Why does the company expect a loss in the first quarter of fiscal 1997?

The filing attributes the expected loss to overall softness in the North American cellular market, the delayed roll-out of Personal Communications Services (PCS), lower shipments, higher fixed costs from maintaining production capacity and product development, and the exit of certain non-strategic business areas. The company expects a loss of approximately $0.24 to $0.27 per share.

How much of the company's sales depend on military business?

In fiscal 1996, approximately 24% of sales were related to military subcontracts for ultimate sale to the Defense Department or foreign governments, down from 29% in fiscal 1995 and 40% in fiscal 1994. The company says it is repositioning toward commercial wireless markets and expects military revenue to continue declining.

How did the company fund its growth and what is its liquidity position?

The company completed a secondary public offering of 1,840,000 shares that raised $25.3 million net of expenses. At March 31, 1996, it had working capital of $32.6 million, including $15.5 million in cash, cash equivalents and short-term investments, and $12.5 million of available lines of credit, of which $1.0 million was outstanding. Management believes these resources are adequate for current operating needs.

Is the company dependent on a few customers?

No single customer accounted for 10% or more of total sales in fiscal 1996. However, the filing notes that sales to four major OEMs and their suppliers represented approximately 29% of fiscal 1996 sales, up from 17% in fiscal 1995, and that the company does not generally enter into long-term customer contracts.

SWKS 10-K FY1996 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed July 1, 1996. Cited figures are marked; the original filing is the authoritative source.

Alpha Industries, Inc. reported record sales and orders for the fiscal year ended March 31, 1996, with net sales of $96.9 million^a, up 23.8% from $78.3 million in fiscal 1995, and net income of $3.8 million, or $0.43 per share, versus $2.8 million, or $0.36 per share, a year earlier.

Gross profit rose 29.4% to $30.9 million^b, or 31.9% of sales. Research and development expense increased 120.2% to $9.1 million as the company doubled its investment in GaAs MMIC and ceramic product development aimed at wireless communications markets. Backlog at March 31, 1996 was approximately $36.5 million, about 90% of which is anticipated to ship in fiscal 1997.

The filing also warns of near-term weakness. The company cited softness in the North American cellular market and a delayed PCS roll-out, and expects a net loss for the first quarter of fiscal 1997, with an estimated loss of $0.24 to $0.27^c per share. It anticipates break-even to positive results in the second quarter and a return to profitability in the second half of fiscal 1997 if demand resurges.

Military sales continued to decline and made up 24% of fiscal 1996 sales, compared with 29% in fiscal 1995. The balance sheet strengthened significantly after a secondary public offering of 1,840,000 shares that raised $25.3 million^d net of expenses. Stockholders' equity rose to $57.5 million from $27.7 million, total assets reached $75.4 million, and cash, cash equivalents and short-term investments totaled $15.5 million.

Working capital was $32.6 million, and the company had $12.5 million of available credit lines. Management stated that it believes it has adequate funds for current operating needs.

02—Key points

Key Highlights

Net sales rose 23.8% to $96.9 million in fiscal 1996, with record sales and orders.
Net income was $3.8 million, or $0.43 per share, compared with $2.8 million, or $0.36 per share, in fiscal 1995.
Gross margin was 31.9% of sales, versus 30.5% in fiscal 1995.
R&D expense increased 120.2% to $9.1 million as the company doubled investment in GaAs MMIC and ceramic product development.
Backlog was approximately $36.5 million at March 31, 1996, with about 90% expected to ship in fiscal 1997.
The company expects a first-quarter fiscal 1997 loss of approximately $0.24 to $0.27 per share due to softer wireless demand and maintained capacity.
A secondary offering of 1,840,000 shares raised $25.3 million net, lifting stockholders' equity to $57.5 million.

03—Questions

Frequently Asked Questions

Why does the company expect a loss in the first quarter of fiscal 1997?
The filing attributes the expected loss to overall softness in the North American cellular market, the delayed roll-out of Personal Communications Services (PCS), lower shipments, higher fixed costs from maintaining production capacity and product development, and the exit of certain non-strategic business areas. The company expects a loss of approximately $0.24 to $0.27 per share.
How much of the company's sales depend on military business?
In fiscal 1996, approximately 24% of sales were related to military subcontracts for ultimate sale to the Defense Department or foreign governments, down from 29% in fiscal 1995 and 40% in fiscal 1994. The company says it is repositioning toward commercial wireless markets and expects military revenue to continue declining.
How did the company fund its growth and what is its liquidity position?
The company completed a secondary public offering of 1,840,000 shares that raised $25.3 million net of expenses. At March 31, 1996, it had working capital of $32.6 million, including $15.5 million in cash, cash equivalents and short-term investments, and $12.5 million of available lines of credit, of which $1.0 million was outstanding. Management believes these resources are adequate for current operating needs.
Is the company dependent on a few customers?
No single customer accounted for 10% or more of total sales in fiscal 1996. However, the filing notes that sales to four major OEMs and their suppliers represented approximately 29% of fiscal 1996 sales, up from 17% in fiscal 1995, and that the company does not generally enter into long-term customer contracts.

04—Continue

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