For first-quarter 2012,GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren,NJ,USA has reported revenue of$28.4m,down a greater-than-seasonal 22%on$36.5m last quarter and down 35%on$43.5m a year ago.The sequential decline is due almost entirely to lower Wireless revenue from the firm's former largest customer Research in Motion(RIM),which contributed just under 10%of revenue in Q1/2012 compared with$16.6m(38%of revenue)a year ago.
Fiscal Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 Quarterly Revenue$43.5m$35.6m$37.3m$36.5m$28.4m
Down 42%on$36.2m a year ago,Wireless revenue of$21m was down 29.8%on$29.9m last quarter,reverting to 75%of total revenue(compared with 82%last quarter),due to seasonality plus the tailing off of business with RIM."Our legacy products are slowing down faster than anticipated,"notes president&CEO Ron Michels.
Broadband revenue was a higher-than-expected$7.4m(25%of total revenue,up from just 18%last quarter).This was up only slightly on$7.3m a year ago but spiked up 12.3%on$6.6m last quarter,due largely to the easing of supply constraints from Q4/2011 caused by the flooding in Thailand.Of Broadband revenue,$3.2m was in infrastructure,$1.7m set-top box,$1.3m wireless LAN,and$1m in WiMAX.
The three greater-than-10%customers were Samsung,ZTE and Huawei.Five other customers in the 5-10%range included Cisco,LG,RIM and two distributors Richardson and World Peace Group.
The lower revenue resulted in both lower contribution and less absorption of fixed manufacturing costs(with factory utilization of just 45%),leading to a$4.1m sequential decline in non-GAAP gross profit.Gross margin has hence fallen further,from 29.4%a year ago and 16.5%last quarter to just 6.7%.Net loss has risen further,from$5m a year ago and$9.5m last quarter to$14.9m.
Capital expenditure(CapEx)was$1.4m and depreciation expense was$4.3m.During the quarter,cash,cash equivalents and short-and long-term marketable securities fell further,from$93.6m to$84m.
For second-quarter 2012,Anadigics expects a slight sequential drop in revenue,due mainly to a final step down in sales to RIM.
"To proactively manage costs while prioritizing new product development,we recently completed a reduction in workforce and are implementing other cost-improvement actions,"says VP&chief financial officer Terry Gallagher."In combination with the first quarter's restructuring,these actions are expected to improve our annualized cost structure by over$8m when fully absorbed by year end,"he adds.This has helped Anadigics reduce its breakeven quarterly revenue level from$50m to about$45m.
"The majority of these savings are being implemented in areas that improve our operating efficiency while maintaining strong R&D investments in support of growth beginning in the late second half 2012 and into 2013,"comments Michels.
Although down on$13.6m a year ago,R&D expenses rose 11.6%from$10m last quarter to$11.6m,mainly in materials as Anadigics accelerates new product sampling for its MMPA(multi-mode multi-band power amplifier),dual-band power amplifier duplexers(PADs),and high-efficiency single-band PAs.R&D spending should return to more normalized levels in Q2.In Q1 selling,general&administrative(SG&A)expenses were largely flat sequentially.Continued progress in reducing general&administrative expenses enabled a small increase in sales&marketing as Anadigics continues to focus on customers in achieving design wins for future revenues.In Q2,SG&A spending should fall 5-10%,driven by the cost-reduction actions.
During Q1,Anadigics gained wireless design wins and traction at key OEMs.At Samsung,it secured multiple sockets in the Galaxy S3 with the Sprint Network with its latest LTE and CDMA dual-band power amps."These devices employ our ILD[inter-level-dielectric]process technology,providing Samsung exceptional 3G and 4G performance and value,"claims Michels."At Huawei,we have secured wideband CDMA positions on the Honor and the Landfire platforms,and at ZTE with one single-band socket in multiple handsets including the Blade 2,"he adds.
"Our penta-band 3G/4G amplifier developed for Qualcomm's Gobi chipset is winning sockets at several major OEMs including Sierra Wireless for data-card and hotspot applications,"continues Michels."We are also engaged with OEMs on automotive and tablets applications.This 5-band PA offers high performance for 3G and 4G networks and a very compact highly integrated package,"he adds."In the MMPA space,we are seeing wide-ranging success across OEMs in Korea and Japan with our first-generation products."
"We are making substantial progress with recent design wins and increased sampling of our new products,"says Michels."As we continue to build traction with our new product design wins,we remain confident that our strategy positions us for growth in late 2012 and 2013,"he adds.