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Gigatronics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 5, 2009 06:12AM

Gigatronics Inc. (GIGA) filed Quarterly Report for the period ended 2009-09-26. 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 $12.5 million; its shares were traded at around $2.6001 with a P/E ratio of 8.6 and P/S ratio of 0.7.

Highlight of Business Operations:

New orders received in the second quarter of fiscal 2010 increased by 57% to $4,850,000 from the $3,089,000 received in the second quarter of fiscal 2009. New orders received in the first half of fiscal 2010 increased 1% to $7,383,000 from the $7,313,000 received in the first half of fiscal 2009. Orders at Giga-tronics increased for the three and six month periods ended September 26, 2009 primarily due to an increase in new military orders whereas orders at Microsource decreased for the three and six month periods ended September 26, 2009 primarily due to a decrease in military demand for its products.

Fiscal 2010 second quarter net sales were $4,623,000, a 25% increase from the $3,689,000 in the second quarter of fiscal 2009. Sales at Giga-tronics Division increased 31% or $767,000 primarily due to an increase in military shipments. Sales at Microsource increased 13% or $167,000 during the second quarter of fiscal 2009 versus the second quarter of fiscal 2009 primarily due to an increase in military shipments.

Net sales for the six month period ended September 26, 2009 were $9,092,000, a 27% increase from the $7,177,000 in the six month period ended September 27, 2008. Sales at Giga-tronics increased 13% or $643,000 primarily due to an increase in military shipments. Sales at Microsource increased 61% or $1,272,000 during the first half of fiscal 2010 versus the first half of fiscal 2009 primarily due to an increase in military shipments.

Operating expenses decreased 11% or $225,000 in the second quarter of fiscal 2010 over fiscal 2009 due to greater manpower efficiencies gained as a result of implementing a new Enterprise Resource Plan (ERP) computer software system, as well as a decrease of $159,000 in product development expenses excluding customer order development (COD) engineering costs and a decrease of $66,000 in selling, general and administrative expenses. The non-recurring engineering (NRE) expenses, which are engineering efforts directed by the customer and are not internally directed projects or sustaining engineering, charged to cost of sales in the second quarter of fiscal 2010 was $106,000. In the second quarter of fiscal 2009 the engineering labor charged to cost of sales was not material. The decrease in selling, general and administrative expense is a result of lower marketing of $97,000 offset by higher administrative expenses of $19,000 and higher commission expenses of $12,000.

Operating expenses decreased 10% or $370,000 in the first half of fiscal 2010 over fiscal 2009 due to greater manpower efficiencies gained as a result of implementing a new ERP computer software system, as well as a decrease of $334,000 in product development expenses excluding COD engineering costs and a decrease of $36,000 in selling, general and administrative expenses. The NRE expenses charged to cost of sales in the first half of fiscal 2010 was $254,000. In the first half of fiscal 2009 the engineering labor charged to cost of sales was not material. The decrease in selling, general and administrative expense is a result of lower marketing of $36,000 and lower administrative expenses of $18,000 offset by higher commission expenses of $18,000.

Giga-tronics recorded a net profit of $373,000 or $0.08 per fully diluted share for the second quarter of fiscal 2010 compared to a net loss of $540,000 or $0.11 per fully diluted share in the same period last year. Giga-tronics recorded a net profit of $706,000 or $0.15 per fully diluted share for the first half of fiscal 2010 compared to a net loss of $1,062,000 or $0.22 per fully diluted share in the same period last year. A $2,000 provision for income taxes was incurred in both the first half of fiscal 2010 and fiscal 2009.

Read the The complete Report



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