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Anaren Reports 1st Quarter Fiscal 2013 Results

Anaren Reports 1st Quarter Fiscal 2013 Results

SYRACUSE, N.Y., Oct. 23, 2012 (GLOBE NEWSWIRE) -- Anaren, Inc. (Nasdaq:ANEN)
today reported net sales for the fiscal 2013 first quarter ended September 30,
2012 of $39.1 million, up 0.9% from $38.7 million for the first quarter of
last year.

GAAP (U.S. generally accepted accounting principles) net income for the first
quarter of fiscal 2013 was $2.9 million, or $0.21 per diluted share, compared
to $2.5 million, or $0.17 per diluted share for the first quarter of last
year.

Non-GAAP diluted earnings per share, excluding non-cash equity based
compensation and intangible asset amortization, was $0.27 for the first
quarter of fiscal 2013 compared to non-GAAP diluted earnings per share of
$0.23 for the first quarter of fiscal 2012.

GAAP operating income for the first quarter of fiscal 2013 was $4.0 million,
or 10.2% of net sales, compared to $3.6 million, or 9.3% of net sales for the
first quarter of last year. Non-GAAP operating income for the first quarter of
fiscal 2013, which excludes non-cash equity based compensation and intangible
asset amortization, was $5.3 million, or 13.6% of net sales, up 9.4% from $4.8
million, or 12.5% of net sales for the first quarter of fiscal 2012.

Income taxes for the first quarter of fiscal 2013 were $1.3 million,
representing an effective tax rate of 32.0% compared to income tax expense of
$1.1 million for the first quarter of fiscal 2012, representing an effective
tax rate of 30.7%. The projected effective tax rate for fiscal 2013, absent
one-time events, is expected to be approximately 32.0%.

Lawrence A. Sala, Anaren's Chairman, President and CEO said, "We were pleased
to see continuing sequential quarterly sales growth and improved profitability
for the quarter. Non-GAAP operating incomeimproved more than 9% from first
quarter fiscal year 2012 levels, as a result of both the higher sales volume
and the actions taken last year to reduce operating expenses."

During the first quarter of fiscal 2013, the Company generated $2.1 million in
operating cash flow compared to $5.3 million in the first quarter of fiscal
2012. Additionally, during the current quarter the Company repurchased
approximately 469,000 shares of its common stock for a total of $8.9 million
and expended $1.3 million for capital additions. Non-operating cash receipts
for the quarter included $1.4 million from the exercise of stock options and
the Company borrowed $8.0 million under its revolving credit facility during
the quarter to help fund stock repurchases. Cash, cash equivalents and
marketable debt securities at September 30, 2012 were $45.6 million, up $1.7
million from $43.9 million at June 30, 2012.

Wireless Group

Wireless Group net sales for the quarter were $13.2 million, down 27.5% from
the first quarter of fiscal 2012, due to the continuing softness in demand in
the wireless infrastructure market. While current Wireless Group sales remain
below the peak first quarter fiscal 2012 levels, demand for our Wireless
infrastructure products has increased more than 29% from the low point in the
third quarter of last year.

New product investments for the quarter continued to be focused on expansion
of the wireless infrastructure components and low power wireless Anaren
Integrated Radio (AIR) module product lines.

Customers that generated greater than 10% of Wireless Group net sales for the
quarter were Arrow Electronics, Richardson, Huawei and Nokia.

Space & Defense Group

Space & Defense Group net sales for the quarter were $25.9 million, up 26.1%
from the first quarter of fiscal 2012. This increase was driven mainly by
higher shipments of passive ranging sub systems and hybrid electronic modules.
The increase in net sales and improved operational execution during the
quarter resulted in higher profitability for the Group.

New orders for the quarter totaled $24.8 million and were driven largely by
radar, passive ranging and satellite applications.Space & Defense Group order
backlog at September 30, 2012 was approximately $104 million. 

Customers that generated greater than 10% of Space & Defense Group net sales
for the quarter were Lockheed Martin, Northrop Grumman and Raytheon.

Non-GAAP Financial Measures

In addition to presenting financial results calculated in accordance with
GAAP, Anaren's earnings release contains non-GAAP financial measures
including: non-GAAP gross profit, non-GAAP operating income, non-GAAP net
income and non-GAAP net income per diluted share. These non-GAAP measures are
each adjusted from GAAP results to exclude certain non-cash items including
equity based compensation and intangible asset amortization.

The Company believes these non-GAAP financial measures provide useful
information to both management and investors to help understand and compare
business trends among reporting periods on a consistent basis.Additionally,
these non-GAAP financial measurements are one of the primary indicators
management uses for planning and forecasting in future periods.The
presentation of this additional information should not be considered in
isolation or as a substitute for results prepared in accordance with GAAP.

Outlook

For the second quarter of fiscal 2013, we anticipate comparable sales for both
the Wireless and Space & Defense Groups compared to the first quarter
levels.As a result, we expect net sales to be in the range of $37 to $41
million. We expect GAAP net earnings per diluted share to be in the range of
$0.17 - $0.25, using an anticipated tax rate of approximately 32.0% and
inclusive of approximately $0.05 -$0.06 per diluted share related to expected
equity based compensation expense and amortization of intangibles
assets.Non-GAAP net earnings per diluted share are expected to be in the
range of $0.22 - $0.30 for the second quarter.

Forward-Looking Statements

The statements contained in this news release which are not historical
information are "forward-looking statements." These and other
forward-looking statements are based on management's current expectations and
are subject to business, market and economic risks and uncertainties that
could cause actual results to differ materially from those discussed.You are
encouraged to review Anaren's filings with the Securities and Exchange
Commission to learn more about the various risks and uncertainties facing
Anaren's business and their potential impact on Anaren's revenue, earnings and
stock price. Unless required by law, Anaren disclaims any obligation to update
or revise any forward-looking statement.

Conference Call

Anaren will host a live teleconference, open to the public on the Anaren
Investor Info, Live Webcast Web Site (www.anaren.com) on October 24 at 8:30
a.m. (ET).A replay of the conference call will be available at 11:30 a.m.
(ET) beginning October 24, 2012 through 11:30 p.m. on October 31, 2012.To
listen to the replay, interested parties may dial in the U.S. at
1-855-859-2056 and International at 1-404-537-3406.The passcode is
34844702.If you are unable to access the Live Webcast, the dial in number for
the U.S. is 1-877-734-4580 and International is 1-678-905-9378.

Company Background

Anaren designs, manufactures and sells complex microwave components and
subsystems for the wireless communications, satellite communications and
defense electronics markets.For more information on Anaren's products, visit
our Web site at www.anaren.com.

The Anaren, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5360

ANAREN, INC.
Condensed Consolidated Income Statements
(in thousands except per share data)
(unaudited)
                                                          
                                                          
                                        Three Months Ended
                                        September 30, 2012 September 30, 2011
                                                          
Sales                                  $39,062          $38,720
                                                          
Cost of sales                          24,647            24,196
Gross profit                           14,415            14,524
                                        36.9%              37.5%
Operating expenses:                                      
Marketing                              2,539             2,596
Research and development               3,334             3,924
General and administration             4,550             4,415
Total operating expenses               10,423            10,935
                                                          
Operating income                       3,992             3,589
                                        10.2%              9.3%
Other income (expense):                                  
Other income                           223               140
Interest expense                       (18)              (80)
Total other income, net                205               60
                                                          
Income before income tax expense       4,197             3,649
Income tax expense                     1,343             1,120
Net income                             $2,854           $2,529
                                        7.3%               6.5%
                                                          
Earnings per share:                                      
Basic                                  $0.22            $0.18
Diluted                                $0.21            $0.17
                                                          
                                                          
Weighted average common shares          
outstanding:
Basic                                  12,999            14,129
Diluted                                13,676            14,803


ANAREN, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                               
                                             September 30, 2012 June 30, 2012
                                                               
Assets:                                                         
Cash, cash equivalents and short-term         $35,990          $32,232
investments
Receivables, less allowances                  33,426            29,521
Inventories                                   36,854            36,443
Held for sale assets                          4,359             --
Prepaid expenses and other assets             5,842             6,650
Total current assets                          116,471           104,846
                                                               
Securities held to maturity                   9,622             11,657
Property, plant, and equipment, net           42,212            47,171
Goodwill                                      42,343            42,343
Other intangibles, net                        7,515             7,770
Total assets                                  $218,163         $213,787
                                                               
Liabilities and Stockholders' Equity                            
Liabilities:                                                    
Accounts payable                              $7,615           $8,604
Accrued expenses                              4,585             3,926
Customer advance payments                     1,206             1,307
Other liabilities                             2,334             2,068
Total current liabilities                     15,740            15,905
                                                               
Long-term debt obligation                     8,000             --
Other non-current liabilities                 12,139            12,379
Total liabilities                             35,879            28,284
                                                               
Stockholders' Equity:                                           
Common stock and additional paid-in capital   226,180           223,326
Retained earnings                             145,980           143,126
Accumulated other comprehensive loss          (3,056)           (3,026)
Less: cost of treasury shares                 (186,820)         (177,923)
Total stockholders' equity                    182,284           185,503
                                                               
Total liabilities and stockholders' equity    $218,163         $213,787


ANAREN, INC.
Reconciliation of GAAP and Non-GAAP Gross Profit, Operating Income, Net
Income and Diluted Earnings Per Share
(in thousands except per share data)
(unaudited)
                                                          
                                        Three Months Ended
                                        September 30, 2012 September 30, 2011
                                                          
Sales                                  $39,062          $38,720
                                                          
GAAP gross profit                      $14,415          $14,524
Equity-based compensation expense (1)  239               194
Amortization of intangibles (2)        39                39
Non-GAAP gross profit                  $14,693          $14,757
% of sales                             37.6%              38.1%
                                                          
GAAP operating income                  $3,992           $3,589
Equity-based compensation expense (1)  1,050             956
Amortization of intangibles (2)        255               298
Non-GAAP operating income              $5,297           $4,843
% of sales                             13.6%              12.5%
                                                          
GAAP net income                        $2,854           $2,529
Equity-based compensation expense (1)  1,050             956
Amortization of intangibles (2)        255               298
Tax effect                             (470)             (451)
Non-GAAP net income                    $3,689           $3,332
% of sales                             9.4%               8.6%
                                                          
                                                          
Diluted earnings per share                               
GAAP diluted earnings per share        $0.21            $0.17
Equity-based compensation expense (1)  0.08              0.06
Amortization of intangibles (2)        0.02              0.02
Tax adjustments                        (0.04)            (0.02)
Non-GAAP diluted earnings per share    $0.27            $0.23
                                                          
Weighted average common shares                            
outstanding
Diluted                                13,676            14,803
                                                          
                                                          
1)These costs represent expense recognized in accordance with the
share-based compensation accounting rules.
                                                          
2)These costs represent amortization of intangible assets for the three
months ended September 30, 2012 and 2011.


ANAREN, INC.
Reconciliation of GAAP and Non-GAAP Gross Profit, Operating Income, and
Earnings Per Share
(in thousands)
(unaudited)
                                                               
The following table details the Non-GAAP, Non-Cash expenses related to
equity-based compensation and intangible asset amortization by expense
category.
                                                               
Three Months EndedSeptember 30, 2012
(in thousands)
(unaudited)
                                                               
                         Equity Based     Amortization       
                         Compensation     of Intangibles     Total
Cost of sales           $239             $39                $278
Marketing               86                --                 86
Research and             120               --                 120
development
General and              605               216                 821
administrative
                         $1,050           $255               $1,305
                                                               
                                                               
                                                               
                                                               
Three Months Ended September 30, 2011
(in thousands)
(unaudited)
                                                               
                         Equity Based     Amortization       
                         Compensation     of Intangibles     Total
Cost of sales           $194             $39                $233
Marketing               65                --                 65
Research and             114               --                 114
development
General and              583               259                 842
administrative
                         $956             $298               $1,254


ANAREN, INC.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
                                                         
                                                         Three Months Ended
                                                         September 30, 2012
Cash flows from operating activities:                     
Net income                                                $2,854
                                                         
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation                                              1,909
Amortization                                              363
Deferred income taxes                                     105
Equity-based compensation                                 1,050
Receivables                                               (3,906)
Inventories                                               (411)
Accounts payable                                          (989)
Other assets and liabilities                              1,088
Net cash provided by operating activities                 2,063
                                                         
Cash flows from investing activities:                     
Capital expenditures                                     (1,309)
Proceeds from deposit on held for sale assets             200
Net maturities of held to maturity securities             5,415
Net cash provided by investing activities                 4,306
                                                         
Cash flows from financing activities:                     
Proceeds from long-term debt obligation                   8,000
Stock options exercised                                   1,352
Excess tax benefit from equity-based compensation         453
Purchase of treasury shares                               (8,897)
Net cash provided by financing activities                 908
                                                         
Effect of exchange rates on cash                          (31)
                                                         
Net increase in cash and cash equivalents                 $7,246
                                                         
Cash and cash equivalents at beginning of period          $21,012
                                                         
Cash and cash equivalents at end of period                $28,258

CONTACT: George Blanton, CFO
         315-362-0436
         Joseph E. Porcello, VP-Accounting
         315-362-0514

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