Giga-tronics Reports First Quarter Results

SAN RAMON, Calif.--(Business Wire)--
Giga-tronics Incorporated (NASDAQ: GIGA) reported today a net loss
of $522,000 or $0.11 per fully diluted share for the quarter ended
June 28, 2008. This compares with a net profit of $92,000 or $0.02 per
fully diluted share for the same period a year ago. Net sales
decreased 25% to $3,488,000 in the first quarter of fiscal 2009
compared to $4,628,000 in the first quarter of fiscal 2008. Operating
expenses other than restructuring charges increased $59,000 in the
first quarter of fiscal 2009 due to an increase of $89,000 in selling,
general and administrative expenses offset by a decrease of $30,000 in
product development expenses. However, total operating expenses
decreased in the first quarter of fiscal 2009 compared to the first
quarter of fiscal 2008 by $21,000 due to the one-time restructuring
charge of $80,000 in severance costs that occurred in the first
quarter of fiscal 2008.

There was no income or loss from discontinued operations for the
quarter ended June 28, 2008. During the quarter ended June 30, 2007,
the Company recorded $64,000 as income on discontinued operations due
to the receipt of a payment of $18,000 on previously reserved
receivables, a payment of $41,000 from the sale of a previously
written off asset, and an adjustment of $5,000 to the sub-lease
accrual.

Orders declined 15% in the first quarter of fiscal 2009 to
$4,224,000 from $4,980,000 for the first quarter of fiscal 2008. Our
book-to-bill ratio was 1.21 for the first quarter of fiscal year 2009
compared to 1.08 in the same period a year ago.

Backlog for the quarter ended June 28, 2008 was $8.3 million
(approximately $5.8 million shippable within one year) as compared to
$8.8 million (approximately $5.9 million shippable within one year)
for the quarter ended June 30, 2007.

Cash and cash equivalents at June 28, 2008 were $1,718,000
compared to $1,845,000 as of March 29, 2008.

Giga-tronics will host a conference call today at 4:30 p.m. ET to
discuss the first quarter results. To participate in the call, dial
(866) 551-1530, and enter Access Code 1719642#. The call will also be
broadcast over the internet at www.gigatronics.com under "Investor
Relations". The conference call discussion reflects management's views
as of July 31, 2008 only.

Giga-tronics produces instruments, subsystems and sophisticated
microwave components that have broad applications in both defense
electronics and wireless telecommunications.

Giga-tronics is a publicly held Company, traded on the NASDAQ
Capital Market under the symbol "GIGA".

This press release contains forward-looking statements concerning
profitability, backlog and shipments. Actual results may differ
significantly due to risks and uncertainties, such as future orders,
cancellations or deferrals, disputes over performance and the ability
to collect receivables. For further discussion, see Giga-tronics'
annual report on Form 10-K for the fiscal year ended March 29, 2008
Part I, under the heading "Risk Factors" and Part II, under the
heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
----------------------------------------------------------------------
(In thousands except share data) June 28, 2008 March 29, 2008
----------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 1,718 $ 1,845
Trade accounts receivable, net of
allowance of $115 and $93,
respectively 2,345 2,693
Inventories, net 5,066 5,008
Prepaid expenses and other current
assets 489 383
------------- ----------------
Total current assets 9,618 9,929

Property and equipment, net 369 400
Other assets 16 32
------------- ----------------
Total assets $ 10,003 $ 10,361
============= ================

Liabilities and shareholders' equity
Current liabilities
Accounts payable $ 592 $ 649
Accrued commissions 119 181
Accrued payroll and benefits 636 526
Accrued warranty 196 190
Customer advances 870 646
Income taxes payable 2 ---
Other current liabilities 524 606
------------- ----------------
Total current liabilities 2,939 2,798
Deferred rent 130 171
------------- ----------------
Total liabilities 3,069 2,969
------------- ----------------
Shareholders' equity
Preferred stock of no par value;
Authorized 1,000,000 shares; no
shares outstanding at June 28, 2008
and March 29, 2008 --- ---
Common stock of no par value;
Authorized 40,000,000 shares;
4,824,021 shares at June 28, 2008
and March 29, 2008 issued and
outstanding 13,462 13,398
Accumulated deficit (6,528) (6,006)
------------- ----------------
Total shareholders' equity 6,934 7,392
------------- ----------------
Total liabilities and shareholders'
equity $ 10,003 $ 10,361
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
----------------------------------------------------------------------
THREE MONTHS ENDED
(In thousands except per share data) June 28, 2008 June 30, 2007
----------------------------------------------------------------------
Net sales $ 3,488 $ 4,628
Cost of sales 2,091 2,684
------------- -------------
Gross profit 1,397 1,944
------------- -------------

Engineering 556 586
Selling, general and administrative 1,364 1,275
Restructuring --- 80
------------- -------------
Operating expenses 1,920 1,941
------------- -------------

Operating (loss) income (523) 3

Other income --- 13
Interest income, net 3 14
------------- -------------
(Loss) income from continuing operations
before income taxes (520) 30
Provision for income taxes 2 2
------------- -------------
(Loss) income from continuing operations (522) 28
Income on discontinued operations, net of
income taxes --- 64
------------- -------------
Net (loss) income $ (522) $ 92
============= =============

Basic and diluted net (loss) income per
share:
From continuing operations $ (0.11) $ 0.01
On discontinued operations 0.00 0.01
------------- -------------
Basic and diluted net (loss) income per
share $ (0.11) $ 0.02
============= =============

Shares used in per share calculation:
Basic 4,824 4,809
============= =============
Diluted 4,824 4,863
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Giga-tronics Incorporated
Pat Lawlor, 925-328-4656
Vice President, Finance/Chief Financial Officer

Copyright Business Wire 2008