Giga-tronics, Incorporated (NASDAQ:GIGA)
F1Q14 Earnings Call
August 8, 2013 4:30 PM ET
Steve Lance – CFO
John Regazzi – CEO and President
Welcome to the Giga-tronics First Quarter Earnings Conference Call. My name is Lesley and I will be your operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded.
I would now like to turn the call over to the CFO, Mr. Steve Lance. Mr. Lance, you may begin.
Thank you, Lesley. At first I’d like to read our Safe Harbor statement. This conference call contains forward-looking statements concerning profitability, backlog of order shipments and the likelihood of realizing certain tax benefits. Actual results may differ significantly due to risks and uncertainties, such as future orders, cancellations or deferral of orders, disputes over performance, the ability to collect receivables and general market conditions. For further discussion, see the most recent annual report filed by Giga-tronics on Form 10-K for the annual year ended March 31, 2013, Part I, under the heading "Certain Factors Which May Adversely Affect Future Operations or an Investment in Giga-tronics" and Part II, under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations".
Now I will turn the call over to John Regazzi, our CEO. John?
Thank you, Steve. Good afternoon and thank you for joining our quarterly earnings conference call. After some brief comments I’ll open the call for questions. Net sales grew 9% to $3 million and gross margins grew 17% to $1.1 million as compared with $2.8 million and $960,000 respectively in the prior quarter. These improvements are primarily due to our Microsource business achieving certain milestones associated with our F-15 and F-18 contracts. The loop of our Microsource operation has just been completed and although the benefits will not begin to accrue until our second quarter. I’m pleased with the way the integration has gone and I look forward to increased efficiency and flexibility on operations from better utilizing our overhead structure.
In addition our Microsource team is in negotiations with the second large aerospace company to develop customized filters for use onboard the F-16 aircraft. This will be a multi-year contract to design the filter and to produce the number of prototypes for flight evaluation. Following the evaluation period the company expects to receive multi-year production contracts in a fashion similar to what it possesses for the F-18 and the F-15 aircraft.
In April of this year the company completed the sale of its Cross Point Matrix product line to Teradyne for $1 million and recorded a net gain of $860,000 in the first quarter. Additional proceeds of $150,000 are due by the end of the calendar year. Net loss for the first quarter of fiscal 2014 was $681,000 which represents a 57% decrease when compared to the $1.6 million loss last quarter. The improvement is primarily due to the sale of the Cross Point Matrix product line to Teradyne. In July the company completed the sale of a new class of securities to Alara Capital that yielded gross profits of $858,000.
The capital raise from the sale of the product line to Teradyne and from the sale of securities to Alara Capital allows us to continue the pace of investment in our new product platform which we believe is necessary for revenue growth and the return to profitability.
With that I’d like to open the call for questions.
Thank you. We will now begin the question-and-answer session. (Operator Instructions) And I’m showing no questions at this time.
Okay, Lesley, thank you. I appreciate everyone’s interest in Giga-tronics and look forward to talking to you in the next quarter.
Thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: firstname.lastname@example.org. Thank you!