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GigOptix, Inc. (GIG)
Q4 2013 Earnings Conference Call
February 11, 2014 05:00 PM ET
Jim Fanucchi - Darrow Associates
Dr. Avi Katz - Chairman and CEO
Curt Sacks - CFO
Krishna Shankar - ROTH Capital
Richard Shannon - Craig-Hallum
Dave Kang - B Riley & Company
Quinn Bolton - Needham & Company
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At this time, I would like to turn the call over to Jim Fanucchi of Darrow Associates. Please go ahead sir.
Thank you operator and thanks to all of you for joining us. Our speakers today are Dr. Avi Katz; Chairman and CEO and Curt Sacks, CFO of GigOptix. After the market closed today, GigOptix issued a press release discussing its financial results for the fourth quarter and fiscal year 2013. The release is currently available in the investor section of the company’s website. Please be advised that the matters discussed in this call contain forward-looking statements or projections regarding future results or events. We caution you that such statements are in fact predictions that are subject to risks and uncertainties that could cause actual events or results to differ materially, actual results may differ materially from our statements or projections, additional risks, uncertainties and factors that could cause actual events or results to differ materially from these forward-looking statements may be found in the Company’s filings with the Securities and Exchange Commissions.
Forward-looking statements are based on the company’s beliefs as of today, Tuesday, February 11, 2014. GigOptix undertakes no obligation or responsibility to publically update any forward-looking statements for any reason except as is required by the law even if new information becomes available or other events occur in the future.
In addition today, we will be discussing non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A table that outline the reconciliation between the non-GAAP financial measures to GAAP financial measures is included in our earnings released which we have filed with the SEC and I refer investors to this document.
I will now turn the call over to Avi.
Thank you Jim and welcome everyone to our fourth quarter and fiscal year 2013 end of the year conference call. Today I’ll review our recent performance and important events and discuss our outlook for the first quarter and beyond.
Let me first start with a brief summary of our financial overview in this quarter which would be further discussed shortly by Curt. Our revenue increased 7% over the third quarter to $7.8 million and was above the quarterly guidance we did in October 2013 of 5% quarterly growth. This increase come on top of the 7% sequential increase we recorded in the third quarter over the second quarter of 2013. In addition, when factoring out the $900,000 in one-time government revenue in the fourth quarter of 2012, the actual product related revenue in the fourth quarter of 2013 increased about 11% from the same quarter a year ago. Non-GAAP gross margin was 60% in this quarter representing our 5th consecutive quarter of gross margin at the 60% or above. And we delivered a non-GAAP profitable quarter with a significant $900,000 in hand by adjusted EBITDA.
During the quarter, we completed a public offering of common stock the generated net proceeds of about $12.5 million allowing us to end the quarter with more than $20 million in cash and with no debt whatsoever.
We’re delighted to experience the institutional invest of interest in this offering and the fact that the offering was largely oversubscribed reflect the short and long term value that those investors sees in GigOptix.
I want to thank our new investors, now representing about 30% of our shareholder base for the trust and welcome all of them on Board.
With this being our first fiscal year end call now, it is important for me to highlight first, some of 2013 achievements which we likely to provide the company’s growth foundation for 2014 and beyond.
In 2013, we executed on many of the stated programs we discussed in pervious calls over the last year. Introduced many new products and enhanced substantially our strategic partnerships with key light house customers. We’re delivering industry leading products to our tier 1 customers and expect to accelerate this in 2014. This resulted in top line growth of about 10% in the second half of 2013 which was at the high end of the industry average and exactly in power with our projections for the datacom and telecom markets recovery after the slow start at the early part of 2013.
As you may remember, we started 2013 facing a deep slow down in optical communication industry. Immediately in January when we recognized the problem, we responded to the sudden slow down demand by lowering significantly out cost structure through meaningful reduction in our workforce, salary reduction and other measures. Those actions lead to reduction of about 7% in the company’s non-GAAP operation expense in 2013 versus 2012 which shed an immediate and long term lasting impact on our balance sheet and income statement.