Giga-tronics Incorporated

For the fourth quarter of fiscal 2022, revenue was $1.4 million versus $2.7 million in the prior-year quarter, a 48% decline. Full-year fiscal 2022 revenue was $9 million compared with $13.1 million in fiscal 2021, down 31%. Q4 gross margin was 28% versus 30% a year ago, and full-year gross margin was 36% versus 38%. Q4 net loss was $1.2 million versus $0.8 million last year; full-year net loss was $2.7 million versus $390,000. Adjusted EBITDA loss was $740,000 in Q4 and $1.3 million for the year, versus losses of $610,000 and $0.5 million, respectively. Looking ahead, management did not give formal revenue guidance, but said it expects more normalized contract award activity in fiscal 2023 and expects to file the Gresham proxy in early August with closing in late August.

John Regazzi said the company’s two businesses have strong strategic fit with Gresham’s similar divisions, creating potential synergies in sales, R&D, and G&A. He framed the merger as a way to move beyond the limits of being a small public company and to build a larger platform that can grow both organically and inorganically. His tone was cautious on the quarter but upbeat about the combination and the longer-term opportunity.

Lutz Henckels described fiscal 2022 as “very disappointing,” with the main issue being weak EW test orders; that division generated only $770,000 of revenue versus $3.7 million in fiscal 2021. He noted gross margin pressure from product mix and lower revenue, operating expenses of $1.56 million in Q4 and $5.9 million for the year, and higher interest expense tied to the $800,000 BitNile affiliate loan. He also pointed to $1.2 million of additional inventory invested for TEmS and said stockholders’ equity fell from $4.2 million to $3.7 million, though debt and equity funding helped offset those investments.

Analysts focused on whether the new IDIQ contract was translating into sustained order activity, and management said multiple service branches and ranges are interested in replicating the capability and can now add task orders more easily. On the product side, management said the key advantages of the range application are reprogrammability and being a low-cost alternative, claiming the system is one-tenth the cost of competitors. On the Gresham deal, management said delays were caused by waiting on audited financial statements, but those have now been received, with the proxy expected in early August and closing in late August.