Giga-tronics Reports Fourth Quarter and FY 2007 Results

SAN RAMON, Calif.--(BUSINESS WIRE)--

Giga-tronics, Incorporated (NASDAQ:GIGA) reported today that net sales for fiscal year 2007 were $18,048,000, down 12% from $20,620,000 a year ago. Net loss from continuing operations was $1,895,000 or $0.40 per fully diluted share versus a net loss from continuing operations of $988,000 or $0.21 per fully diluted share last year. Included in the $1,895,000 net loss for fiscal year 2007 was a one time restructuring charge of $361,000 or $0.08 per fully diluted share.

For the fiscal year ended March 31, 2007, net loss was $1,867,000 or $0.39 per fully diluted share versus a net loss of $961,000 or $0.20 per fully diluted share for the same period a year ago.

In the fourth quarter, net sales were $5,164,000, down 9% from $5,686,000 in the same quarter for the prior year. Net loss for the period was $495,000 or $0.10 per fully diluted share compared with a net loss of $87,000 or $0.02 per fully diluted share for the same period a year ago. Loss from continuing operations for the fourth quarter was $493,000 or $0.10 per fully diluted share compared to a loss from continuing operations of $100,000 or $0.02 per fully diluted share for the same period a year ago. Included in the $493,000 net loss for the fourth quarter of fiscal year 2007 was a one time restructuring charge of $204,000 for the sublease accrual, $139,000 in severance costs and $18,000 for moving expenses, for a total of $361,000 or $0.08 per fully diluted share.

Our book-to-bill ratio in the fourth quarter of fiscal 2007 was .72 compared to .67 in the fourth quarter of fiscal 2006.

Orders booked in the fourth quarter were $3,699,000 compared to $3,822,000 last year and for the 2007 fiscal year were $16,158,000 compared to $15,157,000 a year ago. Backlog at March 31, 2007 was $8.4 million (approximately $5.2 million is shippable within one year) as compared to $10.3 million (approximately $5.9 million shippable within one year) at the end of the prior year.

Cash and cash equivalents at March 31, 2007 were $1,804,000 compared to $3,412,000 as of March 25, 2006.

In an effort to improve results and make optimal use of its resources, Giga-tronics decided to integrate all ASCOR and Instrument Division sales and marketing, administration, engineering and manufacturing activities at the San Ramon, California facility. The impact on operations in the fourth quarter of fiscal 2007 was $361,000. The Microsource subsidiary, located in Santa Rosa, California, remains strictly a manufacturing operation, with all product development work being performed in San Ramon.

Giga-tronics will host a conference call today at 4:30 PM ET to discuss the fourth quarter and full fiscal year results. To participate in the call, dial (866) 463-5401 and enter Access Code 648267#. The call will also be broadcast over the internet at www.gigatronics.com under "Investor Relations". The conference call discussion reflects management's views as of May 22, 2007 only.

Giga-tronics produces instruments, subsystems and sophisticated microwave components that have broad applications in both defense electronics and wireless telecommunications.

Giga-tronics is a publicly held company, traded on the NASDAQ Capital Market under the symbol "GIGA".

This press release contains forward-looking statements concerning profitability, backlog and shipments. Actual results may differ significantly due to risks and uncertainties, such as conditions in the wireless industry, the adequacy of our liquidity, the effects of rapidly changing technology and standards, our ability to compete with better-capitalized competitors, future orders, cancellations or deferrals, disputes over performance and the ability to collect receivables. For further discussion, see Giga-tronics' annual report on Form 10-KSB for the fiscal year ended March 31, 2007 Part I, under the heading "Certain Factors Which May Adversely Affect Future Operations or an Investment in Giga-tronics" and Part II, under the heading "Management's Discussion and Analysis of Financial Conditions and Results of Operations".

                CONDENSED CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------

(In thousands except share data)       March 31, 2007   March 25, 2006
----------------------------------------------------------------------
Assets
Current assets
    Cash and cash equivalents           $       1,804   $       3,412
    Notes receivable, net of allowance
     of $250 and $250, respectively                 -               3
    Trade accounts receivable, net of
     allowance
of $62 and $63, respectively                    2,750           3,435
    Inventories, net                            5,841           4,813
    Prepaid expenses and other current
     assets                                       360             219
                                         -------------   -------------
Total current assets                           10,755          11,882
                                         -------------   -------------

Property and equipment
    Leasehold improvements                        373             373
    Machinery and equipment                    15,426          15,592
    Office furniture and fixtures                 736             723
                                         -------------   -------------
       Property and equipment                  16,535          16,688
       Less accumulated depreciation
        and amortization                       16,211          16,351
                                         -------------   -------------
Property and equipment, net                       324             337
Other assets                                       82             127
                                         -------------   -------------
Total assets                            $      11,161   $      12,346
                                         =============   =============

Liabilities and shareholders' equity
Current liabilities
    Accounts payable                    $       1,106   $         870
    Accrued commissions                           192             171
    Accrued payroll and benefits                  666             781
    Accrued warranty                              207             250
    Customer advances                             681             521
    Other current liabilities                     623             433
                                         -------------   -------------
Total current liabilities                       3,475           3,026
Deferred rent                                     293             222
                                         -------------   -------------
Total liabilities                               3,768           3,248
                                         -------------   -------------
Shareholders' equity
Preferred stock of no par value;
    Authorized 1,000,000 shares; no
     shares outstanding at March 31,
     2007 and March 25, 2006                        -               -
Common stock of no par value;
    Authorized 40,000,000 shares;
     4,809,021 shares at March 31, 2007
     and March 25, 2006 issued and
     outstanding                               13,165          13,003
Accumulated deficit                            (5,772)         (3,905)
                                         -------------   -------------
Total shareholders' equity                      7,393           9,098
                                         -------------   -------------
Total liabilities and shareholders'
 equity                                 $      11,161   $      12,346
                                         =============   =============
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------

                              Three Months Ended       Year Ended
(In thousands except share    March 31, March 25, March 31,  March 25,
 data)                           2007      2006      2007       2006
----------------------------------------------------------------------
Net sales                    $   5,164  $  5,686  $  18,048  $ 20,620
Cost of sales                    3,068     3,588     10,502    12,320
                              ---------  --------  ---------  --------
Gross profit                     2,096     2,098      7,546     8,300

Product development                883       868      3,731     3,760
Selling, general and
 administrative                  1,362     1,338      5,456     5,556
Restructuring                      361         -        361         -
                              ---------  --------  ---------  --------
Operating expenses               2,606     2,206      9,548     9,316
                              ---------  --------  ---------  --------
Operating loss from
 continuing operations            (510)     (108)    (2,002)   (1,016)

Interest income, net                17         8        108        32
                              ---------  -------- ---------- ---------
Loss from continuing
 operations before income
 taxes                            (493)     (100)    (1,894)     (984)
Provision for income taxes           -         -          1         4
                              ---------- --------  ---------  --------
Loss from continuing
 operations                  $    (493) $   (100) $  (1,895) $   (988)
(Loss) income on discontinued
 operations, net of income
 taxes of nil for 2007 and
 2006                               (2)       13         28        27
                              ---------  --------  ---------  --------
Net loss                     $    (495) $    (87) $  (1,867) $   (961)
                              =========  ========  =========  ========

Basic and diluted net (loss)
 earnings per share:
  From continuing operations $   (0.10) $  (0.02) $   (0.40) $  (0.21)
  On discontinued operations      0.00      0.00       0.01      0.01
                              ---------  --------  ---------  --------
  Basic and diluted loss per
   share                     $   (0.10) $  (0.02) $   (0.39) $  (0.20)
                              =========  ========  =========  ========

Shares used in per share
 calculation:
 Basic                           4,809     4,809      4,809     4,782
 Diluted                         4,809     4,809      4,809     4,782

Source: Giga-tronics, Incorporated