UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________________
SCHEDULE
14A
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GIGA-TRONICS
INCORPORATED
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Additional proxy material to
be mailed to shareholders on or after July 22, 2009.
Giga-tronics
Incorporated
4650
Norris Canyon Road
San
Ramon, California 94583
(925)
328-4650
To our
Shareholders:
Fiscal
2009 was a pivotal year for Giga-tronics. The Company entered the
year with exciting new products in the pipeline, a streamlined organization with
better developed cross-functional skills and business planning practices, yet
with a leadership team still working through newly defined roles, and a minimal
backlog of shippable orders. The low beginning backlog coupled with
soft bookings in our 1st half
set us uncomfortably back in profitability and cash reserves forcing us to draw
on our line of credit for the first time. However, by mid-year we had
filled in the remaining gaps in the management team and began to experience a
pickup in bookings throughout our 2nd
half.
We
strengthened the sales and marketing team, adding new personnel in the field and
within the factory. We also opened an office in China staffed with a
local individual providing customer and sales channel support. We
held our costs in line by reducing variances and we managed our cash reserves
paying back our loan by the end of the 3rd
quarter. This combination of solid execution helped us grow our top
line revenue by 43% in the 2nd half of
the year as compared to the 1st half
and drove the 2nd half
into good profitability. Although we were unable to overcome the
losses generated in our first half, I’m very pleased that we have been able to
return the Company to profitability in this very challenging
environment.
During
this past year we introduced a new broadband 10 Watt power amplifier, the first
of its kind. We also introduced a high power synthesizer based upon
our GT2400B and GT2500A models along with a family of USB Power Sensors that
plug directly into a PC. And we recently upgraded the entire
synthesizer line with many improved features including new frequency coverage up
to 50 GHz.
Backlog
continued to grow for Microsource’s high performance specialty filters based
upon our fast switching YIG technology and we are under contract to design a new
version that positions the Company for continuous volume production over the
next 5 years.
In our
switching solution business, we are poised to introduce a new low cost chassis
that allows existing customers to preserve their investment in switch-cards
which adds Ethernet and USB interfaces to the choices currently
available.
Although
there are still areas for improvement, many of the fundamental operating
challenges we’ve faced are behind us. This relieves some of the
immediate pressures on the management team and allows us to focus attention on
new markets for driving the Company’s future growth. As we move
forward, we will be devoting considerable management attention to defining
strategy and identifying markets where we have a clear competitive advantage
over our competition.
Looking
ahead to fiscal 2010, Giga-tronics is well positioned to continue its positive
trajectory. To begin with, we are entering the new fiscal year with
$2.2M more in backlog than we entered fiscal 2009. Although much will
depend upon the economy, this additional backlog improves the base upon which to
build growth. Second, as part of our synthesizer upgrade, we have
standardized the design around a set of common sub assemblies which will allow
us to achieve further cost reductions in the coming year. Third, we
have embarked on growing our customer funded engineering projects that help us
contain our expenses while allowing us to retain our engineering talent during
these uncertain times. Fourth, our senior management team is in place
at the beginning of the year and their efforts will be reflected over the entire
12 months. And finally, we will take advantage of opportunities to
further consolidate the Company as a result of the working efficiencies we’ve
developed.
Overall,
I’m optimistic about the Company’s prospects for fiscal 2010 and I look forward
to updating you throughout the coming year.
Sincerely,
John R.
Regazzi
Chief
Executive Officer