News Article

CEO Charm Offensive Gives Anadigics Hope

Rush orders allow the PA maker to beat its sales forecast and begin to restore the reputation of its manufacturing operations.

Anadigics chips were successfully designed in to 50 new wireless products in the first quarter of 2009, aiding the company s battle to stop its revenues shrinking any further.

Palm and Research in Motion have joined traditional key customers LG and Samsung in using Anadigics PAs in 3G smartphones, supporting the company's claims of technology leadership.

Chief executive officer Mario Rivas has spent much of the time since arriving in February flying from the company s Warren, New Jersey, headquarters to rebuild relationships with the likes of Samsung.

And while the Korean handset manufacturer no longer purchases the numbers of GaAs chips from Anadigics it once did, Rivas believes that its downward trend is now reversing.

Despite these positives, the company s $30.5 million revenues for the three months ended March were far below the $74.4 million it achieved in 2008. However this figure did beat its own expectations by approximately $1 million.

The bonus revenues arose from rush orders, which benefited from what Anadigics says is now its fastest production process ever.

This could be an important factor in reviving fortunes with companies like Samsung, who took their business away after Anadigics was unable to supply enough PAs.

Although Rivas believes the current economy will bring more such rush orders, it also means they cannot be relied upon.

Consequently, Anadigics predicts an 8-10 percent decline in sales for the current quarter, added to by a customer that is decreasing its inventory levels, that Rivas is disappointed with.

However the company does foresee its quarterly loss falling from $21.9 million in the March period, which itself is a drop from $36.4 million in the December quarter.

“Although I am not satisfied with our current financial results and second quarter guidance, I believe we are taking all the necessary steps to manage costs and strengthen our business from both the manufacturing and customer perspectives," Rivas said.

LG and Blackberry manufacturer Research In Motion both made up more than 10 percent of Anadigics sales in the March period.

Outside of smartphones, Rivas claimed Anadigics products had won places in chipset designs for computer wireless cards from Qualcomm, Ericsson, Samsung, Huawei, Sierra Wireless, ZTE and Novatel Wireless.

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