Anaren Reports 4th Quarter and Year End Results

Share Name	Share Symbol	Market	Type
Anaren, Inc. (MM)	NASDAQ:ANEN	NASDAQ	Common Stock

Anaren, Inc. (MM) (NASDAQ:ANEN)
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SYRACUSE, N.Y., Aug. 3 /PRNewswire-FirstCall/ -- Anaren, Inc. (NASDAQ:ANEN) today reported record net sales for the fourth quarter ended June 30, 2006 of $29.1 million, up 21% from the fourth quarter of fiscal year 2005. (Logo: http://www.newscom.com/cgi-bin/prnh/20021022/NYTU197LOGO ) Net income for the fourth quarter was $3.7 million, or $0.20 per diluted share including $0.8 million, or $0.04 per diluted share in equity based compensation expense. This compares to net income of $2.6 million, or $0.14 per diluted share for the fourth quarter of fiscal 2005. Excluding equity based compensation expense, net income for the fourth quarter was $4.4 million, or $0.24 per diluted share, an increase of 68% from the fourth quarter of last year. The effective tax rate for the fourth quarter of fiscal 2006 was 18.3%, compared to 15.2% for the fourth quarter of fiscal 2005. Operating income for the fourth quarter of fiscal 2006 was $3.8 million, or 12.9% of net sales, including $0.8 million in equity based compensation expense. This compares to operating income of $2.6 million, or 10.6% of net sales, for the fourth quarter of fiscal 2005. Excluding equity based compensation expense, operating income for the fourth quarter was $4.5 million, or 15.5% of net sales, an increase of 77% from the fourth quarter of last year. Lawrence A. Sala, Anaren's President and CEO said, "The growth in net sales for the quarter was driven by both the Wireless and Space & Defense business groups. We continue to pursue numerous new Space & Defense opportunities and net sales for the group grew 28% for the fiscal year. In our Wireless business, demand for the quarter increased across all product lines." Mr. Sala added, "We are pleased with our organic growth opportunities, and we are confident that the recently announced expansion of our Syracuse, NY and Suzhou, China facilities will support our business growth." For the fiscal year ended June 30, 2006, net sales were a record $105.5 million, up 11.6% from $94.5 million for fiscal 2005. Operating income for the year was $12.1 million, or 11.5% of net sales, including $3.3 million, or 3.1% of net sales, in equity based compensation expense. Operating income before equity based compensation expense for fiscal 2006 was 14.6% of net sales. Income from continuing operations for fiscal 2006 was $11.3 million, or $0.64 per diluted share, including $3.0 million, or $0.17 per diluted share in equity based compensation expense, net of tax. This compares to income from continuing operations for fiscal 2005 of $7.4 million, or $0.37 per diluted share. Net income for the fiscal year ended June 30, 2006 was $12.2 million, or $0.69 per diluted share, including income from discontinued operations of $0.8 million, or $0.05 per diluted share, compared to net income of $7.4 million, or $0.37 per diluted share for fiscal 2005. Balance Sheet Cash, cash equivalents and marketable debt securities at June 30, 2006 were $88.6 million. During the quarter, the Company generated $5.8 million in cash from operations, bringing the total for fiscal 2006 to $16.6 million. The Company expended $3.2 million on capital additions during the quarter. Wireless Group Wireless Group net sales for the quarter were $18.8 million, up 16% from the fourth quarter of fiscal 2005. The increase in net sales from the fourth quarter of last year was driven by increased demand across all wireless product lines. Sales of consumer component products were $1.1 million for the quarter, up 113% from the fourth quarter of fiscal 2005, driven by continued robust demand for satellite television applications. Wireless Group research and development spending remains focused on consumer and ferrite component development activity. In addition, progress continued during the quarter establishing volume ferrite based custom product manufacturing and test capability in our Suzhou, China operation. Customers that were 10% of Wireless Group net sales or greater for the quarter included Motorola, Inc., Nokia Corp. and Richardson Electronics Ltd. Space & Defense Group Space & Defense Group net sales for the quarter were $10.3 million, up 31% from the fourth quarter of fiscal 2005. New orders for the quarter totaled $11.4 million and included contracts for Passive Ranging Subsystems and radar antenna subassemblies. For the fiscal year, net sales were a record $38.7 million, up 28% from fiscal 2005. New orders for the year were $39.2 million resulting in Space & Defense backlog at June 30, 2006 of $47.8 million. Outlook We expect continued market demand volatility for wireless infrastructure products, a seasonally driven increase in demand for the consumer component product line and consistency from the backlog-driven Space & Defense segment. As a result, we expect net sales to be in the range of $27.5 - $29.5 million for the first quarter of fiscal 2007. With an anticipated tax rate of approximately 24% and an expected equity 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 - $0.20 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. Such 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 ramping up the Company's Suzhou China facility to meet existing and anticipated demand for Wireless products; 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 2005 Annual Report, Anaren's Form 10-K for the fiscal year ended June 30, 2005 and Anaren's Form 10-Q for the three months ended March 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, August 3, 2006 at 5:00 p.m. EDT. A replay of the conference call will be available at 8:00 p.m. (EDT) beginning August 3, 2006 through midnight August 7, 2006. 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 3954920. If you are unable to access the Live Webcast, the dial in number for the U.S. is 1-800-967-7184 and International is 1-719-457-2633. 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/. Consolidated Condensed Statements of Income (Unaudited) Three Months Ended Twelve Months Ended June 30, June 30, June 30, June 30, 2006 2005 2006 2005 Net Sales $29,129,782 $24,120,268 $105,464,236 $94,461,065 Cost of sales 18,788,050 16,054,707 67,188,568 64,590,866 Gross profit 10,341,732 8,065,561 38,275,668 29,870,199 35.5% 33.4% 36.3% 31.6% Operating expenses: Marketing 1,745,913 1,707,082 7,036,240 6,857,974 Research and development 2,256,418 1,620,284 8,747,463 6,287,514 General and administrative 2,573,686 2,184,577 10,345,398 8,685,332 Restructuring -- -- -- 458,335 Total operating expenses 6,576,017 5,511,943 26,129,101 22,289,155 Operating income 3,765,715 2,553,618 12,146,567 7,581,044 12.9% 10.6% 11.5% 8.0% Other income (expense): Other, primarily interest income 708,176 507,977 2,452,914 1,598,914 Interest expense (6,774) (7,637) (25,203) (29,422) Total other income (expense), net 701,402 500,340 2,427,711 1,569,492 Income from continuing operations before income taxes 4,467,117 3,053,958 14,574,278 9,150,536 Income taxes 816,000 464,000 3,225,000 1,738,000 Income from continuing operations 3,651,117 2,589,958 11,349,278 7,412,536 12.5% 10.7% 10.8% 7.8% Discontinued operations: Income from discontinued operations -- -- 817,177 -- Income tax benefit -- -- -- -- Net income from discontinued operations -- -- 817,177 -- Net income $3,651,117 $2,589,958 $12,166,455 $7,412,536 12.5% 10.7% 11.5% 7.8% Basic earnings per share: Income from continuing operations $0.21 $0.14 $0.66 $0.38 Income from discontinued operations 0.00 0.00 0.05 0.00 Net income $0.21 $0.14 $0.71 $0.38 Diluted earnings per share: Income from continuing operations $0.20 $0.14 $0.64 $0.37 Income from discontinued operations 0.00 0.00 0.05 0.00 Net income $0.20 $0.14 $0.69 $0.37 Shares used in computing net earnings Per share: Basic 17,253,753 18,315,130 17,156,720 19,346,491 Diluted 17,859,192 18,669,847 17,682,231 19,831,710 Anaren, Inc. Consolidated Condensed Balance Sheets (Unaudited) June 30, June 30, Mar. 31, 2006 2005 2006 Assets: Cash, cash equivalents and short-term investments $ 82,492,947 $ 58,408,721 $75,464,470 Accounts receivable, net 16,362,011 14,780,146 15,611,714 Other receivables 1,176,009 1,144,680 958,174 Inventories 22,132,680 19,403,348 22,127,577 Other current assets 2,312,471 1,771,658 1,894,413 Total current assets 124,476,118 95,508,553 116,056,348 Net property, plant and equipment 27,635,161 24,983,653 25,689,775 Securities available for sale -- 3,500,000 -- Securities held to maturity 6,131,425 20,100,547 5,502,468 Goodwill 30,715,861 30,715,861 30,715,861 Other assets 373,273 673,241 423,588 Total assets $189,331,838 $175,481,855 $178,388,040 Liabilities and stockholders' equity Liabilities: Accounts payable $6,798,793 $6,077,313 $5,167,651 Accrued expenses 3,254,816 2,331,885 2,475,492 Customer advance payments 483,722 -- 483,722 Other liabilities 1,446,011 2,545,847 1,906,643 Total current liabilities 11,983,342 10,955,045 10,033,508 Other non-current liabilities 4,897,687 5,448,247 6,500,242 Total liabilities 16,881,029 16,403,292 16,533,750 Stockholders' equity: Retained earnings 70,826,262 58,659,807 67,175,145 Common stock and additional paid-in capital 182,049,235 171,346,105 176,098,404 Accumulated comprehensive loss (441,397) (747,539) (1,435,968) Less: cost of treasury stock (79,983,291) (70,179,810) (79,983,291) Total stockholders' equity 172,450,809 159,078,563 161,854,290 Total liabilities and stockholders' equity $189,331,838 $175,481,855 $178,388,040 Anaren, Inc. and Subsidiaries Consolidated Condensed Statements of Income (Unaudited) Three Months Ended GAAP Results SFAS 123R EXP W/O SFAS 123R June 30, June 30, June 30, 2006 2006 2006 Net sales $29,129,782 $-- $29,129,782 Cost of sales 18,788,050 137,627 18,650,423 Gross profit 10,341,732 137,627 10,479,359 35.5% 36.0% Operating expenses: Marketing 1,745,913 69,274 1,676,639 Research and development 2,256,418 108,785 2,147,633 General and administrative 2,573,686 448,000 2,125,686 Restructuring -- -- -- Total operating expenses 6,576,017 626,059 5,949,958 Operating income 3,765,715 763,686 4,529,401 12.9% 15.5% Other income (expense): Other, primarily interest income 708,176 -- 708,176 Interest expense (6,774) -- (6,774) Total other income 701,402 -- 701,402 Income from continuing operations before income tax 4,467,117 763,686 5,230,803 Income taxes 816,000 (56,000) 872,000 Income from continuing operations $3,651,117 $707,686 $4,358,803 12.5% 15.0% Discontinued operations Income from discontinued operations -- -- -- Income tax benefit -- -- -- Net income from discontinued operations -- -- -- Net income $ 3,651,117 $707,686 $4,358,803 12.5% 15.0% Basic earnings per share Income from continuing operations $0.21 $0.04 $0.25 Income from discontinued operations $0.00 $-- $0.00 Net income $0.21 $0.04 $0.25 Diluted earnings per share Income from continuing operations $0.20 $0.04 $0.24 Income from discontinued operations $0.00 $-- $0.00 Net income $0.20 $0.04 $0.24 Shares used in computing net income per share: Basic 17,253,753 17,253,753 17,253,753 Diluted 17,859,192 17,859,192 17,859,192 Anaren, Inc. and Subsidiaries Consolidated Condensed Statements of Income (Unaudited) Twelve Months Ended GAAP Results SFAS 123R EXP W/O SFAS 123R June 30, June 30, June 30, 2006 2006 2006 Net sales $105,464,236 $-- $105,464,236 Cost of sales 67,188,568 875,258 66,313,310 Gross profit 38,275,668 875,258 39,150,926 36.3% 37.1% Operating expenses: Marketing 7,036,240 274,631 6,761,609 Research and development 8,747,463 346,167 8,401,296 General and administrative 10,345,398 1,771,221 8,574,177 Total operating expenses 26,129,101 2,392,019 23,737,082 Operating income 12,146,567 3,267,277 15,413,844 11.5% 14.6% Other income (expense): Other, primarily interest income 2,452,914 -- 2,452,914 Interest expense (25,203) -- (25,203) Total other income, net 2,427,711 -- 2,427,711 Income from continuing operations before income tax 14,574,278 3,267,277 17,841,555 Income taxes 3,225,000 (227,000) 3,452,000 Income from continuing operations $11,349,278 $3,040,277 $ 14,389,555 10.8% 13.6% Discontinued operations Income from discontinued operations 817,177 -- 817,177 Net income $12,166,455 $3,040,277 $ 15,206,732 11.5% 14.4% Basic earnings per share Income from continuing operations $0.66 $0.18 $0.84 Income (loss) from discontinued operations $0.05 $-- $0.05 Net income $0.71 $0.18 $0.89 Diluted earnings per share Income from continuing operations $0.64 $0.17 $0.81 Income (loss) from discontinued operations $0.05 $-- $0.05 Net income $0.69 $0.17 $0.86 Shares used in computing net income per share: Basic 17,156,720 17,156,720 17,156,720 Diluted 17,682,231 17,682,231 17,682,231 Anaren, Inc. and Subsidiaries Consolidated Condensed Statements of Cash Flows (Unaudited) Fiscal Year Three Months Ended Ended June 30, 2006 June 30, 2006 Cash flows from operating activities: Net income $12,166,455 $3,651,117 Net income gain/(loss) from discontinued operations 817,177 -- Net income from continuing operations 11,349,278 3,651,117 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of plant and equipment 4,875,335 1,281,709 Loss on sale of equipment 15,875 -- Amortization of intangibles 332,870 83,217 Provision for doubtful accounts (40,948) (28,335) Deferred income taxes 121,873 (125,532) Equity based compensation 3,474,761 884,270 Receivables (1,540,917) (721,962) Inventories (2,729,332) (5,103) Accounts payable 755,007 1,631,142 Other assets and liabilities 113,365 (888,527) Net cash provided by continuing operations 16,727,167 5,761,996 Net cash used for discontinued operations (97,241) -- Net cash provided by operating activities 16,629,926 5,761,996 Cash flows from investing activities: Capital expenditures (7,543,718) (3,227,095) Proceeds from sale of equipment 1,000 -- Net maturities (purchases) of marketable debt and equity securities 3,217,269 313,485 Net cash (used in) provided by investing activities (4,325,449) (2,913,610) Cash flows from financing activities: Stock options exercised 5,549,220 3,765,729 Tax benefit from exercise of stock options 1,679,149 1,300,831 Purchase of treasury stock (9,803,481) -- Net cash (used in) provided by financing activities (2,575,112) 5,066,560 Effect of exchange rates 103,008 55,973 Net increase (decrease) in cash and cash equivalents 9,832,373 7,970,919 Cash and cash equivalents at beginning of period 5,900,841 7,762,295 Cash and cash equivalents at end of period $15,733,214 $15,733,214 http://www.newscom.com/cgi-bin/prnh/20021022/NYTU197LOGO DATASOURCE: Anaren, Inc. CONTACT: Joseph E. Porcello, VP of Finance of Anaren, Inc., +1-315-432-8909 Web site: http://www.anaren.com/

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ANEN Anaren, Inc. (MM)