Celeritek Reports Second Quarter Results; Record Revenue

Source: Celeritek, Inc.

Santa Clara, CA. Celeritek, Inc. (Nasdaq: CLTK), a designer and manufacturer of GaAs semiconductor components and GaAs-based subsystems for broadband transmission of voice, video and data over wireless networks, today announced results for the quarter ended September 30, 2000, the second quarter of fiscal year 2001.

For the second quarter, Celeritek reported revenues of $23,109,000, an increase of 115%, compared with revenues of $10,731,000 for the second quarter fiscal year 2000. Net income for the second quarter of fiscal 2001 was $2,620,000 or $0.21 per diluted share, compared with a net loss of $958,000 or $0.13 per share for the same period a year ago.

For the first six months of fiscal 2001, revenues were $42,798,000 compared to $20,919,000 for the first six months of fiscal 2000, an increase of 105%. Net income for the six month period was $3,321,000 or $0.29 per diluted share versus a loss of $3,791,000 or $0.51 per share for the comparable period last year.

Revenues from semiconductor products increased 190% to $11.6 million in the second quarter of fiscal 2001 from $4.0 million in the second quarter of the previous year due to increased sales of power amplifiers for use in CDMA value-tier handsets and linear devices for wireless data infrastructure applications.

Subsystems revenue from commercial customers for the second quarter of fiscal 2001 was $7.7 million versus $2.1 million for the comparable period last year, an increase of 267%. This growth was primarily due to increased sales to the company s radio customers. Defense sales declined 17% to $3.8 million from $4.6 million in the second quarter of fiscal 2000.

"We are pleased to announce record revenue levels," said Tamer Husseini, president and chief executive officer. "We are particularly pleased with the receipt of the first production InGaP HBT orders. These orders demonstrate our success in securing design wins on successive new generations of handset platforms. The orders are for CDMA power amplifier modules for a major U.S. manufacturer. We have also received orders from our satellite and high capacity radio customers that moved previous development projects into production," he continued. Delivery of these orders is expected to begin in the last quarter of calendar 2000.

Net orders for the second quarter were $27.1 million, making total orders for the year $65.7 million, a book to bill of 1.5 to 1. Subsequent to the end of the second quarter, the company also received a significant increase to the previously announced production order for satellite transceivers.

"I am happy to report that our expansion plans are on target. Strategically important to the company this quarter were ten new design wins for our fiber optic products. These design wins were from leading manufacturers in the fiber optics field for driver amplifiers for external fiber optic modulators targeting higher bandwidth applications," said Mr. Husseini. "As a long term supplier of microwave frequency products, Celeritek is well prepared to address this exciting market," he added. The company s other design wins this quarter included two for TDMA amplifier products and 5 for HBT InGaP modules.

The gross margin of the company in the second quarter increased to 29% versus 22% in the second quarter of last year. This increase in gross margin is the result of increased absorption of fixed costs because of higher revenue levels.

Celeritek designs and manufactures GaAs semiconductor components and GaAs-based subsystems used in the transmission of voice, video and data traffic over wireless communications networks. Its GaAs semiconductor components and subsystems are designed to facilitate broadband voice and data transmission in mobile handsets and wireless communications infrastructures. Its GaAs semiconductor components primarily consist of transmit solutions, including power amplifiers for cellular and PCS handsets. These products are focused on the high growth CDMA and emerging WCDMA wireless market. Celeritek provides its GaAs-based subsystems to leading companies in the fixed broadband terrestrial and satellite wireless access markets. These products are designed to enable high bandwidth broadband communications. The company s products are used worldwide by leading manufacturers of wireless communications systems.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements represent the company s expectations or beliefs concerning future events and include statements, among others, regarding the company s expectation to deliver orders in the last quarter of calendar 2000, expansion plans, the company s ability to compete in the microwave frequency market and the importance to the company of design wins. Actual results could differ materially from those projected in the forward-looking statements as a result of known and unknown risk factors and uncertainties. Such factors may include, but are not necessarily limited to, the timing, cancellations or delay of customer orders; continued achievement of design wins; changes in manufacturing capacities and variation in the utilization of this capacity; market acceptance of the company s and customers products; variation in manufacturing yields and other competitive factors. Reference is made to the discussion of risk factors detailed in the company s filings with the Securities and Exchange Commission, including its reports on Forms 10-K and 10-Q.

Contact: Peggy Smith of Celeritek Tel: 408-986-5060