SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 28, 1998.
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. 0-25662
ANADIGICS, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
22-2582106
(I.R.S. Employer Identification No.)
35 Technology Drive
Warren, New Jersey 07059
(Address of principal executive offices)
(908) 668-5000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 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 [ ]
The number of shares outstanding of the registrant's common stock as of
July 17, 1998 was 14,727,255.<PAGE>
INDEX
ANADIGICS, Inc.
Part. I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets June 28, 1998 and December 31, 1997.
Condensed consolidated statements of operations - Three and six months ended
June 28, 1998 and June 29, 1997.
Condensed consolidated statements of cash flows - Six months ended
June 28, 1998 and June 29, 1997.
Notes to condensed consolidated financial statements June 28, 1998.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Item 4. Submission of Matters to a Vote of Security Holders
Part II. Other Information
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
PART I
FINANCIAL STATEMENTS
Item 1. Financial Statements (unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
ANADIGICS, Inc.
(Amounts in thousands, except share and per share amounts)
June 28, 1998 December 31, 1997 *
Assets
Current assets:
Cash and cash equivalents $ 19,096 $ 25,675
Marketable securities 13,547 15,826
Accounts receivable, net 12,326 17,999
Inventory 20,651 19,678
Prepaid expenses and other current assets 2,653 1,470
Deferred taxes 4,911 4,461
Total current assets 73,184 85,109
Marketable securities 8,624 9,801
Property and equipment:
Equipment and furniture 64,157 58,916
Leasehold improvements 15,372 4,212
Projects in process 31,557 39,540
Less accumulated depreciation and amortization 35,765 30,419
75,321 72,249
Deposits 865 925
Total assets $ 157,994 $ 168,084
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 4,692 $ 11,223
Accrued liabilities 5,068 5,961
Income taxes payable - 2,439
Current maturities of capital lease obligations 307 425
Total current liabilities 10,067 20,048
Deferred taxes 959 959
Capital lease obligations, less current portion 278 389
Other long-term liabilities 685 225
Total liabilities 11,989 21,621
Stockholders' equity
Common stock, $0.01 par value, 68,000,000 shares
authorized, 14,727,255 and 14,657,157, issued
and outstanding at June 28, 1998 and
December 31, 1997, respectively 147 147
Additional paid-in capital 159,650 159,356
Accumulated deficit (13,792) (13,040)
Total stockholders' equity 146,005 146,463
Total liabilities and stockholders' equity $ 157,994 $ 168,084
*The condensed balance sheet at December 31, 1997 has been derived from
the audited financial statements at that date but does not include all
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In addition, certain amounts
as of December 31, 1997 have been reclassified to conform with the June 28,
1998 presentation.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
ANADIGICS, Inc.
(Amounts in thousands, except share and per share amounts)
Three months ended Six months ended
06/28/98 06/29/97 06/28/98 06/29/97
(unaudited) (unaudited)
Net sales $22,675 $ 24,969 $ 41,460 $ 47,829
Cost of sales 14,565 13,159 26,633 25,480
Gross profit 8,110 11,810 14,827 22,349
Research and development expenses 5,108 4,185 9,750 7,624
Selling and administrative expenses 3,060 3,028 6,405 5,774
Reduction in force - - 1,100 -
Operating income (loss) (58) 4,597 (2,428) 8,951
Interest income, net 570 1,003 1,225 1,565
Income (loss) before income taxes 512 5,600 (1,203) 10,516
Provision (benefit) for income taxes 192 1,988 (451) 3,733
Net income (loss) $ 320 $ 3,612 $ (752) $ 6,783
Basic earnings (loss) per share $ 0.02 $ 0.25 $ (0.05) $ 0.49
Weighted average common
shares outstanding 14,718,286 14,493,766 14,711,323 13,950,604
Diluted earnings (loss) per share $ 0.02 $ 0.24 $ (0.05) $ 0.46
Weighted average common and
dilutive securities
outstanding 14,976,998 15,158,874 14,711,323 14,618,166
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
ANADIGICS, Inc.
(Amounts in thousands)
Six months ended
June 28, 1998 June 29, 1997
(unaudited) (unaudited)
Cash flows from operating activities:
Net income (loss) $ (752) $ 6,783
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation 5,342 3,114
Amortization 404 695
Deferred taxes (451)
Changes in operating assets and liabilities:
Accounts receivable 5,673 (3,676)
Inventory (973) (3,660)
Prepaid expenses and other current assets (1,183) (396)
Deposits 60 (200)
Accounts payable (6,531) 2,735
Accrued liabilities and other long-term liabilities (432) 910
Income taxes payable (2,439) 2,374
Net cash (used in) provided by operating activities (1,282) 8,679
Cash flows from investing activities:
Purchase of plant and equipment (8,818) (33,404)
Purchase of marketable securities (14,456) (31,489)
Proceeds from sale of marketable securities 17,912 4,537
Net cash used in investing activities (5,362) (60,356)
Cash flows from financing activities:
Payment of capital lease obligations (229) (833)
Issuance of common stock 294 56,702
Net cash provided by financing activities 65 55,869
Net (decrease) increase in cash and cash equivalents (6,579) 4,192
Cash and cash equivalents at beginning of period 25,675 23,112
Cash and cash equivalents at end of period $ 19,096 $ 27,304
Supplemental cash flow information:
Interest paid $ 36 $ 116
Taxes paid $ 2,774 $ 654
ANADIGICS, Inc.
Notes to Condensed Consolidated Financial Statements (unaudited) June 28, 1998
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited, condensed, consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended June 28, 1998 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1998. For further information, refer to the financial
statements for the year ended December 31, 1997 and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
The condensed, consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, ANADIGICS Foreign Sales
Corporation. All significant intercompany accounts have been eliminated
in consolidation.
2. Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or
market. Inventories consist of the following:
June 28, 1998 Dec. 31, 1997
Raw materials $ 1,635 $ 1,670
Work in process 10,720 12,054
Finished goods 8,296 5,954
$ 20,651 $ 19,678
3. Earnings Per Share
The reconciliation of shares used to calculate basic and diluted earnings
per share consists of the following:
Three months ended Six months ended
06/28/98 06/29/97 06/28/98 06/29/97
Weighted average common shares
outstanding used to calculate
basic earnings per share 14,718,286 14,493,766 14,711,323 13,950,604
Net effect of dilutive stock options
based upon the treasury stock
method using an average market
price 258,712 665,108 - * 667,562
Weighted average common and
dilutive securities outstanding
used to calculate diluted earnings
per share 14,976,998 15,158,874 14,711,323 14,618,166
* - The dilutive stock options are not included as their effect is
anti-dilutive.
4. Reporting Comprehensive Income
As of January 1, 1998, the Company adopted Statement No. 130, Reporting
Comprehensive Income ("FASB 130"). FASB 130 establishes new rules for the
reporting and display of comprehensive income (or loss) and its components
in the financial statements. The adoption of FASB 130 had no effect on the
Company's financial position or results of operations. Statement 130
requires unrealized gains (losses) on the Company's available-for-sale
securities, which currently are reported in stockholders' equity, to be
included in other comprehensive income and the disclosure of total
comprehensive income.
The components of comprehensive income (loss) are as follows:
Three months ended Six months ended
06/28/98 06/29/97 06/28/98 06/29/97
Net income (loss) $ 320 $ 3,612 $ (752) $ 6,783
Unrealized gain (loss) on
marketable securities (7) 51 20 48
Total comprehensive income (loss) $ 313 $ 3,663 $ (732) $ 6,831
5. Disclosures About Segments of an Enterprise and Related Information
In 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures About Segments of an Enterprise and Related Information"
("FASB 131") which is required to be adopted for the Company's year ending
December 31, 1998. FASB 131 establishes standards for reporting information
about operating segments in annual financial statements and requires that
those enterprises report selected information about operating segments in
interim financial reports to shareholders. It also establishes standards
for related disclosures about products and services, geographic areas, and
major customers. The adoption of FASB 131 will have no impact on the
Company's consolidated results of operation, financial position or cash
flows.
ANADIGICS, Inc.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
Results of Operations
The following table sets forth unaudited consolidated statements of
operations data as a percent of net sales for the periods presented:
Consolidated Statement of Operations
Three months ended Six months ended
06/28/98 06/29/97 06/28/98 06/29/97
(unaudited) (unaudited)
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 64.2% 52.7% 64.2% 53.3%
Gross profit 35.8% 47.3% 35.8% 46.7%
Research and development expenses 22.5% 16.8% 23.5% 15.9%
Selling and administrative expenses 13.5% 12.1% 15.5% 12.1%
Reduction in force - - 2.7% -
Operating income (loss) (0.2%) 18.4% (5.9%) 18.7%
Interest income, net 2.5% 4.0% 3.0% 3.3%
Income (loss) before income taxes 2.3% 22.4% (2.9%) 22.0%
Provision (benefit) for income taxes 0.9% 7.9% (1.1%) 7.8%
Net income (loss) 1.4% 14.5% (1.8%) 14.2%
Second Quarter 1998 (Ended June 28, 1998) Compared to Second Quarter 1997
(Ended June 29, 1997)
Net Sales. Net sales during the second quarter of 1998 decreased 9% to $22.7
million from $25.0 million in the second quarter of 1997. Sales of
integrated circuits for cellular and personal communication services
("PCS") applications decreased 42% during the second quarter of 1998 to
$7.5 million from $12.9 million in the second quarter of 1997. As previously
disclosed, the Company experienced significantly lower demand for its
cellular and PCS products during the first quarter of 1998. This lower
demand continued into the second quarter of 1998 and continued to be due
to several factors, including increased competition, a shift in demand to
lower cost phones not using the Company's parts, customer delays in ramp-up
of new generation dual-band phones using the Company's new parts, and in
part, to the effect of the Asian financial crisis on the wireless
communications markets. Sequentially, sales of integrated circuits for
cellular and PCS applications decreased 12% during the second quarter of
1998 to $7.5 million from $9.0 million in the first quarter of 1998. The
first quarter of 1998 included $2.3 million of sales of products which
reached the end of their lives during the first quarter.
Sales of integrated circuits for cable television ("CATV") applications
increased 37% during the second quarter of 1998 to $8.2 million from $5.9
million in the second quarter of 1997. The increase in sales during the
second quarter of 1998 was due to increases in demand for the Company's
integrated circuit chip set used in analog and digital set-top converters
and cable modems, and the Company's integrated circuit line amplifier used
as a repeater in hybrid fiber coaxial distribution networks. Sales of
integrated circuits for fiber optic telecommunications and data
communication ("fiber optic") applications increased 52% during the
second quarter of 1998 to $4.8 million from $3.2 million in the second
quarter of 1997. The increase was primarily due to an increase in demand
for transimpedence amplifiers for Synchronous Optical Network (SONET) fiber
optic telecommunications applications and sales of a new family of
integrated circuits for data communication applications.
Sales of integrated circuits for direct broadcast satellite ("DBS")
applications decreased 28% during the second quarter of 1998 to $1.9 million
from $2.7 million in the second quarter of 1997. The reduction in sales
of integrated circuits for DBS applications was primarily due to a reduction
in average selling prices of low noise block ("LNB") converter integrated
circuits during the second quarter of 1998, compared to the second quarter
of 1997. Engineering service sales, which reflect customers' contributions
to research and development, was $0.3 million during the second quarter of
1998 and 1997.
Generally, selling prices for same product sales were lower in the second
quarter of 1998 compared to the same period in 1997.
Gross Margin. Gross margin during the second quarter of 1998 declined to
35.8% from 47.3% in the second quarter of 1997. The reduction in gross
margin was primarily due to lower factory utilization during the second
quarter of 1998 as inventories were reduced, and higher fixed costs. The
higher fixed costs were associated with the Company's new test and
manufacturing administration facilities that were placed into service
during the second quarter of 1998.
The Company believes that lower factory utilization, costs associated with
new product introductions, and shorter product life cycles will continue
to adversely impact its gross margin through the third quarter of 1998
and any possible improvement from the second quarter 1998 gross margin
level of 35.8% may not be achieved until subsequent to the third quarter
of 1998.
Research and Development. Company sponsored research and development
expenses increased 22% during the second quarter of 1998 to $5.1 million
from $4.2 million during the second quarter of 1997. As a percentage of
sales, it also increased to 22.5% in the second quarter of 1998 from 16.8%
in the second quarter of 1997. The increase was primarily attributable to
increased research and development of integrated circuits for fiber optic,
cellular and PCS, and CATV applications.
Selling and Administrative. Selling and administrative expenses increased
1% during the second quarter of 1998 to $3.1 million from $3.0 million in
the second quarter of 1997. As a percentage of sales, selling and
administrative expenses increased to 13.5% in the second quarter of 1998
from 12.1% in the second quarter of 1997.
Interest Income, net. Interest income, net decreased 43% to $0.6 million
during the second quarter of 1998 from $1.0 million during the second
quarter of 1997. The reduction in interest income, net of $0.4 million
was primarily due to a lower amount of interest income earning investments
during the second quarter of 1998 (caused by plant and equipment purchases
that were primarily for the Company's new wafer fabrication facility),
compared to the second quarter of 1997.
Provision for Income Taxes. The provision for income taxes during the
second quarter of 1998 was recorded at an estimated annual effective tax
rate of 37.5% of income before income taxes.
Six Months 1998 (Ended June 28, 1998) Compared to Six Months 1997
(Ended June 29, 1997)
Net Sales. Net sales during the six month period ended June 28, 1998
decreased 13% to $41.5 million from $47.8 million in the six month period
ended June 29, 1997. Sales of ICs for cellular and PCS applications
decreased 34% during the six month period ended June 28, 1998 to $16.5
million from $24.9 million during the six month period ended June 29, 1997.
The lower demand was due to several factors, including increased
competition, a shift in demand to lower cost phones not using the Company's
parts, customer delays in ramp-up of new generation dual-band phones using
the Company's new parts, and in part, to the effect of the Asian financial
crisis on the wireless communications markets. Net sales of ICs for cable
television applications for the six month period ended June 28, 1998
increased 21% to $12.8 million from $10.6 million in the six month period
ended June 29, 1997 as demand for wide-band CATV tuner and infrastructure
ICs increased.
Sales of ICs for fiber optic telecommunication and data communication
applications increased 43% during the six month period ended June 28, 1998
to $8.2 million from $5.7 million in the six month period ended June 29,
1997. The increase was primarily due to an increase in demand for
transimpedence amplifiers for Synchronous Optical Network (SONET) fiber
optic telecommunications applications and sales of a new family of
integrated circuits for data communication applications. Sales of ICs for
direct broadcast satellite applications decreased 37% during the six month
period ended June 28, 1998 to $3.6 million from $5.7 million in the six
month period ended June 29, 1997 as selling prices and demand decreased.
Engineering service sales, which reflect customers' contributions to
research and development, decreased $0.5 million during the six month period
ended June 28, 1998 to $0.4 million from $0.9 million in the six month
period ended June 29, 1997.
Generally, selling prices for same product sales were lower in the first
half of 1998 compared to the same period in 1997.
Gross Margin. Gross margin during the six month period ended June 28, 1998
declined to 35.8% from 46.7% in the six month period ended June 29, 1997.
The reduction in gross margin was primarily due to lower factory utilization
during the first six months of 1998 as inventories were reduced, a $1.0
million charge related to excess inventories of the Company's power
amplifier integrated circuits, and higher fixed costs associated with
the Company's new test and manufacturing administration facilities, which
were placed into service during the second quarter of 1998.
Research and Development. Company sponsored research and development
expenses increased 28% during the six month period ended June 28, 1998 to
$9.8 million from $7.6 million in the six month period ended June 29, 1997.
The increase was primarily attributable to increased research and
development of integrated circuits for fiber optic, cellular and PCS, and
CATV applications. As a percent of sales, company funded research
and development increased to 23.5% in the six month period ended June 28,
1998 from 15.9% in the six month period ended June 29, 1997.
Selling and Administrative. Selling and administrative expenses increased
11% during the six month period ended June 28, 1998 to $6.4 million from
$5.8 million in the six month period ended June 29, 1997. The increase was
due in part to increases in operating costs associated with the Company's
information systems and other consulting costs. As a percentage of sales,
selling and administrative expenses increased to 15.5% in the six month
period ended June 28, 1998 from 12.1% in the six month period ended June 29,
1997.
Reduction in Force. During the first quarter of 1998, the Company recorded
a charge of $1.1 million associated with a reduction in staff of 100
employees. The employees who were involuntarily terminated were notified,
received information regarding their benefit arrangement, and employment
was severed on March 2, 1998. The terminated employees represented all
areas of the Company, including production, research and development, and
selling and administrative areas.
The work force reduction charge primarily consisted of severance pay,
extended medical coverage, and outplacement service costs. Approximately
$0.8 million of severance pay, extended medical coverage, and outplacement
service costs were paid through June 28, 1998, resulting in a remaining
liability of approximately $0.3 million as of June 29, 1998. The remaining
liability of $0.3 million, which represents extended medical coverage for
the terminated employees, is expected to be paid during the third quarter
of 1998.
Interest Income, net. Interest income, net decreased 22% during the six
month period ended June 28, 1998 to $1.2 million from $1.6 million during
the six month period ended June 29, 1997. The reduction in interest income,
net of $0.4 million was primarily due to a lower amount of investments
during the first half of 1998 (caused by plant and equipment purchases
that were primarily for the Company's new wafer fabrication facility),
compared to the first half of 1997.
Benefit for Income Taxes. The benefit for income taxes during the six
month period ended June 28, 1998 was recorded at an estimated annual
effective tax rate of 37.5% of the loss before income taxes.
Liquidity and Capital Resources
As of June 28, 1998, the Company had $19.1 million in cash and cash
equivalents and $22.2 million in marketable securities. The Company also
has a $20 million revolving bank credit facility with a drawdown
expiration of July 1, 1999. The availability under the revolving credit
facility is subject to a number of financial covenants. Substantially all
of the assets of the Company are pledged as security for repayments of
amounts borrowed under this facility. There were no borrowings outstanding
under this credit facility during the three month period ended June 28, 1998.
Net cash used in operating activities was $1.3 million during the six
month period ended June 28, 1998. Cash used in operating activities
primarily resulted from a reduction in accounts and income taxes payable,
partially offset by a reduction in accounts receivable during the six month
period ended June 28, 1998. Net cash provided by operating activities was
$3.2 million during the three month period ended June 28, 1998. Cash
provided by operating activities resulted from reductions in accounts
receivable and inventory, partially offset by reductions in liabilities
during the three month period ended June 28, 1998.
Net cash used in investing activities was $5.4 million during the six
month period ended June 28, 1998. Purchases of plant and equipment of $8.8
million were partially offset by net sales of marketable securities of
$3.4 million during the first half of 1998.
Net cash provided by financing activities was $0.1 million during the six
months ended June 28, 1998, which consisted primarily of cash payments
received upon the issuance of common stock of the Company.
The Company expects to spend approximately $25 million on equipment,
furniture and fixtures, and leasehold improvements during the twelve month
period ending June 28, 1999. At June 28, 1998 the Company has committed to
purchase approximately $10 million of equipment, furniture and fixtures,
and leasehold improvements during 1998. The Company plans to continue
activities associated with qualifying its new wafer fabrication facility
during 1998 and anticipates commencing production in the second half of 1999.
The Company believes that its sources of capital, including internally
generated funds and $20 million available under existing credit
arrangements, will be adequate to satisfy anticipated capital needs for
the next twelve months. However, the Company may nevertheless elect to
finance all or part of its future capital requirements through additional
equity or debt financing. There can be no assurance that such additional
financing would be available on satisfactory terms.
Impact of Year 2000
As previously disclosed, the Company has determined that it will need to
modify or replace significant portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
beyond. The Company presently believes that with modifications to existing
software and conversions to new software, the Year 2000 issue will not pose
significant operational problems for its computer systems. However,
if such modifications and conversions are not made, or are not completed
timely, the Year 2000 issue could have a material impact on the operations
of the Company. The Company has initiated formal communications with
all of its significant suppliers, large customers and financial institutions
to ensure that those parties have appropriate plans to remediate Year 2000
issues where their systems interface with the Company's systems or
otherwise impact its operations. The Company is assessing the extent to
which its operations are vulnerable should those organizations fail to
properly remediate their computer systems.
The Company's comprehensive Year 2000 initiative is being managed by a
team of internal staff and outside consultants. The team's activities are
designed to ensure that there is no adverse effect on the Company's core
business operations and that transactions with customers, suppliers, and
financial institutions are fully supported. The Company is well under
way with these efforts, which are scheduled to be completed in early 1999.
The total cost of the Year 2000 project is estimated at $1 million and is
being funded through operating cash flows. Of the total project cost,
approximately one-half is attributable to the purchase of new software
which will be capitalized. The remaining one-half will be expensed when
incurred. While the Company believes its planning efforts are adequate to
address its Year 2000 concerns, there can be no guarantee that the systems
of other companies on which the Company's systems and operations rely
will be converted on a timely basis and will not have a material
effect on the Company. The Company has determined it has no exposure to
contingencies related to the Year 2000 issue for the products it has sold.
Risks and Uncertainties
Except for historical information contained herein, this Management's
Discussion and Analysis of Financial Condition and Results of Operation
contains forward-looking statements that involve risks and uncertainties,
including, but not limited to, timely product and process development,
order rescheduling or cancellation, individual product pricing pressure,
variation in production yield, changes in estimated product lives,
difficulties in obtaining components and assembly services needed for
production of integrated circuits, change in economic conditions of the
various markets the Company serves, as well as the other risks detailed
from time to time in the Company's reports filed with the Securities and
Exchange Commission, including the report on Form 10-K for the year
ended December 31, 1997. These forward-looking statements can generally
be identified as such because the context of the statement will include
words such as the Company "believes", "anticipates", "expects", or words
of similar import. Similarly, statements that describe the Company's future
plans, objectives, estimates or goals are forward-looking statements. The
cautionary statements made in this Form 10-Q should be read as being
applicable to all related forward-looking statements wherever they appear
in this Form 10-Q. Important factors that could cause actual results and
developments to be materially different from those expressed or implied
by such statements include those factors discussed herein.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders on May 28, 1998 at
which the Company's stockholders voted on the ratification of Ernst & Young
LLP as independent auditors of ANADIGICS, Inc. for the fiscal year ending
December 31, 1998. The ratification of the appointment of Ernst & Young
LLP as independent auditors was approved by holders of 12,814,097 shares
of the Company's outstanding capital stock. Holders of 44,730 shares voted
against the ratification, holders of 33,610 shares abstained from voting
on such ratification, and 159,944 broker non-votes were received.
ANADIGICS, Inc.
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
On January 29, 1998, the Company announced its results for the quarter and
year ended December 31, 1997 and also announced that it was experiencing
a substantial reduction in orders and forecasts for orders from its
wireless customers, which will result in significantly lower sales in the
first quarter and could result in a net loss for the period. On the day
following the announcement, the price of the Company's common stock declined
from a closing price of $33 13/16 on January 29, 1998 to a closing price of
$14 1/8 on January 30, 1998.
On March 2, 1998, two proposed class action lawsuits, captioned (i) Jean
Assuncao v. Anadigics, Inc. Ronald Rosenzweig, George Gilbert and Harry
Rein, No. 98-917, and (ii) Office and Professional Employees International
Union Local 153 Pension Fund v. Anadigics, Inc., Ronald Rosenzweig, George
Gilbert and Harry Rein, No. 98-919, were filed in the United States District
Court for the District of New Jersey. On March 3, 1998, a third proposed
class action lawsuit, captioned Beatrice Kotler v. Anadigics, Inc., Ronald
Rosenzweig, John F. Lyons and George Gilbert, No. 98-923, was also filed
in the United States District Court for the District of New Jersey. Four
additional proposed class action lawsuits, captioned Gray v. Anadigics,
Inc., Ronald Rosenzweig, John F. Lyons and George Gilbert, No. 98-1337,
Shashi L. Mirpuri v. Anadigics, Inc., Ronald Rosenzweig, John F. Lyons and
George Gilbert, No. 98-1811, Betty Grayson and Robert Grayson v. Ronald
Rosenzweig, George Gilbert, Charles Huang, John F. Lyons, Javed Patel,
Sheo Khetan, Robert Bayruns, Harry T. Rein and Anadigics, Inc., No. 98-1688,
and James Morgante v. Anadigics, Inc., Ronald Rosenzweig, John F. Lyons and
George Gilbert, No. 98-2024, were filed in the United States District Court
for the District of New Jersey on March 16, April 6, April 17, and April 27,
1998, respectively. The Grayson action was assigned to the Honorable
Maryanne Trump Barry, and the other six actions were assigned to the
Honorable Mary L. Cooper (The Assuncao, Union Local 153, Kotler, Gray,
Mirpuri, Grayson, and Morgante actions are collectively referred to
hereafter as the "Lawsuits"). The Complaints filed in the Lawsuits seek
unspecified damages in connection with alleged violations of Sections 10(b)
(and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities and
Exchange Act of 1934 and, as set forth in the Union Local 153, Kotler, Gray,
and Mirpuri Complaints, common law fraud and negligent misrepresentation.
The Complaints allege that, as a result of certain material misstatements
and omissions made by the Company in connection with its business, the price
of the Company's common stock was artificially inflated during the proposed
class periods. The longest proposed Class Period alleged by the plaintiffs
in the Lawsuits is the period from July 17, 1997 through January 30, 1998.
Although the Company is unable at this time to assess the probable outcome
of the Lawsuits or the materiality of the risk of loss in connection
therewith (given that none of the Complaints alleges damages with any
particularity and the fact that certain procedural issues, including the
prospective consolidation of the Lawsuits and the appointment of Lead
Plaintiff and Lead Plaintiff's Counsel, have not yet been resolved), the
Company believes that it has acted responsibly and intends to vigorously
defend the Lawsuits.
The Company is also involved in other threatened and pending legal
proceedings arising in the course of the Company's business. The adverse
outcome of any of these other legal proceedings is not expected to have a
material adverse effect on the results of operation or financial condition
of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are included herein:
Exhibit 27. - Financial Data Schedule
(b) Reports on Form 8-K during the quarter ended June 28, 1998.
The Company did not file any reports on Form 8-K during the quarter
ended June 28, 1998.
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.
ANADIGICS, INC.
By: /s/ John F. Lyons
John F. Lyons
Senior Vice President and Chief Financial Officer
Dated: July 30, 1998
ANADIGICS, Inc.
EXHIBIT INDEX
Page
Exhibit 27. Financial Data Schedule .................... . . . . . . 18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FOR THE THREE
MONTHS ENDED JUNE 28, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-28-1998
<CASH> 19,096,000
<SECURITIES> 22,171,000
<RECEIVABLES> 12,326,000
<ALLOWANCES> 0
<INVENTORY> 20,651,000
<CURRENT-ASSETS> 73,184,000
<PP&E> 111,086,000
<DEPRECIATION> 35,765,000
<TOTAL-ASSETS> 157,994,000
<CURRENT-LIABILITIES> 10,067,000
<BONDS> 0
0
0
<COMMON> 147,000
<OTHER-SE> 145,858,000
<TOTAL-LIABILITY-AND-EQUITY> 157,994,000
<SALES> 22,675,000
<TOTAL-REVENUES> 22,675,000
<CGS> 14,565,000
<TOTAL-COSTS> 14,565,000
<OTHER-EXPENSES> 8,168,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 570,000
<INCOME-PRETAX> 512,000
<INCOME-TAX> 192,000
<INCOME-CONTINUING> 320,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 320,000
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONDENSED BALANCE SHEET AS OF JUNE 30, 1996 AND THE CONDENSED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 15646000
<SECURITIES> 14566000
<RECEIVABLES> 9012000
<ALLOWANCES> 0
<INVENTORY> 10425000
<CURRENT-ASSETS> 51790000
<PP&E> 40562000
<DEPRECIATION> 18806000
<TOTAL-ASSETS> 75080000
<CURRENT-LIABILITIES> 12539000
<BONDS> 0
0
0
<COMMON> 83000
<OTHER-SE> 61372000
<TOTAL-LIABILITY-AND-EQUITY> 75080000
<SALES> 15862000
<TOTAL-REVENUES> 15862000
<CGS> 8254000
<TOTAL-COSTS> 8254000
<OTHER-EXPENSES> 5347000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (321000)
<INCOME-PRETAX> 2582000
<INCOME-TAX> 516000
<INCOME-CONTINUING> 2066000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2066000
<EPS-PRIMARY> .17
<EPS-DILUTED> .16
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEET AS OF SEPTEMBER 29, 1996 AND THE CONDENSED STATEMENT OF
INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 29, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-29-1996
<CASH> 19401000
<SECURITIES> 11418000
<RECEIVABLES> 9479000
<ALLOWANCES> 0
<INVENTORY> 8352000
<CURRENT-ASSETS> 50157000
<PP&E> 43222000
<DEPRECIATION> 20234000
<TOTAL-ASSETS> 74678000
<CURRENT-LIABILITIES> 10865000
<BONDS> 0
0
0
<COMMON> 83000
<OTHER-SE> 62900000
<TOTAL-LIABILITY-AND-EQUITY> 74678000
<SALES> 17005000
<TOTAL-REVENUES> 17005000
<CGS> 11136000
<TOTAL-COSTS> 11136000
<OTHER-EXPENSES> 4375000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (348000)
<INCOME-PRETAX> 1842000
<INCOME-TAX> 369000
<INCOME-CONTINUING> 1473000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1473000
<EPS-PRIMARY> .12
<EPS-DILUTED> .11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FOR THE TWELVE
MONTHS ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 23,112,000
<SECURITIES> 9,008,000
<RECEIVABLES> 10,696,000
<ALLOWANCES> 0
<INVENTORY> 8,901,000
<CURRENT-ASSETS> 53,637,000
<PP&E> 50,563,000
<DEPRECIATION> 21,830,000
<TOTAL-ASSETS> 86,996,000
<CURRENT-LIABILITIES> 15,812,000
<BONDS> 0
0
0
<COMMON> 126,000
<OTHER-SE> 70,431,000
<TOTAL-LIABILITY-AND-EQUITY> 86,996,000
<SALES> 68,864,000
<TOTAL-REVENUES> 68,864,000
<CGS> 38,887,000
<TOTAL-COSTS> 38,887,000
<OTHER-EXPENSES> 20,242,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,368,000)
<INCOME-PRETAX> 11,103,000
<INCOME-TAX> (888,000)
<INCOME-CONTINUING> 11,991,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,991,000
<EPS-PRIMARY> .97
<EPS-DILUTED> .93
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 30, 1997 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 30, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-30-1997
<CASH> 63,441,000
<SECURITIES> 12,039,000
<RECEIVABLES> 12,378,000
<ALLOWANCES> 0
<INVENTORY> 9,687,000
<CURRENT-ASSETS> 99,625,000
<PP&E> 72,984,000
<DEPRECIATION> 23,583,000
<TOTAL-ASSETS> 153,852,000
<CURRENT-LIABILITIES> 23,355,000
<BONDS> 0
0
0
<COMMON> 145,000
<OTHER-SE> 129,812,000
<TOTAL-LIABILITY-AND-EQUITY> 153,852,000
<SALES> 22,860,000
<TOTAL-REVENUES> 22,860,000
<CGS> 12,321,000
<TOTAL-COSTS> 12,321,000
<OTHER-EXPENSES> 6,185,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (561,000)
<INCOME-PRETAX> 4,915,000
<INCOME-TAX> 1,745,000
<INCOME-CONTINUING> 3,170,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,170,000
<EPS-PRIMARY> .24
<EPS-DILUTED> .23
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 29, 1997 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED JUNE 29, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-29-1996
<CASH> 27,304,000
<SECURITIES> 35,960,000
<RECEIVABLES> 14,372,000
<ALLOWANCES> 0
<INVENTORY> 12,561,000
<CURRENT-ASSETS> 54,451,000
<PP&E> 83,926,000
<DEPRECIATION> 25,598,000
<TOTAL-ASSETS> 155,667,000
<CURRENT-LIABILITIES> 21,162,000
<BONDS> 0
0
0
<COMMON> 145,000
<OTHER-SE> 133,897,000
<TOTAL-LIABILITY-AND-EQUITY> 155,667,000
<SALES> 24,969,000
<TOTAL-REVENUES> 24,969,000
<CGS> 13,159,000
<TOTAL-COSTS> 13,159,000
<OTHER-EXPENSES> 7,213,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,003,000)
<INCOME-PRETAX> 5,600,000
<INCOME-TAX> 1,988,000
<INCOME-CONTINUING> 3,612,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,612,000
<EPS-PRIMARY> .25
<EPS-DILUTED> .24
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 28, 1997 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 28, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-28-1997
<CASH> 25,526,000
<SECURITIES> 27,844,000
<RECEIVABLES> 18,889,000
<ALLOWANCES> 0
<INVENTORY> 16,812,000
<CURRENT-ASSETS> 73,045,000
<PP&E> 91,995,000
<DEPRECIATION> 27,590,000
<TOTAL-ASSETS> 160,779,000
<CURRENT-LIABILITIES> 20,500,000
<BONDS> 0
0
0
<COMMON> 146,000
<OTHER-SE> 139,683,000
<TOTAL-LIABILITY-AND-EQUITY> 160,779,000
<SALES> 26,727,000
<TOTAL-REVENUES> 26,727,000
<CGS> 13,688,000
<TOTAL-COSTS> 13,688,000
<OTHER-EXPENSES> 7,601,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (833,000)
<INCOME-PRETAX> 6,271,000
<INCOME-TAX> 2,310,000
<INCOME-CONTINUING> 3,961,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,961,000
<EPS-PRIMARY> .28
<EPS-DILUTED> .26
</TABLE>
