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Gigatronics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 5, 2010 06:11AM

Gigatronics Inc. (GIGA) filed Quarterly Report for the period ended 2009-12-26. Gigatronics Inc. has a market cap of $11.2 million; its shares were traded at around $2.33 with a P/E ratio of 8 and P/S ratio of 0.6.



Highlight of Business Operations:

New orders received in the third quarter of fiscal 2010 decreased by 18% to $7,715,000 from the $9,461,000 received in the third quarter of fiscal 2009. New orders received for the nine months ended December 26, 2009 decreased 10% to $15,098,000 from the $16,774,000 received for the same period a year ago. Orders at Giga-tronics Division and at Microsource decreased for the three and nine month periods ended December 26, 2009 primarily due to a decrease in new military orders.

Fiscal 2010 third quarter net sales were $4,784,000, a 6% decrease from the $5,099,000 in the third quarter of fiscal 2009. Sales at Giga-tronics Division decreased 24% or $908,000 primarily due to a decrease in military shipments. Sales at Microsource increased 45% or $593,000 during the third quarter of fiscal 2010 versus the third quarter of fiscal 2009 primarily due to an increase in military shipments.

Net sales for the nine month period ended December 26, 2009 were $13,876,000, a 13% increase from the $12,276,000 in the nine month period ended December 27, 2008. Sales at Giga-tronics Division decreased 3% or $265,000 primarily due to a decrease in commercial shipments. Sales at Microsource increased 55% or $1,865,000 during the first nine months of fiscal 2010 versus the first nine months of fiscal 2009 primarily due to an increase in military shipments.

Operating expenses improved by 16% or $332,000 in the third quarter of fiscal 2010 over fiscal 2009 due to a reduction in product development expenses of $166,000 which includes a transfer of expenses to customer order development (COD) engineering costs and a reduction in selling, general and administrative expenses of $166,000. The customer funded engineering, which is directed by the customer and is not an internally directed project or sustaining engineering, was $184,000 in the third quarter of fiscal 2010. In the third quarter of fiscal 2009 the customer funded engineering was not material. The reduction in selling, general and administrative expense is a result of lower commission expenses of $151,000 and lower administrative expenses of $87,000 offset by higher marketing of $72,000.

Operating expenses improved by 12% or $702,000 in the first nine months of fiscal 2010 over the same period in fiscal 2009 due to a reduction in product development expenses of $500,000 which includes a transfer of expenses to COD engineering costs and a reduction in selling, general and administrative expenses of $202,000. The customer funded engineering in the first nine months of fiscal 2010 was $407,000. In the same period of fiscal 2009 the customer funded engineering was not material. The reduction in selling, general and administrative expense is a result of lower commission expenses of $114,000 and lower administrative expenses of $105,000 offset by higher marketing of $17,000.

The Company recorded a net profit of $309,000 or $0.06 per fully diluted share for the third quarter of fiscal 2010 compared to a net profit of $349,000 or $0.07 per fully diluted share in the same period last year. The Company recorded a net profit of $1,015,000 or $0.21 per fully diluted share for the first nine months of fiscal 2010 compared to a net loss of $713,000 or $0.15 per fully diluted share in the same period last year. Provision for income taxes incurred for the third quarter were $1,000 in fiscal 2010 and zero in fiscal 2009, for the first nine months of fiscal 2010 and fiscal 2009 tax provisions were $3,000 and $2,000, respectively.

Read the The complete Report



Stocks Discussed: GIGA,
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