For fourth-quarter 2012, GigOptix Inc of San Jose, CA, USA (a fabless supplier of analog semiconductor and optical components enabling high-speed end-to-end information streaming over optical fiber and wireless networks) has reported preliminary revenue of about $8m, including $0.9m of previously unrecognized government contract revenue. This is down 21% on both Q4 guidance (provided at the end of October) and Q3 revenue of $10.1m.
Factors that contributed to the lower-than-expected revenues in Q4 included weaker demand in the markets that the firm currently serves, challenging macroeconomic conditions, and a push-out into first-half 2013 of some anticipated deployments within the optical product line.
"After 12 consecutive quarters of increasing revenues we are clearly disappointed that revenues for the fourth quarter of fiscal 2012 are below expectations," says chairman & CEO Dr Avi Katz. Indeed, full-year 2012 revenue is expected to be about $37m, up 14% on 2011's $32.3m, due solely to organic growth as the firm did not enter into any mergers or acquisitions in 2012. "We view the revenue performance of the fourth quarter of 2012 as a temporary setback and not indicative of our future prospects," Katz adds.
Nevertheless, GigOptix says that, as it continues to focus on its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), it has taken immediate actions to adjust overall spending. These include reducing its global workforce by about 10% (primarily in support and administrative functions) and company-wide salary reductions of 5-25% (based on an individual's salary level). These actions are expected to result in about $450,000 of quarterly cost savings, once the plan is fully implemented.
"We will use this opportunity to further sharpen our business model and cost structure, enhance our operating efficiency, and deploy a leaner and more structured organization," says Katz. "We are confident these changes will deliver improved adjusted EBITDA in 2013," he adds. "While we are not in a position to provide specific financial guidance for fiscal 2013 at this time, our current outlook for the year is positive, based on customer feedback and the prospect for better conditions in the areas within the optical components market we currently serve, and new product deployments targeting the telecom, datacom, and consumer electronics markets."
GigOptix cautions that its anticipated revenue results, and the cost-reduction savings, are preliminary and based on the best information currently available. The revenue results are subject to completion of the audited financial statements for 2012.
