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TheStreet Open House

GigOptix Reports Strong Second Quarter Fiscal 2012 Financial Results

Stocks in this article: GIG

Litigation against M/A-Com (Optomai) Update

GigOptix continues to actively prosecute the lawsuit for misappropriation of confidential information and trade secrets against its former employees Messrs. Manan, Rajgarhia, D’Agostino, Hwan Yoo and Bovaird, the company which was formed in October 2009 while 4 of the 5 were still employed by GigOptix, Optomai, Inc., and the parent of Optomai, M/A-COM Technology Solutions, Inc. As previously reported in the Company’s SEC filings, the Company has been engaged in discovery, which includes forensic work. This has led to the Company filing on Monday, July 30, 2012 with the Superior Court of California in Santa Clara County a motion for a preliminary injunction against M/A-Com, Optomai and two of the former employees who were designers.

Outlook

“During the first half of fiscal 2012, we made good progress toward our stated goal of achieving $40 million of revenue, which reflects growth of approximately 30% for the fiscal year. We are optimistic about the large opportunity in front of us, and our ability to translate this opportunity into long-term shareholder value,” stated Mr. Curt Sacks, Senior Vice President and Chief Financial Officer of GigOptix.

Financial Results Webcast / Conference Call

GigOptix will host a conference call and webcast with investors today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss the second quarter fiscal 2012 financial results and the business outlook. Investors and other interested parties may access the call by dialing 1-800-901-5213 in the U.S. ( 1-617-786-2962 outside of the U.S.) and entering the passcode 60617647 at least 10 minutes prior to the start of the call. The conference call replay will be available beginning two hours after the call and until midnight Eastern Time on August 7, 2012. The replay dial-in number is 1-888-286-8010, and the passcode is 42708757. International callers should dial 1-617-801-6888 and enter the same passcode at the prompt. Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties on the Investor Relations section of the Company's website at http://www.gigoptix.com.

1 Non-GAAP Measures - GigOptix reports gross margin, operating expense, operating income and net loss on a GAAP and non-GAAP basis. In addition, it reports adjusted EBITDA. These non-GAAP measures are provided to enhance investors’ overall understanding of GigOptix financial performance. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to GAAP results. A reconciliation of these GAAP to non-GAAP measurements and adjusted EBITDA for the three and six months ended July 1, 2012 and July 3, 2011 can be found in the “Reconciliation of GAAP to Non-GAAP Financial Information” table attached to this press release.

About GigOptix, Inc.

GigOptix is a leading fabless supplier of semiconductor and optical components that enable high-speed end-to-end information streaming over the network and address emerging high-growth opportunities in the communications, industrial, defense and avionics industries. The Company offers a unique broad portfolio of Drivers, TIAs and TFPSTM optical modulators for 40G, 100G and 400G fiber-optic telecommunications and data-communications networks, and high performance MMIC solutions that enable next generation wireless microwave systems up to 90GHz and drivers. GigOptix also offers a wide range of digital and mixed-signal ASIC solutions and enables product lifetime extension through its GigOptix Sunset Rescue Program.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the bringing of products to market with full documentation. Such statements contain words such as "will," and "expect," or the negative thereof or comparable terminology, and include (without limitation) statements regarding growth, opportunities, continued traction, contracts, improvements and our statements under the heading "Business Outlook." Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks include, but are not limited to: the ability to extend product offerings into new areas or products, the ability to commercialize licensed technology, unexpected occurrences that deter the full documentation and "bring to market" plan for products that were developed this year and last year, trends and fluctuations in the industry, changes in demand and purchasing volume of customers, unpredictability of suppliers, our ability to attract and retain qualified personnel, the ability to move product sales to production levels, the ability to compete for client design-in opportunities, the ability to cross-sell to new clients and to diversify, the success of product sales in new markets or of recently produced product offerings, including bundled product solutions, the amount of cost savings, the ability to improve productivity, the ability to pursue and attract other M&A opportunities, our ability to enforce intellectual property rights, and the ability to maintain and continue relationships with government agencies. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections of the Company's filings with the SEC, and in the Company's other current and periodic reports filed or furnished from time to time with the SEC. All forward-looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

 
GIGOPTIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
               
Three months ended Six months ended
July 1, % July 3, % July 1, % July 3, %
Revenue 2012 2011 2012 2011
Product $ 9,588 100% $ 7,601 100% $ 18,739 100% $ 14,653 96%
Government contract   - 0%   18 0%   - 0%   628 4%
Total revenue   9,588 100%   7,619 100%   18,739 100%   15,281 100%
Cost of revenue
Product 4,537 47% 3,798 50% 8,715 47% 7,449 49%
Government contract   - 0%   - 0%   - 0%   180 1%
Total cost of revenue   4,537 47%   3,798 50%   8,715 47%   7,629 50%
Gross profit   5,051 53%   3,821 50%   10,024 53%   7,652 50%
Research and development expense 3,445 36% 3,074 40% 6,828 36% 5,464 36%
Selling, general and administrative expense 3,152 33% 2,719 36% 5,959 32% 5,342 35%
Restructuring expense, net (114) -1% 3,054 40% 93 0% 3,054 20%
Merger-related expense - 0% 778 10% - 0% 1,885 12%
Special litigation-related expense 212 2% - 0% 353 2% - 0%
Shareholder settlement expense   - 0%   - 0%   - 0%   1,064 7%
Total operating expenses   6,695 70%   9,625 126%   13,233 71%   16,809 110%
Loss from operations (1,644) -17% (5,804) -76% (3,209) -17% (9,157) -60%
Interest expense, net (41) 0% (47) -1% (193) -1% (143) -1%
Other income, net   72 1%   58 1%   57 0%   70 0%
Loss before provision for income taxes (1,613) -17% (5,793) -76% (3,345) -18% (9,230) -60%
Provision for income taxes   (18) 0%   (7) 0%   (34) 0%   (12) 0%
Net loss $ (1,631) -17% $ (5,800) -76% $ (3,379) -18% $ (9,242) -60%
 
Basic and diluted net loss per share $ (0.08) $ (0.42) $ (0.16) $ (0.71)

Weighted average number of shares used in per share calculations - basic and diluted

21,502 13,906 21,528 13,107
 
GIGOPTIX, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                 
Three months ended Six months ended
July 1, % July 3, % July 1, % July 3, %
Revenue 2012 2011 2012 2011
Product $ 9,588 100 % $ 7,601 100 % $ 18,739 100 % $ 14,653 96 %
Government contract   -   0 %   18   0 %   -   0 %   628   4 %
Total revenue   9,588   100 %   7,619   100 %   18,739   100 %   15,281   100 %
Cost of revenue
Product 4,372 46 % 3,678 48 % 8,413 45 % 7,251 47 %
Government contract   -   -     -   0 %   -   0 %   180   1 %
Total cost of revenue   4,372   46 %   3,678   48 %   8,413   45 %   7,431   49 %
Gross profit   5,216   54 %   3,941   52 %   10,326   55 %   7,850   51 %
Research and development expense 2,838 30 % 2,786 37 % 5,926 32 % 4,950 32 %
Selling, general and administrative expense   2,006   21 %   2,087   27 %   4,254   23 %   4,175   27 %
Total operating expenses   4,844   51 %   4,873   64 %   10,180   54 %   9,125   60 %
Income (loss) from operations 372 4 % (932 ) -12 % 146 1 % (1,275 ) -8 %
Interest expense, net (41 ) 0 % (47 ) -1 % (193 ) -1 % (143 ) -1 %
Other income, net   72   1 %   58   1 %   57   0 %   70   0 %
Income (loss) before provision for income taxes 403 4 % (921 ) -12 % 10 0 % (1,348 ) -9 %
Provision for income taxes   (18 ) 0 %   (7 ) 0 %   (34 ) 0 %   (12 ) 0 %
Net income (loss) $ 385   4 % $ (928 ) -12 % $ (24 ) 0 % $ (1,360 ) -9 %
 
Basic net income (loss) per share $ 0.02 $ (0.07 ) $ (0.00 ) $ (0.10 )
Diluted net income (loss) per share $ 0.02 $ (0.07 ) $ (0.00 ) $ (0.10 )
 
Weighted average number of shares used in basic per share calculation 21,502 13,906 21,528 13,107
Weighted average number of shares used in diluted per share calculation 22,779 13,906 21,528 13,107
 
GIGOPTIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
             
July 1, December 31, Net Change
2012 2011 $ %
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 12,922 $ 15,788 $ (2,866 ) (18 %)
Short-term investments - 400 (400 ) (100 %)
Accounts receivable, net 7,719 5,625 2,094 37 %
Inventories 3,591 2,220 1,371 62 %
Prepaid and other current assets   415     298     117   39 %
Total current assets 24,647 24,331 316 1 %
Property and equipment, net 5,412 4,488 924 21 %
Intangible assets, net 4,776 5,281 (505 ) (10 %)
Goodwill 9,860 9,860 - 0 %
Restricted cash 255 255 - 0 %
Other assets   355     309     46   15 %
Total assets $ 45,305   $ 44,524   $ 781   2 %
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,941 $ 3,183 $ 758 24 %
Accrued compensation 1,462 832 630 76 %
Line of credit 5,950 3,000 2,950 98 %
Other current liabilities   4,742     4,945     (203 ) (4 %)
Total current liabilities 16,095 11,960 4,135 35 %
Pension liabilities 130 65 65 100 %
Other long-term liabilities   769     1,185     (416 ) (35 %)
Total liabilities   16,994     13,210     3,784   29 %
 
Stockholders' Equity

Common stock, $0.001 par value; 50,000,000 shares authorized as of July 1, 2012; 21,191,686 and 21,545,713 issued and outstanding as of July 1, 2012 and December 31, 2011, respectively.

Common stock, $0.001 par value 21 22 (1 ) (5 %)
Additional paid-in capital 121,057 118,362 2,695 2 %
Treasury stock, at cost - 701,754 and zero shares as of July 1, 2012 and
December 31, 2011, respectively. (2,209 ) - (2,209 ) -
Accumulated other comprehensive income 314 423 (109 ) (26 %)
Accumulated deficit   (90,872 )   (87,493 )   (3,379 ) 4 %
Total stockholders' equity   28,311     31,314     (3,003 ) (10 %)
Total liabilities and stockholders' equity $ 45,305   $ 44,524   $ 781   2 %
 
GIGOPTIX, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
             
Three months ended, Six months ended,
July 1, July, 3 July 1, July 3,
2012 2011 2012 2011
GAAP Total cost of revenue $ 4,537 $ 3,798 $ 8,715 $ 7,629
Stock-based compensation (43 ) (14 ) (58 ) (27 )
Amortization of intangible assets   (122 )   (106 )   (244 )   (171 )
Non-GAAP Total cost of revenue $ 4,372   $ 3,678   $ 8,413   $ 7,431  
 
GAAP Gross profit $ 5,051 $ 3,821 $ 10,024 $ 7,652
Stock-based compensation 43 14 58 27
Amortization of intangible assets   122     106     244     171  
Non-GAAP Gross profit $ 5,216   $ 3,941   $ 10,326   $ 7,850  
 
 
GAAP - Operating expenses $ 6,695 $ 9,625 $ 13,233 $ 16,809
Stock-based compensation (1,623 ) (823 ) (2,346 ) (1,486 )
Amortization of intangible assets (130 ) (97 ) (261 ) (195 )
Restructuring expense, net 114 (3,054 ) (93 ) (3,054 )
Merger-related expense - (778 ) - (1,885 )
Shareholder settlement expense - - - (1,064 )
Special litigation-related expense   (212 )   -     (353 )   -  
Non-GAAP Operating expenses $ 4,844   $ 4,873   $ 10,180   $ 9,125  
 
GAAP Loss from operations $ (1,644 ) $ (5,804 ) $ (3,209 ) $ (9,157 )
Stock-based compensation 1,666 837 2,404 1,513
Amortization of intangible assets 252 203 505 366
Restructuring expense, net (114 ) 3,054 93 3,054
Shareholder settlement expense - - - 1,064
Merger-related expense - 778 - 1,885
Special litigation-related expense   212     -     353     -  
Non-GAAP Income (loss) from operations $ 372   $ (932 ) $ 146   $ (1,275 )
 
GAAP - Net loss $ (1,631 ) $ (5,800 ) $ (3,379 ) $ (9,242 )
Stock-based compensation 1,666 837 2,404 1,513
Amortization of intangible assets 252 203 505 366
Restructuring expense, net (114 ) 3,054 93 3,054
Shareholder settlement expense - - - 1,064
Merger-related expense - 778 - 1,885
Special litigation-related expense   212     -     353     -  
Non-GAAP Net Income (loss) $ 385   $ (928 ) $ (24 ) $ (1,360 )
 
 
Adjusted EBITDA reconciliation:
Loss from operations $ (1,644 ) $ (5,804 ) $ (3,209 ) $ (9,157 )
Restructuring expense, net (114 ) 3,054 93 3,054
Shareholder settlement expense - - - 1,064
Merger-related expense - 778 - 1,885
Depreciation and amortization 1,060 721 2,054 1,265
Stock-based compensation 1,666 837 2,404 1,513
Special litigation-related expense   212     -     353     -  
Adjusted EBITDA $ 1,180   $ (414 ) $ 1,695   $ (376 )




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