Giga-tronics Incorporated

Steve Lance - CFO, VP, Finance, Secretary John Regazzi - CEO, President

Thank you, Mayisha. First I'd like to read our Safe Harbor statement.

This conference call contains forward-looking statements concerning operating performance, future orders, long-term growth and shipment. Actual results may differ significantly due to risks and uncertainties, such as delays with manufacturing and orders for new product, receipt or timing of future orders, cancellations or deferral of orders, the company's going concern, needs for additional financing, the ability to be traded on NASDAQ and volatility in the marketplace of our common stock and other general market conditions.

For further discussions see Giga-tronics most recent Annual Report on Form 10-K for the fiscal year-ended March 29, 2014, Part I, under the heading Risk Factors and Part II, under the heading Management's Discussions and Analysis of Financial Condition and Results of Operations. I will now turn the call over to John Regazzi, our Chief Executive Officer.

John?

Thank you, Steve. Good afternoon and thank you for joining our quarterly earnings conference call.

I'm very pleased to report positive news regarding the company's operating performance this quarter. Net sales increased 28% to $5.1 million this quarter from $4 million in the same quarter a year ago.

And 13% as compared to $4.5 million in the immediately preceding quarter. The increase was primarily due to revenues associated with two large customer orders we received within the first quarter of this fiscal year.

Operating income for the second quarter of fiscal 2015 was $113,000 as compared to a loss of $1.1 million in the second quarter of last fiscal year and as compared to a loss of $118,000 in the immediately preceding quarter. The increase in net sales improved gross margins and lower operating expenses all contributed to our second quarter operating profit.

Net income for the second quarter of fiscal 2015 was $93,000 or $0.01 per fully diluted share as compared to a net loss of $1.1 million or $0.21 per fully diluted share in the second quarter of last fiscal year. Now for the first half numbers.

Net sales for the six month period ended this September 2014 increased 37% to $9.6 million as compared to $7 million for the same quarter – excuse me, for the same period a year ago. Operating loss for the six month period ended this September was $5000 as compared to an operating loss of $2.5 million for the same period a year ago.

Net loss for the six month period ended September was $350,000 or $0.07 per fully diluted share as compared to a net loss of $1.8 million or $0.35 per fully diluted share for the same period a year ago. Looking at non-GAAP performance which excludes non-cash expenses recorded in connection with the warrants granted as part of our debt agreement as well as stock-based compensation.

Net income for the second quarter was $262,000 or $0.03 per fully diluted share as compared to a non-GAAP net loss of $880,000, or $0.17 per fully diluted share in the second quarter a year ago. Non-GAAP net income for the six month period ended September was $120,000, or $0.01 per fully diluted share as compared to a non-GAAP net loss of $1.4 million, or $0.28 per fully diluted share for the first half of last fiscal year.

I'm very pleased to see the company return to profitability which we achieved through revenue and efficiency improvements and without any slowdown in our development efforts. We believe our results for the second half of this fiscal year will be inline with the results just reported from the first half of fiscal 2015.

I'm also pleased to see the first customer deliveries of our new product platform that we call the Advanced Signal Generation System, a name fitting its purpose to serve the future needs of radar and electronic warfare professions. We believe the Advanced Signal Generation System will greatly contribute to the long-term success and growth of Giga-tronics.

With that, I'd like to open the call for questions.

Thank you all for your interest in Giga-tronics.