[
X ]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
For
the fiscal year ended March 28, 2009
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from
_____________ to _____________.
|
|
Commission
File No. 0-12719
|
GIGA-TRONICS
INCORPORATED
|
(Exact
name of registrant as specified in its
charter)
|
California
|
94-2656341
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
4650
Norris Canyon Road, San Ramon, CA
|
94583
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code: (925)
328-4650
|
|
Securities
registered pursuant to Section 12(b) of the
Act:
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Stock, No par value
|
The
NASDAQ Stock Market LLC
|
Large
accelerated filer
|
[ ]
|
Accelerated
filer
|
[ ]
|
|
Non-accelerated
filer
|
[ ]
|
Smaller
reporting company
|
[ X
]
|
|
(Do
not check if a smaller reporting company)
|
PART
OF FORM 10-K
|
DOCUMENT
|
|
PART
III
|
Registrant’s
PROXY STATEMENT for its 2009 Annual Meeting of Shareholders to be filed no
later than 120 days after the close of the fiscal year ended March 28,
2009.
|
PART
I
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Page
|
||||
Business
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4
|
||||
Risk
Factors
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8
|
||||
Unresolved
Staff Comments
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9
|
||||
Properties
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10
|
||||
Legal
Proceedings
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10
|
||||
Submission
Of Matters To A Vote Of Security Holders
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10
|
||||
PART
II
|
|||||
Market
For Common Equity, Related Shareholder Matters and Issuer Repurchases of
Equity
|
|||||
Securities
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11
|
||||
Selected
Financial Data
|
11
|
||||
Management’s
Discussion and Analysis Of Financial Condition and Results Of
Operation
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15
|
||||
Item
7A.
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Quantitative
and Qualitative Disclosures About Market Risk
|
20
|
|||
Financial
Statements and Supplementary Data
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21
|
||||
Consolidated Balance Sheets as of March 28, 2009 and
March 29, 2008
|
22
|
||||
Consolidated Statements of Operations for the years
ended March 28, 2009 and March
29, 2008
|
23
|
||||
Consolidated Statements of Shareholders’ Equity for
the years ended March 28, 2009 and
March 29, 2008
|
24
|
||||
Consolidated Statements of Cash Flows for the years
ended March 28, 2009 and March
29, 2008
|
25
|
||||
26
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|||||
35
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|||||
Changes
In and Disagreements With Accountants On Accounting and Financial
Disclosure
|
36
|
||||
Item
9A.
|
Controls
and Procedures
|
36
|
|||
Item
9B.
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Other
Information
|
36
|
|||
PART
III
|
|||||
Directors,
Executive Officers, and Corporate Governance
|
37
|
||||
Executive
Compensation
|
38
|
||||
Item
12.
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Security
Ownership Of Certain Beneficial Owners and Management and
Related
|
||||
Shareholder
Matters
|
38
|
||||
Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence
|
38
|
|||
Item
14.
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Principal
Accountant Fees and Services
|
38
|
|||
PART
IV
|
|||||
Exhibits
And Financial Statements Schedules
|
39
|
||||
41
|
|||||
Significant
Subsidiaries
|
42
|
||||
Consent
of Independent Registered Public Accounting Firm
|
43
|
||||
CEO
Certifications Under Section 302 of the Sarbanes-Oxley Act of
2002
|
44
|
||||
CFO
Certifications Under Section 302 of the Sarbanes-Oxley Act of
2002
|
45
|
||||
CEO
Certifications Under Section 906 of the Sarbanes-Oxley Act of
2002
|
46
|
||||
CFO
Certifications Under Section 906 of the Sarbanes-Oxley Act of
2002
|
47
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Geographic
Distribution of Net Sales
|
% of total
|
|||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Domestic
|
$ | 13,490 | $ | 11,348 | 77.0 | % | 62.0 | % | ||||||||
International
|
3,931 | 6,983 | 23.0 | % | 38.0 | % | ||||||||||
Total
|
$ | 17,421 | $ | 18,331 |
2009
|
High
|
Low
|
2008
|
High
|
Low
|
|||||||||||||
First
Quarter
|
(3/30
- 6/28)
|
$ | 1.80 | $ | 1.26 |
(4/1
- 6/30)
|
$ | 2.22 | $ | 1.61 | ||||||||
Second
Quarter
|
(6/29
- 9/27)
|
1.25 | 0.80 |
(7/1
- 9/29)
|
2.36 | 1.62 | ||||||||||||
Third
Quarter
|
(9/28
- 12/27)
|
1.00 | 0.50 |
(9/30
- 12/29)
|
3.85 | 1.71 | ||||||||||||
Fourth
Quarter
|
(12/28
- 3/28)
|
1.21 | 0.55 |
(12/30
- 3/29)
|
1.87 | 1.27 |
Equity
Compensation Plan Information
|
|||||||||
No.
of securities to be issued upon exercise of outstanding option, warrants
and rights
|
Weighted
average exercise price of outstanding option, warrants and
rights
|
No.
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|||||||
Plan
Category
|
(a)
|
(b)
|
(c)
|
||||||
Equity
compensation plans approved
|
|||||||||
by
security holders
|
770,900 | $1.9015 | 529,975 | ||||||
Equity
compensation plans not approved
|
|||||||||
by
security holders
|
n/a | n/a | n/a | ||||||
Total
|
770,900 | $1.9015 | 529,975 |
SELECTED CONSOLIDATED FINANCIAL
DATA
|
||||||||||||||||||||
Summary
of Operations:
|
Years
Ended
|
|||||||||||||||||||
(In
thousands except per share data)
|
March
28, 2009
|
March
29, 2008
|
March
31, 2007
|
March
25, 2006
|
March
26, 2005
|
|||||||||||||||
Net
sales
|
$ | 17,421 | $ | 18,331 | $ | 18,048 | $ | 20,620 | $ | 21,477 | ||||||||||
Gross
profit
|
7,504 | 7,748 | 7,546 | 8,300 | 9,598 | |||||||||||||||
Operating
expenses
|
7,914 | 7,939 | 9,548 | 9,316 | 8,760 | |||||||||||||||
Interest
income, net
|
7 | 36 | 108 | 32 | - | |||||||||||||||
Per-tax
(loss) income from continuing
|
||||||||||||||||||||
operations
|
(403 | ) | (201 | ) | (1,894 | ) | (984 | ) | 849 | |||||||||||
Provision
for income taxes
|
2 | 2 | 1 | 4 | 4 | |||||||||||||||
(Loss)
income from continuing operations
|
(405 | ) | (203 | ) | (1,895 | ) | (988 | ) | 845 | |||||||||||
Income
(loss) on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
75 | (31 | ) | 28 | 27 | (233 | ) | |||||||||||||
Net
(loss) income
|
$ | (330 | ) | $ | (234 | ) | $ | (1,867 | ) | $ | (961 | ) | $ | 612 | ||||||
Basic
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.08 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.21 | ) | $ | 0.18 | ||||||
On
discontinued operations
|
0.01 | (0.01 | ) | 0.01 | 0.01 | (0.05 | ) | |||||||||||||
Net
(loss) earnings per share - basic
|
$ | (0.07 | ) | $ | (0.05 | ) | $ | (0.39 | ) | $ | (0.20 | ) | $ | 0.13 | ||||||
Diluted
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.08 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.21 | ) | $ | 0.18 | ||||||
On
discontinued operations
|
0.01 | (0.01 | ) | 0.01 | 0.01 | (0.05 | ) | |||||||||||||
Net
(loss) earnings per share - diluted
|
$ | (0.07 | ) | $ | (0.05 | ) | $ | (0.39 | ) | $ | (0.20 | ) | $ | 0.13 | ||||||
Shares
of common stock - basic
|
4,824 | 4,813 | 4,809 | 4,782 | 4,725 | |||||||||||||||
Shares
of common stock - diluted
|
4,824 | 4,813 | 4,809 | 4,782 | 4,741 | |||||||||||||||
Financial
Position:
|
Years
Ended
|
|||||||||||||||||||
(In
thousands except per share data)
|
March
28, 2009
|
March
29, 2008
|
March
31, 2007
|
March
25, 2006
|
March
26, 2005
|
|||||||||||||||
Current
ratio
|
3.14 | 3.68 | 3.09 | 3.93 | 4.29 | |||||||||||||||
Working
Capital
|
$ | 7,131 | $ | 7,231 | $ | 7,280 | $ | 8,856 | $ | 9,337 | ||||||||||
Total
assets
|
$ | 10,467 | $ | 10,361 | $ | 11,161 | $ | 12,346 | $ | 12,961 | ||||||||||
Shareholders'
equity
|
$ | 7,332 | $ | 7,392 | $ | 7,393 | $ | 9,098 | $ | 9,812 | ||||||||||
Percentage
Data:
|
Years
Ended
|
|||||||||||||||||||
(Percentage
of net sales)
|
March
28, 2009
|
March
29, 2008
|
March
21, 2007
|
March
25, 2006
|
March
26, 2005
|
|||||||||||||||
Gross
profit
|
43.1 | % | 42.3 | % | 41.8 | % | 40.3 | % | 44.7 | % | ||||||||||
Operating
expenses
|
45.4 | % | 43.3 | % | 52.9 | % | 45.2 | % | 40.8 | % | ||||||||||
Interest
income, net
|
0.0 | % | 0.2 | % | 0.6 | % | 0.1 | % | 0.0 | % | ||||||||||
Per-tax
(loss) income from continuing
|
||||||||||||||||||||
operations
|
(2.3 | %) | (1.1 | %) | (10.5 | %) | (4.8 | %) | 4.0 | % | ||||||||||
Income
(loss) on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
0.4 | % | (0.2 | %) | 0.2 | % | 0.1 | % | (1.1 | %) | ||||||||||
Net
(loss) income
|
(1.9 | %) | (1.3 | %) | (10.3 | %) | (4.7 | %) | 2.8 | % |
SELECTED CONSOLIDATED FINANCIAL
DATA
|
||||||||||||||||||||
The
following is a summary of unaudited results of operations for the fiscal
years ended March 28, 2009 and March 29, 2008.
|
||||||||||||||||||||
Quarterly
Financial Information (Unaudited)
|
2009
|
|||||||||||||||||||
(In
thousands except per share data)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
|||||||||||||||
Net
sales
|
$ | 3,488 | $ | 3,689 | $ | 5,099 | $ | 5,145 | $ | 17,421 | ||||||||||
Gross
profit
|
1,397 | 1,338 | 2,420 | 2,349 | 7,504 | |||||||||||||||
Operating
expenses
|
1,920 | 1,959 | 2,069 | 1,966 | 7,914 | |||||||||||||||
Interest
income, net
|
3 | 6 | (2 | ) | - | 7 | ||||||||||||||
Per-tax
(loss) income from continuing operations
|
(520 | ) | (615 | ) | 349 | 383 | (403 | ) | ||||||||||||
Provision
for income taxes
|
2 | - | - | - | 2 | |||||||||||||||
(Loss)
income from continuing operations
|
(522 | ) | (615 | ) | 349 | 383 | (405 | ) | ||||||||||||
Income
on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
- | 75 | - | - | 75 | |||||||||||||||
Net
(loss) income
|
$ | (522 | ) | $ | (540 | ) | $ | 349 | $ | 383 | $ | (330 | ) | |||||||
Basic
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.11 | ) | $ | (0.13 | ) | $ | 0.07 | $ | 0.08 | $ | (0.08 | ) | |||||||
On
discontinued operations
|
- | 0.02 | - | - | 0.01 | |||||||||||||||
Net
(loss) earnings per share - basic
|
$ | (0.11 | ) | $ | (0.11 | ) | $ | 0.07 | $ | 0.08 | $ | (0.07 | ) | |||||||
Basic
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.11 | ) | $ | (0.13 | ) | $ | 0.07 | $ | 0.08 | $ | (0.08 | ) | |||||||
On
discontinued operations
|
- | 0.02 | - | - | 0.01 | |||||||||||||||
Net
(loss) earnings per share - basic
|
$ | (0.11 | ) | $ | (0.11 | ) | $ | 0.07 | $ | 0.08 | $ | (0.07 | ) | |||||||
Shares
of common stock - basic
|
4,824 | 4,824 | 4,824 | 4,824 | 4,824 | |||||||||||||||
Shares
of common stock - diluted
|
4,824 | 4,824 | 4,824 | 4,824 | 4,824 | |||||||||||||||
Quarterly
Financial Information (Unaudited)
|
2008
|
|||||||||||||||||||
(In
thousands except per share data)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
|||||||||||||||
Net
sales
|
$ | 4,628 | $ | 4,651 | $ | 4,953 | $ | 4,009 | $ | 18,331 | ||||||||||
Gross
profit
|
1,944 | 2,081 | 2,049 | 1,674 | 7,748 | |||||||||||||||
Operating
expenses
|
1,941 | 1,879 | 1,974 | 2,145 | 7,939 | |||||||||||||||
Interest
income, net
|
14 | 9 | 6 | 7 | 36 | |||||||||||||||
Pre-tax
income (loss) from continuing operations
|
30 | 198 | 51 | (480 | ) | (201 | ) | |||||||||||||
Provision
for income taxes
|
2 | - | - | - | 2 | |||||||||||||||
Income
(loss) from continuing operations
|
28 | 198 | 51 | (480 | ) | (203 | ) | |||||||||||||
Income
(loss) on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
64 | (10 | ) | (20 | ) | (65 | ) | (31 | ) | |||||||||||
Net
income (loss)
|
$ | 92 | $ | 188 | 31 | $ | (545 | ) | $ | (234 | ) | |||||||||
Basic
earnings (loss) per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | 0.01 | $ | 0.04 | $ | 0.01 | $ | (0.10 | ) | $ | (0.04 | ) | ||||||||
On
discontinued operations
|
0.01 | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||||||
Net
earnings (loss) per share - basic
|
$ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.11 | ) | $ | (0.05 | ) | ||||||||
Diluted
earnings (loss) per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | 0.01 | $ | 0.04 | $ | 0.01 | $ | (0.10 | ) | $ | (0.04 | ) | ||||||||
On
discontinued operations
|
0.01 | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||||||
Net
earnings (loss) per share - diluted
|
$ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.11 | ) | $ | (0.05 | ) | ||||||||
Shares
of common stock - basic
|
4,809 | 4,810 | 4,814 | 4,818 | 4,813 | |||||||||||||||
Shares
of common stock - diluted
|
4,863 | 4,880 | 4,913 | 4,818 | 4,813 |
New
Orders
|
% change
|
|||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
vs.
|
vs.
|
|||||||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Giga-tronics
|
$ | 11,599 | $ | 13,795 | $ | 13,067 | (16 | %) | 6 | % | ||||||||||
Microsource
|
7,399 | 3,625 | 3,091 | 104 | % | 17 | % | |||||||||||||
Total
|
$ | 18,998 | $ | 17,420 | $ | 16,158 | 9 | % | 8 | % |
Backlog
|
% change
|
|||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
vs.
|
vs.
|
|||||||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Backlog
of unfilled orders
|
$ | 9,105 | $ | 7,528 | $ | 8,439 | 21 | % | (11 | %) | ||||||||||
Backlog
of unfilled orders shippable within one year
|
6,810 | 4,604 | 5,294 | 48 | % | (13 | %) | |||||||||||||
Previous
fiscal year end (FYE) long term backlog
|
||||||||||||||||||||
reclassified
during year as shippable within one year
|
1,640 | 425 | 303 | 286 | % | 40 | % | |||||||||||||
Net
cancellations during year of previous FYE
|
||||||||||||||||||||
one-year
backlog
|
- | - | 904 | - | - |
Allocation
of Net Sales
|
% change
|
|||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
vs.
|
vs.
|
|||||||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Commercial
|
$ | 6,303 | $ | 7,020 | $ | 7,054 | (10 | %) | 0 | % | ||||||||||
Government
/ Defense
|
11,118 | 11,311 | 10,994 | (2 | %) | 3 | % | |||||||||||||
Total
|
$ | 17,421 | $ | 18,331 | $ | 18,048 | (5 | %) | 2 | % |
Allocation
of Net Sales by Segment
|
% change
|
|||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
vs.
|
vs.
|
|||||||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Giga-tronics Division
|
||||||||||||||||||||
Commercial
|
$ | 4,694 | $ | 5,282 | $ | 5,355 | (11 | %) | (1 | %) | ||||||||||
Government
/ Defense
|
6,989 | 9,264 | 7,183 | (25 | %) | 29 | % | |||||||||||||
Total
|
$ | 11,683 | $ | 14,546 | $ | 12,538 | (20 | %) | 16 | % | ||||||||||
Microsource
|
||||||||||||||||||||
Commercial
|
$ | 1,609 | $ | 1,738 | $ | 1,699 | (7 | %) | 2 | % | ||||||||||
Government
/ Defense
|
4,129 | 2,047 | 3,811 | 102 | % | (46 | %) | |||||||||||||
Total
|
$ | 5,738 | $ | 3,785 | $ | 5,510 | 52 | % | (31 | %) |
Cost
of Sales
|
% change
|
|||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
vs.
|
vs.
|
|||||||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Cost
of sales
|
$ | 9,917 | $ | 10,583 | $ | 10,502 | (6 | %) | 1 | % |
Operating
Expenses
|
% change
|
|||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||
vs.
|
vs.
|
|||||||||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||
Engineering
|
$ | 1,975 | $ | 2,248 | $ | 3,731 | (12 | %) | (40 | %) | ||||||||||
Selling,
general and administrative
|
5,939 | 5,538 | 5,456 | 7 | % | 2 | % | |||||||||||||
Restructuring
|
- | 153 | 361 | (100 | %) | (58 | %) | |||||||||||||
Total
|
$ | 7,914 | $ | 7,939 | $ | 9,548 | 0 | % | (17 | %) |
Net
Inventories
|
%
change
|
|||||||||||
2009
|
||||||||||||
vs.
|
||||||||||||
(Dollars
in thousands)
|
2009
|
2008
|
2008
|
|||||||||
Raw
materials
|
$ | 3,263 | $ | 2,767 | 18 | % | ||||||
Work-in-progress
|
1,127 | 1,501 | (25 | %) | ||||||||
Finished
goods
|
559 | 369 | 51 | % | ||||||||
Demonstration
inventory
|
460 | 371 | 24 | % | ||||||||
Total
|
$ | 5,409 | $ | 5,008 | 8 | % |
(Dollars
in thousands)
|
Under
one year
|
One
to three years
|
Three
to five years
|
More
than five years
|
||||||||||||
Operating
leases
|
$ | 1,067 | $ | 1,458 | $ | 962 | $ | 0 | ||||||||
Capital
lease
|
18 | 18 | 9 | - | ||||||||||||
Purchase
obligations
|
1,152 | 202 | - | - | ||||||||||||
Total
|
$ | 2,237 | $ | 1,678 | $ | 971 | $ | 0 |
Index To
Financial Statements And Schedules
|
|||
Financial Statements
|
Page No.
|
||
Consolidated
Balance Sheets -
|
22
|
||
As
of March 28, 2009 and March 29, 2008
|
|||
Consolidated
Statements of Operations -
|
23
|
||
Years
ended March 28, 2009 and March 29, 2008
|
|||
Consolidated
Statements of Shareholders’ Equity -
|
24
|
||
Years
ended March 28, 2009 and March 29, 2008
|
|||
Consolidated
Statements of Cash Flows -
|
25
|
||
Years
ended March 28, 2009 and March 29, 2008
|
|||
Notes
to Consolidated Financial Statements
|
26
- 34
|
||
Report
of Independent Registered Public Accounting Firm
|
35
|
CONSOLIDATED BALANCE
SHEETS
|
||||||||
(In
thousands except share data)
|
March
28, 2009
|
March
29, 2008
|
||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 1,518 | $ | 1,845 | ||||
Trade
accounts receivable, net of allowance
|
||||||||
of
$102 and $93, respectively
|
3,110 | 2,693 | ||||||
Inventories,
net
|
5,409 | 5,008 | ||||||
Prepaid
expenses and other current assets
|
430 | 383 | ||||||
Total
current assets
|
10,467 | 9,929 | ||||||
Property
and equipment
|
||||||||
Leasehold
improvements
|
373 | 373 | ||||||
Machinery
and equipment
|
15,462 | 15,468 | ||||||
Office
furniture and fixtures
|
788 | 723 | ||||||
Total
property and equipment
|
16,623 | 16,564 | ||||||
Less
accumulated depreciation and amortization
|
16,317 | 16,164 | ||||||
Property
and equipment, net
|
306 | 400 | ||||||
Other
assets
|
16 | 32 | ||||||
Total
assets
|
$ | 10,789 | $ | 10,361 | ||||
Liabilities
and shareholders' equity
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ | 1,219 | $ | 649 | ||||
Accrued
commission
|
144 | 181 | ||||||
Accrued
payroll and benefits
|
397 | 526 | ||||||
Accrued
warranty
|
177 | 190 | ||||||
Deferred
revenue
|
959 | 646 | ||||||
Deferred
rent
|
118 | 286 | ||||||
Capital
lease obligations
|
16 | - | ||||||
Other
current liabilities
|
306 | 220 | ||||||
Total
current liabilities
|
3,336 | 2,698 | ||||||
Long
term obligation - Deferred rent
|
96 | 271 | ||||||
Long
term obligation - Capital lease
|
25 | - | ||||||
Total
liabilities
|
3,457 | 2,969 | ||||||
Commitments
and contingencies
|
- | - | ||||||
Shareholders'
equity
|
||||||||
Preferred
stock of no par value; Authorized 1,000,000 shares; no
shares
|
||||||||
outstanding
at March 28, 2009 and March 29, 2008
|
- | - | ||||||
Common
stock of no par value; Authorized 40,000,000 shares;
4,824,021
|
||||||||
shares
at March 28, 2009 and March 29, 2008 issued and
outstanding
|
13,668 | 13,398 | ||||||
Accumulated
deficit
|
(6,336 | ) | (6,006 | ) | ||||
Total
shareholders' equity
|
7,332 | 7,392 | ||||||
Total
liabilities and shareholders' equity
|
$ | 10,789 | $ | 10,361 | ||||
See
Accompanying Notes to Consolidated Financial Statements
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
||||||||
Years Ended
|
||||||||
(In
thousands except share data)
|
March
28, 2009
|
March
29, 2008
|
||||||
Net
sales
|
$ | 17,421 | $ | 18,331 | ||||
Cost
of sales
|
9,917 | 10,583 | ||||||
Gross
profit
|
7,504 | 7,748 | ||||||
Engineering
|
1,975 | 2,248 | ||||||
Selling,
general and administrative
|
5,939 | 5,538 | ||||||
Restructuring
|
- | 153 | ||||||
Total
operating expenses
|
7,914 | 7,939 | ||||||
Operating
loss from continuing operations
|
(410 | ) | (191 | ) | ||||
Other
expense
|
- | 46 | ||||||
Interest
income, net
|
7 | 36 | ||||||
Loss
from continuing operations before income taxes
|
(403 | ) | (201 | ) | ||||
Provision
for income taxes
|
2 | 2 | ||||||
Loss
from continuing operations
|
(405 | ) | (203 | ) | ||||
Income
(loss) on discontinued operations, net of income
|
||||||||
taxes
of nil for 2009 and 2008
|
75 | (31 | ) | |||||
Net
loss
|
$ | (330 | ) | $ | (234 | ) | ||
Basic
and diluted (loss) earnings per share:
|
||||||||
From
continuing operations
|
$ | (0.08 | ) | $ | (0.04 | ) | ||
On
discontinued operations
|
0.01 | (0.01 | ) | |||||
Basic
and diluted loss per share
|
$ | (0.07 | ) | $ | (0.05 | ) | ||
Shares
used in per share calculation:
|
||||||||
Basic
|
4,824 | 4,813 | ||||||
Diluted
|
4,824 | 4,813 | ||||||
See
Accompanying Notes to Consolidated Financial Statements
|
CONSOLIDATED STATEMENTS OF
CHANGES IN
SHAREHOLDERS' EQUITY
|
||||||||||||||||
Accumulated
|
||||||||||||||||
(In
thousands except share data)
|
Shares
|
Amount
|
Deficit
|
Total
|
||||||||||||
Balance
at March 31, 2007
|
4,809,021 | $ | 13,165 | $ | (5,772 | ) | $ | 7,393 | ||||||||
Net
loss
|
(234 | ) | (234 | ) | ||||||||||||
Share
based compensation
|
- | 211 | - | 211 | ||||||||||||
Stock
issuance under stock options plans
|
15,000 | 22 | - | 22 | ||||||||||||
Balance
at March 29, 2008
|
4,824,021 | 13,398 | (6,006 | ) | 7,392 | |||||||||||
Net
loss
|
(330 | ) | (330 | ) | ||||||||||||
Share
based compensation
|
- | 270 | - | 270 | ||||||||||||
Stock
issuance under stock options plans
|
- | - | - | - | ||||||||||||
Balance
at March 28, 2009
|
4,824,021 | $ | 13,668 | $ | (6,336 | ) | $ | 7,332 | ||||||||
See
Accompanying Notes to Consolidated Financial Statements
|
CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
||||||||
Fiscal Years Ended
|
||||||||
(In
thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Cash
flows from operations:
|
||||||||
Net
loss
|
$ | (330 | ) | $ | (234 | ) | ||
Adjustments
to reconcile net loss to net cash
|
||||||||
(used
in) provided by operations:
|
||||||||
Net
provision for doubtful accounts
|
9 | 31 | ||||||
Depreciation
and amortization
|
162 | 128 | ||||||
Gain
on sale of fixed asset
|
- | (3 | ) | |||||
Share
based compensation
|
270 | 211 | ||||||
Deferred
rent
|
(343 | ) | (83 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Trade
accounts receivable
|
(426 | ) | 26 | |||||
Inventories
|
(401 | ) | 833 | |||||
Prepaid
expenses and other assets
|
(47 | ) | (23 | ) | ||||
Accounts
payable
|
570 | (457 | ) | |||||
Accrued
commissions
|
(37 | ) | (11 | ) | ||||
Accrued
payroll and benefits
|
(129 | ) | (140 | ) | ||||
Accrued
warranty
|
(13 | ) | (17 | ) | ||||
Deferred
revenue
|
313 | (35 | ) | |||||
Other
current liabilities
|
102 | (6 | ) | |||||
Net
cash (used in) provided by operations
|
(300 | ) | 220 | |||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from sales of equipment
|
1 | 5 | ||||||
Purchases
of property and equipment
|
(69 | ) | (206 | ) | ||||
Net
cash used in investing activities
|
(68 | ) | (201 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from capital lease
|
41 | - | ||||||
Issuance
of common stock
|
- | 22 | ||||||
Net
cash provided by financing activities
|
41 | 22 | ||||||
(Decrease)
increase in cash and cash equivalents
|
(327 | ) | 41 | |||||
Beginning
cash and cash equivalents
|
1,845 | 1,804 | ||||||
Ending
cash and cash equivalents
|
$ | 1,518 | $ | 1,845 | ||||
Supplementary
disclosure of cash flow information:
|
||||||||
Cash
paid for income taxes
|
$ | 2 | $ | 2 | ||||
Cash
paid for interest
|
- | - | ||||||
See
Accompanying Notes to Consolidated Financial Statements
|
(Dollars
in thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Beginning
balance
|
$ | 93 | $ | 62 | ||||
Provision
for doubtful accounts
|
9 | 31 | ||||||
Recoveries
of doubtful accounts
|
- | - | ||||||
Write-off
of doubtful accounts
|
- | - | ||||||
Ending
balance
|
$ | 102 | $ | 93 |
Years
Ended
|
March
28, 2009
|
March
29, 2008
|
||||||
Dividend
yield
|
Zero
|
Zero
|
||||||
Expected
volatility
|
90 | % |
80%
to 112
|
% | ||||
Risk-free
interest rate
|
2.67 | % |
2.21%
to 3.59
|
% | ||||
Expected
term (years)
|
3.86 |
3.75
|
(Dollars
in thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Raw
materials
|
$ | 3,263 | $ | 2,767 | ||||
Work-in-progress
|
1,127 | 1,501 | ||||||
Finished
goods
|
559 | 369 | ||||||
Demonstration
inventory
|
460 | 371 | ||||||
Total
|
$ | 5,409 | $ | 5,008 |
March 28,
2009 (Dollars in
thousands)
|
Giga-tronics
Division
|
Microsource
|
Total
|
|||||||||
Revenue
|
$ | 11,683 | $ | 5,738 | $ | 17,421 | ||||||
Interest
income, net
|
7 | - | 7 | |||||||||
Depreciation
and amortization
|
137 | 25 | 162 | |||||||||
(Loss)
income from continuing operations
|
||||||||||||
before
income taxes
|
(1,451 | ) | 1,048 | (403 | ) | |||||||
Assets
|
6,420 | 4,369 | 10,789 | |||||||||
March
29, 2008 (Dollars in
thousands)
|
Giga-tronics
Division
|
Microsource
|
Total
|
|||||||||
Revenue
|
$ | 14,546 | $ | 3,785 | $ | 18,331 | ||||||
Interest
income, net
|
11 | 25 | 36 | |||||||||
Depreciation
and amortization
|
103 | 25 | 128 | |||||||||
(Loss)
income from continuing operations
|
||||||||||||
before
income taxes
|
(265 | ) | 64 | (201 | ) | |||||||
Assets
|
7,193 | 3,168 | 10,361 |
(Dollars
in thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Americas
|
$ | 236 | $ | 1,250 | ||||
Europe
|
1,783 | 2,778 | ||||||
Asia
|
1,456 | 1,087 | ||||||
Rest
of world
|
456 | 1,868 | ||||||
Total
|
$ | 3,931 | $ | 6,983 |
(In
thousands except per share data)
|
March
28, 2009
|
March
29, 2008
|
||||||
Net
loss
|
$ | (330 | ) | $ | (234 | ) | ||
Weighted
average:
|
||||||||
Common
shares outstanding
|
4,824 | 4,813 | ||||||
Potential
common shares
|
- | - | ||||||
Common
shares assuming dilution
|
4,824 | 4,813 | ||||||
Net
loss per share of common stock
|
$ | (0.07 | ) | $ | (0.05 | ) | ||
Net
loss per share of common stock assuming dilution
|
$ | (0.07 | ) | $ | (0.05 | ) | ||
Stock
options not included in computation
|
771 | 856 |
Years
Ended (In thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Current
|
||||||||
Federal
|
$ | - | $ | - | ||||
State
|
2 | 2 | ||||||
Total
current
|
2 | 2 | ||||||
Deferred
|
||||||||
Federal
|
1,182 | 39 | ||||||
State
|
423 | 14 | ||||||
Total
deferred
|
1,605 | 53 | ||||||
Change
in valuation allowance
|
(1,605 | ) | (53 | ) | ||||
Provision
for income taxes
|
$ | 2 | $ | 2 |
Year
Ended (In thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Net
operating loss carryforwards
|
$ | 12,056 | $ | 13,667 | ||||
Income
tax credits
|
2,076 | 1,969 | ||||||
Inventory
reserves and additional costs capitalized
|
2,345 | 2,273 | ||||||
Fixed
assets depreciation
|
149 | 153 | ||||||
Accrued
vacation
|
112 | 110 | ||||||
Accrued
warranty
|
76 | 82 | ||||||
Deferred
rent
|
74 | 50 | ||||||
Other
accrued liabilities
|
1 | 201 | ||||||
Future
state tax effect
|
(196 | ) | (203 | ) | ||||
Allowance
for doubtful accounts
|
45 | 41 | ||||||
Total
deferred tax assets
|
16,738 | 18,343 | ||||||
Valuation
allowances
|
(16,738 | ) | (18,343 | ) | ||||
$ | 0 | $ | 0 |
Years
Ended (In thousands except percentages)
|
March 28, 2009
|
March 29, 2008
|
||||||||||||||
Statutory
federal income tax
|
$ | (112 | ) | 34.0 | % | $ | (79 | ) | 34.0 | % | ||||||
Valuation
allowance
|
(1,605 | ) | 489.4 | (53 | ) | 22.9 | ||||||||||
Expiration
of net operating losses
|
1,758 | (536.0 | ) | 178 | (76.8 | ) | ||||||||||
State
income tax, net of federal benefit
|
(19 | ) | 5.8 | (14 | ) | 6.0 | ||||||||||
Non-tax
deductible expenses
|
82 | (25.0 | ) | 99 | (42.7 | ) | ||||||||||
Liability
for uncertain tax positions
|
(107 | ) | 32.6 | (127 | ) | 54.9 | ||||||||||
Other
|
5 | (1.5 | ) | (2 | ) | 0.7 | ||||||||||
Effective
income tax
|
$ | 2 | (0.7 | %) | $ | 2 | (1.0 | %) |
(In
thousands)
|
Fiscal
Year 2009
|
|||
Balance
as of March 29, 2008
|
$ | 297,000 | ||
Additions
based on current year tax positions
|
70,000 | |||
Reductions
for prior year tax positions and lapses of applicable
statute
|
(177,000 | ) | ||
Balance
as of March 28, 2009
|
$ | 190,000 |
|
|
|
||||||||||||||
Weighted
Average
|
Weighted
Average Remaining Contractual
|
Average
Intrinsic
|
||||||||||||||
Shares
|
Exercise
Price
|
Terms
(Years)
|
Value
|
|||||||||||||
Outstanding
at March 31, 2007
|
840,900 | $ |
2.06
|
3.6
|
$ | 149,624 | ||||||||||
Granted
|
157,000 |
1.84
|
||||||||||||||
Excercised
|
15,000 |
1.47
|
||||||||||||||
Forfeited
/ Expired
|
131,250 |
1.95
|
||||||||||||||
Outstanding
at March 29, 2008
|
851,650 | $ |
2.04
|
3.1
|
$ | - | ||||||||||
Granted
|
146,500 |
1.17
|
||||||||||||||
Excercised
|
- |
-
|
||||||||||||||
Forfeited
/ Expired
|
227,250 |
1.96
|
||||||||||||||
Outstanding
at March 28, 2009
|
770,900 | $ |
1.90
|
2.7
|
$ | - | ||||||||||
Exercisable
at March 28, 2009
|
369,577 | $ |
2.15
|
2.0
|
$ | - |
Options
|
Options
|
Weighted
Average
|
||||||||||
Exercisable
|
Outstanding
|
Fair
Value
|
||||||||||
Outstanding
at March 31, 2007
|
214,750
|
840,900
|
$ | 2.06 | ||||||||
Excercised
|
(15,000 | ) | 1.47 | |||||||||
Forfeited
|
(131,250 | ) | 1.95 | |||||||||
Granted
|
157,000 | 1.84 | ||||||||||
Outstanding
at March 29, 2008
|
338,726
|
851,650 | $ | 2.04 | ||||||||
Excercised
|
- | - | ||||||||||
Forfeited
|
(227,250 | ) | 1.96 | |||||||||
Granted
|
146,500 | 1.17 | ||||||||||
Outstanding
at March 28, 2009
|
369,577
|
770,900 | $ | 1.90 |
Fiscal
year (Dollars in thousands)
|
||||
2010
|
$ | 1,067 | ||
2011
|
1,066 | |||
2012
|
898 | |||
2013
|
391 | |||
2014
|
65 | |||
Thereafter
|
- | |||
$ | 3,487 |
(Dollars
in thousands)
|
March
28, 2009
|
March
29, 2008
|
||||||
Balance
at beginning of period
|
$ | 190 | $ | 207 | ||||
Provision,
net
|
179 | 160 | ||||||
Warranty
costs incurred
|
(192 | ) | (177 | ) | ||||
Balance
at end of period
|
$ | 177 | $ | 190 |
·
|
pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
|
·
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and
directors of the Company; and
|
·
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that
could have a material effect on the financial
statements.
|
Name
|
Age
|
Position
|
John
R. Regazzi
|
54
|
Chief
Executive Officer and a Director of the Company since April
2006. Mr. Regazzi had been President and General Manager of
Instrument Division since September 2005, and prior to that, was Vice
President of Operations for Instrument Division from October 2004 through
September 2005. Prior to that, he was Vice President of
Engineering for Instrument Division from June 2001 through October 2004.
Previous experience includes 22 years at Hewlett Packard and Agilent
Technologies in various design and management positions associated with
their microwave sweeper and synthesizer product lines. His final position
at Agilent Technologies was as a senior engineering manager.
|
Patrick
J. Lawlor
|
58
|
Vice
President, Finance, Chief Financial Officer and Secretary of Giga-tronics,
Inc. since February 2007. Mr. Lawlor was previously a
Consultant to PDL BioPharma, Inc, and before that was the Vice President,
Chief Financial Officer at SaRonix, LLC, a $90 million private company
with international facilities. Prior to that he was the Chief
Financial Officer with Aerojet Fine Chemicals, LLC, a $65 million
subsidiary of GenCorp, and Vice President of Finance with Systems
Chemistry, Inc. Mr. Lawlor spent 23 years with Westinghouse
Electric Corporation, where he rose through numerous positions among
various divisions, with his final position as Vice President of Finance
and Controller.
|
Jeffrey
T. Lum
|
63
|
President
and a Director of the Board of ASCOR (now a division of the Company) since
November 1987. Mr. Lum founded ASCOR in 1987 and has been
President since inception. He was a founder and Vice President
of Autek Systems Corporation, a manufacturer of precision waveform
analyzers. Mr. Lum serves as Treasurer and a member of the
Board of Directors for the Santa Clara Aquamaids, a non-profit
organization dedicated to advancing athletes in synchronized swimming to
the Olympics games.
|
Malcolm
E. Levy
|
59
|
Mr.
Levy has over 25 years of Sales and Marketing experience in the Test &
Measurement industry. His career started in sales with Racal Instruments
in the U.K. A background in RF and Communications made him an ideal
candidate to move to the U.S. and become the sales and marketing manager
for all UK manufactured instruments, including low noise fast switching
synthesizers. His final position at Racal Instruments after 20 years of
service was Executive Vice President, Sales and Marketing. Since leaving
Racal in 2001 he has helped wireless test companies grow their
international sales business.
|
|
(a)
The following consolidated financial statements of Giga-tronics
Incorporated and subsidiaries and the related independent registered
public accounting firm are filed
herewith:
|
Index
To Financial Statements And Schedules
|
||
Consolidated Financial
Statements:
|
Page
|
|
Consolidated
Balance Sheets as of March 28, 2009 and March 29, 2008
|
22
|
|
Consolidated
Statements of Operations for the years ended March 28, 2009 and March 29,
2008
|
23
|
|
Consolidated
Statements of Stockholders Equity for the years ended March 28, 2009 and
March 29, 2008
|
24
|
|
Consolidated
Statements of Cash Flows for the years ended March 28, 2009 and March 29,
2008
|
25
|
|
Notes
to Consolidated Financial Statements
|
26
– 34
|
|
Report
of Independent Registered Public Accounting Firm
|
35
|
|
Index
To Exhibits
|
||
3.1
|
Articles
of Incorporation of the Registrant, as amended, previously filed as
Exhibit 3.1 to Form 10-KSB for the fiscal year ended March 27, 1999 and
incorporated herein by reference.
|
|
3.2
|
Amended
and Restated Bylaws of Giga-tronics Incorporated, as amended on March 7,
2008, previously filed as Exhibit 3.2 to Form 10-K for the fiscal year
ended March 29, 2008, and incorporated herein by
reference.
|
|
10.1
|
Standard
form Indemnification Agreement for Directors and Officers, previously
filed on June 21, 1999, as Exhibit 10.2 to Form 10-KSB for the fiscal year
ended March 27, 1999 and incorporated herein by reference.
*
|
|
10.2
|
Lease
between Giga-tronics Incorporated and Calfront Associates for 4650 Norris
Canyon Road, San Ramon, CA, dated December 6, 1993, previously filed as
Exhibit 10.12 to Form 10-KSB for the fiscal year ended March 26, 1994 and
incorporated herein by reference.
|
|
10.3
|
2000
Stock Option Plan and form of Incentive Stock Option Agreement, previously
filed on September 8, 2000 as Exhibit 99.1 to Form S-8 (33-45476) and
incorporated herein by reference. *
|
|
10.4
|
2005
Equity Incentive Plan incorporated herein by reference to Attachment A of
the Registrant’s Proxy Statement filed July 21, 2005. *
|
|
21
|
Significant
Subsidiaries. (See page 42 of this Annual Report of Form
10-K.)
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm, Perry-Smith
LLP. (See page 43 of this Annual Report on Form
10-K.)
|
|
31.1
|
Certification
of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of
2002. (See page 44 of this Annual Report on Form
10-K.)
|
|
31.2
|
Certification
of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of
2002. (See page 45 of this Annual Report on Form
10-K.)
|
|
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (See
page 46 of this Annual Report on Form 10-K.)
|
|
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (See
page 47 of this Annual Report on Form 10-K.)
|
|
*
|
Management
contract or compensatory plan or
arrangement.
|
GIGA-TRONICS
INCORPORATED
|
|
/s/
JOHN R. REGAZZI
|
|
Chief
Executive Officer
|
/s/
GARRETT A. GARRETTSON
|
Chairman
of the Board
|
5/14/2009
|
||
Garrett
A. Garrettson
|
of
Directors
|
Date
|
||
/s/
JOHN R. REGAZZI
|
Chief
Executive Officer
|
5/14/2009
|
||
John
R. Regazzi
|
(Principal
Executive Officer)
|
Date
|
||
and
Director
|
||||
/s/
PATRICK J. LAWLOR
|
Vice
President, Finance/
|
5/14/2009
|
||
Patrick
J. Lawlor
|
Chief
Financial Officer & Secretary
|
Date
|
||
(Principal
Financial Officer)
|
||||
/s/
GEORGE H. BRUNS, JR.
|
Director
|
5/14/2009
|
||
George
H. Bruns, Jr.
|
Date
|
|||
/s/
JAMES A. COLE
|
Director
|
5/12/2009
|
||
James
A. Cole
|
Date
|
|||
/s/
KENNETH A. HARVEY
|
Director
|
5/13/2009
|
||
Kenneth
A. Harvey
|
Date
|
|||
/s/
ROBERT C. WILSON
|
Director
|
5/12/2009
|
||
Robert
C. Wilson
|
Date
|