<PAGE>
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 APRIL 4,
1999.
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 22-2582106
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
G
35 Technology Drive
Warren, New Jersey 07059
------------------ ------
(Address of principal executive offices) (Zip Code)
(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 APRIL
23, 1999 WAS 14,807,877.
<PAGE>
INDEX
ANADIGICS, Inc.
Part. I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets - April 4,
1999 and December 31, 1998.
Condensed consolidated statements of operations
and comprehensive income (loss) - Three months
ended April 4, 1999 and March 29, 1998.
Condensed consolidated statements of cash flows -
Three months ended April 4, 1999 and March 29,
1998.
Notes to condensed consolidated financial
statements - April 4, 1999.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Part II. Other Information
Item 1. Legal Proceedings
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS
ANADIGICS, INC.
(Amounts in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
APRIL 4, 1999 DECEMBER 31, 1998
------------- -----------------
(unaudited) (Note 1)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22,608 $ 23,987
Marketable securities 15,553 16,923
Accounts receivable, net 16,554 11,848
Inventories 8,622 8,729
Prepaid expenses and other current assets 3,448 2,531
Deferred taxes 4,513 4,345
--------- ---------
Total current assets 71,298 68,363
Marketable securities 1,596 1,486
Property and equipment:
Equipment and furniture 72,371 71,625
Leasehold improvements 15,820 15,717
Projects in process 37,360 34,286
Less accumulated depreciation and amortization 50,070 44,199
--------- ---------
75,481 77,429
Deposits 858 865
Deferred taxes 5,955 5,955
--------- ---------
Total assets $ 155,188 $ 154,098
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,044 $ 6,138
Accrued liabilities 4,061 2,306
Current maturities of capital lease obligations 175 229
Accrued restructuring costs 1,457 1,567
Current maturities of long-term debt 1,000 1,000
--------- ---------
Total current liabilities 12,737 11,240
Capital lease obligations, less current portion 166 183
Other long-term liabilities 1,026 868
Long-term debt, less current portion 3,750 4,000
--------- ---------
Total liabilities 17,679 16,291
Stockholders' equity
Common stock, $0.01 par value, 68,000,000 shares
authorized, 14,804,375 and 14,738,356, issued
and outstanding at April 4, 1999 and
December 31, 1998, respectively 148 147
Additional paid-in capital 160,410 160,215
Accumulated deficit (23,086) (22,598)
Accumulated other comprehensive income 37 43
--------- ---------
Total stockholders' equity 137,509 137,807
--------- ---------
Total liabilities and stockholders' equity $ 155,188 $ 154,098
========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
ANADIGICS, INC.
(Amounts in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Net sales $ 25,048 $ 18,785
Cost of sales 16,900 12,068
------------ ------------
Gross profit 8,148 6,717
Research and development expenses 5,581 4,642
Selling and administrative expenses 3,859 3,345
Reduction in work force -- 1,100
------------ ------------
Operating loss (1,292) (2,370)
Interest income, net 517 656
------------ ------------
Loss before income taxes (775) (1,714)
Benefit for income taxes (287) (643)
------------ ------------
Net loss $ (488) $ (1,071)
============ ============
Basic loss per share $ (0.03) $ (0.07)
============ ============
Weighted average common
shares outstanding 14,798,670 14,704,705
============ ============
Diluted loss per share $ (0.03) $ (0.07)
============ ============
Weighted average common and
dilutive securities outstanding 14,798,670 14,704,705
============ ============
</TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
ANADIGICS, INC.
(Amounts in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Net loss $ (488) $(1,071)
Unrealized loss on marketable securities (6) 23
------- -------
Total comprehensive loss $ (494) $(1,048)
======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
ANADIGICS, INC.
(Amounts in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (488) $ (1,071)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation 5,765 2,560
Amortization 106 208
Deferred taxes (168) (384)
Changes in operating assets and liabilities:
Accounts receivable (4,706) 4,344
Inventory 107 (3,248)
Prepaid expenses and other current assets (917) (749)
Deposits 7 --
Accounts payable (94) (4,678)
Accrued liabilities and other long-term liabilities 1,803 128
Income taxes payable -- (1,607)
-------- --------
Net cash provided by (used in) operating activities 1,415 (4,497)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment (3,923) (6,069)
Purchase of marketable securities (7,126) (6,030)
Proceeds from sale of marketable securities 8,386 8,496
-------- --------
Net cash used in investing activities (2,663) (3,603)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (250) --
Payment of capital lease obligations (71) (92)
Issuance of common stock 190 13
-------- --------
Net cash used in financing activities (131) (79)
-------- --------
Net decrease in cash and cash equivalents (1,379) (8,179)
Cash and cash equivalents at beginning of period 23,987 25,675
-------- --------
Cash and cash equivalents at end of period $ 22,608 $ 17,496
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 102 $ 17
======== ========
Taxes paid $ -- $ 1,350
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
ANADIGICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - APRIL 4, 1999
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 April 4, 1999 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999.
The condensed balance sheet at December 31, 1998 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.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.
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:
<TABLE>
<CAPTION>
APRIL 4, 1999 DEC. 31, 1998
------------- -------------
<S> <C> <C>
Raw materials $1,405 $ 784
Work in process 2,706 3,662
Finished goods 4,511 4,283
------ ------
$8,622 $8,729
====== ======
</TABLE>
6
<PAGE>
ANADIGICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - APRIL 4, 1999
- - (CONTINUED)
3. EARNINGS PER SHARE
The reconciliation of shares used to calculate basic and diluted loss per
share consists of the following:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
<S> <C> <C>
Weighted average common shares
outstanding used to calculate
basic earnings per share 14,798,670 14,704,705
Net effect of dilutive stock options-
based upon the treasury stock method using
an average market
price - * - *
---------- ----------
Weighted average common and
dilutive securities outstanding
used to calculate diluted earnings
per share 14,798,670 14,704,705
========== ==========
</TABLE>
* - The dilutive stock options are not included as their effect is
anti-dilutive.
4. SEGMENT INFORMATION
REVENUES BY APPLICATION
The Company classifies its revenues based upon the end application of
the product in which its integrated circuits are used. Net sales by end
application are regularly reviewed by the chief operating decision maker and are
as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
<S> <C> <C>
Cellular and PCS Applications $ 9,417 $ 9,008
Cable and Broadcast Applications 9,930 6,286
Fiber Optic Applications 5,600 3,381
Engineering service sales 101 110
------- -------
Total $25,048 $18,785
======= =======
</TABLE>
GEOGRAPHIC INFORMATION
The Company primarily sells to four geographic regions; Europe, Asia,
North America, and South America. The geographic region is determined by the
destination of the shipped product. Net sales to each of the four geographic
regions are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
<S> <C> <C>
Europe $ 5,811 $ 4,951
Asia 7,425 5,262
North America 9,310 8,041
South America 2,502 531
------- -------
Total $25,048 $18,785
======= =======
</TABLE>
7
<PAGE>
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:
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS-
THREE MONTHS ENDED
------------------
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 67.5% 64.2%
----- -----
Gross profit 32.5% 35.8%
Research and development expenses 22.3% 24.7%
Selling and administrative expenses 15.4% 17.8%
Reduction in work force - 5.9%
- ----
Operating loss (5.2%) (12.6%)
Interest income, net 2.1% 3.5%
---- ----
Loss before income taxes (3.1)% (9.1%)
Benefit for income taxes (1.1)% (3.4%)
------ -----
Net loss (2.0)% (5.7%)
====== ======
</TABLE>
FIRST QUARTER 1999 (Ended April 4, 1999) COMPARED TO FIRST QUARTER 1998 (Ended
March 29, 1998)
NET SALES. Net sales during the first quarter of 1999 increased 33% to
$25.0 million from $18.8 million in the first quarter of 1998. Sales of
integrated circuits for cable and broadcast applications increased 58% during
the first quarter of 1999 to $9.9 million from $6.3 million in the first quarter
of 1998. Included in the sales of integrated circuits for cable and broadcast
are sales of integrated circuits for direct broadcast satellite (DBS)
applications of $0.6 million in the first quarter of 1999 and $1.7 million in
the first quarter of 1998. The increase in sales during the first quarter of
1999 was due to increases in demand for the Company's integrated circuit chip
set used in 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 communications ("fiber optic") applications increased 66% during the first
quarter of 1999 to $5.6 million from $3.4 million in the first quarter of 1998.
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 the Company's new transimpedence
amplifiers for Gigabit Ethernet applications.
Sales of integrated circuits for cellular and PCS applications
increased 5% during the first quarter of 1999 to $9.4 million from $9.0 million
in the first quarter of 1998.
Engineering service sales, which reflect customers' contributions to
research and development, were $0.1 million during the first quarter of 1999 and
1998.
Generally, selling prices for same product sales were lower during the
first quarter of 1999 compared to the same period in 1998.
8
<PAGE>
GROSS MARGIN. Gross margin during the first quarter of 1999 decreased
to 32.5% from 35.8% in the first quarter of 1998. The reduction in gross margin
was primarily due to $2.7 million of accelerated depreciation expense
(associated with the planned closing of the Company's existing wafer fabrication
facility) that was recorded during the first quarter of 1999.
Excluding the accelerated depreciation expense of $2.7 million, gross
margin during the first quarter of 1999 was 43.1%. The increase in gross margin
to 43.1% during the first quarter of 1999 from 35.8% in the first quarter of
1998 was primarily due to a higher sales volume, improvements within the
Company's manufacturing cost structure, and improved yields.
RESEARCH AND DEVELOPMENT. Company sponsored research and development
expenses increased 20% to $5.6 million during the first quarter of 1999 from
$4.6 million during the first quarter of 1998. The increase in research and
development expenses is primarily attributable to increased investments in both
product design and process research and development. As a percentage of sales,
research and development expenses decreased to 22.3% in the first quarter of
1999 from 24.7% in the first quarter of 1998.
The Company expects research and development expense to be
approximately 23% of sales during 1999.
SELLING AND ADMINISTRATIVE. Selling and administrative expenses
increased 15% during the first quarter of 1999 to $3.9 million from $3.3 million
in the first quarter of 1998. The increase in selling and administrative
expenses during the first quarter of 1999 was primarily due to an increase in
compensation costs associated with the Company's operating performance. As a
percentage of sales, selling and administrative expenses decreased to 15.4%
during the first quarter of 1999 from 17.8% in the same period of 1998.
REDUCTION IN WORK 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 work force reduction charge primarily consisted of
severance pay, extended medical coverage, and outplacement service costs. The
$1.1 million was paid during 1998.
INTEREST INCOME, NET. Interest income, net decreased 21% to $0.5
million during the first quarter of 1999 from $0.7 million during the first
quarter of 1998. The reduction in interest income, net of $0.2 million was
primarily due to a lower amount of interest income earning investments during
the first quarter of 1999, compared to the first quarter of 1998.
BENEFIT FOR INCOME TAXES. The benefit for income taxes during the first
quarter of 1999 was recorded at an estimated annual effective tax rate of 37.0%
of the loss before income taxes.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of April 4, 1999, the Company had $22.6 million in cash and cash
equivalents and $17.1 million in marketable securities. The Company has $4.8
million outstanding under its $20 million revolving bank credit facility as of
the end of the first quarter of 1999. The credit facility has 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. The Company entered into an interest rate swap agreement, which
effectively fixes the interest rate of 7.09% on the outstanding portion of the
credit facility.
Net cash provided by operating activities was $1.4 million during the three
month period ended April 4, 1999. Cash provided by operating activities
primarily resulted from increases in accrued liabilities and other long-term
liabilities.
Net cash used in investing activities was $2.7 million during the three
month period ended April 4, 1999. Purchases of plant and equipment of $3.9
million were partially offset by net sales of marketable securities of
approximately $1.2 million during the three month period ended April 4, 1999.
Net cash used in financing activities was $0.1 million during the three
month period ended April 4, 1999, which was primarily due to the repayment of
long-term debt and capital lease obligations.
The Company expects to spend approximately $18.0 million on equipment,
furniture and fixtures, and leasehold improvements during the twelve month
period ending March 31, 2000. At April 4, 1999, the Company has committed to
purchase approximately $9.0 million of equipment, furniture and fixtures, and
leasehold improvements through the remainder of 1999. The Company plans to
continue activities associated with qualifying its new wafer fabrication
facility during the second quarter of 1999 and anticipates commencing production
during the third quarter of 1999.
The Company believes that its sources of capital, including internally
generated funds and $15.2 million available under its $20 million existing
credit facility, will be adequate to satisfy anticipated capital needs
(including investments in other companies) 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
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
10
<PAGE>
IMPACT OF YEAR 2000 (CONTINUED)
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 remediate properly their computer systems.
The Company's comprehensive Year 2000 initiative is being managed by a
senior 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 mid 1999. The total cost
of the Year 2000 project is estimated at $2.0 million and is being funded
through operating cash flows. Of the total project cost, approximately $1.2
million is attributable to the purchase of new hardware and software, which will
be capitalized. To date, the Company has spent approximately $0.6 million on
hardware and software purchases and the remaining amount represents equipment
purchases expected to be delivered and installed during the second quarter of
1999. The remaining $0.8 million will primarily be for assessment of the Year
2000 issue, development of a modification plan, remediation and modifications to
existing software and will be expensed when incurred. To date, the Company has
incurred and expensed approximately $0.2 million, primarily for assessment of
the Year 2000 issue, development of a modification plan, and remediation
efforts. The remaining amount is expected to be expensed in the second quarter
of 1999.
While the Company believes its efforts will be 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, order rescheduling or cancellation, changes in customer's
forecasts of product demand, timely product and process development, 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,
1998. 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.
11
<PAGE>
ANADIGICS, INC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to changes in interest rates primarily from its
credit facility and its investments in certain available-for-sale securities. To
date, the Company has managed its exposure to changes in interest rates from its
credit facility by entering into an interest rate swap agreement which allows
the Company to convert its debt from variable to fixed interest rates. The
Company plans to continue to reduce its exposure to changes in interest rates
from its credit facility by using interest rate derivative instruments. The
Company's available-for-sale securities consist of fixed income investments
(U.S. Treasury and Agency securities and short-term commercial paper). The
Company continually monitors its exposure to changes in interest rates from its
available-for-sale securities. Accordingly, the Company believes that the
effects of changes in interest rates are limited and would not have a material
impact on its financial condition or results of operations. However, it is
possible that the Company is at risk if interest rates change in an unfavorable
direction. The magnitude of any gain or loss will be a function of the
difference between the fixed rate of the financial instrument and the market
rate and the Company's financial condition and results of operations could be
materially affected.
12
<PAGE>
ANADIGICS, INC.
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March and April 1998, there were filed against the Company and certain
of its officers and directors in the United States District Court for the
District of New Jersey seven proposed class action lawsuits (collectively, the
"Class Action Lawsuits"), captioned Assuncao v. Anadigics, Inc., et al., No.
98-917; Office and Professional Employees International Union Local 153 Pension
Fund v. Anadigics, Inc., et al., No. 98-919; Kotler v. Anadigics, Inc., et al.,
No. 98-923; Gray v. Anadigics, Inc., et al., No. 98-1337; Mirpuri v. Anadigics,
Inc., et al., No. 98-1811; Grayson v. Rosenzweig, et al., No. 98-1688; and
Morgante v. Anadigics, Inc., et al., No. 98-2024. The Complaints filed in the
Class Action Lawsuits (each of which names a combination of the following
directors and officers of the Company: Ronald Rosenzweig, George Gilbert, Harry
T. Rein, John F. Lyons, Charles Huang, Javed Patel, Sheo Khetan and Robert
Bayruns) seek unspecified damages in connection with claims under Sections 10(b)
(and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities Exchange Act
of 1934 and, as set forth in the Union Local 153, Kotler, Gray and Mirpuri
Complaints, claims alleging 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
Class Action Lawsuits is the period from July 17, 1997 through January 30, 1998.
On December 20, 1998, the United States District Court for the District of New
Jersey entered an Order consolidating the Class Action Lawsuits into one action,
captioned In re Anadigics, Inc. Securities Litigation, No. 98-CV-917 (the
"Consolidated Class Action Lawsuit"), and appointing Lead Plaintiffs and Lead
Plaintiffs' Counsel. The parties to the Consolidated Class Action Lawsuit have
jointly requested the Court to extend to May 14, 1999 the deadline by which
plaintiffs must file their Amended Consolidated Complaint. Although the Company
is unable at this time to assess the probable outcome of the Consolidated Class
Action Lawsuit or the materiality of the risk of loss in connection therewith
(given that none of the original Complaints had alleged damages with any
particularity and the Amended Consolidated Complaint has not yet been served),
the Company believes that it has acted responsibly and intends to vigorously
defend such Lawsuits.
On or about August 3, 1998, a shareholders derivative lawsuit, captioned
Deegan v. Rosenzweig, et al., No. 98-CV-3640 (the "Derivative Lawsuit"), was
filed in the United States District Court for the District of New Jersey against
the Company (as nominal defendant) and the following officers and directors
thereof: Charles Burton, Paul Bachow, Robert Bayruns, Ronald Rosenzweig, George
Gilbert, John Lyons, Harry Rein, Sheo Khetan, Javed Patel, Charles Huang and
Phillip Wallace. The Complaint in the Derivative Lawsuit alleges claims, which
are predicated upon the Class Action Lawsuits, seeking damages, contribution,
indemnification and equitable relief. On October 28, 1998, the United States
District Court for the District of New Jersey stayed the Derivative Lawsuit
pending the earlier of (1) the disposition of any motion to dismiss the
Complaint (or any Consolidated Amended Complaint) in the Class Action Lawsuits
or (2) the commencement of discovery in the Class Action Lawsuits. As a result,
on October 29, 1998, the Court administratively dismissed the Derivative Lawsuit
without prejudice. Although the Company is unable at this time to assess the
probable outcome of the Derivative Lawsuit or the materiality of the risk of
loss in connection therewith (given that the original Complaint did not allege
damages with any particularity and no operative pleading presently exists), the
Company believes that the original Complaint filed therein was deficient.
13
<PAGE>
ANADIGICS, INC.
ITEM 5. OTHER INFORMATION
The Company has provided information to the Securities and Exchange
Commission in connection with what the Company understands to be the
Commission's investigation, pursuant to a Formal Order of Investigation, into
trading in the Company's stock in January 1998.
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 April 4, 1999.
The Company did not file any reports on Form 8-K during the
quarter ended April 4, 1999.
14
<PAGE>
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: April 30, 1999
15
<PAGE>
ANADIGICS, INC.
EXHIBIT INDEX
Page
----
Exhibit 27. Financial Data Schedule ........................................ 17
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted for the three
months ended April 4, 1999 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-04-1999
<PERIOD-END> APR-04-1999
<CASH> 22,608,000
<SECURITIES> 17,149,000
<RECEIVABLES> 16,554,000
<ALLOWANCES> 0
<INVENTORY> 8,622,000
<CURRENT-ASSETS> 71,298,000
<PP&E> 125,551,000
<DEPRECIATION> 50,070,000
<TOTAL-ASSETS> 155,188,000
<CURRENT-LIABILITIES> 12,737,000
<BONDS> 0
0
0
<COMMON> 148,000
<OTHER-SE> 137,361,000
<TOTAL-LIABILITY-AND-EQUITY> 155,188,000
<SALES> 25,048,000
<TOTAL-REVENUES> 25,048,000
<CGS> 16,900,000
<TOTAL-COSTS> 16,900,000
<OTHER-EXPENSES> 9,440,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (517,000)
<INCOME-PRETAX> (775,000)
<INCOME-TAX> (287,000)
<INCOME-CONTINUING> (488,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (488,000)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
