18 February 2011

Anadigics’ sales fall less-than-expected 1.7% in Q4 to $60m

For fourth-quarter 2010, GaAs-based broadband wireless and wireline communications component maker Anadigics Inc of Warren, NJ, USA has reported net sales of $60.2m, up 44.1% on $41.8m a year ago but down 1.7% on Q3’s $61.3m. However, this is better than the expected 7% drop to $57m.

Apart from Wireless revenue rising from $45.2m in Q3 to $46.1m ($1m higher than expected, due to higher 3G CDMA sales), increased demand for wireless LAN and cable products yielded a much lower sequential decline in Broadband revenue of 12.5% (from $16.1m to $14.1m) rather than the expected 25% (to $12.1m). In particular, despite set-top box revenue falling from $5.6m to $4.9m, infrastructure from $6.3m to $4.6m and WiMAX from $3.4m to $2.4m, WLAN revenue rose from $0.6m to $2.1m.

Revenue for full-year 2010 was $216.7m, up 54.3% on 2009’s $140.5m. This included growth of 20% in Broadband business (from $47.5m to $56.7m) and 72% in Wireless business (from $93m to $160m). “Our strong performance in 2010 is a result of successful execution on the strategic initiatives that we outlined at the beginning of the year, including expanding our customer base and increasing our market share,” says president & CEO Mario Rivas.

“We also exceeded our goals for both profitability and free cash flow,” says Rivas. Gross margin has risen from Q3’s 37.2% to a slightly better-than-expected 37.7%, while operating expenses were a lower-than-expected $18.3m. This yielded non-GAAP net income of $4.9m, compared with $4.4m last quarter and a net loss of $3.2m a year ago. Non-GAAP net income for full-year 2010 was $7.7m, compared with 2009’s net loss of $33.7m.

Cash flow from operations was $8.6m, contributing to cash, cash equivalents and short- and long-term marketable securities rising during the quarter from $96m to $106.1m (well ahead of the targeted $100m), after capital expenditure of $1.5m.

“We are seeing indications of greater-than-normal seasonality in the first quarter of 2011, primarily due to softness in China and through our distribution channels relating to excess inventories, coupled with a continued market correction expected to further impact our cable and WiMAX revenue [due to excess inventories currently in the channels],” cautions chief financial officer Tom Shields. Including Broadband sales down by perhaps $6m from Q4/2010 and a typical drop of 10-15% for Q1/2010 due to seasonality, Anadigics expects revenue to fall to $42–44m. However, even though Broadband sales of not much more than $8m will be down more than 30% on Q1/2010’s $13.2m, overall gross margin should still be up year-on-year.

“As we’ve seen historically, we know that Q2 typically rebounds very favorably,” says Shields. “Looking forward, we remain well positioned to benefit from the continued growth in the 3G and 4G markets as we strive to expand our market share at new and existing customers, execute on design wins and continue to introduce superior new products,” adds Rivas. New products represented about 40% of business by the end of 2010 (a significant improvement on 2009). “Our long-term goal continues to be capturing 14% market share in wireless gallium arsenide by 2014, which will equate to share gains of approximately 2% per year,” states Rivas.

See related items:

Anadigics’ revenue grows 18.6% in Q3 to $61.3m

Anadigics enters profit as sales rise 18.7% in Q2 to $51.7m

Anadigics revenue rises 4.1% to $43.5m as loss is cut further

Anadigics’ sales rise 13.9% in Q4/2009

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