCS GCS Glasgow Coma Scale GCS Guilford County Schools (North Carolina) GCS Ground Control Station GCS Grand Central Station GCS Ground Control System GCS Ground Combat Systems GCS Group Communication Systems ) that brings the Company closer to its goal of having internal HBT capabilities in place in the first half of 2000. As announced on July 13, GCS will provide ANADIGICS with open foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. services for HBT wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. . The non-exclusive long-term purchase agreement is expected to speed ANADIGICS' time to market for its new HBT products. The Company announced on July 19 that its HBT technology development will be led by Dr. Burhan Bayraktaroglu, a pioneer of the HBT manufacturing process. The quarter's highlights also included several new developments: the beginning of volume shipments of power amplifiers Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. that enable the small, lightweight design The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. and battery-saving operation of Ericsson's new T-class dual-band phones See dual-band handset. ; the beginning of volume shipments of 256 QAM tuner A QAM tuner is a device present in some digital televisions and similar devices which enables direct reception of digital cable channels without the use of a set-top box. QAM stands for "quadrature amplitude modulation," the format by which digital cable channels are encoded and ICs for use in advanced interactive digital CATV (Community Antenna TV) The original name for cable TV. It used a single antenna at the highest location in the community in order to deliver a quality signal to homes in areas with hilly terrain or other interference. set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. ; and introduction of the Company's first CMOS (Complementary Metal Oxide Semiconductor) Pronounced "c-moss." The most widely used integrated circuit design. It is found in almost every electronic product from handheld devices to mainframes. silicon IC for Cable TV applications. ANADIGICS designs and manufactures radio frequency integrated circuit (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, 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. For more information on ANADIGICS, visit the Company's Web site at www.anadigics.com 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, 1998. (Tables to follow) -0-
ANADIGICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three months ended Six months ended
----------------- ----------------
-------------- --------------
July 4, June 28, July 4, June 28,
1999 1998 1999 1998
------- ------- ------- -------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $30,534 $ 22,675 $ 55,582 $ 41,460
Cost of sales 19,248(1) 14,565 36,148(2) 26,633
------- -------- ---------- ------------
Gross profit 11,286 8,110 19,434 14,827
Research and
development
expenses 6,387 5,108 11,968 9,750
Selling and
administrative
expenses 4,885 3,060 8,744 6,405
Restructuring
charge 1,100
------- -------- ---------- ------------
Operating income
(loss) 14 (58) (1,278) (2,428)
Interest income, net 478 570 995 1,225
Provision for
litigation settlement 6,925(1) 6,925(2)
------- -------- ---------- -----------
Income (loss) before
income taxes (6,433) 512 (7,208) (1,203)
Provision (benefit)
for income taxes (2,380) 192 (2,667) (451)
------- -------- ---------- ------------
======= ======== ========== ============
Net income (loss) $(4,053)(1) $ 320 $(4,541)(2) $ (752)
======= ======== ========== =========
Basic earnings
(loss) per share $ (0.27)(1) $ 0.02 $(0.31)(2) $ (0.05)
=========== ======== ========== ========
Weighted average common
shares outstanding 14,838,546 14,718,286 14,811,687 14,711,323
========== ========== ========== ==========
Diluted earnings
(loss) per share $ (0.27)(1) $ 0.02 $ (0.31)(2) $ (0.05)
=========== ======== =========== ==========
Weighted average
common and
dilutive securities
outstanding 14,838,546 14,976,998 14,811,687 14,711,323
============ =========== ========== ==========
(1) - Excluding accelerated depreciation expense of $2,660
(associated with the planned closing of the Company's existing
wafer fabrication facility) and the provision for litigation
settlement of $6,925, the Company reported net income of $1,986
and diluted earnings per share of $0.12 during the second quarter
of 1999.
(2) - Excluding accelerated depreciation expense of $5,320
(associated with the planned closing of the Company's existing
wafer fabrication facility) and the provision for litigation
settlement of $6,925, the Company reported net income of $3,173
and diluted earnings per share of $0.20 during the six month
period ended July 4, 1999.
ANADIGICS, INC.
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share amounts)
July 4, 1999 Dec. 31, 1998
------------ -------------
Assets
Current assets:
Cash and cash equivalents $ 25,343 $ 23,987
Marketable securities 14,736 16,923
Accounts receivable, net 18,191 11,848
Inventory 10,256 8,729
Prepaid expenses and
other current assets 2,466 2,531
Insurance settlement
recievable 5,325
Deferred taxes 6,856 4,345
------ -----
Total current assets 83,173 68,363
Marketable securities 3,568 1,486
Property and equipment:
Equipment and furniture 80,823 71,625
Leasehold improvements 16,424 15,717
Projects in process 34,150 34,286
Less accumulated
depreciation and
amortization 56,117 44,199
-------- -------
75,280 77,429
Other assets 1,279 865
Deferred taxes 5,955 5,955
-------- --------
======== ========
Total assets $169,255 $154,098
======== ========
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable $ 9,043 $ 6,138
Accrued litigation
settlement costs 12,050 -
Accrued liabilities 5,952 2,306
Accrued restructuring
costs 1,441 1,567
Current maturities
of long-term debt 1,000 1,000
Current maturities of
capital lease
obligations 160 229
-------- --------
Total current liabilities 29,646 11,240
Capital lease
obligations, less
current portion 117 183
Other long-term
liabilities 1,183 868
Long-term debt,
less current portion 3,500 4,000
-------- -----
Total liabilities 34,446 16,291
Stockholders' equity
Common Stock, $0.01 par value,
68,000,000 shares
authorized, 14,838,546 and
14,738,356 issued and
outstanding at April 4,
1999 and December 31, 1998, 149 147
respectively
Additional paid-in capital 161,843 160,215
Accumulated deficit (27,139) (22,598)
Accumulated other
comprehensive income (loss) (44) 43
--------- ---------
Total stockholders' equity 134,809 137,807
--------- ---------
Total liabilities and
stockholders' equity $ 169,255 $ 154,098
========= =========
- The condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. balance sheet at December 31, 1998 has been derived from the audited financial statements at such date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. |
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