SYRACUSE, N.Y., Feb. 1 /PRNewswire-FirstCall/ -- Anaren, Inc.
(NASDAQ:ANEN) today reported record net sales for the second
quarter ended December 31, 2006 of $30.3 million, up 21% from the
second quarter of fiscal year 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20021022/NYTU197LOGO ) Net
income for the second quarter of fiscal 2007 was $4.0 million, or
$0.22 per diluted share, up 101% from the second quarter of last
year. Net income for the quarter included $0.04 per diluted share
in stock based compensation expense. Excluding stock based
compensation expense, net income for the second quarter was $4.7
million, or $0.26 per diluted share. The effective tax rate for the
second quarter of fiscal 2007 was 21.6%, compared to 27.4% for the
second quarter of fiscal 2006. Operating income for the second
quarter of fiscal 2007 was $4.3 million, or 14.0% of net sales, up
90% from the second quarter of last year. Operating income for the
quarter included $820,000 in stock based compensation expense.
Excluding stock based compensation expense, operating income for
the second quarter of fiscal 2007 was $5.1 million, or 16.7% of net
sales. Lawrence A. Sala, Anaren's President and CEO said, "The
overall growth in net sales for the quarter was driven by strong
growth in Space & Defense Group net sales which offset reduced
demand for wireless infrastructure products. The continued growth
in net sales and a favorable product mix positively impacted our
profitability for the quarter." Mr. Sala added, "Though the general
decline in wireless infrastructure demand continued throughout the
quarter, we continue to see numerous new wireless consumer and
infrastructure product opportunities." For the six months ended
December 31, 2006, net sales were $60.5 million, up 22% from the
first six months of fiscal 2006. Operating income for the first six
months of fiscal 2007 was $8.4 million, or 13.8% of net sales,
including $1.6 million, or 2.7% of net sales, in stock based
compensation expense. Operating income before stock based
compensation expense for the first six months of fiscal 2007 was
16.6% of net sales. Net income for the first six months of fiscal
2007 was $7.8 million, or $0.43 per diluted share, including $0.08
per diluted share in stock based compensation expense. This
compares to net income for the first six months of fiscal 2006 of
$4.2 million, or $0.24 per diluted share, which included $1.7
million in stock based compensation expense. Balance Sheet Cash,
cash equivalents and marketable debt securities at December 31,
2006 were $91.5 million. During the quarter, the Company generated
$7.2 million in cash from operations which consisted of the $4.0
million in net income and a $3.6 million decrease in accounts
receivable which was partially offset by a $2.1 million increase in
inventory. Expenditures for capital additions in the second quarter
were $3.9 million driven primarily by the building expansion at the
Company's East Syracuse, New York manufacturing facility and
capital equipment purchases for the Company's newly acquired
Suzhou, China facility. Wireless Group Wireless Group net sales for
the quarter were $17.0 million, up 9.7% from the second quarter of
fiscal 2006 but down 14% from the first quarter of fiscal year
2007. Reduced demand across all wireless infrastructure product
lines from first quarter levels continued throughout the quarter.
Sales of consumer component products were $1.8 million for the
quarter, up 68% from the second quarter of last year. Product
development activity remains focused on expanding the ferrite and
consumer component product lines. During the quarter, the Company
introduced several new filter products for satellite television
applications. "We are pleased with the progress of our new product
development efforts as well as the number and quality of new
business opportunities for both infrastructure and consumer
applications," said Mr. Sala. Customers that generated 10% of
Wireless Group net sales or greater for the quarter were Motorola,
Inc. and Nokia Corp. Space & Defense Group Space & Defense
Group net sales for the quarter were $13.3 million, up 40% from the
second quarter of fiscal 2006 due largely to production relating to
the recently announced contracts with SRCTec, Inc. New orders for
the quarter totaled $12.7 million and included contracts for
airborne and ground based radar receiver and jammer components and
subsystems. Research and development investment is focused on
increasing the integration, functionality and frequency range of
radar and receiver related products. Space & Defense backlog at
December 31, 2006 was $50.7 million. Outlook For the third quarter,
we expect moderate demand for wireless infrastructure products, a
seasonally driven decrease in demand for the consumer component
product line and continued strong sales for the Space & Defense
segment as a result of recent new contract wins. As a result, we
expect net sales to be in the range of $27.0 - $30.0 million for
the third quarter of fiscal 2007. With an anticipated tax rate of
approximately 25% and an expected stock based compensation expense
of approximately $0.04 per diluted share, we expect net earnings
per diluted share to be in the range of $0.16 - $0.21 for the third
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 subject to business and economic risks and
uncertainties that could cause actual results to differ materially
from those discussed. The risks and uncertainties described below
are not the only risks and uncertainties facing our Company.
Additional risks and uncertainties not presently known to us or
that are currently deemed immaterial may also impair our business
operations. If any of the following risks actually occur, our
business could be adversely affected, and the trading price of our
common stock could decline, and you may lose all or part of your
investment. On January 31, the Company filed an amended Annual
Report on Form 10-k/A for the fiscal year 2006 restating the
Company's consolidated financial statements for the fiscal year
2006 and the fiscal year 2004, modified related disclosures, and
disclosed material weaknesses in the Company's disclosure controls
and procedures. The Company additionally filed on January 31, 2007
amended Quarterly Reports on Form 10-Q/A for the periods ending
December 31, 2005, March 31, 2006 and September 30, 2006. The
Company cannot predict the reaction to the filing of these Amended
Reports and if adverse, the market price of the Company's stock
could decline. Other known factors include, but are not limited to:
the Company's ability to timely ramp up to meet some of our
customers' increased demands; unanticipated delays and/or
difficulties associated with relocating the Company's Suzhou China
facility and successfully completing all requalification
procedures; potential unanticipated liabilities and delays
associated with the physical expansion of the Company's Syracuse,
New York facility; unanticipated delays in successfully completing
customer orders within contractually required timeframes; increased
pricing pressure from our customers; decreased capital expenditures
by wireless service providers; the possibility that the Company may
be unable to successfully execute its business strategies or
achieve its operating objectives, generate revenue growth or
achieve profitability expectations; successfully securing new
design wins from our OEM customers, reliance on a limited number of
key component suppliers, unpredictable difficulties or delays in
the development of new products; order cancellations or extended
postponements; the risks associated with any technological shifts
away from the Company's technologies and core competencies;
unanticipated impairments of assets including investment values and
goodwill; diversion of defense spending away from the Company's
products and or technologies due to on-going military operations;
and litigation involving antitrust, intellectual property,
environmental, product warranty, product liability, and other
issues. You are encouraged to review Anaren's 2006 Annual Report,
Anaren's Form 10-K/A for the fiscal year ended June 30, 2006,
Anaren's Form 10-Q for the three months ended September 30, 2006,
Anaren's Form 10-Q/A for the three months ended December 31, 2006
and exhibits to those Reports filed 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 (http://www.anaren.com/) and ccbn.com at
http://www.streetevents.com/ on Thursday, February 1 at 5:00 p.m.
EDT. A replay of the conference call will be available at 8:00 p.m.
(EDT) beginning February 1, 2007 through midnight February 5, 2007.
To listen to the replay, interested parties may dial in the U.S. at
1-888-203-1112 and international at 1-719-457-0820. The access code
is 5964893. If you are unable to access the Live Webcast, the dial
in number for the U.S. is 1-800-474-8920 and International is
1-719-457-2727. Company Background Anaren designs, manufactures and
sells complex microwave signal distribution networks and components
for the wireless communications, satellite communications and
defense electronics markets. For more information on Anaren's
products, visit our Web site at http://www.anaren.com/. Anaren,
Inc. and Subsidiaries Consolidated Condensed Statements of Income
(Unaudited) Three Months Ended Six Months Ended Dec. 31, Dec. 31,
Dec. 31, Dec. 31, 2006 2005 2006 2005 Sales $30,325,785 $25,019,013
$60,528,895 $49,633,371 Cost of sales 19,224,005 16,273,387
38,587,783 32,233,299 Gross profit 11,101,780 8,745,626 21,941,112
17,400,072 36.6% 35.0% 36.2% 35.1% Operating expenses: Marketing
1,928,858 1,715,660 3,741,564 3,483,739 Research and development
2,192,823 2,268,438 4,331,008 4,303,079 General and administrative
2,726,742 2,523,124 5,494,968 5,015,434 Total operating expenses
6,848,423 6,507,222 13,567,540 12,802,252 Operating income
4,253,357 2,238,404 8,373,572 4,597,820 14.0% 8.9% 13.8% 9.3% Other
income (expense): Other income, primarily interest 917,080 536,821
1,813,686 1,124,565 Interest expense (6,143) (6,143) (12,286)
(12,286) Total other income (expense) 910,937 530,678 1,801,400
1,112,279 Income before income taxes 5,164,294 2,769,082 10,174,972
5,710,099 Income taxes 1,116,000 759,000 2,366,000 1,474,000 Net
income $4,048,294 $2,010,082 $7,808,972 $4,236,099 13.3% 8.0% 12.9%
8.5% Basic earnings per share $0.23 $0.12 $0.44 $0.25 Diluted
earnings per share $0.22 $0.11 $0.43 $0.24 Shares used in computing
net income Per share: Basic 17,622,700 17,020,360 17,557,429
17,211,315 Diluted 18,088,109 17,595,314 18,032,032 17,765,683
Anaren, Inc. and Subsidiaries Consolidated Condensed Statements of
Income (Unaudited) Three Months Ended Stock Based W/O Stock Based
Compensation Compensation GAAP Results Expense Expense Dec. 31,
2006 Dec. 31, 2006 Dec. 31, 2006 Net sales $30,325,785 $ -
$30,325,785 Cost of sales 19,224,005 242,647 18,981,358 Gross
profit 11,101,780 242,647 11,344,427 36.6% 37.4% Costs and
expenses: Marketing 1,928,858 59,262 1,869,596 Research and
development 2,192,823 103,965 2,088,858 General and administrative
2,726,742 414,007 2,312,735 Total operating expenses 6,848,423
577,234 6,271,189 Operating income 4,253,357 819,881 5,073,238
14.0% 2.8% 16.7% Other income (expense): Other, primarily interest
income 917,080 - 917,080 Interest expense (6,143) - (6,143) Total
other income, net 910,937 - 910,937 Income from continuing
operations before income tax 5,164,294 819,881 5,984,175 Income
taxes 1,116,000 (173,000) 1,289,000 Net Income $ 4,048,294 $
646,881 $ 4,695,175 13.3% 15.5% Basic earnings per share $0.23
$0.04 $0.27 Diluted earnings per share $0.22 $0.04 $0.26 Shares
used in computing net income per share Basic 17,622,700 17,622,700
17,622,700 Diluted 18,088,109 18,088,109 18,088,109 Anaren, Inc.
and Subsidiaries Consolidated Condensed Statements of Income
(Unaudited) Six Months Ended Stock Based W/O Stock Based
Compensation Compensation GAAP Results Expense Expense Dec. 31,
2006 Dec. 31, 2006 Dec. 31, 2006 Net sales $60,528,895 $ -
$60,528,895 Cost of sales 38,587,783 519,690 38,068,093 Gross
profit 21,941,112 519,690 22,460,802 36.2% 37.1% Costs and
expenses: Marketing 3,741,564 115,168 3,626,396 Research and
development 4,331,008 172,636 4,158,372 General and administrative
5,494,968 842,053 4,652,915 Total operating expenses 13,567,540
1,129,857 12,437,683 Operating income 8,373,572 1,649,547
10,023,119 13.8% 2.7% 16.6% Other income (expense): Other,
primarily interest income 1,813,686 - 1,813,686 Interest expense
(12,286) - (12,286) Total other income, net 1,801,400 - 1,801,400
Income from continuing operations before income tax 10,174,972
1,649,547 11,824,519 Income taxes 2,366,000 (322,000) 2,688,000 Net
Income $ 7,808,972 $ 1,327,547 $ 9,136,519 12.9% 15.1% Basic
earnings per share $0.44 $0.08 $0.52 Diluted earnings per share
$0.43 $0.08 $0.51 Shares used in computing net income per share
Basic 17,557,429 17,557,429 17,557,429 Diluted 18,032,032
18,032,032 18,032,032 Anaren, Inc. and Subsidiaries Consolidated
Condensed Balance Sheets Dec. 31, 2006 June 30, 2006 (Unaudited)
Assets: Cash, cash equivalents and short-term investments
$71,681,774 $82,492,947 Accounts receivable, net 16,451,375
16,362,011 Other receivables 1,763,909 1,336,009 Inventories
26,819,270 21,827,271 Other current assets 2,934,089 2,152,471
Total current assets 119,650,417 124,170,709 Net property, plant
and equipment 31,226,848 27,635,161 Securities available for sale -
- Securities held to maturity 19,865,894 6,131,425 Goodwill
30,715,861 30,715,861 Other intangibles 185,935 340,371 Other
assets 32,902 32,902 Total assets $201,677,857 $189,026,429
Liabilities and stockholders' equity Liabilities: Accounts payable
$7,769,666 $6,798,793 Accrued expenses 2,575,912 3,254,816 Customer
advance payments 483,722 483,722 Other liabilities 963,172
1,473,011 Total current liabilities 11,792,472 12,010,342 Other
non-current liabilities 5,535,266 4,897,687 Total liabilities
17,327,738 16,908,029 Stockholders' equity: Retained earnings
78,302,825 70,493,853 Common stock and additional paid-in capital
186,417,499 182,049,235 Accumulated comprehensive loss (386,914)
(441,397) Less cost of treasury stock (79,983,291) (79,983,291)
Total stockholders' equity 184,350,119 172,118,400 Total
liabilities and stockholders' equity $201,677,857 $189,026,429
Anaren, Inc. and Subsidiaries Consolidated Condensed Statements of
Cash Flows (Unaudited) Six Months Three Months Three Months Ended
Ended Ended Dec. 31, 2006 Dec. 31, 2006 Sept. 30, 2006 Cash flows
from operating activities: Net income $7,808,972 $4,048,294
$3,760,678 Adjustments to reconcile net income to net cash provided
by operating activities: Depreciation and amortization of plant and
equipment 2,524,216 1,120,904 1,403,312 Amortization of intangibles
154,436 74,218 80,218 Gain on sale of land (77,508) - (77,508)
Stock based compensation 1,628,320 800,512 827,808 Provision for
doubtful accounts (21,726) (23,005) 1,279 Deferred income taxes
248,000 103,000 145,000 Receivables (67,638) 3,602,359 (3,669,997)
Inventories (4,991,999) (2,143,644) (2,848,355) Accounts payable
970,873 292,701 678,172 Other assets and liabilities (2,008,682)
(710,936) (1,297,746) Net cash provided by (used in) operating
activities 6,167,264 7,164,403 (997,139) Cash flows from investing
activities: Capital expenditures (6,172,903) (3,902,635)
(2,270,268) Increase in other assets - 341,448 (341,448) Proceeds
from sale of land 134,508 - 134,508 Net maturities (purchases) of
marketable debt and equity securities (647,869) 213,475 (861,344)
Net cash used in investing activities (6,686,264) (3,347,712)
(3,338,552) Cash flows from financing activities: Stock options
exercised 2,111,188 885,391 1,225,797 Tax benefit from exercise of
stock options 628,756 206,676 422,080 Net cash provided by
financing activities 2,739,944 1,092,067 1,647,877 Effect of
exchange rates 54,483 66,634 (12,151) Net increase (decrease) in
cash and cash equivalents 2,275,427 4,975,392 (2,699,965) Cash and
cash equivalents at beginning of period 15,733,214 13,033,249
15,733,214 Cash and cash equivalents at end of period $18,008,641
$18,008,641 $13,033,249 DATASOURCE: Anaren, Inc. CONTACT: Joseph E.
Porcello, VP of Finance, +1-315-432-8909 Web site:
http://www.newscom.com/cgi-bin/prnh/20021022/NYTU197LOGO Web site:
http://www.anaren.com/
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