ANADIGICS (ANAD) Announces Strategic Restructuring, Updates Guidance

ANADIGICS, Inc. (Nasdaq: ANAD), a world leader in radio frequency (RF) solutions, announced today it is restructuring its business model to lower its operating costs and better align resources to address growth opportunities in rapidly expanding infrastructure markets.

"With a strong infrastructure design-win trajectory, I'm pleased we're able to accelerate our strategy to expand in infrastructure markets, and with that, lower our fixed manufacturing and operating costs," said Ron Michels, chairman and CEO of ANADIGICS. "We believe that these steps, coupled with our previously announced $10 million cost-savings initiatives, should enable the Company to deliver significant EBITDA improvements and profitability leverage from a lower breakeven revenue level."

Strategic Restructuring

Since the 1Q14 earnings call, ANADIGICS has made stronger-than-expected progress in infrastructure-targeted activities and experienced a decline in demand for some of the Company's legacy mobile products. In response, the Company is restructuring to expand its presence in the infrastructure space and reduce the fixed costs associated with the legacy mobile business.

ANADIGICS' infrastructure-targeted products have a higher revenue- and profit-per-wafer than mobile-targeted products. The Company believes that, with an increasing percentage of future revenues coming from infrastructure products, the manufacturing capability and staff can be resized to better match the new wafer quantity required.

The reduced in-house wafer demand is expected to enable more efficient manufacturing operations and allow the Company to monetize certain excess wafer processing equipment. It is expected that the proceeds from these sales will help offset a significant portion of the cash costs of the restructuring.

Infrastructure

ANADIGICS designs, markets and manufactures radio-frequency (RF) and optical products for a variety of infrastructure applications including cable television, cellular wireless small cell, WiFi and machine-to-machine (M2M). Today, these markets are expanding to support an increasing worldwide demand for high-data-rate connectivity to the Internet. ANADIGICS believes these infrastructure build outs demand high-performance, high-quality products, which is creating a high-value and target-rich environment for the Company's core technologies and competencies.

Mobile

ANADIGICS designs, markets and manufactures RF power amplifier and front-end products for a variety of mobile applications including handsets, tablets and data cards in the cellular 3G/4G and WiFi markets. As discussed in recent Company announcements and conference calls, the latest products in the Company's mobile-targeted portfolio are gaining design-win traction. ANADIGICS will continue to focus on and support strategic mobile markets, and may expand its existing partnerships with external wafer foundries to benefit from the lower fixed cost business model those relationships can deliver.

Going forward, ANADIGICS is committed to maintaining its high level of technical and commercial support to mobile-product customers for all existing and new opportunities.

Cost Improvements

ANADIGICS' restructuring initiative enables the Company to implement numerous cost efficiency improvements that we believe should lower cash manufacturing and operating costs by over $15 million annually. ANADIGICS anticipates that the completion of the restructuring will lower manufacturing costs by approximately $5 million and operating costs by approximately $10 million. These savings are in addition to the previously announced program targeting $10 million in annual savings.

The workforce reduction will eliminate approximately 140 positions throughout the Company or approximately 30%. The Company anticipates recording a cash workforce restructuring charge of approximately $2.3 million and a non-cash charge of approximately $5 million for fixed asset and inventory write downs. The proceeds from equipment sales are expected to substantially offset the cash costs of the restructuring.

"We are aligning the Company's R&D investment focus and in-house manufacturing capacity toward a higher mix of infrastructure products," said Terry Gallagher, CFO of ANADIGICS. "The efficiencies gained through this action are expected to strengthen our presence in key infrastructure markets, reduce fixed costs and enable an expected EBITDA breakeven revenue level of approximately $26-27 million."

Q2 2014 Guidance Update

ANADIGICS anticipates revenues for the quarter ending June 28, 2014 will be approximately $23 million with infrastructure contributing a larger percentage of revenue than in the prior quarter. ANADIGICS expects a sequential improvement in non-GAAP gross margin and expects lower non-GAAP operating costs attributable to the previously announced expense reduction program. With these factors considered, ANADIGICS anticipates it will report a non-GAAP loss per share of approximately $0.10.

(Street sees loss of $0.09 on $25.52 million in revenue)

The statements regarding the Company's anticipated future performance are forward looking and actual results may differ materially. Please see safe harbor statement at the end of this press release.

This press release includes financial measures that

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