UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the period ended
June 24, 1995, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the transition period
from _______ to ________
Commission File No. 0-12719
GIGA-TRONICS INCORPORATED
(Exact name of Registrant as specified in its charter)
California 94-2656341
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4650 Norris Canyon Road, San Ramon, CA 94583
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (510) 328-4650
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes / X / No / /
Common stock outstanding as of June 24, 1995: 2,569,920
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PAGE 2
GIGA-TRONICS INCORPORATED
INDEX
PART I - FINANCIAL INFORMATION Page No.
ITEM 1 Financial Statements:
Balance Sheets as of June 24, 1995 (unaudited)
and March 25, 1995............................ 3
Statements of Operations, three months ended
June 24, 1995 and June 25, 1994 (unaudited)... 4
Statements of Cash Flows, three months ended
June 24, 1995 and June 25, 1994 (unaudited)... 5
Notes to Unaudited Financial Statements....... 6
ITEM 2 Management's Discussion and Analysis
of Operations and Financial Condition......... 7
PART II - OTHER INFORMATION
ITEM 1
TO 5 Not Applicable
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Computation of Net Earnings and
Common Share Equivalents........... 8
(27) Financial Data Schedule
(b) Reports on Form 8-K
Not Applicable
SIGNATURES................................................ 9
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PAGE 3
<TABLE>
GIGA-TRONICS INCORPORATED
BALANCE SHEETS
(In thousands, except share data)
ASSETS
<CAPTION>
June 24, March 25,
1995 1995
_________ _________
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 3,458 $ 2,137
Investments 3,659 3,631
Trade accounts receivable 3,016 3,524
Inventories, net 5,887 6,701
Prepaid expenses 581 588
Deferred income taxes 859 868
________ ________
Total current assets 17,460 17,449
Property and Equipment:
Machinery and equipment 6,166 6,095
Office furniture and fixtures 411 411
Leasehold improvements 88 93
________ ________
Gross cost property and equipment 6,665 6,599
Less accumulated depreciation and amortization (4,431) (4,212)
________ ________
Net property and equipment 2,234 2,387
Patents and licenses 2,009 2,150
Other assets 204 239
________ ________
Total assets $ 21,907 $ 22,225
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,108 $ 1,477
Accrued commissions 421 318
Accrued expenses 661 745
Accrued payroll and benefits 618 778
Accrued warranty 432 417
Accrued earnout payable 472 472
Income taxes payable 40 --
________ ________
Total liabilities 3,752 4,207
Shareholders' Equity:
Convertible preferred stock of no par value.
Authorized 1,000,000 shares; no shares
outstanding at June 24, 1995 and March 25, 1995 -- --
Common stock of no par value. Authorized
40,000,000 shares; issued and outstanding
2,569,920 shares at June 24, 1995 and March 25, 1995 7,773 7,773
Unrealized loss on investments (58) (77)
Retained earnings 10,440 10,322
________ ________
Total shareholders' equity 18,155 18,018
________ ________
Total liabilities and shareholders' equity $ 21,907 $ 22,225
======== ========
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
GIGA-TRONICS INCORPORATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
<CAPTION>
Three Months Ended
____________________
June 24, June 25,
1995 1994
________ ________
<S> <C> <C>
Net sales $ 6,261 $ 5,547
Cost of sales 3,976 3,342
_______ _______
Gross profit 2,285 2,205
Product development 660 571
Selling, general and administrative 1,452 1,383
_______ _______
Operating expenses 2,112 1,954
Net operating income 173 251
Other income 72 --
Amortization of intangibles (140) (139)
Interest income, net 52 35
_______ _______
Earnings before income taxes 157 147
Provision for income taxes 39 54
_______ _______
Net earnings $ 118 $ 93
======= =======
Earnings per share of common stock $ 0.05 $ 0.04
======= =======
Weighted average common and common equivalent
shares outstanding 2,620 2,570
======= =======
See accompanying notes to financial statements.
</TABLE>
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PAGE 5
<TABLE>
GIGA-TRONICS INCORPORATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
Three Months Ended
_____________________
June 24, June 25,
1995 1994
________ ________
<S> <C> <C>
Cash flows provided from (used by) operations:
Net earnings as reported $ 118 $ 93
Adjustments to reconcile net earnings to
net cash provided from (used by) operating
activities 1,277 (430)
_______ _______
1,395 (337)
Cash flows used by investing activities:
Investment purchases, net (9) (470)
Additions to property and equipment (65) (202)
_______ _______
Net cash used by investing activities (74) (672)
Increase (decrease) in cash and cash
equivalents 1,321 (1,009)
Beginning cash and cash equivalents 2,137 2,680
_______ _______
Ending cash and cash equivalents $ 3,458 $ 1,671
======= =======
Supplementary disclosure of cash flow information:
(1) No cash was paid for interest in the periods indicated.
(2) Cash paid for income taxes in the three month period
ending June 24, 1995 was $ 0.
(3) Non-cash investing activities:
The Company incurred an unrealized gain of $19,000 on
investments held available for sale.
See accompanying notes to financial statements.
</TABLE>
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PAGE 6
GIGA-TRONICS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
(1) Basis of Presentation
The financial statements included herein have been prepared
by the Company, pursuant to the rules and regulations of the
Securities and Exchange Commission. The results of
operations for the interim periods shown in this report are
not necessarily indicative of results to be expected for the
fiscal year. In the opinion of management, the information
contained herein reflects all adjustments necessary to make
the results of operations for the interim periods a fair
statement of such operations. For further information, refer
to the financial statements and footnotes thereto, included
in the Annual Report on Form 10-K, filed with the Securities
and Exchange Commission for the year ended March 25, 1995.
(2) Inventories (unaudited)
Inventories consist of the following (in thousands):
June 24, 1995 March 25, 1995
_____________ ______________
Raw materials $ 2,313 $ 2,489
Work-in-process 2,777 3,347
Finished goods 797 865
________ _______
$ 5,887 $ 6,701
======== =======
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PAGE 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
THREE MONTHS ENDED JUNE 24, 1995 AND JUNE 25, 1994
Net sales for the three month period ended June 24, 1995
increased 12.9% ($714,000) compared to the same period last year.
The change resulted mostly from an increase in shipments of RF
signal generator products.
Gross profit for the three month period increased by only 3.6%
($80,000) compared to the same period last year due to higher
sales volume being offset by unfavorable product margins.
Operating expenses for the three month period increased 8.1%
($158,000) compared to the same period last year. The increase
was primarily attributable to higher product development expense
and administrative expense.
Other income was comprised primarily of an insurance claim
recovery.
Earnings before income taxes for the three month period increased
6.8% ($10,000) compared to the same period last year. The change
was primarily due to the other income and higher sales volume,
offset by increased operating expenses and unfavorable product
margins. Management is focused on the improvement of gross profit
as a percentage of sales for the balance of fiscal 1996.
For the three month period ended June 24, 1995, the level of new
bookings and the backlog of unfilled orders decreased somewhat
from the unusually high levels at year-end.
FINANCIAL CONDITION
The Company maintains a strong financial position, with working
capital of $13,708,000 and a ratio of current assets to current
liabilities of 4.7 at June 24, 1995. The Company continues to
fund all of its working capital needs from cash flow provided
from operations. Cash provided from operations for the three
month period ended June 24, 1995 was $1,395,000. Management
believes that cash reserves and investments remain adequate to
meet anticipated operating needs.
During the three month period, the Company spent $65,000 on new
manufacturing and test equipment and other capital items. The
Company will continue to invest in capital items that support
growth and new product development, raise productivity and
improve quality. Historically, the Company has satisfied its cash
needs internally for both operating and capital expenses, and
management expects to continue to do so.
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PAGE 8
[See Exhibit 11.]
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PAGE 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GIGA-TRONICS INCORPORATED
(Registrant)
Date: 7/27/95 /s/ George H. Bruns, Jr.
____________________________________
George H. Bruns, Jr.
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: 7/27/95 /s/ Gregory L. Overholtzer
____________________________________
Gregory L. Overholtzer
Vice President, Finance and Chief
Financial Officer
(Principal Accounting Officer)
EXHIBIT 11
PART II, Item 6
COMPUTATION OF NET EARNINGS PER SHARE AND
COMMON SHARE EQUIVALENTS
(Unaudited)
(In thousands, except per share data)
Earnings per share were computed using the weighted average
number of shares outstanding plus, when dilutive, incremental
shares issuable upon exercise of outstanding options under the
treasury stock method.
<TABLE>
<CAPTION>
Three Months Ended
____________________
June 24, June 25,
1995 1994
________ ________
<S> <C> <C>
Weighted average number of
common shares outstanding:
Common stock outstanding 2,570 2,570
Common stock equivalents 50 0
_______ _______
2,620 2,570
======= =======
Net earnings $ 118 $ 93
======= =======
Net earnings per share of
common stock $ 0.05 $ 0.04
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000719274
<NAME> GIGA-TRONICS
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-25-1995
<PERIOD-START> MAR-26-1995
<PERIOD-END> JUN-24-1995
<EXCHANGE-RATE> 1
<CASH> 3,458
<SECURITIES> 3,659
<RECEIVABLES> 3,016
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<INVENTORY> 5,887
<CURRENT-ASSETS> 17,460
<PP&E> 6,665
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<TOTAL-ASSETS> 21,907
<CURRENT-LIABILITIES> 3,752
<BONDS> 0
<COMMON> 7,773
0
0
<OTHER-SE> 10,382
<TOTAL-LIABILITY-AND-EQUITY> 21,907
<SALES> 6,261
<TOTAL-REVENUES> 6,261
<CGS> 3,976
<TOTAL-COSTS> 6,088
<OTHER-EXPENSES> 68
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (52)
<INCOME-PRETAX> 157
<INCOME-TAX> 39
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 118
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0
</TABLE>
