Giga-tronics Reports Sixth Straight Quarterly Profit

SAN RAMON, Calif., May 4, 2010 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated (Nasdaq:GIGA) reported today its sixth consecutive quarterly net profit of $285,000 or $0.06 per fully diluted share for the fourth quarter ended March 27, 2010. This compares with a net profit of $383,000 or $0.08 per fully diluted share for the same period a year ago. Net sales increased 1% to $5,181,000 in the fourth quarter of fiscal 2010 compared to $5,145,000 in the fourth quarter of fiscal 2009. Gross margin of $2,154,000 decreased by $195,000 over the same quarter last year. Gross margin as a percentage of net sales decreased by 4.1% to 41.6% in the fourth quarter of fiscal 2010 as compared to 45.7% in the fourth quarter of fiscal 2009. Operating expenses improved by 4.9% or $97,000 in the fourth quarter of fiscal 2010 due to a reduction in sales and marketing expense of $53,000 and general and administrative expense of $91,000. Orders increased 51% in the fourth quarter of fiscal 2010 to $3,350,000 from $2,224,000 for the fourth quarter of fiscal 2009.

Net profit for the year ended March 27, 2010 was $1,300,000 or $0.26 per fully diluted share compared with a net loss of $330,000 or $0.07 per fully diluted share for the same period last year. Net sales improved by 9.4% to $19,057,000 in the twelve month period ended March 27, 2010 compared to $17,421,000 for the same period a year ago. Gross margin of $8,435,000 improved by $931,000 over the same twelve month period last year. Gross margin as a percentage of net sales improved by 1.2% to 44.3% for the fiscal year 2010 as compared to 43.1% for the fiscal year 2009. Operating expenses improved by 10.1% or $799,000 for the fiscal year 2010 due to a reduction in product development expenses of $453,000, a reduction in sales and marketing of $150,000 and general and administrative expenses of $196,000. The reduction in product development expenses was due to customer funded development. Orders decreased for the twelve months ended March 27, 2010 to $18,448,000 compared to $18,998,000 for the same period of fiscal 2009.

Non-GAAP net income, which excludes share based compensation, for the three month period ended March 27, 2010 would have been $57,000 higher, or $342,000. Non-GAAP basic and diluted earnings per share would have been $0.07 compared to $0.06 as reported. For the same period last year, the Company's non-GAAP net income would have been $97,000 higher or $480,000 and the basic and diluted earnings per share would have been $0.10 compared to $0.08 as reported.

Non-GAAP net income for the twelve month period ended March 27, 2010 would have been $187,000 higher, or $1,487,000. Non-GAAP basic and diluted earnings per share would have been $0.31 compared to $0.26 as reported. For the same period last year, the Company's non-GAAP net loss would have been $270,000 lower or $60,000 and the basic and diluted share loss would have been $0.01 compared to $0.07 as reported.

Backlog at March 27, 2010 was $8.5 million (approximately $7.6 million is shippable within one year) as compared to $9.1 million (approximately $6.8 million was shippable within one year) at March 28, 2009.

Cash and cash equivalents at March 27, 2010 were $3,074,000 compared to $2,457,000 as of December 26, 2009. The Company paid off its outstanding line of credit of $500,000 during the current quarter.

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the fourth quarter results. To participate in the call, dial (877) 407-8035 domestically or (201) 689-8035 for international. 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 4, 2010 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".

The Giga-tronics Incorporated logo is available at https://www.globenewswire.com/newsroom/prs/?pkgid=6087

This press release contains forward-looking statements concerning profitability, backlog and shipments. Actual results may differ significantly due to risks and uncertainties, such as future orders, cancellations or deferrals, disputes over performance and the ability to collect receivables. For further discussion, see Giga-tronics' most recent annual report on Form 10-K for the fiscal year ended March 28, 2009 and the annual report on Form 10-K for the fiscal year ended March 27, 2010 (to be filed shortly) 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 Condition and Results of Operations".


       CONSOLIDATED BALANCE SHEETS (Unaudited)
  -------------------------------------------------

                                             March
  (In thousands except share       March      28,
   data)                          27, 2010   2009
  ------------------------------  --------  -------
  Assets
  Current Assets
   Cash and cash equivalents        $3,074   $1,518
   Trade accounts receivable,
    net of allowance of $95 and
    $102, respectively               4,332    3,110
   Inventories, net                  5,803    5,409
   Prepaid expenses and other
    current assets                     383      430
                                  --------  -------

  Total current assets              13,592   10,467
                                  --------  -------

  Property and equipment
   Leasehold improvements              315      373
   Machinery and equipment          15,590   15,462

   Office furniture and fixtures       786      788
                                  --------  -------
    Total property and equipment    16,691   16,623
    Less accumulated
     depreciation and
     amortization                   16,380   16,317
                                  --------  -------
  Property and equipment, net          311      306

  Other assets                          16       16
                                  --------  -------

  Total assets                     $13,919  $10,789
                                  ========  =======

  Liabilities and shareholders'
   equity
  Current liabilities
   Accounts payable                   $881   $1,219
   Accrued commission                  227      144
   Accrued payroll and benefits        698      397
   Accrued warranty                    139      177
   Deferred revenue                  2,682      959
   Deferred rent                        --      118
   Capital lease obligations            57       16

   Other current liabilities           225      306
                                  --------  -------
  Total current liabilities          4,909    3,336

  Long term obligation -
   Deferred rent                        31       96
  Long term obligation --
   Capital lease                        36       25
                                  --------  -------

  Total liabilities                  4,976    3,457
                                  --------  -------

  Commitments and contingencies         --       --

  Shareholders' equity
  Preferred stock of no par
   value; Authorized 1,000,000
   shares;
  no shares outstanding at March
   27, 2010 and March 28, 2009          --       --
  Common stock of no par value;
   Authorized 40,000,000 shares;
   4,891,394
  shares at March 27, 2010 and
   4,824,021 at March 28, 2009
   issued and
  outstanding                       13,979   13,668

  Accumulated deficit              (5,036)  (6,336)
                                  --------  -------

  Total shareholders' equity         8,943    7,332
                                  --------  -------
  Total liabilities and
   shareholders' equity            $13,919  $10,789
                                  ========  =======



                   CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
  ----------------------------------------------------------------------------------


  ----------------------------------------------------------------------------------
                                       Three Months Ended         Year Ended

                                        March     March
  (In thousands except  per share         27,       28,     March 27,     March 28,
   data)                                 2010      2009        2010         2009
  -----------------------------------  --------  --------  ------------  -----------
  Net sales                             $ 5,181   $ 5,145     $  19,057   $   17,421

  Cost of sales                           3,027     2,796        10,622        9,917
                                       --------  --------  ------------  -----------

  Gross profit                            2,154     2,349         8,435        7,504
                                       --------  --------  ------------  -----------

  Engineering                               465       418         1,522        1,975

  Selling, general and administrative     1,404     1,548         5,593        5,939
                                       --------  --------  ------------  -----------

   Total operating expenses               1,869     1,966         7,115        7,914
                                       --------  --------  ------------  -----------

  Operating income (loss) from
   continuing operations                    285       383         1,320        (410)

  Other expense                               1        --            --           --

  Interest (expense) income, net             --        --          (16)            7
                                       --------  --------  ------------  -----------
  Income (loss) from continuing
   operations
  before income taxes                       286       383         1,304        (403)
                                       --------  --------  ------------  -----------
  Provision for income taxes                  1        --             4            2
  Income (loss) from continuing
   operations                               285       383         1,300        (405)
  Income on discontinued operations,
   net of
  income taxes of nil for 2010 and
   2009                                      --        --            --           75
                                       --------  --------  ------------  -----------

  Net income (loss)                       $ 285     $ 383       $ 1,300      $ (330)
                                       ========  ========  ============  ===========

  Basic earnings (loss) per share:
   From continuing operations            $ 0.06    $ 0.08        $ 0.27     $ (0.08)

   On discontinued operations                --        --            --         0.01
                                       --------  --------  ------------  -----------
  Net earnings (loss) per share -
   basic                                 $ 0.06    $ 0.08        $ 0.27     $ (0.07)
                                       ========  ========  ============  ===========

  Diluted earnings (loss) per share:
   From continuing operations            $ 0.06    $ 0.08        $ 0.26     $ (0.08)

   On discontinued operations                --        --            --         0.01
                                       --------  --------  ------------  -----------
  Net earnings (loss) per share -
   diluted                               $ 0.06    $ 0.08        $ 0.26     $ (0.07)
                                       ========  ========  ============  ===========

  Shares used in per share
   calculation:
   Basic                                  4,887     4,824         4,846        4,824
   Diluted                                5,013     4,824         4,907        4,824
CONTACT:  Giga-tronics Incorporated
          Pat Lawlor, Vice President, Finance/Chief Financial Officer
          (925) 328-4656