ANADIGICS Reports Second Quarter 2001 Results
July 23, 2001
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ANADIGICS, Inc. (Nasdaq: ANAD) today reported net sales of $18.9 million for the second quarter ended June 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 costs associated with a steep ramp in HBT 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 ($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. 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 Bastani, President and Chief Executive Officer of ANADIGICS. "During the quarter, we restructured the organization and we continue to take action to align 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 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 HBT PA modules, displacing our MMIC business with fast growing CDMA 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 that our new products will be the major drivers of future growth." The Company's balance sheet remains strong, with cash and marketable securities totaling $124 million at June 30, 2001.
Outlook Highlights of the Quarter
STRATEGIC SALES AGREEMENT - Tesco, Inc. of Korea
NEW PRODUCT - Reverse Path Amplifier for CATV Applications
NEW PRODUCTS / DESIGN WIN - CDMA Power Amplifier Modules
Conference Call ANADIGICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts) 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
ANADIGICS, INC. Three Months Ended Six Months Ended
---------------------------------------------------------
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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. June 30, 2001 December 31, 2000(a)
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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
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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
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(a) The condensed balance sheet at December 31, 2000 has been 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, 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. |
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