2 August 2010


Anadigics enters profit as sales rise 18.7% in Q2 to $51.7m

For second-quarter 2010, GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren, NJ, USA has reported a fifth consecutive quarter of revenue growth, to $51.7m. Compared to guidance of 12% growth (to $48.7m), this is up a more-than-expected 18.7% on Q1’s $43.5m, and up 64.2% on $31.5m a year ago.

“We are growing faster than all the other competitors, so we're taking market share,” says president & CEO Mario Rivas. “We’re the smallest, but we're growing.”

Growth was driven by wireless sales of $38.3m, up 26% on Q1’s $30.4m (compared to the expected 20% growth) and up 65% on a year ago. Broadband sales were $13.4m, up 2% on Q1’s $13.1m and up 61% on a year ago. In particular, broadband saw sequential growth of 20% (to $6m) for tuner and active splitters business for cable TV set-top boxes and growth of 3% (to $4.7m) for cable TV infrastructure business, offset by revenue drops of $600,000 in WiMAX and of $400,000 in wireless LAN.

With fab utilization moving into the mid-60s, gross margin rose from Q1’s 32.3% to 35.6% (more than the targeted 35%).

Compared to a net loss of $11.3m a year ago and $2.7m in Q1, in Q2 Anadigics moved into profit, with net income of $1.1m on a non-GAAP basis (excluding non-cash stock compensation expense of $2.3m, recoveries in auction rate securities of $0.3m and the sale of a building in Kunshan, China for $1.7m).

Cash flow from operations was up $3.3m on last quarter. So, after capital expenditure of $1.9m, cash, cash equivalents and short- and long-term marketable securities rebounded from $90.4m to $91.8m.

“The results of our second quarter reflect the continued execution of our business initiatives highlighting increasing revenue, operational excellence, expanded market share and achieving profitability [several quarters ahead of prior expectation],” comments Rivas. “Our participation in a fast-growing 3G & 4G wireless market, which will require increasing power amplifier content over time, coupled with our strong product breadth provides for continued opportunities to build our revenue, increase our market share and improve our financial results,” he adds.

In mid-July, Anadigics unveiled a new range of power amplifiers for the booming 3G mobile device market. “The continued expanded high demand of wireless connectivity in a growing number of consumer devices including smart phones, datacards, netbooks, notebooks and tablets provide for substantial opportunities,” says Rivas. “By the end of 2010 the 3G market is expected to be roughly 25% of the handset market, with a forecasted compound annual growth rate upgraded on 30% through 2014,” he adds.

In addition, Anadigics is well positioned to capitalize in the evolution of the 4G LTE (long-term evolution) market, reckons Rivas. The firm sampled LTE products as early as February 2009. “Our highly favored HELP4 LTE power amplifier is specifically tailored to cover UMTS and LTE bands 1, 2, 4, 12 and 13,” he adds. According to ABI Research, there are about 132 networks with trials or plans to launch LTE.

For third-quarter 2010, Anadigics expects sales up 11% sequentially to $57.5m. Gross margin should rise to nearly 37%. “As we continue to scale, we expect to realize additional operational leverage,” says Rivas. The longer-term target is 40%.

See related items:

Anadigics revenue rises 4.1% to $43.5m as loss is cut further

Anadigics’ sales rise 13.9% in Q4/2009

Anadigics upbeat on future wireless markets

Samsung helps Anadigics to revenue gain

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