ANADIGICS Reports Strong Second Quarter 2002 Results
July 29, 2002
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ANADIGICS, Inc. (Nasdaq: ANAD), a leading supplier of wireless and broadband communications solutions, today reported net sales of $23.0 million for the second quarter ended June 29, 2002, compared with $19.5 million for the first quarter ended March 30, 2002. Wireless product line revenue was $13.1 million, up 45% sequentially and 121% year-on-year, reflecting increased demand for shipments of CDMA wireless products to existing customers and the ramp of an additional tier one CDMA customer. Broadband revenue was on track at $9.9 million, consistent with industry trends in the cable set-top box and infrastructure markets. "We are the fastest-growing CDMA power amplifier module supplier. We're ahead of target in terms of market share gains, and now expect to garner over 20% share of CDMA handsets by the fourth quarter of this year," remarked Dr. Bami Bastani, President and Chief Executive Officer of ANADIGICS. "Our best-of-breed RF front-end module strategy is being extremely well-received by a multitude of wireless customers around the globe, for not only CDMA handsets but GPRS/EDGE/UMTS as well." The adjusted EPS loss for the second quarter was $0.29 per share (excluding a favorable add-back of inventory reserves and acquisition accounting), comparing favorably to the adjusted EPS loss for the first quarter of $0.37 (excluding restructuring, acquisition accounting and the cumulative effect of an accounting change). The Company continues to improve profitability with initiatives to decrease manufacturing costs. In the second quarter, adjusted gross profit was $3.8 million, an improvement from the 2002 first quarter of $3.2 million, comparing favorably with the total revenue increase of $3.5 million. Second quarter adjusted operating expense of $13.1 million increased from the first quarter by $1.0 million, reflecting strong demand by the Company's customers for both CDMA and GSM product development, as well as increased sales-related activities. Compared with the second quarter of 2001, expenses were down $3.3 million or 20%. "Our gross profit reflects the cost advantages of our 6-inch manufacturing line and the significant product cost reductions we have achieved," remarked Tom Shields, Chief Financial Officer of ANADIGICS. "Moreover, our investments in R&D reflect the acceleration of strategic programs tied specifically to both CDMA and GSM customers." The Company's balance sheet remains strong. Cash and marketable securities totaled $185 million at June 29, 2002. During the period ended June 29, 2002, the Company completed the first of the required impairment tests of goodwill required under Statement of Financial Accounting Standards ("FAS") No. 142, "Goodwill and Other Intangible Assets", which was adopted effective January 1, 2002. As a result of completing the required test, the Company recorded a non-cash adjustment retroactive to the adoption date for the cumulative effect of the accounting change in the amount of $8.0 million ($0.26 per basic and diluted share) representing the excess of the carrying value of a fiber operating unit as compared to its estimated fair value. This charge is reflected in the statement of operations for the six months ended June 29, 2002. OUTLOOK The Company continues to estimate that total revenue for the 2002 third quarter will approximate $21 million, including $11 million of wireless revenue and $10 million of broadband revenue. A resumption of sequential wireless revenue growth is expected in the fourth quarter. The Company's loss per share estimate for the third quarter is reaffirmed as $0.33, with a resumption of sequential improvement in the fourth quarter. HIGHLIGHTS OF THE QUARTER
PRODUCTION ORDER - CDMA Power Amplifier Modules for LG Electronics
NEW TECHNICAL DEVELOPMENT CENTER - GSM Reference Design Support
NEW PRODUCT - 10 Gb/s Modulator Driver for OC-192 SONET Applications
EMPLOYEE PROGRAM (excluding Officers and Directors) - Voluntary Stock Option Exchange
CONFERENCE CALL Three Months Ended June 29, 2002
As Reported Adjustments Adjusted
(unaudited) (unaudited)(unaudited)
Net sales $23,021 $- $23,021
Cost of sales 18,832 404 (1,2) 19,236
Gross profit 4,189 (404) 3,785
Research and development expenses 7,699 - 7,699
Selling and administrative
expenses 5,656 (270)(1) 5,386
Restructuring and other charges - - -
Asset impairment charges - - -
Operating loss (9,166) (134) (9,300)
Interest income 1,735 - 1,735
Interest expense (1,422) - (1,422)
Other income (expense) - - -
Loss before income taxes (8,853) (134) (8,987)
Provision (benefit) for income
taxes - - -
Net loss $(8,853) $(134) $(8,987)
Basic and diluted loss per share $(0.29) $(0.29)
Weighted average common and
dilutive securities
outstanding 30,579,575 30,579,575
(1)Includes amortization of acquisition accounting-related assets ($58 in
COGS, $270 in S&A).
(2)Includes reversal of certain previously recorded inventory reserves no
longer required, due to improved market demand for certain Fiber
products.
Three Months Ended Six Months Ended
June 29, June 30, June 29, June 30,
2002 2001 2002 2001
Net sales $23,021 $18,897 $42,542 $47,418
Cost of sales 18,832 26,235 37,837 47,440
Gross profit (loss) 4,189 (7,338) 4,705 (22)
Research and
development
expenses 7,699 9,972 15,277 20,023
Selling and
administrative
expenses 5,656 7,369 10,935 14,010
Restructuring and
other charges - 900 2,715 900
Asset impairment
charges - 800 3,244 800
Purchased in-
process research
and development - 3,800 - 3,800
Operating loss (9,166) (30,179) (27,466) (39,555)
Interest income 1,735 1,660 3,416 4,084
Interest expense (1,422) (66) (2,864) (129)
Other income
(expense) - 11 2 (49)
Loss before income
taxes and
cumulative effect
of accounting
change (8,853) (28,574) (26,912) (35,649)
Provision for
income taxes - 26,814 - 24,338
Net loss before
cumulative effect
of accounting
change (8,853) (55,388) (26,912) (59,987)
Cumulative effect
of accounting
change - - (8,010) -
Net loss $(8,853) $(55,388) $(34,922) $(59,987)
Basic and diluted
loss per share
Net loss before
cumulative effect
of accounting
change $(0.29) $(1.84) $(0.88) $(1.99)
Net loss $(0.29) $(1.84) $(1.14) $(1.99)
Weighted average
common and
dilutive
securities
outstanding 30,579,575 30,183,105 30,575,202 30,126,585
June 29, 2002 December 31, 2001
Assets
Current assets:
Cash and cash equivalents $25,703 $63,102
Marketable securities 83,976 55,364
Accounts receivable 11,636 10,200
Inventory 16,180 14,661
Prepaid expenses and other
current assets 5,242 6,635
Total current assets 142,737 149,962
Marketable securities 75,241 81,629
Property and equipment, net 79,050 90,483
Goodwill and other intangibles,
net of amortization 10,893 19,443
Other assets 5,548 5,397
$313,469 $346,914
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable $10,712 $9,115
Accrued liabilities 6,312 6,549
Accrued restructuring costs 2,188 1,898
Current maturities of long-
term debt 113 244
Current maturities of capital
lease obligations - 94
Total current liabilities 19,325 17,900
Other long-term liabilities 2,526 2,378
Long-term debt, less current
portion 100,000 100,000
Stockholders' equity 191,618 226,636
$313,469 $346,914
Total cash and marketable
securities $184,920 $200,095
July 29, 2002
Wireless and Total Company Revenues Grow Sequentially 45% and 18% 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, 2001. Actual results could differ materially from the Company's forward-looking statements. 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, including the statements in this press release regarding revenue expectations, cost reduction initiatives, and strategic alternatives, are forward-looking statements. |
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