14th November 2006

WJ Communications' Cut Loss & To Close Fab

WJ Communications, Inc., announced impressive financial results for its third quarter ended October 1, 2006, includes mention of the planned closure of its wafer fab thanks to the excellent progress it has made with partner GCS. It acquired its MMIC fab in Fremont, CA, USA, after acquiring EiC Corporation's wireless infrastructure business two years ago. Evidently the fabless model has proved the better option which make other similar companies to rethink their status in due course.

In its financials it reports how it achieved record revenue of $12.7 m, representing a 57% increase year-over-year plus it attained highest gross margin in 2 years at 55.7% and reduced its net loss to $1.2 m.

"During the quarter, we continued to make progress towards our financial objectives, resulting in a 57 percent year-over-year revenue growth, increased gross margins and improved EBITDA," commented Bruce Diamond, President and CEO of WJ Communications, Inc. "Additionally, we achieved another milestone in our strategic arrangement at GCS. As a result of our successful qualification and production ramp, we have solidified a restructuring plan, resulting in the planned closure of our wafer manufacturing facility during the first quarter of 2007. We expect to accrue restructuring costs of approximately $1.5 m in the fourth quarter, which we expect to be substantially offset by a gain on the sale of equipment in the first half of 2007. On an ongoing basis, we expect to realize future cost savings that will range from $1 m to $1.25 m per quarter, or $4 m to $5 m on an annualized basis."

Web: www.wj.com