Anadigics Has Reported Net Sales of $28.6m,Down 23.1% on $37.3m a Year

For third-quarter 2012, GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren, NJ, USA has reported net sales of $28.6m, down 23.1% on $37.3m a year ago but up 14.1% on $25.1m last quarter.

Revenue for Infrastructure (formerly termed Broadband) was $7.5m (up 5.8% on $7.1m last quarter), driven mainly by growth in CATV infrastructure to $3.8m, plus $1.1m from CATV subscriber, $1m from WiMAX, and $1.3m from WiFi.

Wireless revenue was $21.1m, up 17.3% on $18m last quarter, due largely to greater 3G content per device at the firm’s top customers, fueled by increased dual-band shipments.

There were three greater-than-10% customers (Samsung, ZTE and Huawei) and four customers in the 5-10% range (Cisco and Sierra Wireless – which last quarter replaced Blackberry-maker Research In Motion - plus two distributors Richardson and World Peace Group).

“Revenue from the ramping of new products exceeded declines in legacy products,” says president & CEO Ron Michels. “These results serve as evidence that our growth initiatives are beginning to take hold as we maintain our focus on introducing innovative products and expanding our served available markets,” he adds.

Specifically, Anadigics started generating revenue for two new product ranges: its ProEficient power amplifiers (with single-band products launched in June now shipping in production volumes to OEMs including Samsung and Huawei); and its multi-mode multi-band power amplifier (MMPA) products (shipping in volume to Samsung for the Galaxy Express and Galaxy S Relay 4G smartphones). In addition, dual-band ProEficient Plus products were launched in September (“Working closely with a reference design leader, we are now sampling a key OEM”, says Michels). Regarding MMPAs, design wins for more smartphones are pending. “To build upon this success, we’ve developed our next-generation penta-band MMPA and are starting to sample key customers,” Michels adds.

“We have continued to accelerate new product introductions and at the same time, we are effective in managing R&D expenses to a 3% sequential reduction [down again, from $11.3m last quarter to $10.8m],” says chief financial officer Terry Gallagher. “Selling & administrative expenses fell by about 8% to $5m as we eliminated non-critical expenses through past restructurings and remain tough on costs going forward,” he adds. 

Although still down on the low 50s percent a year ago, capacity utilization has risen from 40% last quarter to 45%. Favorably impacted by the incremental contribution of the increase in revenue and improved absorption of manufacturing costs, non-GAAP gross margin rebounded from negative 7.5% last quarter to just above break-even (though still down on +6.7% in Q1/2012 and 20% in Q3/2011).

Combining the gross profit improvement with lower operating expenses, non-GAAP net loss was cut from $17.9m last quarter to $15.3m. However, this is still nearly double the $7.8m a year ago.
Capital expenditure (CapEx) was cut further, from $0.7m last quarter to just $0.25m (compared with $1.5m a year ago). During the quarter, cash, cash equivalents and short- and long-term marketable securities fell from $73.1m to $62.2m.

“Although there was a reduction in R&D, it was not at the expense of future growth, as new products introduction and investments in R&D remain critical to our growth strategy,” notes Gallagher. Most recently, in October, Anadigics launched a new gallium nitride (GaN) line amplifier MMIC.

 “Looking to the fourth quarter, we expect sequential [double-digit] growth in wireless, with new products continuing to more than offset the decline in legacy business,” says Gallagher. Infrastructure business will probably be flat. Capacity utilization should increase further.

“With a robust product development pipeline, strong design-win activity and outstanding manufacturing prowess, we believe that Anadigics is well positioned for continued revenue growth and gross margin improvement,” concludes Michels.