UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the period ended September 26, 1998,
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the transition period from
to
Commission File No. 0-12719
GIGA-TRONICS INCORPORATED
(Exact name of Registrant as specified in its charter)
California 94-2656341
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4650 Norris Canyon Road, San Ramon, CA 94583
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (925) 328-4650
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Common stock outstanding as of September 26, 1998: 4,342,904
PAGE 2
GIGA-TRONICS INCORPORATED
INDEX
PART I - FINANCIAL INFORMATION Page No.
ITEM 1 Consolidated Condensed Financial Statements:
Consolidated Condensed Balance Sheets as of September 26, 1998
(unaudited) and March 28, 1998.........................................3
Consolidated Condensed Statements of Operations, three and six months
ended September 26, 1998 and September 27, 1997 (unaudited)............4
Consolidated Condensed Statements of Cash Flows, six months ended
September 26, 1998 and September 27, 1997 (unaudited)..................5
Notes to Unaudited Consolidated Condensed Financial Statements.........6
ITEM 2 Management's Discussion and Analysis of
Operations and Financial Condition.....................................9
PART II - OTHER INFORMATION
ITEM 1
TO 3 Not applicable
ITEM 4 Submission of Matters to a Vote of Security Holders............13
ITEM 5 Not applicable
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
Not applicable
SIGNATURES....................................................................14
PAGE 3
GIGA-TRONICS INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except share data)
September 26, 1998 March 28, 1998
------------------ --------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,670 $ 4,611
Investments -- 5,724
Notes receivable -- 860
Trade accounts receivable, net of allowance 6,311 6,924
of $306 and $292, respectively
Inventories, net 13,584 8,064
Prepaid expenses 1,143 997
Deferred income taxes 2,082 2,092
-------- --------
Total current assets 25,790 29,272
Property and Equipment:
Land 279 279
Building and leasehold improvements 932 782
Machinery and equipment 13,526 8,880
Office furniture and fixtures 740 689
-------- --------
Property and equipment, gross cost 15,477 10,630
Less accumulated depreciation and amortization 8,556 7,885
-------- --------
Property and equipment, net cost 6,921 2,745
Patents and licenses 505 577
Goodwill, net 1,171 --
Other assets 119 78
-------- --------
Total assets $ 34,506 $ 32,672
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable $ -- $ --
Accounts payable 3,603 2,659
Accrued commissions 449 516
Accrued payroll and benefits 1,290 939
Accrued warranty 708 673
Customer advances 1,779 612
Current portion of capital lease and other long term 153 27
obligations
Other current liabilities 469 670
-------- --------
Total current liabilities 8,451 6,096
Capital lease and other long term obligations, net 495 58
Deferred income taxes 56 57
-------- --------
Total liabilities 9,002 6,211
-------- --------
Shareholders' Equity
Preferred stock of no par value;
Authorized 1,000,000 shares; no shares outstanding at
September 26, 1998 and March 28, 1998 -- --
Common stock of no par value;
Authorized 40,000,000 shares; 4,342,904 shares at
September 26, 1998 and 4,326,299 shares at March 28,
1998 issued and outstanding 11,574 11,532
Unrealized gain (loss) on investments -- (18)
Retained earnings 13,930 14,947
-------- --------
Total shareholders' equity 25,504 26,461
-------- --------
Total liabilities and shareholders' equity $ 34,506 $ 32,672
======== ========
See accompanying notes to unaudited consolidated condensed financial statements
PAGE 4
GIGA-TRONICS INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
------------------------------ -----------------------------
Sep. 26, 1998 Sep. 27, 1997 Sep. 26, 1998 Sep. 27, 1997
------------- ------------- ------------- -------------
Net sales $ 9,030 $ 9,574 $ 17,707 $ 18,655
Cost of sales 6,196 5,232 11,560 10,136
----------- --------- ---------- ----------
Gross profit 2,834 4,342 6,147 8,519
Product development 1,530 1,319 2,976 2,604
Selling, general and administrative 2,280 2,491 4,515 4,738
Amortization of intangibles 140 103 265 230
----------- --------- ---------- ----------
Operating expenses 3,950 3,913 7,756 7,572
Operating income (loss) (1,116) 429 (1,609) 947
Other income 34 3 38 25
Interest income, net 6 98 118 222
----------- --------- ---------- ----------
Earnings (loss) before income taxes (1,076) 530 (1,453) 1,194
Provision for income taxes (323) 159 (436) 358
----------- --------- ---------- ----------
Net earnings (loss) $ (753) $ 371 $ (1,017) $ 836
=========== ========= ========== ==========
Net earnings (loss) per common share
- - - basic $ (0.17) $ 0.09 $ (0.23) $ 0.19
=========== ========= ========== ==========
Net earnings (loss) per common share
- - - diluted $ (0.17) $ 0.08 $ (0.23) $ 0.19
=========== ========= ========== ==========
Weighted average basic common shares
outstanding 4,331 4,318 4,329 4,317
----------- --------- ---------- ----------
Weighted average diluted common
shares outstanding 4,331 4,378 4,329 4,370
----------- --------- ---------- ----------
See accompanying notes to unaudited consolidated condensed financial statements.
PAGE 5
GIGA-TRONICS INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
---------------------------
Sep. 26, 1998 Sep. 27, 1997
------------- -------------
Cash flows from operations:
Net earnings (loss) $(1,017) $ 836
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operations:
Depreciation and amortization 1,065 721
Gain (loss) on sale of fixed assets 7 (3)
Deferred income taxes, net 9 (331)
Changes in operating assets and liabilities (1,499) (1,527)
------- -------
Net cash provided by (used in) operations (1,435) (304)
Cash flows from investing activities
Investment maturities, net 5,742 (1,409)
Additions to property and equipment, net (610) (497)
Payment for purchase of Microsource Inc, including transaction
costs (630) --
Advances to Microsource (940) --
Other assets (27) 42
------- -------
Net cash provided by (used in) investing activities 3,535 (1,864)
Cash flows from financing activities:
Issuance of common stock 42 26
Dividends paid -- (27)
Proceeds (payment) on line of credit (1,500) (189)
Proceeds (payment) on notes payable and long term debt (2,518) (985)
Payment on capital lease and other long term (65) (21)
------- -------
Net cash provided by (used in) financing activities (4,041) (1,196)
Increase (decrease) in cash and cash equivalents (1,941) (3,364)
------- -------
Beginning cash and cash equivalents 4,611 6,999
Ending cash and cash equivalents $ 2,670 $ 3,635
======= =======
Supplementary disclosure of cash flow information:
(1) No cash was paid for interest in the six month period ended September
26, 1998. Cash paid for interest in the six month period ended
September 27, 1997 was $44,000.
(2) Cash paid for taxes in the six month period ended September 26, 1998
was $5,000. Cash paid for income taxes in the six month period ended
September 27, 1997 was $700,000.
See accompanying notes to unaudited consolidated condensed financial statements.
PAGE 6
GIGA-TRONICS INCORPORATED
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(1) Basis of Presentation
The financial statements included herein have been prepared by the
Company, pursuant to the rules and regulations of the Securities and
Exchange Commission. The results of operations for the interim periods
shown in this report are not necessarily indicative of results to be
expected for the fiscal year. In the opinion of management, the
information contained herein reflects all adjustments necessary to make
the results of operations for the interim periods a fair statement of
such operations. For further information, refer to the financial
statements and footnotes thereto, included in the Annual Report on Form
10-K, filed with the Securities and Exchange Commission for the year
ended March 28, 1998.
(2) Business Combinations
On May 18, 1998, the Company acquired Microsource, Inc. of Santa Rosa,
California. Microsource develops and manufactures a broad line of YIG
tuned oscillators, filters, and microwave synthesizers. The acquisition
was accounted for using the "purchase" method of accounting, and
accordingly, the results of operations of Microsource have been included
in the Company's consolidated financial statements from May 18, 1998.
The purchase price consisted of $1,500,000 plus contingent payments
based upon future net income of Microsource during the two fiscal years
after the effective time of the merger. The excess of the purchase price
over the fair value of the net identifiable assets of $1,323,000 was
recorded as goodwill and is being amortized on a straight-line basis
over five years. The additional payments, if any, over the next two
years contingent on future net income of Microsource will be accounted
for as additional goodwill.
The total purchase price of $1,500,000 has been allocated to the net
assets acquired based on the estimated fair value as follows (in
thousands):
Accounts receivable $ 1,390
Net inventory 3,661
Prepaid expenses 254
Property and equipment 4,370
Goodwill and other intangibles 1,323
Line of credit (1,500)
Bank term loans and short term capital leases (913)
Notes to related parties (682)
Accounts payable (985)
Accrued commissions (33)
Accrued payroll (340)
Accrued warranty (63)
Customer advances (2,004)
Other current liabilities (498)
Capital lease and other long term obligations, net (517)
-------
3,463
-------
Less advances to Microsource, net, and transaction costs (1,963)
-------
$ 1,500
=======
PAGE 7
(3) Inventories
Inventories consist of the following (in thousands):
September 26, 1998 March 28, 1998
------------------ --------------
Raw materials $ 6,990 $ 3,943
Work-in-process 5,658 2,999
Finished goods 936 1,122
------------ ------------
Total inventory $ 13,584 $ 8,064
============ ============
(4) Earnings Per Share
Basic earnings per share is calculated by dividing net income or loss by
weighted average common shares outstanding during the period. Diluted
earnings per share reflects the net incremental shares that would be
issued if dilutive outstanding stock options were exercised, using the
treasury stock method. In the case of a net loss, it is assumed that no
incremental shares would be issued because they would be antidilutive.
In addition, certain options are considered antidilutive because the
options' exercise price was above the average market price during the
period. Antidilutive shares are not included in the computation of
diluted earnings per share, in accordance with SFAS No. 128. The shares
used in per share computations for the fiscal periods ended September
26, 1998 and September 27, 1997 are as follows:
Three Months Ended Six Months Ended
--------------------------- ---------------------------
Sep. 26, 1998 Sep. 27, 1997 Sep. 26, 1998 Sep. 27, 1997
------------- ------------- ------------- -------------
Net earnings (loss) $ (753) $ 371 $ (1017) $ 836
========== ======== ========== ========
Weighted average common shares 4,331 4,318 4,329 4,317
outstanding:
Common share equivalents: --- 60 --- 55
---------- -------- ---------- --------
Weighted average common shares
outstanding assuming dilution 4,331 4,378 4,329 4,372
========== ======== ========== ========
Net earnings (loss) per share of
common stock $ (0.17) $ 0.09 $ (0.23) $ 0.19
========== ======== ========== ========
Net earnings (loss) per share of
common stock assuming dilution $ (0.17) $ 0.08 $ (0.23) $ 0.19
========== ======== ========== ========
Number of stock options not included
in the computation 555 171 555 171
---------- -------- ---------- --------
The number of stock options not included in the computation of diluted
EPS for the three month and six month periods ended September 26, 1998
reflects a loss from continuing operations and the options are therefore
antidilutive.
The number of stock options not included in the computation of diluted
EPS for the three month and six month periods ended September 27, 1997
reflects stock options where the exercise prices were greater than the
average market price of the common shares and are therefore
antidilutive.
PAGE 8
(5) Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income". SFAS No, 130 establishes
standards of reporting and display of comprehensive income and its
components of net income and "other comprehensive income" in a full set
of general purpose financial statements. "Other comprehensive income"
refers to revenues, expenses, gains and losses that are not included in
net income but rather are recorded directly in shareholders' equity.
SFAS No. 130 is effective for annual and interim periods beginning after
December 15, 1997 and for periods ended before that date when presented
for comparative purposes. The Company has not yet determined the format
it will use to display the information required by SFAS No. 130 in the
financial statements for the year ending March 27, 1999. Total
comprehensive loss was $999,000 for the six months ended September
26,1998. Total comprehensive income was $815,000 for the six months
ended September 27, 1997.
PAGE 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
The forward-looking statements included in Management's Discussion and Analysis
of Financial Condition and Results of Operations, which reflect management's
best judgment based on factors currently known, involve risks and uncertainties.
Actual results could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including but not
limited to those discussed below. Forward-looking information provided by
Giga-tronics pursuant to the safe harbor established by recent securities
legislation should be evaluated in the context of these factors.
GENERAL
The Company designs, manufactures, and markets microwave and radio frequency
signal generation and power measurement instruments, switching devices, and YIG
tuned oscillators. These products are used in the development, test, and
maintenance of wireless communications products and systems, electronic defense
systems, and automatic testing systems (ATE). The Company also manufactures a
line of inspection and handling devices used in the production of semiconductor
devices.
THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 26, 1998 AND SEPTEMBER 27, 1997
Net sales for the three month and six month period ended September 26, 1998
declined 6% ($544,000) and 5% ($948,000), respectively, compared with the same
periods last year. Sales for semiconductor products decreased 75% ($2,113,000)
in the quarter and 60% ($3,179,000) for the six month period principally due to
declining orders related to the Asian markets and the downturn in the
semiconductor industry. Sales for power meters (PM) and switching modules also
decreased 14% ($943,000) in the quarter and 11% ($1,485,000) for the six month
period due to a slowdown in new orders. These declines were offset by additional
sales of $2,512,000 in the quarter and $3,716,000 for the six month period by
Microsource Inc., which was acquired by the Company in May 1998.
Gross profit for the three month and the six month period decreased by 35%
($1,508,000) and 28% ($2,372,000), respectively, due to lower sales volume and a
change in the product mix. Gross margin as a percent of sales for the three
months decreased to 31% compared to 45% in the prior year period and the six
months decreased to 35% compared to 46% for the prior year period. The decrease
in profit is attributable to higher manufacturing material costs in both
Semiconductor and Test & Measurement segments. The lower gross profit percentage
on the sales for Microsource products as compared to the Company's other
products also contributed to the decline in margin as a percent of sales as
compared to the prior year.
Operating expenses for the three month and for the six month period increased 1%
($37,000) and 2% ($184,000), respectively, compared with the corresponding
period in the prior year. Product development expenses for the three month and
six month period increased 16% ($211,000) and 14% ($372,000), respectively,
compared with the prior year periods principally due to Microsource, which was
not included in the prior year. There was $99,000 in the three months and
$224,000 in the six months of product development spending at Microsource. In
addition, product development spending declined as it related to semiconductor
products, but increased in an effort to develop new test and measurement
products. Sales and administrative expenses declined 9% ($211,000) for the three
month and 5% ($223,000) for the six month period compared to the corresponding
prior year periods. Sales and administrative expenses in the prior year included
$299,000 in the three months and $451,000 in the six months of merger
transaction costs. Sales and administrative costs included approximately
$446,000 of expenses for the three months and $657,000 for the six months
incurred by the new Microsource entity, subsequent to the acquisition.
Interest income for the three month and six month periods declined over the
prior year due to lower cash available for investment. The cash decline resulted
from the purchase of Microsource and the extinguishment of its debt.
PAGE 10
Earnings before income taxes for the three month period decreased 303%
($1,606,000) and decreased 221% ($2,647,000) for the six month period compared
to the same period last year. The decline was primarily due to the reduction in
gross margin caused by the decline in sales volume and the increased development
costs related to the test and measurement products.
Orders for the current quarter were 17% ($1,476,000) higher than the comparable
period last year. Orders were 383% ($3,429,000) higher for switching modules
while orders for instruments were down 44% ($2,485,000) due to the softness of
the wireless industry. The decline in orders of 13% ($263,000) for semiconductor
products was a result of the continued effect of the Asian economy and downturn
in the semiconductor industry. Included in the current orders is $795,000 for
Microsource where there were no comparable orders in the prior year. Orders for
the six month period were higher by 4% (or $626,000) which was the result of
higher orders for switches of $2,987,000 and the addition of Microsource orders
of $2,160,000 which were offset by reduced orders for instruments of $2,901,000
and semiconductor equipment of $1,620,000. Backlog at September 1998 was
$18,968,000 compared to $6,492,000 at the March year end. The increase in
backlog is a result of $12,150,000 of backlog acquired in the Microsource
acquisition, an increase in switching module backlog, partially offset by the
decline in orders in the instrumentation and semiconductor products.
FINANCIAL CONDITION
The Company maintains a strong financial position, with working capital of
$17,339,000 and a ratio of current assets to current liabilities of 3.1 to 1.0
at September 26, 1998. The Company continues to fund all of its working capital
needs from cash provided by operations. Cash used in operations, for the six
months ended September 26, 1998, was $1,435,000.
Cash and cash equivalents declined $1,941,000 and investments declined
$5,724,000 in the six month period primarily due to the acquisition of
Microsource and subsequent pay-off of their line of credit and bank notes. The
Company spent $610,000 on new manufacturing and test equipment and other capital
items. The Company will continue to invest in capital items that support growth
and new product development, raise productivity and improve quality.
Historically the Company has satisfied its cash needs internally for both
operating and capital expenses, and management expects to continue to do so.
Management believes that cash reserves remain adequate to meet anticipated
operating needs. In addition, the Company has an unsecured revolving line of
credit for $7,000,000, none of which has been utilized. It is also the Company's
intention to increase product development expenditures for the purpose of
broadening its product base. From time to time, the Company considers a variety
of acquisition opportunities to also broaden its product lines and expand its
market. Such acquisition activity could also increase the Company's operating
expenses and require the additional use of capital resources.
YEAR 2000 (Y2K) ISSUES
The Company is aware of and is addressing the issues associated with the
programming code in existing computer systems as the year 2000 approaches. The
Year 2000 problem is pervasive and complex, as many computer systems,
manufacturing equipment and industrial control systems will be affected in some
way by the rollover of the two-digit year value to 00. Systems that do not
properly recognize such data could generate erroneous information or cause a
system to fail. The Year 2000 issue creates risk for the Company from unforeseen
problems in its own systems and from third parties with which the Company deals
on financial transactions worldwide. Failures of the Company's and/or third
parties' computer systems, manufacturing equipment and industrial control
systems could have a material adverse impact on the Company's ability to conduct
its business.
The Company is in the process of analyzing the Company's internal systems as
well as all external systems (such as vendor, customer, banking systems, etc.)
upon which the Company is dependent, to identify and evaluate any potential Year
2000 issues. The Company is committed to achieving Year 2000 compliance;
however, with a significant portion of the problem external and therefore
outside the direct control of the Company, there can be no assurances that the
Company will be fully or even significantly Year 2000 compliant at the critical
juncture. In
PAGE 11
addition, as full testing of Year 2000 functionality must occur in a simulated
environment, the Company will not be able to test full system Year 2000
interfaces and capabilities prior to the Year 2000.
The Company has completed an inventory of internal systems, hardware, software,
manufacturing equipment and embedded chips in industrial control instruments.
Each of these items was identified as mission critical, mission essential;
mission impaired or missions non-critical. The Company is in the process of
prioritizing and evaluating mission critical and mission essential items,
identifying fixes and resources as appropriate, and performing and testing
corrective measures. While the Company believes that its evaluation has been
comprehensive, there can be no assurance that all systems critical to Year 2000
compliance have been identified, or that the corrective actions identified will
be completed on time.
The Company has completed an inventory of current products and their hardware,
software, and embedded chips. Each of the Company's products was evaluated as to
whether it maintained the date and if the date handling was Year 2000 compliant.
All of the Company's current products, which maintained the date, were found to
be Year 2000 compliant. Several of the Company's non-current products were found
not to be Year 2000 compliant but the Company has determined either a manual
work around or has an upgrade path to resolve the Year 2000 problem for such
non-current products.
Currently, the Company is inventorying key suppliers of goods and services to
the Company, and considering the potential impact on the Company and its
customers of Year 2000 compliance by these suppliers. The Giga-tronics
Instrument Division has mailed surveys to more than 600 of its suppliers, and is
in the process of evaluating responses and sending follow-up letters. Surveys to
the suppliers of the Company's other subsidiaries and divisions are scheduled to
go out during the next two fiscal quarters. The Company plans to determine if
our sources pose a threat to us for their non compliance. If these sources pose
a threat to us we plan to disqualify these non-complaint sources, look for
alternative sources and re-qualify new suppliers to help mediate potential
business disruptions. While the Company believes that it will be able to qualify
alternative suppliers as needed, until all supplier and customer survey
responses have been received and evaluated, the Company can not fully evaluate
the extent of potential problems and the costs associated with corrective
actions.
To date, the Company has not incurred significant costs associated with Year
2000 compliance. The Company estimates the cost to complete its current
compliance program will not be significant. Of these costs, less than $30,000 is
associated with the upgrade of packaged software systems used by the Company's
subsidiaries. These are systems that would not otherwise have been replaced or
upgraded at this time. The Company may incur significant additional costs
depending largely on the response from the Company's suppliers and the extent to
which supplier re-qualification is needed. Cost estimates will also be
reevaluated as the status of the overall compliance program is updated. There
can be no assurance that actual costs will not be materially higher than
currently anticipated. Most of these costs are not likely to be incremental
costs to the Company, but rather will represent the redeployment of existing
information technology resources. The Company is unable to determine what effect
the failure of systems because of Year 2000 issues by the Company or its
suppliers or customers will have, but any significant failures could have an
adverse material effect on the Company's results of operations and financial
condition.
FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS
Due to the softness in order intake for 1999, revenues for the third quarter,
excluding anticipated revenues from Microsource products, may be less than the
prior year. However, it is projected at this time that cost reduction activities
and continued improvement in manufacturing efficiencies may partially offset the
unfavorable impact caused by the decline in revenues.
As part of its business strategy, the Company intends to broaden its product
lines and expand its markets, in part through the acquisition of other business
entities. The Company had acquired Viking Semiconductor Equipment, Inc. and
Ultracision, Inc. in fiscal 1998 and Microsource, Inc. in fiscal 1999. The
Company is subject to various risks in connection with these and any future
acquisitions. Such risks include, among other things, the difficulty of
PAGE 12
assimilating the operations and personnel of the acquired companies, the
potential disruption of the Company's business, the inability of the Company's
management to maximize the financial and strategic position of the Company by
the successful incorporation of acquired technology and rights into the
Company's product offerings, the maintenance of uniform standards, controls,
procedures and policies, and the potential loss of key employees of acquired
companies. No assurance can be given that any acquisition by the Company will or
will not occur, that if an acquisition does occur, that it will not materially
and adversely affect the Company or that any such acquisition will be successful
in enhancing the Company's business. The Company currently contemplates that
future acquisitions may involve the issuance of additional shares of the
Company's Common Stock. Any such issuances may result in dilution to all
shareholders of the Company, and sales of such shares in significant volume by
the shareholders of acquired companies may depress the price of the Company's
Common Stock.
PAGE 13
PART II, Item 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(A.) Annual Meeting of stockholders was held on August 11, 1998.
(1) The vote for the nominated Directors was as follows:
Nominee In Favor Withheld
------- -------- --------
George H. Bruns, Jr. 3,738,884 113,400
James A. Cole 3,715,850 136,434
Edward D. Sherman 3,733,284 119,000
Robert C. Wilson 3,709,150 143,134
(2) (a) Other matters voted upon at the meeting were as follows:
Ratification of the selection of KPMG Peat Marwick LLP as
independent public accountants for the fiscal year 1999 was
approved as follows:
No. of Votes on Proposal Percent of Votes Cast
------------------------ ---------------------
For
3,847,684 99.89%
Against
1,400 0.03%
Abstain
3,200 0.08%
Quorum 3,852,284 100.0%
Non-voted Shares = 474,015
Outstanding shares on Record Date = 4,326,299
PAGE 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GIGA-TRONICS INCORPORATED
(Registrant)
Date: 11/06/98 /s/
---------------- ------------------------------------
George H. Bruns, Jr.
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: 11/06/98 /s/
---------------- ------------------------------------
Mark H. Cosmez II
Vice President, Finance and
Chief Financial Officer
(Principal Accounting Officer)
EXHIBIT INDEX
Exhibit Description
- - ------- ------------------------
27 Financial Data Schedule