ANADIGICS, Inc. (
Q4 2011 Earnings Call
February 22, 2012, 8:30 a.m. ET
Terry Gallagher – CFO
Ronald Michels – CEO
Quinn Bolton – Needham & Co. LLC
Edward Snyder – Charter Equity Research
Aalok Shah – D. A. Davidson & Co
Paul McWilliams – Next Inning Technology Research
Blaine Carroll – Avian Securities
Previous Statements by ANAD
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Good morning, everyone and welcome to our fourth quarter and full-year 2011 conference call. With me today is Ron Michels, our President and Chief Executive Officer. My name is Terry Gallagher and I’m the CFO.
During the call, we’ll make forward-looking statements about our business and projected financial results. I must remind you that actual results could differ materially from our projections based on various risk factors, including those described in the press release we issued earlier today, and our reports on Forms 10-K, 10-Q, and other filings with the Securities and Exchange Commission. All numbers during the call will be presented on a non-GAAP basis. Non-GAAP financial measures exclude equity compensation charges and other specifically identified non-routine items. These non-GAAP measures are provided to enhance the understanding of our core operating performance. A full reconciliation of these non-GAAP measures to our GAAP results are presented in our press release.
With that said, I will now turn over the call to Ron Michels.
Thank you, Terry, and good morning, everyone. Thank you for joining us. Today I’d like to review our Q4 and full-year results for 2011. I’ll discuss key products and corporate developments related to our two primary markets, and that is, of course, wireless and broadband. And I’ll close with an outline of our key initiatives for 2012.
2011 was a challenging year for ANADIGICS, one in which revenue declined 29.5% year-over-year. Terry will discuss the financial details of these results in a minute, but I would like to focus my comments on progress we’ve made towards reestablishing ANADIGICS as a technology leader, and the continuing steps we’re taking to position the company for future growth.
Despite the challenges we face in our business and the global economy, we finished 2011 reporting fourth quarter revenue of $36.5 million or a 2% sequential decline. Wireless revenue increased 7.3% quarter-over-quarter driven by continued design win success at our top three wireless customers; Samsung, Huawei, and ZTE, offset by a decline in our broadband business.
Although there continues to be uncertainty in the marketplace as we enter 2012, we remain focused on executing from our refined business strategy in the coming year. As a reminder, our strategy relies on three pillars.
One, expand our serviceable available market and new product families, including MMPA, PADs, and new amplifiers for wireless infrastructure.
Two, strengthen relationships with and provide value to reference design partners and OEM customers.
And three, reduce product cost structure to better align with market price expectations, which is a continual process aimed at strengthening our financial fundamentals. I will refer back to these three pillars as I detail the progress in our wireless and broadband target markets.
I’ll begin our discussion on wireless by highlighting some progress with key customers. Last quarter we discussed a number of new smartphone and data card design wins at Samsung, ZTE, Huawei and LG. We started ramping production in support of these design wins, and are poised to help drive 2012 revenue.
In addition, we secured a number of new design wins, including ZTE’s next generation Blade models, and Samsung, Nexus and Galaxy S2 4G.
On the product development front, we recently announced four new wireless products that expand our SAM in new market segments. The first is the ALT6181, our first generation multi-mode, multi-band power amplifier ideal for smartphones and tablets. This is an important addition to our portfolio for two reasons. The complexity of the RF front-ends in smartphones and tablets, many major OEMs are adapting the MMPA, to simplify and save precious board area without compromising non-performance.
And two, the 6181 represents the beachhead for ANADIGICS in this space, it’s the first in our evolving MMPA family of products that not only aligns beach with OEM customers, but also our reference design partners as well. The products includes a quad-band GSM/EDGE amplifier and a dual band 3G/4G amplifier and a single 5 x 7.5 millimeter package. We’re engaged with several Tier 1 OEMs, they are accelerating product development toward production later this year.
The other recently announced products include our compact highly integrated in high performance dual-band power amplifier duplexers, or PADs. We are very excited about these products and the value proposition they provide our OEM customers. Each dual-band PAD is a robust front-end solution that saves over 40% of board space, and reduces [inaudible] complexity. This translates in to faster time to market for our customers.
The customer feedback on the product performance is very good. We’re working closely with fleet customers and are targeting design and opportunities that will lead to production later this year.
We are also applying innovations to our work horse, single and dual-band power amplifiers that targets CDMA, TD-SCDMA, WECDMA, and LTE applications. We have a strong portfolio of dual-band PA products that sold over 160 million units to date. We’re expanding and evolving these products, using a brand new PA architecture that is uniquely optimized for operation with our with or without a DC to DC converter. This allows us to address higher tier phone/tablet applications and use DC-to-DC converters with average power tracking to reduce current and consumption, and extend battery life.