[
X ]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
For
the fiscal year ended
March 29,
2008
,
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from ____________ to
____________.
|
|
Commission
File No.
0-12719
|
GIGA-TRONICS
INCORPORATED
|
(Exact
name of registrant as specified in its
charter)
|
California
|
94-2656341
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
4650
Norris Canyon Road, San Ramon, CA
|
94583
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code:
(925)
328-4650
|
|
Securities
registered pursuant to Section 12(b) of the
Act:
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Stock, No par value
|
The
NASDAQ Stock Market LLC
|
|
Securities
registered pursuant to Section 12(g) of the
Act: None.
|
Large
accelerated filer
|
[
]
|
Accelerated
filer
|
[
]
|
|
Non-accelerated
filer
|
[
]
|
Smaller
reporting company
|
[ X
]
|
|
(Do
not check if a smaller reporting company)
|
PART
OF FORM 10-K
|
DOCUMENT
|
|
PART
III
|
Registrant’s
PROXY STATEMENT for its 2008 Annual Meeting of Shareholders to be filed no
later than 120 days after the close of the fiscal year ended March 29,
2008.
|
PART
I
|
||
DESCRIPTION
OF BUSINESS
|
||
RISK
FACTORS
|
||
UNRESOLVED
STAFF COMMENTS
|
||
DESCRIPTION
OF PROPERTY
|
||
LEGAL
PROCEEDINGS
|
||
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
||
PART
II
|
||
MARKET
FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
|
||
SELECTED
FINANCIAL DATA
|
||
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
||
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
||
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
||
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
|
||
CONTROLS
AND PROCEDURES
|
||
ITEM 9B. | OTHER INFORMATION | |
PART
III
|
||
DIRECTOR,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
|
||
EXECUTIVE
COMPENSATION
|
||
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS
|
||
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
||
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
||
PART
IV
|
||
EXHIBITS
AND FINANCIAL STATEMENTS SCHEDULES
|
||
EXHIBIT
21
|
||
EXHIBIT
23.1
|
||
EXHIBIT
31.1
|
||
EXHIBIT
31.2
|
||
EXHIBIT
32.1
|
||
EXHIBIT
32.2
|
Geographic
Distribution of Net Sales
|
||||||||||||||||
(Dollars
in thousands)
|
2008
|
Percent
|
2007
|
Percent
|
||||||||||||
Domestic
|
$ | 11,348 | 61.9 | % | $ | 14,218 | 78.8 | % | ||||||||
International
|
6,983 | 38.1 | % | 3,830 | 21.2 | % |
2008
|
High
|
Low
|
2007
|
High
|
Low
|
|||||||||||||
First
Quarter
|
(4/1
- 6/30)
|
$ | 2.22 | $ | 1.61 |
(3/26
- 6/24)
|
$ | 2.89 | $ | 1.78 | ||||||||
Second
Quarter
|
(7/1
- 9/29)
|
2.36 | 1.62 |
(6/25
- 9/30)
|
1.94 | 1.29 | ||||||||||||
Third
Quarter
|
(9/30
- 12/29)
|
3.85 | 1.71 |
(10/1
- 12/30)
|
2.45 | 1.39 | ||||||||||||
Fourth
Quarter
|
(12/30
- 3/29)
|
1.87 | 1.27 |
(12/31
- 3/31)
|
2.97 | 1.83 |
Equity
Compensation Plan Information
|
||||||||||||
No.
of securities to be issued upon exercise of outstanding option, warrants
and rights
|
Weighted
average exercise price of outstanding option, warrants and
rights
|
No.
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
||||||||||
Plan
Category
|
(a)
|
(b)
|
(c)
|
|||||||||
Equity
compensation plans approved
|
||||||||||||
by
security holders
|
855,650 | $ | 2.04 | 445,225 | ||||||||
Equity
compensation plans not approved
|
||||||||||||
by
security holders
|
n/a | n/a | n/a | |||||||||
Total
|
855,650 | $ | 2.04 | 445,225 |
SELECTED CONSOLIDATED
FINANCIAL DATA
|
||||||||||||||||||||
Summary
of Operations:
|
Years
Ended
|
|||||||||||||||||||
(In
thousands except per share data)
|
March
29, 2008
|
March
31, 2007
|
March
25, 2006
|
March
26, 2005
|
March
27, 2004
|
|||||||||||||||
Net
sales
|
$ | 18,331 | $ | 18,048 | $ | 20,620 | $ | 21,477 | $ | 17,491 | ||||||||||
Gross
profit
|
7,748 | 7,546 | 8,300 | 9,598 | 4,736 | |||||||||||||||
Operating
expenses
|
7,939 | 9,548 | 9,316 | 8,760 | 9,179 | |||||||||||||||
Interest
income, net
|
36 | 108 | 32 | - | 7 | |||||||||||||||
Pre-tax
(loss) income from continuing
|
||||||||||||||||||||
operations
|
(201 | ) | (1,894 | ) | (984 | ) | 849 | (4,440 | ) | |||||||||||
Provision
for income taxes
|
2 | 1 | 4 | 4 | 4 | |||||||||||||||
(Loss)
income from continuing operations
|
(203 | ) | (1,895 | ) | (988 | ) | 845 | (4,444 | ) | |||||||||||
(Loss)
income on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
(31 | ) | 28 | 27 | (233 | ) | (2,377 | ) | ||||||||||||
Net
(loss) income
|
$ | (234 | ) | $ | (1,867 | ) | $ | (961 | ) | $ | 612 | $ | (6,821 | ) | ||||||
Basic
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.04 | ) | $ | (0.40 | ) | $ | (0.21 | ) | $ | 0.18 | $ | (0.94 | ) | ||||||
On
discontinued operations
|
(0.01 | ) | 0.01 | 0.01 | (0.05 | ) | (0.51 | ) | ||||||||||||
Net
(loss) earnings per share - basic
|
$ | (0.05 | ) | $ | (0.39 | ) | $ | (0.20 | ) | $ | 0.13 | $ | (1.45 | ) | ||||||
Diluted
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.04 | ) | $ | (0.40 | ) | $ | (0.21 | ) | $ | 0.18 | $ | (0.94 | ) | ||||||
On
discontinued operations
|
(0.01 | ) | 0.01 | 0.01 | (0.05 | ) | (0.51 | ) | ||||||||||||
Net
(loss) earnings per share - diluted
|
$ | (0.05 | ) | $ | (0.39 | ) | $ | (0.20 | ) | $ | 0.13 | $ | (1.45 | ) | ||||||
Shares
of common stock - basic
|
4,813 | 4,809 | 4,782 | 4,725 | 4,704 | |||||||||||||||
Shares
of common stock - diluted
|
4,813 | 4,809 | 4,782 | 4,741 | 4,704 | |||||||||||||||
Financial
Position:
|
Years
Ended
|
|||||||||||||||||||
(In
thousands except per share data)
|
March
29, 2008
|
March
31, 2007
|
March
25, 2006
|
March
26, 2005
|
March
27, 2004
|
|||||||||||||||
Current
ratio
|
3.55 | 3.09 | 3.93 | 4.29 | 2.92 | |||||||||||||||
Working
Capital
|
$ | 7,131 | $ | 7,280 | $ | 8,856 | $ | 9,337 | $ | 7,997 | ||||||||||
Total
assets
|
$ | 10,361 | $ | 11,161 | $ | 12,346 | $ | 12,961 | $ | 13,733 | ||||||||||
Shareholders'
equity
|
$ | 7,392 | $ | 7,393 | $ | 9,098 | $ | 9,812 | $ | 9,196 | ||||||||||
Percentage
Data:
|
Years
Ended
|
|||||||||||||||||||
(Percentage
of net sales)
|
March
29, 2008
|
March
21, 2007
|
March
25, 2006
|
March
26, 2005
|
March
27, 2004
|
|||||||||||||||
Gross
profit
|
42.3 | % | 41.8 | % | 40.3 | % | 44.7 | % | 27.1 | % | ||||||||||
Operating
expenses
|
43.3 | % | 52.9 | % | 45.2 | % | 40.8 | % | 52.5 | % | ||||||||||
Interest
income, net
|
0.2 | % | 0.6 | % | 0.1 | % | 0.0 | % | 0.0 | % | ||||||||||
Pre-tax
(loss) income from continuing
|
||||||||||||||||||||
operations
|
(1.1 | %) | (10.5 | %) | (4.8 | %) | 4.0 | % | (25.4 | %) | ||||||||||
(Loss)
income on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
(0.2 | %) | 0.2 | % | 0.1 | % | (1.1 | %) | (13.6 | %) | ||||||||||
Net
(loss) income
|
(1.3 | %) | (10.3 | %) | (4.7 | %) | 2.8 | % | (39.0 | %) |
SELECTED CONSOLIDATED
FINANCIAL DATA
|
||||||||||||||||||||
The
following is a summary of unaudited results of operations for the fiscal
years ended March 29, 2008 and March 31, 2007.
|
||||||||||||||||||||
Quarterly
Financial Information (Unaudited)
|
2008
|
|||||||||||||||||||
(In
thousands except per share data)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
|||||||||||||||
Net
sales
|
$ | 4,628 | $ | 4,651 | $ | 4,953 | $ | 4,009 | $ | 18,331 | ||||||||||
Gross
profit
|
1,944 | 2,081 | 2,049 | 1,674 | 7,748 | |||||||||||||||
Operating
expenses
|
1,941 | 1,879 | 1,974 | 2,145 | 7,939 | |||||||||||||||
Interest
income, net
|
14 | 9 | 6 | 7 | 36 | |||||||||||||||
Pre-tax
income (loss) from continuing operations
|
30 | 198 | 51 | (480 | ) | (201 | ) | |||||||||||||
Provision
for income taxes
|
2 | - | - | - | 2 | |||||||||||||||
Income
(loss) from continuing operations
|
28 | 198 | 51 | (480 | ) | (203 | ) | |||||||||||||
Income
(loss) on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
64 | (10 | ) | (20 | ) | (65 | ) | (31 | ) | |||||||||||
Net
income (loss)
|
$ | 92 | $ | 188 | 31 | $ | (545 | ) | $ | (234 | ) | |||||||||
Basic
earnings (loss) per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | 0.01 | $ | 0.04 | $ | 0.01 | $ | (0.10 | ) | $ | (0.04 | ) | ||||||||
On
discontinued operations
|
0.01 | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||||||
Net
earnings (loss) per share - basic
|
$ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.11 | ) | $ | (0.05 | ) | ||||||||
Diluted
earnings (loss) per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | 0.01 | $ | 0.04 | $ | 0.01 | $ | (0.10 | ) | $ | (0.04 | ) | ||||||||
On
discontinued operations
|
0.01 | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||||||
Net
earnings (loss) per share - diluted
|
$ | 0.02 | $ | 0.04 | $ | 0.01 | $ | (0.11 | ) | $ | (0.05 | ) | ||||||||
Shares
of common stock - basic
|
4,809 | 4,810 | 4,814 | 4,818 | 4,813 | |||||||||||||||
Shares
of common stock - diluted
|
4,863 | 4,880 | 4,913 | 4,818 | 4,813 |
Quarterly
Financial Information (Unaudited)
|
2007
|
|||||||||||||||||||
(In
thousands except per share data)
|
First
|
Second
|
Third
|
Fourth
|
Year
|
|||||||||||||||
Net
sales
|
$ | 3,386 | $ | 3,934 | $ | 5,564 | $ | 5,146 | $ | 18,048 | ||||||||||
Gross
profit
|
1,199 | 1,857 | 2,394 | 2,096 | 7,546 | |||||||||||||||
Operating
expenses
|
2,258 | 2,306 | 2,378 | 2,606 | 9,548 | |||||||||||||||
Interest
income, net
|
29 | 37 | 25 | 17 | 108 | |||||||||||||||
Pre-tax
(loss) income from continuing operations
|
(1,030 | ) | (412 | ) | 41 | (493 | ) | (1,894 | ) | |||||||||||
Provision
for income taxes
|
- | 1 | - | - | 1 | |||||||||||||||
(Loss)
income from continuing operations
|
(1,030 | ) | (413 | ) | 41 | (493 | ) | (1,895 | ) | |||||||||||
Income
(loss) on discontinued operations,
|
||||||||||||||||||||
net
of income taxes
|
3 | 10 | 17 | (2 | ) | 28 | ||||||||||||||
Net
(loss) income
|
$ | (1,027 | ) | $ | (403 | ) | $ | 58 | $ | (495 | ) | $ | (1,867 | ) | ||||||
Basic
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.21 | ) | $ | (0.08 | ) | $ | 0.01 | $ | (0.10 | ) | $ | (0.40 | ) | ||||||
On
discontinued operations
|
0.00 | 0.00 | 0.00 | (0.00 | ) | 0.01 | ||||||||||||||
Net
(loss) earnings per share - basic
|
$ | (0.21 | ) | $ | (0.08 | ) | $ | 0.01 | $ | (0.10 | ) | $ | (0.39 | ) | ||||||
Diluted
(loss) earnings per share:
|
||||||||||||||||||||
From
continuing operations
|
$ | (0.21 | ) | $ | (0.08 | ) | $ | 0.01 | $ | (0.10 | ) | $ | (0.40 | ) | ||||||
On
discontinued operations
|
0.00 | 0.00 | 0.00 | (0.00 | ) | 0.01 | ||||||||||||||
Net
(loss) earnings per share - diluted
|
$ | (0.21 | ) | $ | (0.08 | ) | $ | 0.01 | $ | (0.10 | ) | $ | (0.39 | ) | ||||||
Shares
of common stock - basic
|
4,809 | 4,809 | 4,809 | 4,809 | 4,809 | |||||||||||||||
Shares
of common stock - diluted
|
4,809 | 4,809 | 4,884 | 4,809 | 4,809 |
New
Orders
|
||||||||||||||||||||
(Dollars
in thousands)
|
2008
|
%
change
|
2007
|
%
change
|
2006
|
|||||||||||||||
Instrument
Division
|
$ | 8,434 | (3 | %) | $ | 8,677 | (3 | %) | $ | 8,943 | ||||||||||
ASCOR
|
5,361 | 22 | % | 4,390 | 30 | % | 3,389 | |||||||||||||
Microsource
|
3,625 | 17 | % | 3,091 | 9 | % | 2,825 | |||||||||||||
Total
|
$ | 17,420 | 8 | % | $ | 16,158 | 7 | % | $ | 15,157 |
(Dollars
in thousands)
|
2008
|
%
change
|
2007
|
%
change
|
2006
|
|||||||||||||||
Backlog
of unfilled orders
|
$ | 7,528 | (11 | %) | $ | 8,439 | (18 | %) | $ | 10,329 | ||||||||||
Backlog
of unfilled orders
|
||||||||||||||||||||
shippable
within one year
|
4,604 | (13 | %) | 5,294 | (10 | %) | 5,863 | |||||||||||||
Previous
fiscal year end (FYE)
|
||||||||||||||||||||
one-year
backlog reclassified
|
||||||||||||||||||||
during
year as shippable later than
|
||||||||||||||||||||
one
year
|
425 | 40 | % | 303 | (88 | %) | 2,439 | |||||||||||||
Net
cancellations during year of
|
||||||||||||||||||||
previous
FYE one-year backlog
|
- | - | 904 | - | - |
Allocation
of Net Sales
|
||||||||||||||||||||
(Dollars
in thousands)
|
2008
|
%
change
|
2007
|
%
change
|
2006
|
|||||||||||||||
Commercial
|
$ | 7,020 | - | $ | 7,054 | (40 | %) | $ | 11,657 | |||||||||||
Government
/ Defense
|
11,311 | 3 | % | 10,994 | 23 | % | 8,963 |
Allocation
of Net Sales by Segment
|
||||||||||||||||||||
(Dollars
in thousands)
|
2008
|
%
change
|
2007
|
%
change
|
2006
|
|||||||||||||||
Instrument
Division
|
||||||||||||||||||||
Commercial
|
$ | 4,972 | 2 | % | $ | 4,870 | (33 | %) | $ | 7,319 | ||||||||||
Government
/ Defense
|
3,554 | (13 | %) | 4,096 | 77 | % | 2,309 | |||||||||||||
ASCOR
|
||||||||||||||||||||
Commercial
|
$ | 310 | (36 | %) | $ | 485 | (26 | %) | $ | 659 | ||||||||||
Government
/ Defense
|
5,710 | 85 | % | 3,087 | (21 | %) | 3,900 | |||||||||||||
Microsource
|
||||||||||||||||||||
Commercial
|
$ | 1,738 | 2 | % | $ | 1,699 | (54 | %) | $ | 3,679 | ||||||||||
Government
/ Defense
|
2,047 | (46 | %) | 3,811 | 38 | % | 2,754 |
Cost
of Sales
|
||||||||||||||||||||
(Dollars
in thousands)
|
2008
|
%
change
|
2007
|
%
change
|
2006
|
|||||||||||||||
Cost
of sales
|
$ | 10,583 | 1 | % | $ | 10,502 | (15 | %) | $ | 12,320 |
Operating
Expenses
|
||||||||||||||||||||
(Dollars
in thousands)
|
2008
|
%
change
|
2007
|
%
change
|
2006
|
|||||||||||||||
Engineering
|
$ | 2,248 | (40 | %) | $ | 3,731 | (1 | %) | $ | 3,760 | ||||||||||
Selling,
general and administrative
|
5,538 | 2 | % | 5,456 | (2 | %) | 5,556 | |||||||||||||
Restructuring
|
153 | (58 | %) | 361 | - | - | ||||||||||||||
Total
|
$ | 7,939 | (17 | %) | $ | 9,548 | 3 | % | $ | 9,316 |
(Dollars
in thousands)
|
Under
one year
|
One
to three years
|
Three
to five years
|
More
than five years
|
||||||||||||
Operating
leases
|
$ | 971 | $ | 1,942 | $ | 1,155 | $ | 57 | ||||||||
Purchase
obligations
|
500 | - | - | - | ||||||||||||
Total
|
$ | 1,471 | $ | 1,942 | $ | 1,155 | $ | 57 |
INDEX
TO FINANCIAL STATEMENTS AND SCHEDULES
|
|||
Financial
Statements
|
Page
No.
|
||
Consolidated
Balance Sheets -
|
23
|
||
As
of March 29, 2008 and March 31, 2007
|
|||
Consolidated
Statements of Operations -
|
24
|
||
Years
ended March 29, 2008 and March 31, 2007
|
|||
Consolidated
Statements of Shareholders’ Equity -
|
25
|
||
Years
ended March 29, 2008 and March 31, 2007
|
|||
Consolidated
Statements of Cash Flows -
|
26
|
||
Years
ended March 29, 2008 and March 31, 2007
|
|||
Notes
to Consolidated Financial Statements
|
27
- 36
|
||
Report
of Independent Registered Public Accounting Firm
|
37
|
(Dollars
in thousands)
|
March
29, 2008
|
March
31, 2007
|
||||||
Beginning
balance
|
$ | 62 | $ | 63 | ||||
Provision
for doubtful accounts
|
31 | 5 | ||||||
Recoveries
of doubtful accounts
|
- | - | ||||||
Write-off
of doubtful accounts
|
- | 6 | ) | |||||
Ending
balance
|
$ | 93 | $ | 62 |
Years
Ended
|
March
29, 2008
|
March
31, 2007
|
||||||
Dividend
yield
|
Zero
|
Zero
|
||||||
Expected
volatility
|
80%
to 112%
|
51%
to 88%
|
||||||
Risk-free
interest rate
|
2.21%
to 3.59%
|
4.50%
to 4.97%
|
||||||
Expected
term (years)
|
3.75 | 3.75 |
(Dollars
in thousands)
|
March
29, 2008
|
March
31, 2007
|
||||||
Raw
materials
|
$ | 2,767 | $ | 3,163 | ||||
Work-in-progress
|
1,501 | 2,128 | ||||||
Finished
goods
|
369 | 209 | ||||||
Demonstration
inventory
|
371 | 341 | ||||||
Total
|
$ | 5,008 | $ | 5,841 |
Instrument
|
||||||||||||||||||||
March
29, 2008 (Dollars in thousands)
|
Division
|
ASCOR
|
Microsource
|
Corporate
|
Total
|
|||||||||||||||
Revenue
|
$ | 8,526 | $ | 6,020 | $ | 3,785 | $ | - | $ | 18,331 | ||||||||||
Interest
income, net
|
2 | 7 | 25 | 2 | 36 | |||||||||||||||
Depreciation
and amortization
|
80 | 23 | 25 | - | 128 | |||||||||||||||
(Loss)
income from continuing operations
|
||||||||||||||||||||
before
income taxes
|
(1,773 | ) | 1,692 | 64 | (184 | ) | (201 | ) | ||||||||||||
Assets
|
4,228 | 2,680 | 3,168 | 285 | 10,361 | |||||||||||||||
Instrument
|
||||||||||||||||||||
March
31, 2007 (Dollars in thousands)
|
Division
|
ASCOR
|
Microsource
|
Corporate
|
Total
|
|||||||||||||||
Revenue
|
$ | 8,966 | $ | 3,572 | $ | 5,510 | $ | - | $ | 18,048 | ||||||||||
Interest
income, net
|
(343 | ) | (54 | ) | (870 | ) | 1,375 | 108 | ||||||||||||
Depreciation
and amortization
|
153 | 30 | 32 | - | 215 | |||||||||||||||
(Loss)
income from continuing operations
|
||||||||||||||||||||
before
income taxes
|
(1,975 | ) | (734 | ) | (345 | ) | 1,160 | (1,894 | ) | |||||||||||
Assets
|
4,948 | 1,968 | 3,922 | 323 | 11,161 |
(Dollars
in thousands)
|
March
29, 2008
|
March
31, 2007
|
|||
Americas
|
$ 1,250
|
$ 360
|
|||
Europe
|
2,778
|
2,233
|
|||
Asia
|
1,087
|
748
|
|||
Other
|
1,868
|
489
|
|||
Total
|
$ 6,983
|
$ 3,830
|
(In
thousands except per share data)
|
March
29, 2008
|
March
31, 2007
|
||||||
Net
loss
|
$ | (234 | ) | $ | (1,867 | ) | ||
Weighted
average:
|
||||||||
Common
shares outstanding
|
4,813 | 4,809 | ||||||
Potential
common shares
|
- | - | ||||||
Common
shares assuming dilution
|
4,813 | 4,809 | ||||||
Net
loss per share of common stock
|
$ | (0.05 | ) | $ | (0.39 | ) | ||
Net
loss per share of common stock assuming dilution
|
$ | (0.05 | ) | $ | (0.39 | ) | ||
Stock
options not included in computation
|
856 | 841 |
Years
Ended (In thousands)
|
March
29, 2008
|
March
31, 2007
|
||||||
Current
|
||||||||
Federal
|
$ | - | $ | - | ||||
State
|
2 | 1 | ||||||
Total current | 2 | 1 | ||||||
Deferred
|
||||||||
Federal
|
- | - | ||||||
State
|
- | - | ||||||
Total
deferred
|
- | - | ||||||
Charge
in lieu of taxes attributable to employer stock option
plans
|
- |
-
|
||||||
Provision
for income taxes
|
$ | 2 | $ | 1 |
Year
Ended (In thousands)
|
March
29, 2008
|
March
31, 2007
|
||||||
Net
operating loss carryforwards
|
$ | 13,667 | $ | 13,625 | ||||
Income
tax credits
|
2,196 | 2,196 | ||||||
Inventory
reserves and additional costs capitalized
|
2,333 | 2,486 | ||||||
Fixed
assets depreciation
|
153 | 163 | ||||||
Accrued
vacation
|
120 | 122 | ||||||
Accrued
warranty
|
82 | 88 | ||||||
Deferred
rent
|
50 | 98 | ||||||
Other
accrued liabilities
|
201 | 235 | ||||||
Future
state tax effect
|
(203 | ) | (220 | ) | ||||
Allowance
for doubtful accounts
|
41 | 27 | ||||||
Total
deferred tax assets
|
18,640 | 18,820 | ||||||
Liability
for uncertain tax positions
|
(297 | ) | (424 | ) | ||||
Valuation
allowances
|
(18,343 | ) | (18,396 | ) | ||||
$ | 0 | $ | 0 |
Years
Ended (In thousands except percentages)
|
March
29, 2008
|
March
31, 2007
|
||||||||||||||
Statutory
federal income tax (benefit)
|
$ | (79 | ) | (34.0 | )% | $ | (635 | ) | (34.0 | )% | ||||||
Valuation
allowance
|
(53 | ) | (22.9 | ) | (206 | ) | (11.0 | ) | ||||||||
Expiration
of net operating losses
|
178 | 76.8 | 805 | 43.1 | ||||||||||||
State
income tax, net of federal benefit
|
(14 | ) | (6.0 | ) | (109 | ) | (5.8 | ) | ||||||||
Non-tax
deductible expenses
|
99 | 42.7 | 11 | 0.6 | ||||||||||||
Tax
credits
|
- | - | 95 | 5.1 | ||||||||||||
Liability
for uncertain tax positions
|
(127 | ) | (54.9 | ) | - | - | ||||||||||
Other
|
(2 | ) | (0.7 | ) | 40 | 2.1 | ||||||||||
Effective
income tax
|
$ | 2 | 1.0 | % | $ | 1 | .1 | % |
(In
thousands)
|
Fiscal
Year 2008
|
|||
Balance
as of March 31, 2007
|
$ | 424,000 | ||
Additions
based on current year tax positions
|
70,000 | |||
Reductions
for prior year tax positions
|
||||
lapses
of applicable statute
|
(197,000 | ) | ||
Balance
as of March 29, 2008
|
$ | 297,000 |
Weighted
|
Weighted
Average
|
Average
|
|||||
Average
|
Remaining
Contractual
|
Intrinsic
|
|||||
Shares
|
Exercise
Price
|
Terms
(Years)
|
Value
|
||||
Outstanding
at March 25, 2006
|
438,975
|
$
|
2.57
|
2.7
|
$ 122,173
|
||
Granted
|
541,400
|
1.85
|
|||||
Excercised
|
-
|
-
|
|||||
Forfeited
/ Expired
|
(139,475)
|
2.84
|
|||||
Outstanding
at March 31, 2007
|
840,900
|
$
|
2.06
|
3.6
|
$ 149,624
|
||
Granted
|
157,000
|
1.84
|
|||||
Excercised
|
15,000
|
1.47
|
|||||
Forfeited
/ Expired
|
(127,250)
|
1.96
|
|||||
Outstanding
at March 29, 2008
|
855,650
|
$
|
2.04
|
3.1
|
$ -
|
||
Exercisable
at March 29, 2008
|
342,726
|
$
|
2.22
|
2.0
|
$ -
|
Options
|
Options
|
Weighted
Average
|
||||||||||
Exercisable
|
Outstanding
|
Fair
Value
|
||||||||||
Outstanding
at March 25, 2006
|
203,475 | 438,975 | $ | 2.57 | ||||||||
Excercised
|
- | - | ||||||||||
Forfeited
|
(139,475 | ) | 2.84 | |||||||||
Granted
|
541,400 | 1.85 | ||||||||||
Outstanding
at March 31, 2007
|
214,750 | 840,900 | $ | 2.06 | ||||||||
Excercised
|
(15,000 | ) | 1.47 | |||||||||
Forfeited
|
(127,250 | ) | 1.96 | |||||||||
Granted
|
157,000 | 1.84 | ||||||||||
Outstanding
at March 29, 2008
|
342,726 | 855,650 | $ | 2.04 |
Fiscal
Year (Dollars in thousands)
|
||||
2009
|
$ | 971 | ||
2010
|
971 | |||
2011
|
971 | |||
2012
|
814 | |||
2013
|
341 | |||
Thereafter
|
57 | |||
$ | 4,125 |
(Dollars
in thousands)
|
March
29, 2008
|
March
31, 2007
|
||||||
Balance
at beginning of period
|
$ | 207 | $ | 250 | ||||
Provision,
net
|
160 | 130 | ||||||
Warranty
costs incurred
|
(177 | ) | (173 | ) | ||||
Balance
at end of period
|
$ | 190 | $ | 207 |
Name
|
Age
|
Position
|
John
R. Regazzi
|
53
|
Chief
Executive Officer and a Director of the Company since April
2006. Mr. Regazzi had been President and General Manager of
Instrument Division since September 2005, and prior to that, was Vice
President of Operations for Instrument Division from October 2004 through
September 2005. Prior to that, he was Vice President of
Engineering for Instrument Division from June 2001 through October 2004.
Previous experience includes 22 years at Hewlett Packard and Agilent
Technologies in various design and management positions associated with
their microwave sweeper and synthesizer product lines. His final position
at Agilent Technologies was as a senior engineering manager.
|
Patrick
J. Lawlor
|
57
|
Vice
President, Finance, Chief Financial Officer and Secretary of Giga-tronics,
Inc. since February 2007. Mr. Lawlor was previously a
Consultant to PDL BioPharma, Inc, and before that was the Vice President,
Chief Financial Officer at SaRonix, LLC, a $90 million private company
with international facilities. Prior to that he was the Chief
Financial Officer with Aerojet Fine Chemicals, LLC, a $65 million
subsidiary of GenCorp, and Vice President of Finance with Systems
Chemistry, Inc. Mr. Lawlor spent 23 years with Westinghouse
Electric Corporation, where he rose through numerous positions among
various divisions, with his final position as Vice President of Finance
and Controller.
|
Jeffrey
T. Lum
|
62
|
President
and a Director of the Board of ASCOR (now a division of the Company) since
November 1987. Mr. Lum founded ASCOR in 1987 and has been
President since inception. He was a founder and Vice President
of Autek Systems Corporation, a manufacturer of precision waveform
analyzers. Mr. Lum serves as Treasurer and a member of the
Board of Directors for the Santa Clara Aquamaids, a non-profit
organization dedicated to advancing athletes in synchronized swimming to
the Olympics games.
|
Rodrick
G. Cross
|
51
|
Vice
President, Sales & Marketing since October 2007. Mr. Cross
has over 25 years of experience in building, leading and operating global
marketing, sales, business development, customer service and technical
application engineering organizations. He has worked for
Agilent/Hewlett-Packard and Sony America as well as 5 startup companies
generating hundreds of millions of dollars in market share expansion and
new sales revenue. His strategic and tactical business programs
have been involved with many technologies - RF& microwave,
electronics, internet, solar energy, software, semiconductor and optical
coatings - spanning several industries including test and measurement,
electrical power, telecommunications, aerospace and defense and internet
security. Mr. Cross has a Bachelor of Science Degree from
Brigham Young University and Certificates of Study from
M.I.T. Mr. Cross has broad international business experience in
North America, Europe and Asia and speaks fluent
Japanese.
|
|
(a)
The following consolidated financial statements of Giga-tronics
Incorporated and subsidiaries and the related independent registered
public accounting firm are filed
herewith:
|
INDEX
TO FINANCIAL STATEMENTS AND SCHEDULES
|
||
Consolidated Financial
Statements
:
|
Page
|
|
Consolidated
Balance Sheets as of March 29, 2008 and March 31, 2007
|
23
|
|
Consolidated
Statements of Operations for the years ended March 29, 2008 and March 31,
2007
|
24
|
|
Consolidated
Statements of Stockholders Equity for the years ended March 29, 2008 and
March 31, 2007
|
25
|
|
Consolidated
Statements of Cash Flows for the years ended March 29, 2008 and March 31,
2007
|
26
|
|
Notes
to Consolidated Financial Statements
|
27
- 36
|
|
Report
of Independent Registered Public Accounting Firm
|
37
|
|
INDEX
TO EXHIBITS
|
||
3.1
|
Articles
of Incorporation of the Registrant, as amended, previously filed as
Exhibit 3.1 to Form 10-KSB for the fiscal year ended March 27, 1999 and
incorporated herein by reference.
|
|
3.2
|
Amended
and Restated Bylaws of Giga-tronics Incorporated, as amended on March 7,
2008.
|
|
10.1
|
1990
Restated Stock Option Plan and form of Incentive Stock Option Agreement,
previously filed on November 3, 1997 as Exhibit 99.1 to Form S-8
(33-39403) and incorporated herein by
reference. *
|
|
10.2
|
Standard
form Indemnification Agreement for Directors and Officers, previously
filed on June 21, 1999, as Exhibit 10.2 to Form 10-KSB for the fiscal year
ended March 27, 1999 and incorporated herein by
reference. *
|
|
10.3
|
Lease
between Giga-tronics Incorporated and Calfront Associates for 4650 Norris
Canyon Road, San Ramon, CA, dated December 6, 1993, previously filed as
Exhibit 10.12 to Form 10-KSB for the fiscal year ended March 26, 1994 and
incorporated herein by reference.
|
|
10.4
|
Employee
Stock Purchase Plan, previously filed on August 29, 1997, as Exhibit 99.1
to Form S-8 (33-34719), and incorporated herein by
reference. *
|
|
10.5
|
2000
Stock Option Plan and form of Incentive Stock Option Agreement, previously
filed on September 8, 2000 as Exhibit 99.1 to Form S-8 (33-45476) and
incorporated herein by reference. *
|
|
10.6
|
Amendment
No. 1 to Employee Stock Purchase Plan, previously filed on September 24,
2001, as Exhibit 99.1 to Form S-8 (33-69688), and incorporated herein by
reference. *
|
|
10.7
|
2005
Equity Incentive Plan incorporated herein by reference to Attachment A of
the Registrant’s Proxy Statement filed July 21,
2005. *
|
|
21
|
Significant
Subsidiaries. (See page 57 of this Annual Report of Form
10-K.)
|
|
23.1
|
Consent
of Independent Registered Public accounting Firm Perry-Smith
LLP. (See page 58 of this Annual Report of Form
10-K.)
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley
Act. (See page 59 of this Annual Report of Form
10-K.)
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley
Act. (See page 60 of this Annual Report of Form
10-K.)
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley
Act. (See page 61 of this Annual Report of Form
10-K.)
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley
Act. (See page 62 of this Annual Report of Form
10-K.)
|
|
*
|
Management
contract or compensatory plan or
arrangement.
|
GIGA-TRONICS
INCORPORATED
|
|
/s/
JOHN R. REGAZZI
|
|
Chief
Executive Officer
|
/s/
GARRETT A. GARRETTSON
|
Chairman
of the Board
|
6/11/2008
|
||
Garrett
A. Garrettson
|
of
Directors
|
Date
|
||
/s/
JOHN R. REGAZZI
|
Chief
Executive Officer
|
6/11/2008 | ||
John
R. Regazzi
|
(Principal
Executive Officer)
|
Date
|
||
and
Director
|
||||
/s/
PATRICK J. LAWLOR
|
Vice
President, Finance/
|
6/11/2008 | ||
Patrick
J. Lawlor
|
Chief
Financial Officer & Secretary
|
Date
|
||
(Principal
Financial Officer)
|
||||
/s/
GEORGE H. BRUNS, JR.
|
Director
|
6/11/2008 | ||
George
H. Bruns, Jr.
|
Date
|
|||
/s/
JAMES A. COLE
|
Director
|
6/11/2008 | ||
James
A. Cole
|
Date
|
|||
/s/
KENNETH A. HARVEY
|
Director
|
6/11/2008 | ||
Kenneth
A. Harvey
|
Date
|
|||
/s/
ROBERT C. WILSON
|
Director
|
6/11/2008 | ||
Robert
C. Wilson
|
Date
|
AMENDED
AND RESTATED
|
BYLAWS
FOR THE REGULATION, EXCEPT AS
|
OTHERWISE
PROVIDED BY STATUTE OR ITS
|
ARTICLES
OF INCORPORATION, OF
|
GIGA-TRONICS
INCORPORATED
|
a
California corporation
|
(the
"Corporation")
|
ARTICLE
I
|
Offices
|
ARTICLE
II
|
Shareholders
|
|
Except
as provided in the second paragraph of
Section 2.06:
|
|
All
such written consents shall be filed with the secretary of the
Corporation.
|
ARTICLE
III
|
Directors
|
(g)
|
the
appointment of other committees of the Board or the members
thereof.
|
ARTICLE
IV
|
Officers
|
ARTICLE
V
|
Indemnification
and Advancement
|
|
(1)
|
In
respect of any claim, issue or matter as to which the person shall have
been adjudged to be liable to the Corporation in the performance of that
person’s duty to the Corporation and its shareholders, unless and only to
the extent that the court in which the proceeding is or was pending shall
determine upon application, that, in view of all the circumstances of the
case, the person is fairly and reasonably entitled to indemnity for
expenses and then only to the extent that the court shall
determine.
|
|
(2)
|
Of
amounts paid in settling or otherwise disposing of a pending action
without court approval.
|
|
(3)
|
Of
expenses incurred in defending a pending action which is settled or
otherwise disposed of without court
approval.
|
|
(1)
|
That
it would be inconsistent with a provision of the Articles of
Incorporation, these Bylaws, a resolution of the shareholders, or an
agreement in effect at the time of the accrual of the alleged cause of
action asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits
indemnification.
|
|
(2)
|
That
it would be inconsistent with any condition expressly imposed by a court
in approving a settlement.
|
ARTICLE
VI
|
Miscellaneous
|
ARTICLE
VII
|
Amendments
|
SIGNIFICANT
SUBSIDIARIES
|
|||
Name
|
Jurisdiction of
incorporation
|
||
ASCOR,
Inc.
|
California
|
||
Microsource,
Inc.
|
California
|
1.
|
I
have reviewed this Annual Report on Form 10-K of Giga-tronics,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date:
|
6/11/08
|
|||
/s/
JOHN R. REGAZZI
|
||||
John
R. Regazzi
|
||||
Chief
Executive Officer
|
1.
|
I
have reviewed this Annual Report on Form 10-K of Giga-tronics,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date:
|
6/11/08
|
|||
/s/
PATRICK J. LAWLOR
|
||||
Patrick
J. Lawlor
|
||||
Vice
President Finance/
|
||||
Chief
Financial Officer & Secretary
|
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
|
6/11/08
|
|||
/s/
JOHN R. REGAZZI
|
||||
John
R. Regazzi
|
||||
Chief
Executive Officer
|
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date:
|
6/11/08
|
|||
/s/
PATRICK J. LAWLOR
|
||||
Patrick
J. Lawlor
|
||||
Vice
President Finance,
Chief
Financial Officer & Secretary
|