Anadigics, Inc. (ANAD)
Q4 2010 Earnings Call
February 17, 2011 8:30 a.m. ET
Tom Shields - Executive Vice President and CFO
Mario Rivas - President and CEO
Anthony Stoss - Craig-Hallum
Edward Snyder - Charter Equity Research
Todd Koffman - Raymond James
Patrick Newton - Stifel Nicolaus
Unidentified Analyst - Needham & Company
Previous Statements by ANAD
» ANADIGICS CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Anadigics, Inc. Q2 2010 Earnings Call Transcript
» ANADIGICS, Inc. Q1 2010 Earnings Call Transcript
If you would like to ask a question during this time simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question press the pound key. Thank you. I will now turn the call over to Tom Shields, Chief Financial Officer. Please go ahead sir.
Thank you operator. Good morning everyone and welcome to the Anadigics fourth quarter and full year 2010 earnings conference call. Before we get started please remember any comments made on this call by management as part of prepared remarks or in response to your questions may contain forward-looking information. Such information is subject to risks an uncertainties as described in this morning’s press release and in the company’s various filing with the SEC. I would like now to turn the call over to Mario for his opening remarks.
Thank you Tom and good afternoon everyone from Barcelona at the Mobile World Congress where I have the opportunity to meet directly with many of our existing customers and potential key prospects including tier one OEMs and strategic chip providers. This engagement not only provided a forum to further strengthen our business relationships and share company market strategies.
It also enables us to discuss and review 2011 and future possibilities. I believe these deliberations will bring tangible benefits for our company over both the short, medium and long term. Anadigics truly had a great 2010. We increased revenue by greater than 54% over 2009 and delivered a 41 million or 65 cents improvement in earnings per share.
We further strengthened our balance sheet as we ended the year with 106 million in cash and cash equivalents. Our wireless business grew 72% and our broadband business increased 20% year over year. Our strong 2010 results directly reflect our successful execution on our strategic initiatives that were outlined at the beginning of the year including expanding our customer base and increasing our market share.
For the December quarter our reported revenue of $60.2 million was stronger than expected from the 57 million provided in our previous revenue guidance. Increased demand for wireless, LAN and our cable products provided for a much lower sequential decline in broadband to 12.5% compared to our anticipated 25% decrease. And wireless showed stronger (turns) business, coming in 2% higher than expected.
As a result, we were able to achieve one penny better in earnings per share than our previous guidance. Now I’d like to discuss our 2010 achievements in more detail and then provide an overview of our 2011 growth drivers and initiatives. As you may recall, we entered the year 2010 with three key initiatives including leveraging our operational excellence, introduce peer products to capitalize on the growth of both 3-G and 4-G markets and achieve profitability.
I am proud to say we were successful in all three during this past year. Beginning with operational excellence, I’m very pleased with the performance metrics achieved at our Warren facility. We have achieved and maintained the best five cycle punch in the industry of less than 30 days and yields in the mid to high 90s while we continue to simultaneously scale our business. Over the past year we not only improved yields and delivery rates but also reduced our cycle times and production costs, which collectively contributed to higher gross margins as well as increasing our available capacity with existing equipment.
We also continue to make great progress in achieving our (unintelligible) strategy with our partner Wynn Semiconductors. As we have completed several successful product (mappings). This is a significant advantage for Anadigics as some of our competitors have become capacity constrained and we are finding that many of our customers are emphasizing available capacity over pricing. Turning to our new product introductions during the year, our commitment to technology innovation and superior products allowed us to win business over competition while capitalizing on the growth in 3-G and 4-G.
New products represented approximately 40% of our business at year end, which was a significant improvement over 2009. Our robust research and development efforts fed customer demand for our superior 3-G and 4-G products. Demand for instantaneous connectivity anytime, anywhere driven in large part by social networking and mobile video, is increasing the need for greater bandwidth across the growing 3-G market.
According to Gardner Research, the compounded annual growth for 3-G is expected to be 35% through 2014. Speaking of dynamic growth, I want to quickly discuss tablets because I get a lot of questions about whatever Anadigics targets the tablet market and whatever we plan to introduce new products for that market. The reality is that there is little difference between providing a power amplifier for a smart phone or a power amplifier for a tablet. So the answer is yes, we are well positioned to benefit from the growth in this market as well.