Anaren Reports 4th Quarter Fiscal 2013 Results

Anaren Reports 4th Quarter Fiscal 2013 Results

SYRACUSE, N.Y., Aug. 5, 2013 (GLOBE NEWSWIRE) -- Anaren, Inc. (Nasdaq:ANEN)
today reported net sales for the fiscal 2013 fourth quarter ended June 30,
2013 of $42.3 million, up 10.9% from $38.2 million for the fourth quarter of
last year.

GAAP (U.S. generally accepted accounting principles) net income for the fourth
quarter of fiscal 2013 was $3.4 million, up 15.2% from $2.9 million for the
fourth quarter of last year. GAAP diluted earnings per share for the fourth
quarter of fiscal 2013 was $0.25, up 25% from diluted earnings per share of
$0.20 for the fourth quarter of last year.

Non-GAAP diluted earnings per share, excluding non-cash equity based
compensation and intangible asset amortization, was $0.30 for the fourth
quarter of fiscal 2013, up 15.4% compared to non-GAAP diluted earnings per
share of $0.26 for the fourth quarter of fiscal 2012.

Both GAAP and Non-GAAP net income for the fourth quarter of fiscal 2013 were
reduced by a one-time unfavorable adjustment of approximately $0.4 million,
net of tax, or $(0.03) per diluted share resulting from an accrued charge for
possible losses related to a bankruptcy filing (Chapter 11) by a current
vendor.

GAAP operating income for the fourth quarter of fiscal 2013 was $4.1 million,
or 9.8% of net sales, up 15.7% from $3.6 million, or 9.4% of net sales for the
fourth quarter of last year. Non-GAAP operating income for the fourth quarter
of fiscal 2013, which excludes non-cash equity based compensation and
intangible asset amortization, was $5.2 million, or 12.2% of net sales, up
6.5% from $4.9 million, or 12.7% of net sales for the fourth quarter of fiscal
2012. Both GAAP and non-GAAP operating income for the fourth quarter of fiscal
2013 were reduced by the one-time unfavorable adjustment of approximately $0.6
million, or 1.4% of net sales, resulting from the previously mentioned vendor
bankruptcy filing.

Income taxes for the fourth quarter of fiscal 2013 were $0.9 million,
representing an effective tax rate of 20.2% compared to income tax expense of
$0.9 million for the fourth quarter of fiscal 2012, representing an effective
tax rate of 22.6%. The projected effective tax rate for fiscal 2014, absent
one-time events, is expected to be 27%.

Lawrence A. Sala, Anaren's Chairman, President and CEO said, "The growth in
net sales for the quarter was driven by both the Space & Defense and Wireless
Groups. The Space & Defense Group business is benefiting from a growing
percentage of Space related business and increasing demand for radar related
technology. Wireless demand improved during the quarter and customer forecasts
indicate strengthening worldwide demand for cellular infrastructure equipment.
For the year, GAAP net income increased 75% on 7.5% growth in net sales and we
believe that we are well positioned for continued growth and improved
profitability in fiscal 2014."

Net sales for the year ended June 30, 2013, were $158.4 million, up 7.5%
compared to net sales of $147.3 million for last year. GAAP net income for
fiscal 2013 was $15.1 million, up 75% compared to $8.6 million for fiscal
2012. On a per share basis, GAAP diluted earnings per share for fiscal 2013
was $1.13, up 92% from diluted earnings per share of $0.59 for last year.

Non-GAAP diluted earnings per share, which excludes non-cash equity based
compensation and intangible amortization, was $1.36 for fiscal 2013, up 68%
compared to non-GAAP diluted earnings per share of $0.81 for fiscal 2012.

During the fourth quarter of fiscal 2013, the Company generated $10.9 million
in operating cash flow compared to $10.4 million in the fourth quarter of
fiscal 2012. Additionally, during the quarter the Company expended $1.5
million for capital additions and had non-operating cash receipts of $1.4
million from the exercise of stock options. During the fourth quarter of
fiscal 2013, the Company did not purchased any additional treasury shares
under the current buyback authorization. Cash, cash equivalents and marketable
debt securities were $53.6 million at June 30, 2013, up $10.9 million from
March 31, 2013 and at June 30, 2013, the Company had no outstanding debt.

Wireless Group

Wireless Group net sales for the quarter were $12.8 million, down 4.3% from
the fourth quarter of fiscal 2012, and up 6.7% sequentially, due primarily to
rising infrastructure component customer demand. Demand from Wireless
infrastructure customers has increased in recent quarters and current
forecasts indicate increased demand levels for fiscal 2014.

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. The Company continues to see an
increasing number of AIR related design wins and new customers transitioning
to volume production.

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

Space & Defense Group

Space & Defense Group net sales for the quarter were $29.6 million, up 19.1%
from the fourth quarter of fiscal 2012. The sales increase was highlighted by
rising Low-temperature Co-fired Ceramic ("LTCC") product sales generated by
our Salem Ceramics subsidiary. The Group also experienced continued
improvement in operational execution, despite a less favorable product mix
during the current quarter which resulted in higher profitability for the
Group compared to the fourth quarter of last year.

New orders for the quarter totaled $28.2 million which were driven by numerous
space, radar and electronic warfare applications.Space & Defense Group order
backlog at June 30, 2013 was approximately $96.3 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 first quarter of fiscal 2014, we anticipate comparable sales for the
Wireless Group and lower sales for the Space & Defense Group compared to the
fourth quarter levels as Space & Defense Group LTCC product sales are
anticipated to decline due to a one quarter gap in production on a new
multi-year program. As a result, we expect net sales to be in the range of $38
to $42 million.We expect GAAP net earnings to be in the range of $0.25 -
$0.31 per diluted share for the first quarter.

Non-GAAP net earnings, which are inclusive of approximately $0.05 -$0.06 per
diluted share related to expected equity based compensation expense and
amortization of intangibles assets,are expected to be in the range of $0.30 -
$0.36 per diluted share for the first quarter of fiscal 2014.

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 August 6, 2013 at
8:30 a.m. (ET).A replay of the conference call will be available at 11:30
a.m. (ET) beginning August 6 through 11:30 p.m. on August 20, 2013.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 93139749.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.

ANAREN, INC.
Condensed Consolidated Statements of Income
(in thousands except per share data)
(unaudited)
                                                             
                      Three Months Ended        Twelve Months Ended
                      June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
                                                             
Net sales            $42,336     $38,172     $158,374    $147,346
                                                             
Cost of sales        27,212       24,305       99,565       95,924
Gross profit         15,124       13,867       58,809       51,422
                      35.7%         36.3%         37.1%         34.9%
Operating expenses:                                         
Marketing            2,123        2,742        9,545        10,328
Research and          3,629        3,035        13,607       13,217
development
General and           5,230        4,511        17,518       17,549
administration
Total operating       10,982       10,288       40,670       41,094
expenses
                                                             
Operating income     4,142        3,579        18,139       10,328
                      9.8%          9.4%          11.5%         7.0%
Other income                                                 
(expense):
Other income         82           203          494          656
Interest expense     (18)         (19)         (127)        (170)
Total other income,   64           184          367          486
net
                                                             
Income before income  4,206        3,763        18,506       10,814
tax expense
Income tax expense   850          850          3,450        2,200
Net income           $3,356      $2,913      $15,056     $8,614
                      7.9%          7.6%          9.5%          5.8%
                                                             
                                                             
                                                             
Earnings per share:                                         
Basic                $0.27       $0.21       $1.19       $0.61
Diluted              $0.25       $0.20       $1.13       $0.59
                                                             
                                                             
Weighted average common shares                                
outstanding:
Basic                12,558       13,767       12,687       14,050
Diluted              13,220       14,457       13,281       14,702
                                                             


ANAREN, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                              
                                                 June 30, 2013 June 30, 2012
                                                              
Assets:                                                        
Cash, cash equivalents and short-term investments $50,996     $32,232
Receivables, less allowances                      32,059       29,521
Inventories                                       34,928       36,443
Prepaid expenses and other assets                 5,108        6,650
Total current assets                             123,091      104,846
                                                              
Securities held to maturity                       2,582        11,657
Property, plant, and equipment, net               40,842       47,171
Goodwill                                          42,297       42,343
Other intangibles, net                            6,833        7,770
Total assets                                     $215,645    $213,787
                                                              
Liabilities and Stockholders' Equity                            
Liabilities:                                                   
Accounts payable                                  $7,319      $8,604
Accrued expenses                                  4,806        3,926
Customer advance payments                         1,603        1,307
Other liabilities                                 1,900        2,068
Total current liabilities                        15,628       15,905
                                                              
Other non-current liabilities                     10,279       12,379
Total liabilities                                25,907       28,284
                                                              
Stockholders' Equity:                                          
Common stock and additional paid-in capital       230,653      223,326
Retained earnings                                 158,182      143,126
Accumulated other comprehensive loss              (858)        (3,026)
Less: cost of treasury shares                     (198,239)    (177,923)
Total stockholders' equity                       189,738      185,503
                                                              
Total liabilities and stockholders' equity       $215,645    $213,787


ANAREN, INC.
Reconciliation of GAAP and Non-GAAP Gross Profit, Operating Income, Net
Income and Dilluted Earnings Per Share
(in thousands except per share data)
(unaudited)
                                                             
                                                             
                      Three Months Ended        Twelve Months Ended
                      June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
                                                             
Net sales            $42,336     $38,172     $158,374    $147,346
                                                             
GAAP gross profit    $15,124     $13,867     $58,809     $51,422
Equity-based
compensation expense   198          209          886          814
(1)
Amortization of       39           39           156          156
intangibles (2)
Non-GAAP gross        $15,361     $14,115     $59,851     $52,392
profit
% of sales           36.3%         37.0%         37.8%         35.6%
                                                             
GAAP operating        $4,142      $3,579      $18,139     $10,328
income
Equity-based
compensation expense   809          984          3,784        3,853
(1)
Amortization of       227          298          936          1,192
intangibles (2)
Non-GAAP operating    $5,178      $4,861      $22,859     $15,373
income
% of sales           12.2%         12.7%         14.4%         10.4%
                                                             
GAAP net income      $3,356      $2,913      $15,056     $8,614
Equity-based
compensation expense   809          984          3,784        3,853
(1)
Amortization of       227          298          936          1,192
intangibles (2)
Tax effect           (373)        (462)        (1,699)      (1,816)
Non-GAAP net income  $4,019      $3,733      $18,077     $11,843
% of sales           9.5%          9.8%          11.4%         8.0%
                                                             
                                                             
Diluted earnings per                                         
share
GAAP diluted earnings $0.25       $0.20       $1.13       $0.59
per share
Equity-based
compensation expense   0.06         0.07         0.28         0.26
(1)
Amortization of       0.02         0.02         0.07         0.08
intangibles (2)
Tax adjustments      (0.03)       (0.03)       (0.12)       (0.12)
Non-GAAP diluted      $0.30       $0.26       $1.36       $0.81
earnings per share
                                                             
Weighted average
common shares                                                 
outstanding
Diluted              13,220       14,457       13,281       14,702
                                                             

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 and year endedJune 30, 2013 and 2012.


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 EndedJune 30, 2013
(in thousands)
(unaudited)
                                                               
                         Equity Based     Amortization       
                         Compensation     of Intangibles     Total
Cost of sales           $198             $39                $237
Marketing               (1)               --                 (1)
Research and             67                --                 67
development
General and              545               188                 733
administrative
                         $809             $227               $1,036
                                                               
                                                               
Twelve Months EndedJune 30, 2013
(in thousands)
(unaudited)
                                                               
                         Equity Based     Amortization       
                         Compensation     of Intangibles     Total
Cost of sales           $886             $156               $1,042
Marketing               249               --                 249
Research and             392               --                 392
development
General and              2,257             780                 3,037
administrative
                         $3,784           $936               $4,720
                                                               
                                                               
Three Months EndedJune 30, 2012
(in thousands)
(unaudited)
                                                               
                         Equity Based     Amortization       
                         Compensation     of Intangibles     Total
Cost of sales           $209             $39                $248
Marketing               71                --                 71
Research and             101               --                 409
development
General and              603               259                 862
administrative
                         $984             $298               $1,282
                                                               
                                                               
Twelve Months EndedJune 30, 2012
(in thousands)
(unaudited)
                                                               
                         Equity Based     Amortization       
                         Compensation     of Intangibles     Total
Cost of sales           $814             $156               $970
Marketing               245               --                 245
Research and             409               --                 409
development
General and              2,385             1,036               3,421
administrative
                         $3,853           $1,192             $5,045
                                                               


ANAREN, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                             
                                              Three Months    Twelve Months
                                               Ended        Ended
                                              June 30, 2013 June 30, 2013
Cash flows from operating activities:                         
Net income                                     $3,356        $15,056
                                                             
Adjustments to reconcile net income to net                    
cash provided by operating activities:
Depreciation                                   1,733          7,508
Write down of other current asset              600            600
Amortization                                   285            1,259
Gain on disposal of fixed assets               --            (557)
Deferred income taxes                          (616)          393
Equity-based compensation                      809            3,784
Receivables                                    (1,355)        (2,538)
Inventories                                    2,743          1,515
Accounts payable                               519            (1,285)
Other assets and liabilities                   2,816          516
Net cash provided by operating activities      10,890         26,251
                                                             
Cash flows from investing activities:                         
Capital expenditures                          (1,463)        (5,538)
Proceeds from sale of property, plant, and     --            5,787
equipment
Maturities of held to maturity securities      1,605          13,285
Net cash provided by investing activities      142            13,534
                                                             
Cash flows from financing activities:                         
Stock options exercised                        1,366          3,084
Excess tax (expense) benefit from equity-based (87)           459
compensation
Purchase of treasury shares                    --            (20,316)
Net cash provided by (used in) financing       1,279          (16,773)
activities
                                                             
Effect of exchange rates on cash               197            284
                                                             
Net increase in cash and cash equivalents      $12,508       $23,296
                                                             
Cash and cash equivalents at beginning of      $31,800       $21,012
period
                                                             
Cash and cash equivalents at end of period     $44,308       $44,308
                                                             

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

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