In order to increase its liquidity, Anadigics, Inc. (ANAD) recently priced an underwritten public offering of 10 million shares at $2.00 each. The company will provide a 30-day option to the underwriters for purchasing an additional 1.5 million shares. The offering is expected to close on Mar 19, 2013.
The secondary offering is expected to generate net proceeds of $18.4 million (excluding the over-allotment options), which will be utilized for working capital and general corporate purposes. This will help Anadigics to infuse capital for its various operating activities and enhance its financial flexibility. Such moves are also expected to aid top-line expansion, which would ultimately lead to value creation for its shareholders. As of Dec 31, 2012 cash and equivalents stood at $24.9 million.
In the last reported quarter, Anadigics reported a loss of $16.1 million or 23 cents per share compared to a loss of $15.6 million or 23 cents per share in the year-ago quarter. Anadigics has been incurring losses over the last few quarters and we do not expect the company to return to profitability before 2014. Total revenue in the last reported quarter was $30.5 million, down 16.5% year over year.
The company needs to generate higher revenues to offset its costs. Going forward, Anadigics expects considerable growth in its wireless segment as new products will likely offset the decline in legacy business. Management also expects gross margin to improve steadily. This augurs well on a long-term perspective, given the extent of competition and price wars involved in the industry.
Headquartered in Warren, N.J, Anadigics designs and manufactures semiconductor solutions for the broadband wireless and wireline communications markets. Its products include power amplifiers, tuner integrated circuits, active splitters, line amplifiers, and other components.
The company faces intense competition from industry bigwigs, which include formidable names such as Cabot Microelectronics Corporation (CCMP) and Rambus Inc (RMBS).
Anadigics currently has a Zacks Rank #2 (Buy). One of its competitors, Semiconductor Manufacturing International Corp (SMI) carries a Zacks Rank #1 (Strong Buy).
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