AnalogicTech Reports Financial Results for the Third Quarter 2010

Net revenue for the third quarter of 2010 was $25.0 million, a decrease of 4.4% over net revenue of $26.1 million for the third quarter of 2009 and a sequential increase of 7.9% from net revenue of $23.1 million for the second quarter of 2010.

In accordance with U.S. generally accepted accounting principles (GAAP), net loss for the third quarter of 2010 was $1.3 million, or $0.03 per diluted share. Included in the results for the third quarter of 2010, the Company recorded a one-time tax benefit of $3.4 million as a result of a settlement with the IRS for the 2005 and 2006 tax years. This compares to a GAAP net loss of $1.0 million, or $0.02 per diluted share for the third quarter of 2009, and a GAAP net loss of $3.9 million, or $0.09 per diluted share, for the second quarter of 2010.

On a non-GAAP basis, net loss for the third quarter of 2010 was $2.4 million, or $0.06 per diluted share. This compares to non-GAAP net income of $0.8 million, or $0.02 per diluted share, for the third quarter of 2009 and a non-GAAP net loss of $2.7 million, or $0.06 per diluted share, for the second quarter of 2010.

Please refer to the tables below for a reconciliation between GAAP and non-GAAP financial measures.

AnalogicTech reported gross margins of 43.5% for the third quarter of 2010, compared to 51.2% for the third quarter of 2009 and 45.5% for the second quarter of 2010. Non-GAAP gross margin was 44.2% for the third quarter of 2010, compared to 51.7% for the third quarter of 2009 and 45.8% for the second quarter of 2010. The Company ended the quarter with $90.8 million in cash, cash equivalents, and short-term investments.

Solid sales in our handset business in Korea and Taiwan drove the sequential revenue increase in the third quarter, stated Richard K. Williams, President, CEO and CTO of AnalogicTech. We continued to make progress on our end market diversification strategy and experienced further traction with our products for LED backlit HDTVs. In addition, customer concentration on a percentage basis declined significantly from the prior year. Specifically, sales in Korea comprised less than 50% of total revenue for the quarter.

As we have previously indicated, following a period of extensive investment in R&D we are returning our focus to profitability. At the end of the third quarter, we reduced our headcount in the U.S. by approximately 15% and realigned several management functions. Tightly managing expenses will continue to be a priority.