Form 8-K GIGA TRONICS INC For: May 18

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 8-K

  

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

  

  

Date of Report (Date of earliest event reported): May 18, 2015

  

GIGA-TRONICS INCORPORATED

(Exact name of registrant as specified in its charter)

 

California	0-12719	94-2656341
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification Number)

  

4650 Norris Canyon Road, San Ramon, CA		94583
(Address of principal executive offices)		(Zip Code)
(925) 328-4650
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

  

  

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

  

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

  

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

  

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

  

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

 

Item 2.02 Results of Operations and Financial Condition.

  

On May 18, 2015 Giga-tronics Incorporated reported its fourth quarter and fiscal year 2015 results. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

  

  

Item 9.01 Financial Statements and Exhibits.

  

(d) Exhibits.

  

Exhibit No.	Description
(d) Exhibit 99.1	Press Release dated May 18, 2015

  

 

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 hereunto duly authorized.

  

	GIGA-TRONICS INCORPORATED
Date: May 19, 2015
	By: /s/ STEVEN D. LANCE
	Steven D. Lance
	Vice President of Finance, Chief Financial Officer and Secretary

 

 

Exhibit 99.1

 

NEWS RELEASE

For Release on May 18, 2015	Contact: Steven D. Lance
4:00 PM (ET)	Vice President of Finance/Chief Financial Officer
	[email protected]
	(925) 302-1056

 

Giga-tronics Reports Results for the Fourth Quarter and FY 2015

Fourth Quarter Net Sales Increase 48%

 

  San Ramon, CA – May 18, 2015 – Giga-tronics Incorporated (Nasdaq: GIGA) reported today net sales for the fourth quarter of fiscal 2015 increased 48% to $4.3 million, as compared to $2.9 million for the fourth quarter of fiscal 2014. The increase in quarterly net sales was primarily due to a $771,000 increase in sales of radar filter components associated with two fighter jet programs, and $499,000 associated with initial customer acceptance of the Company’s new Advanced Signal Generation System.

 

Net sales for the fiscal year 2015 increased 39% to $18.5 million, as compared to $13.3 million for the fiscal year 2014. The increase in annual net sales was primarily due to a $6.5 million nonrecurring engineering (NRE) order for YIG filters and a $2.4 million Naval Air Warfare Center (Navy) order for test equipment, both of which were received in the first quarter of fiscal 2015.

 

Net loss for the fourth quarter of fiscal 2015 was $1.4 million or $0.25 per fully diluted share. This net loss includes a one-time non-recurring and non-cash charge of approximately $1.2 million related to the issuance of new warrants. This compares to a net loss for the fourth quarter of fiscal 2014 of $1.3 million, or $0.25 per fully diluted share.

 

Net loss for fiscal year 2015 was $1.7 million or $0.32 per fully diluted share. This net loss includes a one-time non-recurring and non-cash charge of approximately $1.2 million related to the issuance of new warrants. Net loss for fiscal year 2014 was $3.7 million, or $0.74 per fully diluted share. The improvements to net loss when comparing fiscal 2015 to fiscal 2014 were primarily due to increased revenues from the NRE and Navy orders, along with improved gross margins and lower operating expenses.

 

Non-GAAP net income for the fourth quarter of fiscal 2015 was $179,000, or $0.03 per fully diluted share, compared to a non-GAAP net loss for the fourth quarter of fiscal 2014 of $1.2 million, or $0.23 per fully diluted share.

Non-GAAP net income for fiscal 2015 was $538,000 or $0.10 per fully diluted share, compared to a non-GAAP net loss for fiscal 2014 of $3.2 million or $0.64 per fully diluted share. Non-GAAP net income/loss excludes non-cash expenses associated with the derivative revaluation, warrant charge expense and discount accretion of debt and warrant agreements as well as stock-based compensation (1).

 

Mr. John Regazzi, the Company's CEO stated, “We achieved an important milestone in the fourth quarter of fiscal 2015 when after years in development, two customers accepted their initial units of our Advanced Signal Generation System. With it now in production, the Advanced Signal Generation System should start contributing to the Company’s long term success.”

 

Mr. Regazzi concluded, “I am very pleased to see the Company achieving non-GAAP profits for the past three fiscal quarters and for all of fiscal 2015. The non-GAAP profits and the $1.5 million of net proceeds received from Alara Capital AVI II, LLC from their recent exercise of warrants has greatly improved the Company’s financial viability.”

 

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the fourth quarter results. To participate in the call, dial (888) 424-8151 or (847) 585-4422, and enter PIN Code 9178731#. The call will also be broadcast over the internet at www.gigatronics.com under "Investor Relations." The conference call discussion reflects management's views as of May 18, 2015.

 

 

Giga-tronics is a publicly held company, traded on the NASDAQ Capital Market under the symbol "GIGA".  Giga-tronics produces instruments, subsystems and sophisticated microwave components that have broad applications in defense electronics, aeronautics and wireless telecommunications.

 

This press release contains forward-looking statements concerning operating results, future orders, sales of new products, long term growth, shipments, and customer acceptance of new products. Actual results may differ significantly due to risks and uncertainties, such as: delays in customer orders for the new Advanced Signal Generation System, receipt or timing of future orders, cancellations or deferrals, our ability to continue as a going concern, our need for additional financing, possible delisting from trading on the NASDAQ Capital Market and moving to the OTCQB marketplace; the volatility in the market price of our common stock; and general market conditions.  For further discussion, see Giga-tronics' most recent annual report on Form 10-K for the fiscal year ended March 29, 2014, Part I, under the heading "Risk Factors" and Part II, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Results of Operations".

 

(1) Non-GAAP net income/loss and non-GAAP earnings/loss per share, differ from net income/loss and earnings/loss per share determined in accordance with GAAP (Generally Accepted Accounting Principles in the United States). Non-GAAP net income/loss and non-GAAP earnings/loss per share for the quarter and fiscal year ended March 28, 2015 exclude the effects of the revaluation of the derivative liability as well as the accretion of the discounts on debt and warrant notes entered into in March and June of 2014. Non-GAAP net income/loss and non-GAAP earnings/loss per share for the quarter and fiscal year ended March 28, 2015 also exclude the effects of a warrant charge expense related to the issuance of new warrants issued in February 2015. These numbers also exclude the impact of Stock Based Compensation which is also excluded from non-GAAP operating margin, operating expenses and operating income/loss. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included in the financial information appearing at the end of this press release. Giga-tronics utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance to evaluate and manage its internal business and to assist in making financial operating decisions. Giga-tronics believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors' understanding of Giga-tronics’ core operating results and trends. Additionally, Giga-tronics believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by Giga-tronics.

 

 

GIGA-TRONICS INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands except share data)		March 28, 2015				March 29, 2014
Assets
Current assets:
Cash and cash-equivalents		$	1,170			$	1,059
Trade accounts receivable, net of allowance of $45 and $44, respectively			2,354				1,846
Inventories, net			3,365				3,321
Prepaid expenses and other current assets			373				349
Total current assets			7,262				6,575
Property and equipment, net			718				949
Other long term assets			74				69
Total assets		$	8,054			$	7,593
Liabilities and shareholders' equity
Current liabilities:
Line of credit		$	—			$	1,165
Current portion of long term debt			811				200
Accounts payable			973				1,430
Accrued payroll and benefits			678				755
Deferred revenue			1,127				1,329
Deferred rent			127				104
Capital lease obligations			69				147
Other current liabilities			501				472
Total current liabilities			4,286				5,602
Long term loan and warrant debt, net of discounts			392				672
Derivative Liability-at estimated fair value			252				128
Long term obligations - deferred rent			111				237
Long term obligations - capital lease			58				77
Total liabilities			5,099				6,716
Shareholders' equity:
Convertible preferred stock of no par value;
Authorized - 1,000,000 shares
Series A - designated 250,000 shares; no shares at March 28, 2015 and March 29, 2014 issued and outstanding			—				—
Series B, C, D - designated 19,500 shares; 18,533.31 shares at March 28, 2015 and March 29, 2014 issued and outstanding; (liquidation preference of $3,540)			2,911				2,911
Common stock of no par value;
Authorized - 40,000,000 shares; 6,706,065 shares at March 28, 2015 and 5,181,247 at March 29, 2014 issued and outstanding			19,975				16,224
Accumulated deficit			(19,931	)			(18,258	)
Total shareholders' equity			2,955				877
Total liabilities and shareholders' equity		$	8,054			$	7,593

 

 

GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
		Three Month Periods Ended								Years Ended
		March 28,				March 29,				March 28,				March 29,
(In thousands except share and per share data)		2015				2014				2015				2014
Net sales		$	4,325			$	2,905			$	18,452			$	13,309
Cost of sales			2,344				2,139				10,445				8,811
Gross margin			1,981				766				8,007				4,498
Operating expenses:
Engineering			647				857				3,210				3,897
Selling, general and administrative			1,382				1,135				4,783				4,809
Restructuring			—				(29	)			—				331
Total operating expenses			2,029				1,963				7,993				9,037
Operating income/(loss)			(48	)			(1,197	)			14				(4,539	)
Gain on sale of product line			—				—				—				913
Loss on adjustment of derivative liability to fair value			(17	)			—				—				—
Warrant expense			(1,232	)			—				(1,232	)			—
Other loss			—				(16	)			(2	)			(8	)
Interest expense, net			(55	)			(53	)			(254	)			(106	)
Accretion of loan and warrant debt discounts			(38	)			—				(152	)			—
Loss before income taxes			(1,390	)			(1,266	)			(1,626	)			(3,740	)
Provision for income taxes			—				—				47				2
Net loss		$	(1,390	)		$	(1,266	)		$	(1,673	)		$	(3,742	)
Loss per common share – basic		$	(0.25	)		$	(0.25	)		$	(0.32	)		$	(0.74	)
Loss per common share – diluted		$	(0.25	)		$	(0.25	)		$	(0.32	)		$	(0.74	)
Weighted average common shares used in per share calculation:
Basic			5,616				5,060				5,279				5,058
Diluted			5,616				5,060				5,279				5,058

 

 

RECONCILIATION OF NET LOSS TO NON-GAAP NET INCOME/(LOSS)
(Unaudited in thousands, except for share and per share data)
		Three Month Periods Ended								Years Ended
		March 28,				March 29,				March 28,				March 29,
		2015				2014				2015				2014
Net loss		$	(1,390	)		$	(1,266	)		$	(1,673	)		$	(3,742	)
Adjustments to reconcile net loss to non-GAAP net income/(loss):
Warrant charge expense			1,232				—				1,232				—
Stock based compensation expense			282				96				827				494
(Gain) / loss on adjustment of derivative liability to fair value			17				—				—				—
Accretion of loan and warrant debt discounts			38				—				152				—
Non-GAAP net income/(loss)		$	179			$	(1,170	)		$	538			$	(3,248	)
Non-GAAP earnings/(loss) per common share-basic		$	0.03			$	(0.23	)		$	0.10			$	(0.64	)
Non-GAAP earnings/(loss) per common share- diluted		$	0.03			$	(0.23	)		$	0.10			$	(0.64	)
Shares used in the calculation of non-GAAP earnings/(loss) per share:
Basic			5,616				5,060				5,279				5,058
Diluted			5,616				5,060				5,279				5,058

 

 

GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
		Three Month Periods Ended
		March 28,				December 27,				September 27,				June 28,
(In thousands except share and per share data)		2015				2014				2014				2014
Net sales		$	4,325			$	4,509			$	5,110			$	4,508
Cost of sales			2,344				2,637				2,794				2,670
Gross margin			1,981				1,872				2,316				1,838
Operating expenses:
Engineering			647				672				962				929
Selling, general and administrative			1,382				1,133				1,241				1,027
Total operating expenses			2,029				1,805				2,203				1,956
Operating income/(loss)			(48	)			67				113				(118	)
Gain / (loss) on adjustment of derivative liability to fair value			(17	)			107				103				(193	)
Other (expense) income			(1,232	)			—				—				(2	)
Interest expense, net			(55	)			(62	)			(78	)			(59	)
Accretion of loan and warrant debt discounts			(38	)			(45	)			(45	)			(24	)
Income/(loss) before income taxes			(1,390	)			67				93				(396	)
Provision for income taxes			—				—				—				47
Net income/(loss)		$	(1,390	)		$	67			$	93			$	(443	)
Earnings/(loss) per common share – basic		$	(0.25	)		$	0.01			$	0.01			$	(0.09	)
Earnings/(loss) per common share – diluted		$	(0.25	)		$	0.01			$	0.01			$	(0.09	)
Weighted average common shares used in per share calculation:
Basic			5,616				5,208				5,178				5,113
Diluted			5,616				5,463				5,720				5,113

 

 

RECONCILIATION OF NET INCOME/(LOSS) TO NON-GAAP NET INCOME/(LOSS)

(Unaudited in thousands, except share and per share data)

		Three Month Periods Ended
		March 28,				December 27,				September 27,				June 28,
		2015				2014				2014				2014
Net income/(loss)		$	(1,390	)		$	67			$	93			$	(443	)
Adjustments to reconcile net income/(loss) to non-GAAP net income/(loss):
Warrant charge expense			1,232				—				—				—
Stock based compensation expense			282				234				227				84
(Gain) / loss on adjustment of derivative liability to fair value			17				(107	)			(103	)			193
Accretion of loan and warrant debt discounts			38				45				45				24
Non-GAAP net income/(loss)		$	179			$	239			$	262			$	(142	)
Non-GAAP earnings/(loss) per common share-basic		$	0.03			$	0.03			$	0.04			$	(0.03	)
Non-GAAP earnings/(loss) per common share- diluted		$	0.03			$	0.03			$	0.03			$	(0.03	)
Shares used in the calculation of non-GAAP earnings/(loss) per share:
Basic			5,616				5,208				5,178				5,113
Diluted			5,616				5,463				5,720				5,113

 

 

 

 

 

 

 

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