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Gigatronics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 3, 2009 04:20PM

Gigatronics Inc. (GIGA) filed Quarterly Report for the period ended 2008-12-27. Giga-tronics designs manufactures and markets through its Giga-tronicsInstrument Division a broad line of test and measurement equipment used in the development test and maintenance of wireless communications products and systems flight navigational equipment electronic defense systems and automatic testing systems. These products are used primarily in the design production repair and maintenance of commercial telecommunications radar and electronic warfare. Gigatronics Inc. has a market cap of $3.06 million; its shares were traded at around $1.06 with and P/S ratio of 0.17.

Highlight of Business Operations:

Fiscal 2009 third quarter net sales were $5,099,000, a 3% increase from the $4,953,000 in the third quarter of fiscal 2008. Sales at Giga-tronics decreased 6% or $228,000 primarily due to a decrease in commercial shipments for its products. Sales at Microsource increased 39% or $374,000 during the third quarter of fiscal 2009 versus the third quarter of fiscal 2008 primarily due to an increase in military shipments.

Net sales for the nine month period ended December 27, 2008 were $12,276,000, a 14% decrease from the $14,232,000 in the nine month period ended December 29, 2007. Sales at Giga-tronics decreased 19% or $2,140,000 primarily due to a decrease in military demand for its products. Sales at Microsource increased 6% or $184,000 during the nine month period ended December 27, 2008 versus the same period in the prior fiscal year primarily due to an increase in military shipments.

In the third quarter of fiscal 2009, cost of sales decreased 8% to $2,679,000 from $2,904,000 for the same period last year. For the nine months ended December 27, 2008, cost of sales decreased 13% to $7,121,000 from $8,158,000 for the similar period ended December 29, 2007. For the three month period the decrease is primarily due to a better product mix sold with higher profit margins, whereas the decrease for the nine month period is primarily due to lower sales.

Operating expenses increased 5% or $95,000 in the third quarter of fiscal 2009 over fiscal 2008. Product development costs decreased 8% or $41,000 for the quarter ended December 27, 2008 as compared to the same period in the prior year. This is primarily due to engineering expense associated with an NRE (non-recurring engineering) contract inventoried on the balance sheet until the revenue from the milestone is recognized. Selling, general and administrative expenses increased 9% or $136,000 for the third quarter of fiscal year 2009 compared to the same period in the prior year. The increase is a result of higher marketing expenses of $131,000 and higher commission expenses of $17,000 offset by lower administrative expenses of $12,000.

December 27, 2008. The increase is a result of higher marketing expenses of $336,000 and higher administrative expenses of $188,000 offset by lower commission expenses of $227,000 on lower commissionable sales for the nine month period. A one-time restructuring charge of $80,000 in severance costs was made in the nine month period ended December 29, 2007.

The Company recorded a net profit of $349,000 or $0.07 per fully diluted share for the third quarter of fiscal 2009 versus a net profit of $31,000 or $0.01 per fully diluted share in the same period last year. The Company recorded a net loss of $713,000 or $0.15 per fully diluted share for the nine months ended December 27, 2008 versus a net profit of $311,000 or $0.06 per fully diluted share in the same period last year.

Read the The complete Report



Stocks Discussed: GIGA,
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