Anadigics $75 million convertibles talked at 5.0-5.5% yield, 21-25% premium

By Ronda Fears

Nashville, Tenn., Nov. 16 - Anadigics Inc. launched $75 million of five-year convertible senior notes with price talk of a 5.0% to 5.5% yield and a 21% to 25% initial conversion premium. The Rule 144A issue is set to price after the close Tuesday, via lead manager Goldman Sachs & Co.

There is an $11.25 million greenshoe.

The company, which designs and manufactures radio frequency integrated circuitry products for the wireless and broadband communications industry, said proceeds would be used for working capital, strategic acquisitions and general corporate purposes.

Anadigics boosted its revenue forecast Friday as it has seen increased demand in fourth quarter for its CDMA and TDMA wireless products. The company said it now expects wireless revenues to reach $13 million to $13.5 million, versus previous expectations of $11 million to $11.5 million. Broadband (cable and fiber) revenue remains on track at $7 million to $7.5 million, the company said.

"We are pleased with the strength in our wireless product line in the fourth quarter, with our anticipated overall sequential revenue growth from the third quarter, and with our increased share of the CDMA handset market, which represents the fastest growing part of the wireless market," said Bami Bastani, chief executive officer of Anadigics. "Additionally, we remain focused on improving our gross margin and reaching profitability, while maintaining a strong balance sheet."

The company said it is on track with initiatives to reduce manufacturing costs and cut operating expenses 30% by first quarter. In addition to actions already implemented, the company plans to partially outsource its test operations, which over time is expected to improve gross margin by lowering test cost per unit. Also, the company said it is evaluating strategic alternatives for its fiber optics product line that could include a possible sale of the line, which the company said is expected to represent 5% of fourth quarter revenue.

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