6 August 2012

Anadigics’ revenue falls 12% in Q2 to $25.1m

For second-quarter 2012, GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren, NJ, USA has reported net sales of $25.1m, down 11.7% on $28.4m last quarter and 29.5% on $35.6m a year ago.

Revenue for Infrastructure (formerly termed Broadband) was $7.1m, down 4% on $7.4m last quarter, after supplying pent-up demand in Q1/2012. Of Infrastructure revenue, about $4.5m came from CATV and the rest from WiFi, WiMax etc.

Wireless revenue was $18m, down 14% on $21m last quarter (falling further from 75% to 72% of total revenue). This was due mainly to an anticipated reduction of $2m with Blackberry-maker Research In Motion (to just over $500,000), as well as smaller declines for China OEMs who saw their market shares drop as Apple and Samsung increasingly dominate smartphone sales.

Anadigics again had three greater-than-10% customers (Samsung, ZTE, and Huawei) and another five customers in the 5-10% range (Cisco, LG, two distributors Richardson and World Peace Group, and Sierra Wireless, which replaced Research In Motion this quarter). Just over a year ago (in Q1/2011) RIM had contributed $16.6m (38% of total revenue).

On a non-GAAP basis, gross margin has fallen further, from +6.7% last quarter to negative 7.7%. Capacity utilization was only about 40%, while additional costs had to be absorbed during the introduction and ramp-up of new technologies, processes, and products.

R&D expenses were cut from $11.6m last quarter to $11.3m, but remain high as Anadigics continues to bring more products to market and accelerate new product introductions. Selling & administrative expenses were cut from $6.8m to $6.3m following staff reductions, as the firm continues to reduce non-critical expenses.

Nevertheless, net loss has risen further, from $9.4m a year ago and $14.9m last quarter to $17.9m. Depreciation expense was $4.2m (roughly level with last quarter), while capital expenditure (CapEx) has halved from $1.4m to $0.7m. During the quarter, cash, cash equivalents and short- and long-term marketable securities fell further, from $84m to $73.1m.

“During the second quarter, Anadigics made tremendous strides in executing to its product strategy, exemplified by the introduction of several new products,” says president & CEO Ron Michels. These included the launch in mid-June of the ProEficient power amplifier family, as well as expanding its family of small-cell wireless infrastructure power amplifiers to support additional bands and power levels (for Band 5 WCDMA and LTE applications). “The commercial success of these new products has been validated by several new design wins and ramping production volumes,” he adds.

“With the successful market introduction of MMPAs [multi-mode multi-band power amplifiers], outstanding design-win activity with ProEficient power amplifiers [for Band 1], continued traction with our penta-band PA, and dual-band design wins in flagship products such as [Samsung’s] Galaxy S3, we believe Anadigics’ wireless mobile device portfolio is positioned for strong growth,” says Michels.

“Revenues have stabilized as new products and wireless ramp and offset the decline in legacy business,” believes VP & chief financial officer Terry Gallagher. “We are pleased with the traction we continue to see in the development of our new products,” he adds.

“We continue to aggressively execute on our market strategy with new product introductions that drive expansion of our served available market,” says Michels. “Specifically, we’re addressing the front-end areas of wireless mobile devices with dual-band power amplifiers and MMPAs, ProEficient power amplifiers [for Bands 2, 4, 5 and 8] as well,” he adds. “We are also utilizing expertise in power amplifier design to take the leadership position in the enterprise small-cell market, which is expected to follow a steep growth trajectory in 2013. Lastly, we are leveraging our differentiated technology and IP to address the WiFi market trend toward higher data rates in mobile devices,” Michels continues.

“Over time, margin headwinds will ease as revenues recover and we complete the transition from legacy to new products,” believes Gallagher. “We remain focused on streamlining our cost structure and, on that front, we recently took additional actions that further reduced annualized expenses by over $1m.”

See related items:

Anadigics’ revenue falls 22% in Q1 to $28.4m

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