ANADIGICS Inc. (ANAD, Financial) filed Quarterly Report for the period ended 2010-07-29.
Anadigics Inc. has a market cap of $296.7 million; its shares were traded at around $4.55 with and P/S ratio of 2.1. ANAD is in the portfolios of Chuck Royce of Royce& Associates, Pioneer Investments, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased 8.7% to $6.9 million during the second quarter of 2010 from $6.3 million during the second quarter of 2009. Selling and administrative expenses for the six month period ended July 3, 2010 increased 0.8% to $13.9 million from $13.8 million during the six month period ended July 4, 2009. The increase in the second quarter was driven by increased investment in our sales effort.
INTEREST INCOME. Interest income decreased 67.6% to $0.1 million during the second quarter of 2010 from $0.3 million during the second quarter of 2009. For the six months ended July 3, 2010, interest income decreased 78.0% to $0.2 million from $0.8 million in the six month period ended July 4, 2009. The decreases were due to lower interest rates and compounded by lower average funds invested.
INTEREST EXPENSE. Interest expense decreased 92.7% when compared to $0.6 million during the second quarter of 2009. For the six months ended July 3, 2010, interest expense decreased 92.0% to $0.1 million from $1.2 million in the six month period ended July 4, 2009. The decreases principally related to the repayment of our $38.0 million outstanding balance of our 5% Convertible Senior Notes due in October 2009.
Operating activities used $0.7 million in cash during the six month period ended July 3, 2010, primarily as a result of our operating results adjusted for non-cash expenses offset by $8.4 million of cash used to fund working capital. Investing activities, consisting of net proceeds received from the sale of a wafer fabrication building in Kunshan, China of $1.7 million, net proceeds received from the sale of marketable securities of $1.1 million, and cash paid for fixed assets of $2.6 million, provided $0.2 million of cash during the six month period ended July 3, 2010. Financing activities provided $0.4 million of cash, consisting of proceeds received from stock option exercises.
Within our $8.8 million in marketable securities at July 3, 2010, we held a total of $5.9 million of auction rate securities (ARS) and $2.9 million as a corporate debt security, which was originally purchased as an ARS prior to its exchange for the underlying 30 year notes due 2037. ARS are generally financial instruments of long-term duration with interest rates that are reset in short intervals through auctions. During the second half of 2007, certain auction rate debt and preferred securities failed to auction due to sell orders exceeding buy orders. In February 2008, liquidity issues in the global credit markets resulted in failures of the auction process for a broader range of ARS, including substantially all of the auction rate corporate, state and municipal debt and preferred equity securities we hold. When there is insufficient demand for the securities at the time of an auction and the auction is not completed, the interest rates reset to predetermined higher rates (default rates). While certain issuers have redeemed certain of their ARS since 2008, the market remains constrained by illiquidity and the lack of free trading. The funds associated with the remaining failed auctions will not be accessible until a successful auction occurs, a buyer is found outside of the auction process or an issuer redeems its security. If the credit ratings of the security issuers deteriorate and any decline in market value below our amortized cost basis is determined to be other-than-temporary, we would be required to adjust the carrying value of the investment through an additional impairment charge. To date, we have not realized any losses on ARS held by the Company or the notes received in exchange for an ARS, but have recognized other-than-temporary impairments of $8.9 million. For the six months ended July 3, 2010, fair market values of certain of our ARS, when combined with the fair market values of our corporate debt security, increased by $0.1 million, which was recorded to other comprehensive income.
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Anadigics Inc. has a market cap of $296.7 million; its shares were traded at around $4.55 with and P/S ratio of 2.1. ANAD is in the portfolios of Chuck Royce of Royce& Associates, Pioneer Investments, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
RESEARCH AND DEVELOPMENT. Company-sponsored research and development (R&D) expenses increased 17.7% during the second quarter of 2010 to $12.2 million from $10.4 million during the second quarter of 2009. Company sponsored research and development expenses for the six month period ended July 3, 2010 increased 9.1% to $24.0 million from $22.0 million during the six month period ended July 4, 2009. The increases were primarily due to higher material spending, personnel and support costs for our accelerated R&D product and process development efforts.SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased 8.7% to $6.9 million during the second quarter of 2010 from $6.3 million during the second quarter of 2009. Selling and administrative expenses for the six month period ended July 3, 2010 increased 0.8% to $13.9 million from $13.8 million during the six month period ended July 4, 2009. The increase in the second quarter was driven by increased investment in our sales effort.
INTEREST INCOME. Interest income decreased 67.6% to $0.1 million during the second quarter of 2010 from $0.3 million during the second quarter of 2009. For the six months ended July 3, 2010, interest income decreased 78.0% to $0.2 million from $0.8 million in the six month period ended July 4, 2009. The decreases were due to lower interest rates and compounded by lower average funds invested.
INTEREST EXPENSE. Interest expense decreased 92.7% when compared to $0.6 million during the second quarter of 2009. For the six months ended July 3, 2010, interest expense decreased 92.0% to $0.1 million from $1.2 million in the six month period ended July 4, 2009. The decreases principally related to the repayment of our $38.0 million outstanding balance of our 5% Convertible Senior Notes due in October 2009.
Operating activities used $0.7 million in cash during the six month period ended July 3, 2010, primarily as a result of our operating results adjusted for non-cash expenses offset by $8.4 million of cash used to fund working capital. Investing activities, consisting of net proceeds received from the sale of a wafer fabrication building in Kunshan, China of $1.7 million, net proceeds received from the sale of marketable securities of $1.1 million, and cash paid for fixed assets of $2.6 million, provided $0.2 million of cash during the six month period ended July 3, 2010. Financing activities provided $0.4 million of cash, consisting of proceeds received from stock option exercises.
Within our $8.8 million in marketable securities at July 3, 2010, we held a total of $5.9 million of auction rate securities (ARS) and $2.9 million as a corporate debt security, which was originally purchased as an ARS prior to its exchange for the underlying 30 year notes due 2037. ARS are generally financial instruments of long-term duration with interest rates that are reset in short intervals through auctions. During the second half of 2007, certain auction rate debt and preferred securities failed to auction due to sell orders exceeding buy orders. In February 2008, liquidity issues in the global credit markets resulted in failures of the auction process for a broader range of ARS, including substantially all of the auction rate corporate, state and municipal debt and preferred equity securities we hold. When there is insufficient demand for the securities at the time of an auction and the auction is not completed, the interest rates reset to predetermined higher rates (default rates). While certain issuers have redeemed certain of their ARS since 2008, the market remains constrained by illiquidity and the lack of free trading. The funds associated with the remaining failed auctions will not be accessible until a successful auction occurs, a buyer is found outside of the auction process or an issuer redeems its security. If the credit ratings of the security issuers deteriorate and any decline in market value below our amortized cost basis is determined to be other-than-temporary, we would be required to adjust the carrying value of the investment through an additional impairment charge. To date, we have not realized any losses on ARS held by the Company or the notes received in exchange for an ARS, but have recognized other-than-temporary impairments of $8.9 million. For the six months ended July 3, 2010, fair market values of certain of our ARS, when combined with the fair market values of our corporate debt security, increased by $0.1 million, which was recorded to other comprehensive income.
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