News Column

GigOptix Posts Fourth Quarter and Fiscal Year 2013 Financial Results

February 13, 2014

GigOptix, Inc., a supplier of high speed semiconductor components for use in long-haul, metro, Cloud connectivity, data centers, consumer electronics links and interactive applications, through optical and wireless communications networks, announced financial results for its fourth quarter and fiscal year 2013, which ended December 31, 2013.

Fourth Quarter Fiscal 2013 GAAP Results

In a release on February 11, the Company noted that total revenue in the fourth quarter of fiscal 2013 was $7.8 million. This compares with revenue of $7.1 million, excluding approximately $0.9 million of government contract revenue, in the fourth quarter of fiscal 2012, and $7.3 million in the third quarter of fiscal 2013.

Gross margin was 58 percent in the fourth quarter of fiscal 2013, compared with 58 percent in the fourth quarter of fiscal 2012, and 59 percent in the third quarter of fiscal 2013.

Net loss in the fourth quarter of fiscal 2013 was $1.5 million, or a net loss of ($0.07) per share. This compares with a net loss of $2.1 million, or a net loss of ($0.10) per share, in the fourth quarter of fiscal 2012, and net income of $3.5 million, or net income of $0.16 per diluted share, in the third quarter of fiscal 2013. The third quarter fiscal 2013 GAAP net income was positively impacted by a gain of approximately $5.7 million pertaining to the net settlement of the litigation against M/A-Com, partially offset by an additional approximately $0.6 million in R&D wafer tape-out related expenses associated with the Company's joint development programs.

Cash and cash equivalents at December 31, 2013 were $20.4 million, and the Company had no debt outstanding. This compares with $6.5 million, excluding the $3.6 million drawn from the Company's line of credit at December 31, 2012, and $9.3 million, excluding the $6.0 million drawn from the Company's line of credit at September 29, 2013.

Fourth Quarter Fiscal 2013 Non-GAAP Results

Non-GAAP net income in the fourth quarter of fiscal 2013 was $0.1 million, or $0.00 per diluted share, and excludes approximately $1.0 million in stock-based compensation, $0.4 million in compensation expense related to financing activities, and $0.2 million in amortization of intangible assets. The fourth quarter results compare with a non-GAAP net loss of $0.1 million, or ($0.01) per share in the fourth quarter of fiscal 2012, and a non-GAAP net loss of $0.7 million, or ($0.03) per share in the third quarter of fiscal 2013.

Non-GAAP gross margin was 60 percent, compared with 60 percent in the fourth quarter of fiscal 2012 and 62 percent in the third quarter of fiscal 2013.

Adjusted EBITDA for the fourth quarter of 2013 was $0.9 million. This compares with Adjusted EBITDA of $0.7 million in the fourth quarter of fiscal 2012, and Adjusted EBITDA of $0.1 million in the third quarter of fiscal 2013.

Fiscal Year 2013 GAAP Results

Total revenue was $28.9 million, compared with total revenue of $36.7 million in fiscal 2012. The year-over-year change was primarily due to the decline in the previously discussed end of life (EOL) related sales from the Company's ASIC and RF product groups, pertaining to the prior ChipX and Endwave acquisitions, as well as the government contract revenue in Q4 2012.

Gross margin increased to 60 percent, up from 54 percent in the prior fiscal year.

Fiscal 2013 net loss was $1.9 million, compared with a net loss of $7.0 million in fiscal 2012. The year-over-year improvement was due in part to the one time net gain of approximately $4.8 million pertaining to a litigation settlement in the third quarter of fiscal 2013.

Fiscal Year 2013 Non-GAAP Results

Non-GAAP gross margin was 63 percent, up from 56 percent in the prior fiscal year. Non-GAAP net loss was $0.4 million, compared with non-GAAP net income of $0.4 million in fiscal 2012.

Adjusted EBITDA1 for fiscal 2013 was $2.4 million, compared with $3.6 million in fiscal 2012.

"We had a very strong finish to fiscal 2013, with fourth quarter revenue growing 7 percent sequentially, on top of the 7 percent sequential growth we recorded in the prior quarter, and returning to non-GAAP profitability," said Dr. Avi Katz, Chairman and Chief Executive Officer of GigOptix, Inc. "These results were better than we forecasted, led by a nearly 40 percent increase in datacom related revenue and a near doubling of sales of our E-band product."

"In addition, during the fourth quarter we completed a successful stock offering that raised approximately $13.6 million before expenses. We expect to use these additional funds for possible strategic alternatives, and to accelerate our strategic R&D initiatives as we look to bring several products to market in 2014. This includes extending our leadership offering in the 100Gbps Coherent telecom market, expanding our delivery of 40Gbps and 100Gbps devices for data center connectivity, and our new offering for natural interfaces, gesture tracking and other advanced application devices for the consumer market. When taken together, I am confident this year we will deliver meaningful revenue growth over 2013," said Dr. Katz.

"Today we also announced a very significant event for GigOptix. We have entered the Silicon Photonics arena, which will leverage our Thin Film Polymer on Silicon (TFPSTM) technology, through the signing of a definitive agreement with CPqD, a leading Brazil-based optical communications research and development organization, to incept BrPhotonics Produtos Optoeletronicos LTDA., a new joint venture company in Brazil," said Dr. Katz. "This mutually exclusive partnership leverages GigOptix's small form factor Thin Film Polymer on Silicon modulation devices expertise, and CPqD's Silicon Photonics (SiPh) based product expertise. We expect BrPhotonics will provide advanced high-speed components for optical communications utilizing Silicon Photonics and Thin Film Polymer on Silicon technologies to advance the development and deployment of 100Gbps to 1Tbps fiber-optic long haul, metro links and Cloud-connectivity in the next generation CFP2 and CFP4 applications. With GigOptix being the exclusive worldwide sales agent for BrPhotonics, we believe that this progressive business arrangement will significantly enhance our product portfolio and enable us to bring those products to our customers in the fastest and most cost-effective manner."

Financial Outlook

"As is traditionally the case in the first quarter of our fiscal year, we expect revenue will decline due to the normal seasonal pricing reductions that occur in our High-Speed Communications business. We expect this will result in first quarter revenue of approximately $7.2 million," said Curt Sacks, Senior Vice President and Chief Financial Officer of GigOptix, Inc. "It is our current belief that after the first quarter revenue will grow steadily over the rest of the fiscal year and increase over 2013 levels."

More information:

www.gigoptix.com

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