ANADIGICS Reports Record Third Quarter Results
October 23, 2000
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ANADIGICS, Inc. (Nasdaq: ANAD) today reported record net sales of $51.1 million for the third quarter ended September 30, 2000, a 44% increase over the $35.5 million reported in the third quarter of 1999. Net income for the third quarter was $7.1 million or $0.23 per diluted share, also a record for the company, compared with adjusted net income of $2.5 million or $0.10 per diluted share in the year-ago quarter. Net sales were up 7.5% sequentially from the $47.5 million reported in the second quarter ended July 2, 2000. Net income and diluted earnings per share increased sequentially 7% and 10%, respectively, from the $6.6 million and $0.21 reported in the 2000 second quarter. Net sales of $141.6 million for the first nine months of 2000 rose 56% from the $91.0 million reported in the comparable period of 1999. Excluding special items, net income of $19.4 million and diluted earnings per share of $0.61 increased 275% and 190%, respectively, from the $5.2 million and $0.21 reported in the 1999 period. The record revenues in the third quarter were achieved through increased product demand in our broadband businesses - cable and fiber optic communications IC products. Broadband revenues reached $30.4 million (cable - $23.6 million and fiber - $6.8 million), a 38% sequential increase from the second quarter. This increase was spurred by increased orders from existing customers, reflecting the rapid growth in the broadband markets, the success of our broadband product offerings, and the continued expansion of our customer base. "Our broadband cable access and fiber optics businesses enjoyed a tremendous quarter," said Dr. Bami Bastani, ANADIGICS President and Chief Executive Officer. "We have an ideally balanced Communication IC marketplace and product portfolio. Further, our newly introduced PicoTuner™ is an industry breakthrough, one that we anticipate will change the tuner landscape for the cable industry. In our estimation, the PicoTuner™ puts us one year ahead of our competitors." Broadband revenues for the first nine months of 2000 were $72 million ($55.9 million cable and $16.1 million fiber), up 36% from the comparable 1999 period. Cable revenues alone were up 68%, while fiber revenues were lower by 18%, reflecting the impact of the strategic repositioning of the fiber optics product line to serve higher data rate communication applications. Wireless products revenues, principally power amplifier ICs for mobile phones, were $20.7 million in the quarter, an increase of 32% from the year-ago quarter, but a decline of 18% sequentially from the second quarter. As previously discussed in ANADIGICS' second quarter earnings release and consistent with the Company's September 15, 2000 comments on the outlook for the second half 2000 and calendar year 2001, inventory corrections and component shortage issues at our largest customer led to a shift in revenue mix to broadband products. Wireless revenues for the first nine months of 2000 were up 82% from the year-ago period. "Our relationship with our largest customer is excellent and we're well positioned as a strategic supplier in 2001. At the same time, our new 3-Volt, InGaP HBT power amplifier products are on track to generate the needed diversification in the wireless customer base," Dr. Bastani continued. "At the recent European Microwave Week exhibition in Paris, France, we introduced the industry's first InGaP HBT power amplifier featuring dual band (GSM/DCS) voice operation as well as GPRS data services capability in a single, highly integrated module solution." Gross margin in the third quarter of 51.4% increased slightly from 51.3% in the second quarter. For the same period last year, gross margin was 46.8%. The Company completed the migration to its state-of-the-art, six-inch GaAs RF wafer fabrication facility on September 21, 1999 and expects to complete the expansion of the facility by the end of this year. ANADIGICS is the leader in the industry with its 6-inch manufacturing capability. The Company's balance sheet remains strong. Cash generated from operations in the quarter was $4.9 million. The Company's cash position, including marketable securities, was $168.7 million at quarter's end, which allows the Company financial flexibility to fund future growth. Days sales outstanding at September 30, 2000 was 56 days, an increase from 54 days from last quarter. Inventory levels of 62 days were up from 56 days last quarter.
Highlights of the Quarter
NEW PRODUCT - InGaP HBT Power Amplifier for GSM/DCS and GPRS Data-Enabled Wireless Handsets
NEW PRODUCT - IP Telephony Reverse Path Amplifier
NEW PRODUCT AND DESIGN WIN - Rate-Agile Optical Receiver; Selected by Stratos Lightwave For Use in Small form Factor Transceivers
NEW PRODUCT - Small Form Factor Receiver for Datacom Fiber Optic Systems
INDIVIDUAL INVESTOR Names ANADIGICS One of America's 100 Fastest Growing Companies
NEW PRODUCT - 24-Volt Surface Mount Linear Amplifier
MILESTONE - Over 100 Million ICs Shipped To Date for Broadband Network Applications
Three months ended Nine months ended
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Sept. 30, Oct. 3, Sept. 30, Oct. 3,
2000 1999 2000 1999
-------------------- -------------------
(unaudited) (unaudited)
Net sales $51,075 $35,460 $141,597 $91,042
Cost of sales 24,810 18,862 69,778(4) 55,011(3)
---------- ----------- ----------- ----------
Gross profit 26,265 16,598 71,819 36,031
Research and
development
expenses 10,852 8,293 30,821(4) 20,260
Selling and
administrative
expenses 7,121 5,091 19,885(4) 13,834
Restructuring
charge (441)(2) (441)(3)
---------- ----------- ----------- ----------
Operating income 8,292 3,655 21,113 2,378
Interest
income, net 2,756 503 7,876 1,497
Gain on sale
of equipment 15 1,353(4)
Provision for
litigation
settlement - 6,925 (3)
---------- ----------- ----------- ----------
Income (loss)
before
income taxes 11,063 4,158 30,342 (3,050)
Provision
(benefit)
for income
taxes 3,986 1,413 11,119 (1,253)
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
Net income
(loss) $7,077 $2,745(2) $19,223(4) ($1,797)(3)
========== =========== =========== ==========
Basic earnings
(loss)
per share (1) $0.24 $0.12(2) $0.65(4) ($0.08)(3)
========== =========== =========== ==========
Weighted
average
common
shares
outstanding (1) 29,880,442 22,487,981 29,655,966 22,314,602
========== =========== =========== ==========
Diluted
earnings
(loss)
per share (1) $0.23 $0.11 (2) $0.61(4) ($0.08)(3)
========== =========== =========== ==========
Weighted
average
common and
dilutive
securities
outstanding (1) 31,241,801 25,336,989 31,655,258 22,314,602
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(1) - Historical share and per share date have been restated to reflect a 3-for-2 stock split.
(2) - Excluding the reversal of the restructuring charge of $441, the Company reported net income of
$2,485 and diluted earnings per share of $0.10 during the third quarter of 1999.
(3) - Excluding accelerated depreciation expense of $5,320 (associated with the planned closing of
the Company's existing wafer fabrication facility), the provision for litigation settlement of $6,925, and
the reversal of the restructuring charge of $441, the Company reported net income of $5,168 and
diluted earnings per share of $0.21 during the nine month period ended October 3, 1999.
(4) - Excluding certain costs of $1,305 associated with employee stock options exercised during the
period and a gain on the sale of equipment of $1,049, the Company reported net income of $19,374
and diluted earnings per share of $0.61 during the nine month period ended September 30, 2000. ANADIGICS, Inc. (Nasdaq: ANAD) designs and manufactures radio frequency integrated circuit (RFIC) solutions for growing broadband and wireless communications 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 9001 certification. Except for historical information contained herein, this press release contains forward-looking statements 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 for the year ended December 31, 1999. 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. |
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