Anadigics targets cost-cuts as loss widens
RFIC maker Anadigics has posted revenue of $21.2 million for the quarter ending April 3 2004, up $5.1 million on the comparable period in 2003.
Despite the increased sales, the company continued to pile up a loss. Increases in sales costs, research and development, and general costs combined to more than wipe out the extra revenue.
The company made a $12.8 million loss in the quarter, up from $12.2 million in the same period last year, and $12.1 million in the traditionally strong final quarter of 2003.
As a result, Anadigics is to initiate a cost-cutting strategy starting in the current quarter. The strategy is set to affect operations throughout the company, including research and development activity.
Company CFO Tom Shields said: “We will be implementing an operating expense reduction initiative that targets total annual savings of $8 million…by the fourth quarter of 2004.”
Shields added that the savings will come from out-sourcing, as well as improved manufacturing efficiency.
However, with quarterly losses running consistently at $12 million or more for the past two years (Anadigics has racked up a loss of $106.7 million over the past two fiscal years), further strong increases in revenue would still be required to bring Anadigics to the break-even level even if the anticipated $8 million annual saving is realized this year.
As of April 3 2004, Anadigics held $64.3 million in cash and cash equivalents, as well as $45.1 million in marketable securities.
On a more positive note, the company did see a strong increase in sales to the wireless LAN segment, with shipments up 32% on the previous quarter. But with revenue from this market totalling only $1.5 million, Anadigics will need to further penetrate the GSM market to generate a serious increase in overall sales.
Signs of this are promising, with the company managing eight GSM design-wins in the latest quarter.
