ANADIGICS Reports Second Quarter 2001 Results -- Revenue of $18.9 million and Adjusted EPS Loss of $0.48.Business Editors WARREN, N.J.--(BUSINESS WIRE)--July 23, 2001 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 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 $18.9 million for the second quarter ended June June: see month. 30, 2001, compared with $47.5 million reported in the second quarter of 2000. Sequentially, net sales were down from $28.5 million in the first quarter. The net loss was $14.5 million or ($0.48) per share, excluding special charges and acquisition related costs. Adjusted gross margin in the quarter was 1.6% due to higher than expected start-up Start-up The earliest stage of a new business venture. costs associated with a steep ramp in HBT HBT Heterojunction Bipolar Transistor HBT HyCult Biotechnology (Uden, The Netherlands) HBT Hanbury-Brown-Twiss (interferometer) HBT Herring Bone Twill HBT Heflex Bioengineering Test module production and continued low fab utilization. As previously announced, ANADIGICS recorded special charges of $36.1 million during the quarter. These included cash-related charges of $0.9 million resulting from a 10% reduction in workforce and lease terminations. Non-cash related charges were $35.2 million, resulting from the write-offs of the deferred tax asset balance ($26.8 million), certain inventories ($7.6 million) and 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 ($0.8 million). In addition, the Company completed the acquisition of Telcom Devices Corporation and incurred related charges in the quarter of $4.8 million. Including these special charges, the net loss was $55.4 million or ($1.84) per share. "It obviously has been a difficult year for the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. . We were able to deliver revenue results that were slightly better than expectations, however, the current low production volume environment and the ramp of our HBT module assembly process have certainly put pressure on our gross margins," remarked Dr. Bami BAMI Cardiology A study–Biochemical markers for Acute Myocardial Infarction that compared serum troponin I levels with CK-MB levels for diagnosing acute MI. See Cardiac profile guideline, Troponin I. Bastani, President and Chief Executive Officer of ANADIGICS. "During the quarter, we restructured the organization and we continue to take action to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our cost structure with business conditions. We remain confident that the Company's gross margin target of 40% - 50% is achievable as new products are introduced, business conditions improve, and we return to normal fab utilization levels." In the second quarter, broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). product line revenues were $13.0 million (cable - $8.4 million; fiber - $4.6 million). Wireless revenues were $5.9 million. "During the second quarter we reached several significant milestones," continued Dr. Bastani. "In wireless, we entered production with our InGaP InGaP Indium Gallium Phosphide HBT PA modules, displacing our MMIC (Monolithic Microwave IC) An integrated circuit used in high-frequency applications such as mobile phones. Also known as "monolithic microwave/millimeter-wave IC," MMICs combine transistors and passive devices (resistors, capacitors, etc. business with fast growing 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. modules. In fiber, our OC-768 (40 Gb/s) InP fiber products lead the industry in performance and we received evaluation orders for our travelling wave amplifiers. Customer feedback and design win activity in our wireless and broadband markets remain strong and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our new products will be the major drivers of future growth." The Company's balance sheet remains strong, with 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 totaling $124 million at June 30, 2001. OUTLOOK The Company expects a decline in its third quarter revenue to $15.5 million, with an 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 of ($0.55) per share. Third quarter revenue expectations reflect a change in production ramp schedules of certain wireless 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. platforms, the timing of new design win opportunities and continued softness in the broadband markets. For the fourth quarter we anticipate a sequential sales increase in wireless fueled by increased HBT module production and anticipated recovery in cable businesses. ANADIGICS will conduct a mid-quarter update via conference call on September September: see month. 10, 2001. HIGHLIGHTS OF THE QUARTER -- STRATEGIC SALES AGREEMENT - Tesco, Inc. of Korea On July 2, 2001, the Company announced a strategic sales agreement with Tesco Inc., a Korean-based distributor and manufacturer's representative for the communications electronics industry, to strengthen and expand the Company's wireless sales efforts in Korea. Tesco will serve as ANADIGICS' manufacturer's representative for wireless products and will provide a dedicated sales team to target original equipment manufacturers (OEMs) and original design manufacturers (ODMs) of portable wireless products. -- NEW PRODUCT - Reverse Path Amplifier for 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. Applications On June 20, 2001, the Company introduced the ARA Ara or Arrah (both: ŭ`rə), city (1991 pop. 157,082), Bihar state, NE India, on the Son Canal. A major road and rail junction, it is the administrative center for a district that produces grain, sugarcane, and oilseed. 2005, a new reverse amplifier that provides the reverse path amplification amplification /am·pli·fi·ca·tion/ (33000) (am?pli-fi-ka´shun) the process of making larger, such as the increase of an auditory stimulus, as a means of improving its perception. and output level control functions necessary in various two-way CATV system designs. The amplifier, developed for high-speed cable modems cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. , telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. over cable systems and open cable 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. , meets the reliability and performance requirements of fiber nodes, mini nodes and CMTS (Cable Modem Termination System) A computerized device that enables cable modems to send and receive packets over the Internet. It inserts IP packets from the Internet into MPEG frames and transmits them to the cable modems via an RF signal. (Cable Modem Termination Systems A cable modem termination system or CMTS is equipment typically found in a cable company's headend, or at cable company hubsite and is used to provide high speed data services, such as cable internet or Voice over IP, to cable subscribers. ). -- NEW PRODUCTS / DESIGN WIN - CDMA 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. Modules On May 14, 2001, the Company announced production orders and pre-production shipments of two of its power amplifier module products to a leading CDMA handset manufacturer. These products, the first in a new series of InGaP HBT power amplifier modules that provide low and high band operation for CDMA handsets, meet the requirements of the CDMA 1X (2.5 G) wireless standard. CONFERENCE CALL ANADIGICS' senior management will conduct a conference call today at 9:00 AM Eastern time. A live audio Webcast will be available at www.anadigics.com. A recording of the call will be available from approximately two hours after the call until July 30 on the ANADIGICS Web site or by dialing (800) 642-1687 (passcode 10032). 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. 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 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. , 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. 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 are forward-looking statements. (tables to follow)
ANADIGICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Ended June 30, 2001
------------------------------------------------------------
As Reported Adjustments Adjusted
-------------- ------------ ---------
(unaudited) (unaudited) (unaudited)
Net sales $18,897 $ - $18,897
Cost of sales 26,235 (7,636)(1) 18,599
------ ---------- ---------
Gross (loss)
profit (7,338) (7,636) 298
Research and
development
expenses 9,972 - 9,972
Selling and
administrative
expenses 7,369 (912)(2) 6,457
Restructuring charge 1,700 (1,700)(3) 0
Purchased in-process
R&D 3,800 (3,800)(4) 0
------ ---------- -------
Operating loss (30,179) (14,048) (16,131)
Interest income,
net 1,594 - 1,594
Gain on sale
of equipment 11 - 11
-------- ------------ --------
Loss before income
taxes (28,574) (14,048) (14,526)
Provision for
income taxes 26,814 (26,814)(5) 0
-------- ------------ --------
-------- ------------ --------
Net loss $(55,388) $(40,862) $(14,526)
========= ============ =========
Basic and diluted
loss per share $(1.84) $(0.48)
======== =========
Weighted average
common
shares
outstanding 30,183,105 30,183,105
========== ==========
(1) Comprised principally of the write-off of excess, obsolete, and
slow-moving inventories.
(2) Comprised of the amortization of acquisition-related goodwill and
intangible assets.
(3) Comprised of a workforce reduction of $750, asset impairments
of $800, and lease terminations of $150.
(4) Comprised of the write-off of in-processed R&D.
(5) Comprised of the write-off of the Company's deferred tax asset
balance.
ANADIGICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
Three Months Ended Six Months Ended
---------------------------------------------------------
---------------------------------------------------------
June 30, 2001 July 2, 2000 June 30, 2001 July 2, 2000
------------- ------------- -------------- ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $18,897 $47,517 $47,418 $90,522
Cost of sales 26,235 23,135 47,440 44,968
------- -------- -------- ---------
Gross (loss)
profit (7,338) 24,382 (22) 45,554
Research and
development
expenses 9,972 10,181 20,023 19,970
Selling and
administrative
expenses 7,369 6,627 14,010 12,764
Restructuring
charge 1,700 0 1,700 0
Purchased in-
process R&D 3,800 0 3,800 0
------ ------- ------ --------
Operating (loss)
income (30,179) 7,574 (39,555) 12,820
Interest income,
net 1,594 2,621 3,955 5,120
Gain (loss) on
sale of
equipment 11 290 (49) 1,339
------ ------ -------- ------
(Loss) income
before
income
taxes (28,574) 10,485 (35,649) 19,279
Provision for
income taxes 26,814 3,879 24,338 7,133
-------- ------ -------- ------
-------- ------ -------- ------
Net (loss)
income $(55,388) $6,606 $(59,987) $12,146
========= ====== ========= =======
Basic (loss)
earnings
per share $(1.84) $0.22 $(1.99) $0.41
========= ====== ========= =======
Weighted average
common
shares
outstanding 30,183,105 29,810,187 30,126,585 29,543,727
========== ========== ========== ==========
Diluted (loss)
earnings
per share $(1.84) $0.21 $(1.99) $0.38
========== ========== ========== ==========
Weighted average
common and
dilutive
securities
outstanding 30,183,105 31,782,288 30,126,585 31,774,482
========== ========== ========== ==========
ANADIGICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
June 30, 2001 December 31, 2000(a)
--------------------------------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $38,695 $95,116
Marketable securities 24,269 53,254
Accounts receivable 12,671 21,794
Inventory 16,994 22,969
Prepaid expenses and other current
assets 5,665 3,475
Deferred taxes 0 3,035
-------- ---------
Total current assets 98,294 199,643
Marketable securities 61,036 17,791
Property and equipment:
Equipment and furniture 138,183 137,819
Leasehold improvements 33,809 32,767
Projects in process 22,584 19,083
Less accumulated depreciation
and amortization 86,904 83,034
------- --------
107,672 106,635
Goodwill and other intangibles,
net of amortization 21,266 0
Other assets 5,217 5,302
Deferred taxes 0 23,102
------- --------
------- --------
$293,485 $352,473
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $13,116 $10,985
Accrued liabilities 5,759 6,824
Accrued restructuring costs 1,257 597
Current maturities of long-term
debt 254 1,000
Current maturities of capital
lease obligations 254 250
-------- ---------
Total current liabilities 20,640 19,656
Other long-term liabilities 2,183 1,985
Long-term debt, less current
portion 135 2,000
Stockholders' equity 270,527 328,832
------- --------
Total stockholders'
equity and liabilities $293,485 $352,473
======== =========
(a) The condensed balance sheet at December 31, 2000 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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