ANADIGICS, Inc. (ANAD) Q1 2012 Earnings Conference Call May 1, 2012 17:00 ET Executives Terry Gallagher – Chief Financial Officer Ron Michels – President and Chief Executive Officer Analysts Blaine Carroll Dale Pfau Harsh Kumar – Stephens Presentation Operator
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With that said, I will now turn the call over to Ron Michels.Ron Michels – President and Chief Executive Officer Thank you, Terry and good afternoon everyone. Thank you for joining us. Today, we'll review our first quarter 2012 results and discuss key product developments for our target markets in wireless and broadband. Our revenue for Q1 was $28.4 million, representing a 22% sequential decline that is greater than typical seasonality. Wireless revenue was $21 million representing a decline of 29.8% on the combination of seasonality and the tailing off of a business with the former number one customer. In broadband, we saw higher than expected revenue of $7.4 million, representing a quarter-on-quarter increase of 12%. This growth was largely attributable to the loosening of Q4 supply constraints caused by the flooding in Thailand. Overall, we are making significant progress with the development and launch of new products in both wireless and broadband. Not only do our products offer more compelling performance, but many have been developed with our new ILD wafer process, which gives ANADIGICS a much healthier cost structure and provides our customers with fantastic value. I would like to discuss what we are doing operationally as we transition our portfolio from legacy products to new more competitive designs. We have taken proactive steps to reduce expenses by an analyzed $8 million, which better aligns our cost structure with near-term business outlook. 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. I'll begin our discussion on wireless by highlighting our latest design wins and traction at key OEMs during the last quarter. At Samsung, we secured multiple sockets in the Galaxy S3 with the Sprint Network with our latest LTE and CDMA dual-band power amps. These devices employ our ILD process technology providing Samsung exceptional 3G and 4G performance and value. At Huawei, we have secured wideband CDMA positions on the (honor and the LANDFIRE) platforms and at ZTE with one single-band sockets in multiple handsets including the Blade 2.
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. 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. In the MMPA space, we are seeing wide ranging success across OEMs in Korea and Japan with our first generation products.For the customer designs that are furthest along, we are nearing the final steps of qualification in air interface type approval. Assuming type approval acceptance, we will be on track with the planned volume ramp of our MMPA in the second half of this year. As for our dual-band power amps duplexers or PADs, we are supporting OEM design activities in applications such as gaming devices and are on track to ramp late this year. We are really pleased to highlight that we begun sampling our first single-band 3G, 4G PA that utilizes our unique high-efficiency architecture. It delivers the world's best combination of high efficiency at both high power for data traffic and low power for voice traffic. Achieving high-efficiency at all power levels across the complete dynamic range is a compelling differentiator that our customers value. The OEM interest is very strong and we are accelerating the first product into high volume production. We are expanding our high efficiency portfolio with additional single-band and dual-band products, which will sample over the next few months. Let me shift now to our broadband business. The emerging small cell market is a key growth area for 2013 for our broadband business and serves as a point of entry for our wireless infrastructure product portfolio. We are in early stages of ramping our latest small cell amplifiers for production orders and have secured new design wins at key OEMs including Contela, Alcatel-Lucent, and IP Access. We are continuing to expand our portfolio, which now includes PAs for our products for seven bands. In the CATV market, we are anticipating solid long-term growth in spite of today's challenging macroeconomic environment. We continue to innovate in the space and are sampling our latest gallium nitride-based high-performance line amplifiers. In addition to traditional CATV amplifiers, we are supporting the DOCSIS 3 standard with a new CMOS programmable game amplifier that is garnering a positive response in the market. Read the rest of this transcript for free on seekingalpha.com