Giga-tronics Reports Fourth Straight Quarterly Profit

• Press Release
• Source: Giga-tronics Incorporated
• On 4:00 pm EDT, Wednesday October 28, 2009

SAN RAMON, Calif., Oct. 28, 2009 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated (Nasdaq:GIGA - News) reported today a net profit of $373,000 or $0.08 per fully diluted share for the quarter ended September 26, 2009. This compares with a net loss of $540,000 or $0.11 per fully diluted share for the same period a year ago. Net sales increased 25% to $4,623,000 in the second quarter of fiscal 2010 compared to $3,689,000 in the second quarter of fiscal 2009. Gross margin of $2,113,000 improved by $775,000 over the same quarter last year. Gross margin as a percentage of net sales improved by 9.4% to 45.7% in the second quarter of fiscal 2010 as compared to 36.3% in the second quarter of fiscal 2009. Operating expenses decreased $225,000 in the second quarter of fiscal 2010 due to a decrease of $159,000 in product development expenses and a decrease of $66,000 in selling, general and administrative expenses. The $159,000 reduction in product development expenses was primarily due to $113,000 of non-recurring engineering (NRE) costs. Orders improved 57% in the second quarter of fiscal 2010 to $4,850,000 from $3,089,000 for the second quarter of fiscal 2009.

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Symbol	Price	Change
GIGA	2.34	+0.01

{"s" : "giga","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Net profit for the six month period ended September 26, 2009 was $706,000 or $0.15 per fully diluted share. This compares with a net loss of $1,062,000 or $0.22 per fully diluted share for the same period a year ago. Net sales increased 27% to $9,092,000 in the first half of fiscal 2010 compared to $7,177,000 in the first half of fiscal 2009. Gross margin of $4,227,000 improved by $1,492,000 over the same six month period last year. Gross margin as a percentage of net sales improved by 8.4% to 46.5% in the first half of fiscal 2010 as compared to 38.1% in the first half of fiscal 2009. Operating expenses decreased $370,000 in the first half of fiscal 2010 due to a decrease of $334,000 in product development expenses and a decrease of $36,000 in selling, general and administrative expenses. The $334,000 reduction in product development expenses was primarily due to $233,000 of NRE costs. Orders improved 1% in the first half of fiscal 2010 to $7,383,000 from $7,313,000 for the same period last year.

Non-GAAP net income, which excludes share based compensation, for the three month period ended September 26, 2009 would have been $44,000 higher, or $417,000. Non-GAAP basic and diluted earnings per share would have been $0.09 compared to $0.08 as reported. For the same period last year, the Company's non-GAAP net loss would have been $54,000 lower or $486,000 and the basic and diluted share loss would have been $0.10 compared to $0.11 as reported.

Non-GAAP net income, which excludes share based compensation, for the six month period ended September 26, 2009 would have been $80,000 higher, or $786,000. Non-GAAP basic and diluted earnings per share would have been $0.17 compared to $0.15 as reported. For the same period last year, the Company's non-GAAP net loss would have been $118,000 lower or $944,000 and the basic and diluted share loss would have been $0.20 compared to $0.22 as reported.

Backlog for the quarter ended September 26, 2009 was $7.4 million (approximately $6.9 million shippable within one year) as compared to $7.7 million (approximately $6.2 million shippable within one year) for the quarter ended September 27, 2008.

Cash and cash equivalents at September 26, 2009 were $1,345,000 compared to $1,551,000 as of June 27, 2009. The Company continues to utilize $500,000 of its line of credit in the current quarter.

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the first quarter results. To participate in the call, dial (877) 407-0782 domestically or (201) 689-8567 for international. The call will also be broadcast over the internet at www.gigatronics.com under "Investor Relations". The conference call discussion reflects management's views as of October 28, 2009 only.

Giga-tronics produces instruments, subsystems and sophisticated microwave components that have broad applications in both defense electronics and wireless telecommunications.

Giga-tronics is a publicly held company, traded on the NASDAQ Capital Market under the symbol "GIGA".

The Giga-tronics Incorporated logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6087

This press release contains forward-looking statements concerning profitability, backlog and shipments. Actual results may differ significantly due to risks and uncertainties, such as future orders, cancellations or deferrals, disputes over performance and the ability to collect receivables. For further discussion, see Giga-tronics' most recent annual report on Form 10-K for the fiscal year ended March 28, 2009, Part I, under the heading "Certain Factors Which May Adversely Affect Future Operations or an Investment in Giga-tronics" and Part II, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations".

           CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
 ---------------------------------------------------------------------
 (In thousands except share data) September 26, 2009   March 28, 2009
 ---------------------------------------------------------------------
 Assets
 Current assets
  Cash and cash equivalents       $            1,345  $          1,518
  Trade accounts receivable, net
   of allowance of $94 and $102,
   respectively                                3,569             3,110
  Inventories, net                             6,204             5,409
  Prepaid expenses and other
   current assets                                341               430
                                  ------------------  ----------------
 Total current assets                         11,459            10,467

 Property and equipment, net                     236               306
 Other assets                                     16                16
                                  ------------------  ----------------
  Total assets                    $           11,711  $         10,789
                                  ==================  ================

 Liabilities and shareholders'
  equity
 Current liabilities
  Line of credit                  $              500  $             --
  Accounts payable                               694             1,219
  Accrued commissions                            191               144
  Accrued payroll and benefits                   550               397
  Accrued warranty                               177               177
  Deferred revenue                             1,075               959
  Deferred rent                                   32               118
  Capital lease obligations                       16                16
  Other current liabilities                      253               306
                                  ------------------  ----------------
 Total current liabilities                     3,488             3,336

 Long term obligation - Deferred
  rent                                            76                96
 Long term obligation - Capital
  lease                                           17                25
                                  ------------------  ----------------
 Total liabilities                             3,581             3,457
                                  ------------------  ----------------

 Commitments and contingencies                    --                --

 Shareholders' equity
 Preferred stock of no par value;
  Authorized 1,000,000 shares; no
   shares outstanding at
   September 26, 2009 and March 28,
   2009                                           --                --
 Common stock of no par value;
  Authorized 40,000,000 shares;
   4,832,521 shares at September
   26, 2009 and 4,824,021 shares
   at March 28, 2009 issued and
   outstanding                                13,760            13,668
 Accumulated deficit                          (5,630)           (6,336)
                                  ------------------  ----------------
 Total shareholders' equity                    8,130             7,332
                                  ------------------  ----------------
 Total liabilities and
  shareholders' equity            $           11,711  $         10,789
                                  ==================  ================


      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 ---------------------------------------------------------------------
                             Three Months Ended     Six Months Ended

 (In thousands
  except share data)        Sept. 26,  Sept. 27,  Sept. 26,  Sept. 27,
                              2009       2008       2009       2008
 ---------------------------------------------------------------------
 Net sales                  $   4,623  $   3,689  $   9,092  $   7,177
 Cost of sales                  2,510      2,351      4,865      4,442
                            ---------  ---------  ---------  ---------
 Gross profit                   2,113      1,338      4,227      2,735
                            ---------  ---------  ---------  ---------

 Engineering                      363        522        744      1,078
 Selling, general and
  administrative                1,371      1,437      2,765      2,801
                            ---------  ---------  ---------  ---------
  Total operating expenses      1,734      1,959      3,509      3,879
                            ---------  ---------  ---------  ---------

 Operating income (loss)
  from continuing
  operations                      379       (621)       718     (1,144)

 Other expense                     --         --         (1)        --
 Interest (expense) income,
  net                              (6)         6         (9)         9
                            ---------  ---------  ---------  ---------
 Income (loss) from
  continuing operations
  before income taxes             373       (615)       708     (1,135)
 Provision for income taxes        --         --          2          2
                            ---------  ---------  ---------  ---------
 Income (loss) from
  continuing operations           373       (615)       706     (1,137)
 Income on discontinued
  operations, net of income
  taxes                            --         75         --         75
                            --------- ----------  ---------  ---------
 Net income (loss)          $     373  $    (540) $     706  $  (1,062)
                            =========  =========  =========  =========

 Basic and diluted earnings
  (loss) per share:
  From continuing
   operations               $    0.08  $   (0.13) $    0.15  $   (0.24)
  On discontinued
   operations                      --       0.02         --       0.02
                            ---------  ---------  ---------  ---------
  Basic and diluted earnings
   (loss) per share         $    0.08  $   (0.11) $    0.15  $   (0.22)
                            =========  =========  =========  =========

 Shares used in per share
  calculation:
  Basic                         4,828      4,824      4,826      4,824
  Diluted                       4,844      4,824      4,829      4,824

Giga-tronics Incorporated
Pat Lawlor, Vice President, Finance/Chief Financial Officer
(925) 328-4656