Giga-tronics Inc. (NASDAQ:GIGA) Q3 2019 Earnings Conference Call Transcript

Feb 12, 2019 • 04:30 pm ET

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Giga-tronics Inc. (NASDAQ:GIGA) Q3 2019 Earnings Conference Call Transcript

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Operator
Operator

Welcome to the Giga-Tronics Third Quarter Earnings Conference Call. My name is Sylvia and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) Please note that this conference is being recorded.

I will now turn the call over to Traci Mitchell. Traci, you may begin.

Executive
Traci Mitchell

Hi, everyone, and thanks for joining our quarterly earnings conference call. I'm Traci Mitchell, and I'm joined here today by John Regazzi, our CEO; and Dr. Lutz Henckels, our CFO and Executive VP.

Before we begin, I need to remind everyone that this conference call contains forward-looking statements concerning operating performance, future orders, long-term growth and shipments. Actual results may differ significantly due to risks and uncertainties, such as delays with manufacturing and orders for our ASG, receipt or timing of future orders, cancellations or deferrals of existing orders, the company's potential need of additional financing, ability to be traded on OTC market, uncertainty as to the company's ability to continue as a going concern, the volatility in the market price of our common stock, results of pending or threatened litigation and general market conditions. For further discussion, see our most recent annual report on Form 10-K for the fiscal year ended March 31, 2018, 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.

With those reminders in place, I will now pass the call on to John.

Executive
John Regazzi

Thank you, Traci. Good afternoon, and thank you for joining our third quarter conference call. We have prepared a thorough review of the numbers for today's call. But, I first want to acknowledge, the Company has now received the long anticipated order from our government customer located at the Naval Air Station in Point Mugu, California. The order totaling $4 million has two line items. The first item is for two of the Company's multi-ship signal generators systems at $1.66 million apiece. And the second item is for 3,000 hours of engineering services and support totaling $671,000.

The two multi-ship systems are expected to be delivered over the next two quarters and brings the total to five of these systems owned and operated by this customer. The engineering services for selective upgrades and support of these five systems will be delivered over the next 12 to 15 months. This is a very welcome event for Giga-tronics, and we will be using some of the proceeds to accelerate development of additional systems to help the company further penetrate this market.

As we approach the beginning of our next fiscal year, we have been conducting extensive planning of engineering projects to integrate the Company's ASG and ASA products with a variety of advanced third-party digital solutions to position Giga-tronics as a provider of full solutions and not just the underlying microwave components. This has been a key change in our strategy to approach the market, and we will