SYRACUSE, N.Y., Aug. 6, 2009 (GLOBE NEWSWIRE) -- Anaren, Inc. (Nasdaq:ANEN) today reported record net sales for the fiscal 2009 fourth quarter ended June 30, 2009 of $43.8 million, up 28.0% from $34.2 million for the fourth quarter of last year. Net sales for the fourth quarter of fiscal 2009 included $11.9 million of sales from M.S. Kennedy Corp. and Unicircuit, Inc.; which were acquired by the Company in the first quarter ended September 30, 2008.
GAAP (U.S. generally accepted accounting principles) net income for the fourth quarter of fiscal 2009 was $3.5 million, or $0.24 per diluted share, compared to $1.2 million, or $0.08 per diluted share for the fourth quarter of last year.
Non-GAAP diluted earnings per share, excluding non-cash equity based compensation and acquisition related intangible amortization, was $0.30 for the fourth quarter of fiscal 2009 compared to non-GAAP earnings per share of $0.13 for the fourth quarter of fiscal 2008.
The effective tax rate for the fourth quarter of fiscal 2009 was 30.3%, compared to an effective tax rate on income from continuing operations of 27.7% for the entire fiscal 2009 year and 25.3% for the fourth quarter of fiscal 2008. The tax rate increase resulted from changes in U.S. and foreign income distribution and tax provisions for ongoing federal and state income tax audits.
GAAP operating income for the fourth quarter of fiscal 2009 was $5.1 million, or 11.7% of net sales, up 349% from $1.1 million, or 3.3% of net sales for the fourth quarter of last year. Non-GAAP operating income for the fourth quarter of fiscal 2009, excluding non-cash equity based compensation and acquisition related intangible amortization, was $6.4 million, or 14.6% of net sales, up 214% from $2.0 million, or 5.9% of net sales, for the fourth quarter of fiscal 2008.
Lawrence A. Sala, Anaren's President and CEO, said, "The fourth quarter growth in Space & Defense Group net sales more than off-set the softening of demand in the Wireless Group. The increase in net sales, a favorable product mix and our continued cost containment efforts resulted in improved operating profitability for the quarter."
Net sales for the 2009 fiscal year ended June 30, 2009 were $166.9 million, up 27.1% from net sales of $131.3 million for last year. Sales for fiscal 2009 included $37.5 million of sales from M.S. Kennedy Corp. and Unicircuit, Inc. GAAP net income for fiscal 2009 was $9.9 million, or $0.70 per diluted share, compared to $9.2 million, or $0.61 per diluted share for fiscal 2008, which included $0.05 per diluted share of income from discontinued operations.
Non-GAAP diluted earnings per share, excluding non-cash equity based compensation, acquisition related inventory step-up and intangible amortization, was $1.04 for fiscal 2009 compared to non-GAAP diluted earnings per share of $0.79 for fiscal 2008, which included $0.05 per diluted share of income from discontinued operations.
During the fourth quarter and for the 2009 fiscal year, the Company generated $12.2 million and $28.4 million, respectively, in operating cash flow as a result of improved profitability, collections and inventory management compared to the same periods in fiscal 2008. The Company did not repurchase any shares of its common stock in the fourth quarter and for the 2009 fiscal year the Company repurchased 471,000 shares for $5.0 million. Expenditures for capital additions were $1.4 million for the fourth quarter and $6.8 million for fiscal 2009. Cash, cash equivalents and marketable debt securities at June 30, 2009 were $64.8 million, up $20.7 million from $44.1 million at June 30, 2008.
Wireless Group
Wireless Group net sales for the quarter were $15.2 million, down 22.3% from the fourth quarter of fiscal 2008 and down 12.0% from 3rd quarter fiscal 2009 levels. Weaker demand for infrastructure products, predominately from applications in India and China, and for consumer products for satellite TV applications drove the decrease in sales from the third quarter.
During the quarter the Group began production of Xinger(r) III, the latest generation of its industry leading infrastructure standard component product line. In addition, the Group introduced new balun transformer products for analog-to-digital converter applications.
Customers that generated greater than 10% of Wireless Group net sales for the quarter were Nokia and Richardson.
Space & Defense Group
Space & Defense Group net sales for the quarter were $28.6 million, up 95% from the fourth quarter of fiscal 2008 and included $11.9 million of net sales from M.S. Kennedy Corp and Unicircuit, Inc. New orders for the quarter totaled $27.8 million and included contracts for components and assemblies for use in satellite, radar, and airborne jamming applications.
Space & Defense Group order backlog at June 30, 2009 was $87.0 million and included approximately $25.0 million from M.S. Kennedy and Unicircuit. Sala stated, "We are very pleased with the performance at both MSK and Unicircuit as well as the integration progress. The technologies and manufacturing capabilities of these two companies coupled with our core microwave design and test expertise has greatly expanded the addressable market for our Space & Defense Group."
Customers that generated greater than 10% of Space & Defense Group net sales for the quarter were Lockheed Martin and Northrop Grumman.
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 acquisition related inventory step-up and intangible 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 accounting principles generally accepted in the United States.
Outlook
For the first quarter of fiscal 2010, we anticipate comparable sales for the Wireless Group and a decline in sales for the Space & Defense Group from our just completed fourth quarter. As a result, we expect net sales to be in the range of $40 million to $43 million. We expect GAAP net earnings per diluted share to be in the range of $0.15 - $0.20 using an anticipated tax rate of approximately 32.0%, inclusive of approximately $0.05 - $0.06 per share related to expected equity based compensation expense and acquisition related amortization of acquired intangibles. Non-GAAP net earnings per diluted share are expected to be in the range of $0.20 - $0.25 for the first 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.
These known risks and uncertainties include, but are not limited to: the Company's ability to continue to successfully integrate the MSK and Unicircuit acquisitions, including but not limited to, the timely and effective installation of appropriate financial controls; unknown liabilities not identified during due diligence; not realizing the expected benefits of the acquisitions, including the realization of the accretive effects from the acquisitions; the Company's substantial increase in long term debt ($50 million), and the unanticipated loss of key management employees. The Company also could experience an impairment of goodwill which increased as the result of the two recent fiscal 2009 acquisitions as well as acquisitions made in previous years. Other non-acquisition related risks and uncertainties include: the Company's ability to timely ramp up to meet some of our customers' increased demands; potential delay or inability to collect account receivables due to the current economic recession; unanticipated delays in successfully completing customer orders within contractually required timeframes; unanticipated penalties resulting from failure to meet contractually imposed delivery schedules; unanticipated costs and damages resulting from replacement or repair of products found to include latent defects; 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 limited number of OEM customers, reliance on key component suppliers, unpredictable difficulties or delays in the development of new products; the potential need to relocate the Company's Suzhou, China facility due to expansion of China's mass transit system; 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; 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 2008 Annual Report on Form 10-K for the fiscal year ended June 30, 2008 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) on Thursday, August 6, 2009 at 5:00 p.m. EDT. A replay of the conference call will be available at 8:00 p.m. (EDT) beginning August 6, 2009 through midnight August 10, 2009. 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 5114816. If you are unable to access the Live Webcast, the dial in number for the U.S. is 1-877-591-4958 and International is 1-719-325-4927.
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 Statement
(in thousands except per share data)
(unaudited)
Three Months Ended Year Ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Sales $ 43,831 $ 34,239 $ 166,905 $ 131,316
Cost of sales 28,121 24,821 112,289 90,838
------------ ------------ ------------ ------------
Gross profit 15,710 9,418 54,616 40,478
------------ ------------ ------------ ------------
35.8% 27.5% 32.7% 30.8%
Operating
expenses:
Marketing 2,461 1,719 8,967 7,018
Research &
Development 3,487 2,845 12,986 10,411
General &
Administration 4,643 3,458 18,636 13,592
Restructuring -- 255 -- 255
------------ ------------ ------------ ------------
Total
operating
expenses 10,591 8,277 40,589 31,276
------------ ------------ ------------ ------------
Operating income 5,119 1,141 14,027 9,202
------------ ------------ ------------ ------------
11.7% 3.3% 8.4% 7.0%
Other income
(expense):
Other income,
primarily
interest 120 439 1,088 2,322
Interest
expense (282) (27) (1,482) (79)
------------ ------------ ------------ ------------
Total other
income
(expense) (162) 412 (394) 2,243
------------ ------------ ------------ ------------
Income from
continuing
operations
before income
taxes 4,957 1,553 13,633 11,445
Income taxes 1,500 393 3,774 2,982
------------ ------------ ------------ ------------
Income from
continuing
operations 3,457 1,160 9,859 8,463
------------ ------------ ------------ ------------
7.9% 3.4% 5.9% 6.4%
Discontinued
operations:
Income from
discontinued
operations -- -- -- 770
------------ ------------ ------------ ------------
Net income $ 3,457 $ 1,160 $ 9,859 $ 9,233
============ ============ ============ ============
7.9% 3.4% 5.9% 7.0%
Basic earnings
per share
Income from
continuing
operations $ 0.25 $ 0.08 $ 0.71 $ 0.57
Income from
discontinued
operations -- -- -- 0.05
------------ ------------ ------------ ------------
Net Income $ 0.25 $ 0.08 $ 0.71 $ 0.62
============ ============ ============ ============
Diluted earnings
per share
Income from
continuing
operations $ 0.24 $ 0.08 $ 0.70 $ 0.56
Income from
discontinued
operations -- -- -- 0.05
------------ ------------ ------------ ------------
Net Income $ 0.24 $ 0.08 $ 0.70 $ 0.61
============ ============ ============ ============
Weighted average
common shares
outstanding
Basic 13,895,679 14,236,344 13,911,125 14,826,795
============ ============ ============ ============
Diluted 14,409,919 14,420,118 14,179,171 15,067,711
============ ============ ============ ============
ANAREN, INC.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, June 30,
2009 2008
---------- ----------
Assets:
Cash, cash equivalents and short-term
investments $ 61,703 $ 31,785
Accounts receivable 24,756 23,102
Other receivables 2,100 1,505
Inventories 35,282 26,981
Other current assets 3,479 3,409
---------- ----------
Total current assets 127,320 86,782
Net property plant and equipment 52,889 42,266
Securities available for sale 1,050 314
Securities held to maturity 2,080 11,994
Goodwill 42,635 30,716
Other intangibles 11,344 --
Other assets 27 31
---------- ----------
Total assets $ 237,345 $ 172,103
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
Current portion long-term debt $ 9,800 $ --
Accounts payable 7,282 9,160
Accrued expenses 5,207 2,581
Customer advance payments 118 1,259
Other liabilities 2,526 2,619
---------- ----------
Total current liabilities 24,933 15,619
Long-term debt 40,000
Other non-current liabilities 11,468 5,621
---------- ----------
Total liabilities 76,401 21,240
Retained earnings 104,399 94,540
Common stock and additional paid-in capital 199,877 192,588
Accumulated other comprehensive loss (2,398) (345)
Less: cost of treasury shares (140,934) (135,920)
---------- ----------
Total stockholders' equity 160,944 150,863
---------- ----------
Total Liabilities and Stockholders' Equity $ 237,345 $ 172,103
========== ==========
ANAREN, INC.
Reconciliation of GAAP and Non-GAAP Gross Profit, Operating Income,
and Earnings Per Share (in thousands except per share data)
(unaudited)
Three Months Ended Year Ended
------------------------- --------------------------
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
------------ ------------ ------------- ------------
Sales $ 43,831 $ 34,239 $ 166,905 $ 131,316
============ ============ ============= ============
GAAP gross
profit $ 15,710 $ 9,418 $ 54,616 $ 40,478
Equity based
compensation
expense (1) 212 221 906 846
Acquisition
related
inventory
step-up (2) -- -- 2,164 --
Acquisition
related
amortization
of
intangibles (3) 39 -- 143 --
------------ ------------ ------------- ------------
Non-GAAP
gross profit $ 15,961 $ 9,639 $ 57,829 $ 41,324
============ ============ ============= ============
% of sales 36.4% 28.2% 34.6% 31.5%
GAAP operating
income $ 5,119 $ 1,141 $ 14,027 $ 9,202
Equity based
compensation
expense (1) 979 895 4,027 3,676
Acquisition
related
inventory
step-up (2) -- -- 2,164 --
Acquisition
related
amortization
of
intangibles (3) 298 -- 1,076 --
------------ ------------ ------------- ------------
Non-GAAP
operating
income $ 6,396 $ 2,036 $ 21,294 $ 12,878
============ ============ ============= ============
% of sales 14.6% 5.9% 12.8% 9.8%
GAAP net income $ 3,457 $ 1,160 $ 9,859 $ 9,233
Equity based
compensation
expense (1) 979 895 4,027 3,676
Acquisition
related
inventory
step-up (2) -- -- 2,164 --
Acquisition
related
amortization
of
intangibles (3) 298 -- 1,076 --
Tax effect (418) (229) (2,383) (945)
------------ ------------ ------------- ------------
Non-GAAP
operating
income $ 4,316 $ 1,826 $ 14,743 $ 11,964
============ ============ ============= ============
% of sales 9.8% 5.3% 8.8% 9.1%
Diluted earnings
per share
GAAP earnings
per share $ 0.24 $ 0.08 $ 0.70 $ 0.61
Equity based
compensation
expense (1) 0.07 0.06 0.28 0.24
Acquisition
related
inventory
step-up (2) -- -- 0.15 --
Acquisition
related
amortization
of
intangibles (3) 0.02 -- 0.08 --
Tax
adjustments (0.03) (0.02) (0.17) (0.06)
------------ ------------ ------------- ------------
Non-GAAP
earnings
per share $ 0.30 $ 0.13 $ 1.04 $ 0.79
============ ============ ============= ============
Weighted average
common shares
outstanding
Diluted 14,409,919 14,420,118 14,179,171 15,067,711
============ ============ ============= ============
- These costs represent expense recognized in accordance with FASB Statement No. 123R, Share-based Payment.
- These costs represent purchase accounting charges for step-up in inventory to fair market value charged to cost of sales related to the sale of acquisition related inventory in the nine months and quarter ended June 30, 2009.
- These costs represent amortization of purchase accounting charges for acquisition related intangible charged to expense for the nine months and quarter ended June 30, 2009.
- The following table details the Non-GAAP, Non-Cash expenses related to equity compensation and acquisition related inventory step-up and intangible amortization by expense category.
Three Months Ended June 30, 2009
---------------------------------------------------
Acquisition Amortization
Equity Based Inventory of
Compensation Step-up Intangibles Total
------------ ------------ ------------- ------------
Cost of sales $ 212 $ -- $ 39 $ 251
Marketing 72 -- -- 72
Research and
Development 154 -- -- 154
General and
Administrative 541 -- 259 800
------------ ------------ ------------- ------------
$ 979 $ -- $ 298 $ 1,277
============ ============ ============= ============
Year ended June 30, 2009
----------------------------------------------------
Acquisition Amortization
Equity Based Inventory of
Compensation Step-up Intangibles Total
------------ ------------ ------------- ------------
Cost of sales $ 906 $ 2,164 $ 143 $ 3,213
Marketing 289 -- -- 289
Research and
Development 569 -- -- 569
General and
Administrative 2,263 -- 933 3,196
------------ ------------ ------------- ------------
$ 4,027 $ 2,164 $ 1,076 $ 7,267
============ ============ ============= ============
ANAREN, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three
months Year
ended ended
June 30, June 30,
2009 2009
-------- ---------
Cash flows from operating activities:
Net income $ 3,457 $ 9,859
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,317 8,400
Amortization 368 1,425
Loss on disposal of fixed assets 68 64
Deferred income taxes 116 (352)
Equity based compensation 979 4,027
Receivables 1,456 4,766
Inventories 3,442 2,818
Accounts payable (2,026) (2,512)
Other assets and liabilities 2,032 (132)
-------- ---------
Net cash provided by operating activities 12,209 28,363
-------- ---------
Cash flows from investing activities:
Capital expenditures (1,356) (6,831)
Payment for purchase of M.S. Kennedy and
Unicircuit -- (48,166)
Net maturities of marketable debt and
equity securities 5,350 19,329
-------- ---------
Net cash provided by (used in) investing
activities 3,994 (35,668)
-------- ---------
Cash flows from financing activities:
Proceeds from note payable -- 49,800
Payments on mortgage payable -- (1,210)
Stock options exercised 2,412 2,641
Tax benefit from exercise of stock options 206 235
Purchase of treasury stock -- (5,014)
-------- ---------
Net cash provided by financing activities 2,618 46,452
-------- ---------
Effect of exchange rates on cash 30 35
Net increase in cash and cash equivalents $18,851 $ 39,182
Cash and cash equivalents at beginning of period $31,042 $ 10,711
-------- ---------
Cash and cash equivalents at end of period $49,893 $ 49,893
-------- ---------