ANADIGICS Reports Record Sales and Profits for the First Quarter 2000

ANADIGICS, Inc. today reported record net sales of $43.0 million for the first quarter ended April 2, 2000, a 72% increase over the $25.0 million reported in the first quarter of 1999. Net income was $5.7 million for the first quarter, or $0.18 per diluted share, compared with net income of $1.2 million or $0.05 in the year-ago quarter. Quarterly EPS reflects the Company's 3-for-2 stock split, which took effect at the close of business on February 29, 2000.

Net income for the first quarter excludes certain costs of $1.3 million associated with employee stock options exercised and a gain of $1.0 million on the sale of four-inch fab equipment. Including these items, net income was $5.5 million, also $0.18 per share. First quarter 1999 net income excludes the special charge for accelerated depreciation of $2.7 million associated with the closing of the four-inch wafer fabrication facility. Including the special charge, the Company reported a net loss in the 1999 first quarter of $0.5 million or $0.02 per share.

Net sales were up 7% sequentially over the $40.1 million in net sales reported in the quarter ended December 31, 1999. Net income (excluding the above items) and earnings per share increased sequentially by 30% and 20%, respectively, over the net income of $4.4 million and earnings per share of $0.15 reported in the 1999 fourth quarter.

"The communications IC market is as healthy as ever," said Dr. Bami Bastani, ANADIGICS' President and Chief Executive Officer. "We enter the second quarter with a Company record book-to-bill well in excess of 1.0. Business fundamentals are strong - our suppliers are meeting our demand, and we in turn are meeting the ever-growing demand of our customers. We're expanding our role in the wireless and cable worlds, while at the same time refocusing our efforts on the fiber front. Our current portfolio, design wins, and leading edge product samples in wireless and broadband communications markets uniquely position ANADIGICS to take advantage of new growth markets driven by the convergence of data over wireless."

Wireless, cable, and fiber optic products' net sales each contributed to the record quarter, reflecting continued strong customer demand and growth in each market. Wireless products of $23.4 million increased 148% over the 1999 first quarter and were up 3% sequentially from the seasonally strong fourth quarter. Cable products of $15.3 million rose 54% over the year-ago quarter and 12% sequentially on growth in sales of ICs for cable set-top box and cable modem applications. Fiber products of $4.3 million achieved a 14% sequential growth on the increased shipment of higher data rate products for data communications applications.

Gross margin in the first quarter jumped 200 basis points sequentially to 50.1% (excluding $0.4 million of the previously mentioned costs). For the same period last year, gross margin was 43.1% (excluding special charges). The Company completed the migration to its six-inch, state-of-the-art wafer fabrication facility on September 21, 1999. Moreover, during the first quarter the Company announced plans to expand the facility, which will approximately double existing manufacturing clean room capacity in the third quarter.

"We were the first with our state-of-the-art, six-inch GaAs RF wafer fabrication facility, and have achieved a significant competitive advantage that is demonstrated by a gross margin that exceeded 50% in the quarter," said Dr. Bastani. "We feel that we have a substantial lead on our competitors, and our expansion activities will help us take further advantage of that lead."

Design Win - Reverse Amplifier is Selected by Motorola for Communications Gateway IP Telephony Product
The Company received a design win in Motorola's CentriQ 1000 IP Telephony gateway product, which provides customers up to four separate telephone lines, support for telephone features like call waiting, high-speed data via an integrated DOCSIS-based cable modem and a distribution point for video services over cable. ANADIGICS' ARA1400I reverse amplifier was announced March 17, 1999 for use in digital set-top boxes, cable modems, and Internet telephony applications.

Highlights of the Quarter
- Announced the Appointment of Dennis F. Strigl to the Company's Board of Directors.
Mr. Strigl, President & CEO of both Verizon Wireless (formerly Bell Atlantic Mobile) and Bell Atlantic Global Wireless, is one of the most prominent architects of the wireless communications industry. He has pioneered numerous initiatives that have shaped the wireless communications markets, including the launch of the nation's first cellular telephone network and the management of two of the largest cellular mergers in the telecommunications industry's history. He currently leads one of the world's largest wireless CDMA networks, with domestic operations in 28 states and international investments spanning Latin America, Europe, and the Pacific Rim.
- Shipped Production Volumes of Multi-Band Power Amplifiers to Ericsson for New TDMA T18d Handsets.
Three T-Class phones now utilize ANADIGICS' patented multi-band technology, which enables a dual-band single-chain amplifier using a switching impedance network, providing a more efficient and smaller solution for dual-band power amplifiers. The Company now holds three separate U.S. patents associated with this multi-band power amplifier design and implementation.
- Developed a 12 Channel MSM Photodetector Array for use in 2x Fibre Channel and Infiniband Datacom Networks.
The Company announced a highly integrated photodetector array that, when coupled with optical link laser arrays, delivers scalable broadband fiber interconnects for networking and fiber optic backplanes. The array is capable of data rates up to 3.125 Gb/s per channel and is a continuation of the Company's strategy to transition into higher data rate fiber applications.
- Introduced the World's First High-Speed Integrated Fiber Optic Datacom Receivers with Patented Automatic Gain Control
The Company announced its first 2.5 Gb/s datacom receivers for the fiber optic market, continuing its strategy to transition into higher data rate applications. These 3-volt datacom receivers, utilizing ANADIGICS' patented Automatic Gain Control (AGC) technology, serve both short and long-wave fiber optic networks, including 2x Fibre Channel and SONET OC-48.
- Shipped Dual-Band 3-Volt HBT Power Amplifier Samples for Use in GSM/DCS Wireless Handsets
The 3-volt single supply power amplifiers, which are currently being evaluated by major wireless handset OEMs, expand the Company's portfolio of HBT power amplifiers to serve U.S. digital and GSM wireless standards. The development of GSM/DCS dual-band HBT products further strengthens ANADIGICS' ability to expand its wireless customer base and grow its share of the wireless handset market.
- Expanded Wireless Product Portfolio with Introduction of New Family of PHEMT Switches
ANADIGICS introduced a new family of PHEMT switches that utilize the Company's six-inch PHEMT manufacturing technology. The innovative RF switches provide cost-effective solutions that meet the rigorous performance requirements of next generation multi-band GSM handsets.
- Introduced Integrated Multi-Mode, Multi-Band PHEMT Switches with Decoder for Wireless Handsets
The Company expanded its wireless device portfolio with a new line of integrated single-pole four-throw (SP4T) antenna switches with internal decoders. The innovative 3-Volt PHEMT switches simplify digital and analog multi-mode, multi-band cellular handset designs by integrating logic control and RF band and mode selection in a small, cost-effective plastic package.
- Announced Multi-Million Unit Orders and Production Shipments of RF Switches to Motorola for the Wireless Handset Market
The Company announced an order for more than 10 million RF switches and has begun production shipments to Motorola, the largest U.S.-based manufacturer of wireless handsets. The single supply 3-volt RF switches will be used in an 800 MHz Digital CDMA/AMPS dual-mode phone that is enjoying increased cellular market penetration, particularly in the U.S.