SANTA CLARA, Calif., April 29 /PRNewswire/ -- Celeritek, Inc. (Nasdaq: CLTK - news), a manufacturer of GaAS RF
ICs and subsystems for the wireless communications market, today reported results for the fourth quarter and all of fiscal 1998.
For the quarter ended March 31, 1998, the company reported revenues of $15,781,000 compared with revenues of
$11,606,000 in the fourth quarter of 1997. Net income for the quarter was $812,000, or $0.11 of diluted earnings per share,
compared with net income of $1,013,000, or $0.14 of diluted earnings per share, in the fourth quarter of 1997.
For all of fiscal 1998, Celeritek reported revenues of $56,317,000 versus revenues of $45,346,000 in fiscal 1997. The
company reported net income of $3,991,000, or $0.54 of diluted earnings per share, compared with net income of
$3,656,000, or $0.50 of diluted earnings per share, in fiscal 1997. The results for fiscal 1998 include a one-time charge of
approximately $320,000 or approximately $0.03 per share, related to a potential acquisition that was subsequently terminated.
The company reported that sales from the commercial market in the fourth quarter of fiscal 1998 increased 67 percent versus a
year ago, while revenues from the defense market increased four percent versus the fourth quarter of last year.
Celeritek also announced it had received more than $34 million in orders during the quarter, including $29 million in commercial
orders -- including $3 million for semiconductor products -- and $5 million in the defense market.
''The major orders we received during the quarter included one from a new customer, STM Wireless, which ordered $6
million in VSAT transceivers for use in their satellite communications systems, as well as orders from several existing
customers,'' said Tamer Husseini, president and chief executive officer. ''These included a $13 million order from P-COM for
38Ghz outdoor units (ODU's); a $2.8 million order from Alcatel for microwave radio components; and a $1.9 million order
from ITT Aerospace for space components.
''Our activity in the commercial sector remained strong, reflecting growing volume from GaAs RF IC semiconductor sales,
which increased nearly 90 percent over the fourth quarter of last year,'' Husseini said. ''In addition, we received a $1.7 million
order for handset RF ICs from Phillips Consumer Communications.
''We continued to expand our capabilities in the semiconductor area during the quarter,'' he added. ''We now have our
production capabilities fully ramped up and have established a design center in Northern Ireland to enhance our engineering
resources and provide application engineering support for key European cellular handset manufacturers. In addition, we
announced three new products during the quarter -- two low cost, ''true'' 3.0 Volt-power amplifiers to support dual band
handset requirements and a high dynamic range, low noise GaAs FET consisting of phase and gain matched devices in one
surface mount package.''
Husseini said that the company's financial results for the quarter were impacted by costs associated with the expansion of
semiconductor production capacity and short-term yield problems. ''We have added a number of new people and purchased
fixed assets to accommodate a higher production level and installed new equipment and quality control procedures which are
already beginning to improve our yields,'' he said. ''We have yet to generate a commensurate increase in semiconductor
volume. However, we continue to achieve significant design wins and remain dedicated to and optimistic about the long-term
potential of the market, although our earnings in the first quarter of fiscal 1999 are likely to be flat or slightly down when
compared with those in the just completed quarter,'' he added.
Celeritek designs and manufactures GaAs RF ICs and high frequency radio products for wireless 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 ramp up and establishment of production capabilities
and facilities and the long-term potential of the market. 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; the mix
of products sold; changes in manufacturing capacities and variation in the utilization of this capacity; market acceptance of the
company's and its customers' products; variations 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 Form 10-K and 10-Q.
CELERITEK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per share Amounts)
(Unaudited)
Three Months Ended Fiscal Year Ended
March 31, March 31,
1998 1997 1998 1997
Total Net Sales $15,781 $11,606 $56,317 $45,346
Cost of Goods Sold 10,698 7,298 36,147 28,918
Gross Profit 5,083 4,308 20,170 16,428
Operating expenses:
Research and development 1,362 1,080 5,389 4,252
Selling, general
and administrative 2,461 1,724 8,784 6,802
Total operating expenses 3,823 2,804 14,173 11,054
Income from operations 1,260 1,504 5,997 5,374
Interest income (expense)
and other 50 130 416 525
Income before Income tax 1,310 1,634 6,413 5,899
Provision for income tax 498 621 2,422 2,243
Net Income $812 $1,013 $3,991 $3,656
Basic earnings per share $0.11 $0.14 $0.56 $0.52
Diluted earnings per share $0.11 $0.14 $0.54 $0.50
Weighted common shares
outstanding 7,161 7,060 7,126 7,017
Common shares assuming dilution 7,438 7,348 7,450 7,352
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, March 31,
1998 1997
(Note)
ASSETS
Current assets:
Cash and cash equivalents $4,022 $7,033
Short-term investments 7,500 8,200
Accounts receivable, net 15,816 10,111
Inventories 10,635 7,318
Prepaid expenses and other current assets 415 270
Deferred tax assets 1,927 2,144
Total current assets 40,315 35,076
Property and equipment, net 8,042 6,038
Other assets 91 43
Total assets $48,448 $41,157
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $403 $--
Accounts payable 4,491 3,889
Accrued payroll 1,570 1,190
Accrued liabilities 4,065 3,594
Total current liabilities 10,529 8,673
Long-term portion of debt 906 --
Shareholders' equity 37,013 32,484
Total liabilities and shareholders' equity $48,448 $41,157
Note: The balance sheet at March 31, 1997 has been derived from the audited financial statements at that date but does not
include all of the information and footnotes required by generally accepted accounting principles for complete financial
Statements.
SOURCE: Celeritek, Inc.
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