Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
------------------
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission file number 0-6620
ANAREN, INC.
(Exact name of registrant as specified in its Charter)
New York 16-0928561
------------------------ -----------------------------------
(State of incorporation) (I.R.S Employer Identification No.)
6635 Kirkville Road
East Syracuse, New York 13057
----------------------- ---------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: 315-432-8909
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by Check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
Indicate by checkmark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files. Yes __
No __
Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or smaller reporting company (as
defined in Rule 12b-2 of the Exchange Act).
Check One: Large accelerated filer __ Accelerated filer X
Non-accelerated filer __ Smaller reporting company __
Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes __ No X
The number of shares of Registrant's Common Stock outstanding on October
26, 2009 was 14,928,614.
ANAREN, INC.
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION Page No.
------------------------------ --------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of 3
September 30, 2009 and June 30, 2009 (unaudited)
Condensed Consolidated Statements of Income 4
for the Three Months Ended September 30,
2009 and 2008 (unaudited)
Condensed Consolidated Statements of Cash Flows 5
for the Three Months Ended September 30,
2009 and 2008 (unaudited)
Notes to Condensed Consolidated Financial 6 - 13
Statements (unaudited)
Item 2. Management's Discussion and Analysis 14 - 18
of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
Item 4. Controls & Procedures 19 - 20
PART II - OTHER INFORMATION
Item 1A. Risk Factors 20
Item 6. Exhibits 20
Officer Certifications 21 - 25
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ANAREN, INC.
Condensed Consolidated Balance Sheets
September 30, 2009 and June 30, 2009
(in thousands, except per share amounts)
(unaudited)
September 30, June 30,
2009 2009
------------- ---------
ASSETS
------
Assets:
Cash and cash equivalents $ 52,815 $ 49,893
Securities held to maturity 5,977 11,810
Receivables, less an allowance of $0.4 million at
September 30, 2009 and June 30, 2009 26,303 24,466
Inventories 34,939 35,282
Prepaid expenses and other current assets 3,496 4,033
Deferred income taxes 1,383 1,547
--------- ---------
Total current assets 124,913 127,031
Securities available-for-sale 1,050 1,050
Securities held to maturity 2,067 2,079
Property, plant, and equipment, net 51,960 52,889
Deferred income taxes 27 27
Goodwill 42,635 42,635
Other intangible assets, net of accumulated amortization 11,046 11,344
--------- ---------
Total assets $ 233,698 $ 237,055
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities and Shareholders' Equity:
Current installments of long-term obligation $ 10,000 $ 9,800
Accounts payable 8,953 6,991
Accrued expenses 3,419 5,208
Deferred income taxes 100 177
Customer advance payments 75 118
Other current liabilities 2,409 2,525
--------- ---------
Total current liabilities 24,956 24,819
--------- ---------
Deferred income taxes 2,743 2,103
Pension and postretirement benefit obligation 6,726 6,496
Long-term obligation 30,000 40,000
Other liabilities 2,731 2,692
--------- ---------
Total liabilities 67,156 76,110
--------- ---------
Stockholders' Equity:
Common stock, $0.01 par value. Authorized 200,000
shares; issued 28,191 and 28,007 at September 30, 2009
and June 30, 2009, respectively 282 280
Additional paid-in capital 202,790 199,597
Retained earnings 107,256 104,399
Accumulated other comprehensive loss (2,383) (2,397)
--------- ---------
307,945 301,879
Less 13,280 and 13,251 treasury shares at September 30, 2009
and June 30, 2009, respectively, at cost 141,403 140,934
--------- ---------
Total stockholders' equity 166,542 160,945
--------- ---------
Total liabilities and stockholders' equity $ 233,698 $ 237,055
========= =========
See accompanying notes to condensed consolidated financial statements
3
ANAREN, INC.
Condensed Consolidated Statements of Income
Three Months Ended September 30, 2009 and 2008
(in thousands, except per share amounts)
(unaudited)
2009 2008
-------- --------
Net Sales $ 40,337 $ 38,124
Cost of Sales 25,673 26,460
-------- --------
Gross profit 14,664 11,664
Operating Expenses:
Marketing 2,363 2,093
Research and development 3,608 3,085
General and administrative 4,480 4,560
-------- --------
Total operating expenses 10,451 9,738
-------- --------
Operating income 4,213 1,926
Other income (expense):
Interest expense (183) (266)
Other, primarily interest income 127 404
-------- --------
Total other income (expense), net (56) 138
-------- --------
Income before income tax expense 4,157 2,064
Income tax expense 1,300 722
-------- --------
Net income $ 2,857 $ 1,342
======== ========
Earnings per share:
Basic $ 0.20 $ 0.09
======== ========
Diluted $ 0.19 $ 0.09
======== ========
Weighted average common shares Outstanding:
Basic 14,117 14,131
======== ========
Diluted 14,795 14,268
======== ========
See accompanying notes to condensed consolidated financial statements
4
ANAREN, INC.
Condensed Consolidated Statements of Cash Flows
Three Months Ended September 30, 2009 and 2008
(in thousands)
(unaudited)
2009 2008
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,857 $ 1,342
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,104 1,878
Loss on disposal of fixed assets 10 4
Amortization 344 383
Deferred income taxes 305 (267)
Equity based compensation 702 1,066
Changes in operating assets and liabilities:
Receivables (1,836) 2,261
Inventories 350 (316)
Prepaid expenses and other current assets 101 (656)
Accounts payable 1,962 (671)
Accrued expenses (1,788) (487)
Customer advance payments (43) (505)
Other liabilities 344 868
Pension and postretirement benefit obligation 230 84
-------- --------
Net cash provided by operating activities 5,642 4,984
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,188) (1,834)
Payment for purchase of M. S. Kennedy and
Unicircuit, net of cash acquired -- (47,296)
Proceeds from sale of property, plant,
and equipment 3 --
Maturities of held to maturity and
available-for-sale securities 5,800 9,224
Purchases of held to maturity and
available-for-sale securities -- (2,127)
-------- --------
Net cash provided by (used in)
investing activities 4,615 (42,033)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgage payable -- (1,210)
Payment on note payable (9,800)
Proceeds from note payable -- 49,800
Stock options exercised 2,729 92
Excess tax benefit from exercise of stock options 191 5
Purchase of treasury stock (469) (5,014)
-------- --------
Net cash used in financing activities (7,349) 43,673
-------- --------
Effect of exchange rates on cash 14 --
-------- --------
Net increase in cash and cash equivalents 2,922 6,624
Cash and cash equivalents, beginning of year 49,893 10,711
-------- --------
Cash and cash equivalents, end of period $ 52,815 $ 17,335
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 278 $ 20
======== ========
Income taxes, net of refunds $ 180 $ --
======== ========
See accompanying notes to condensed consolidated financial statements
5
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The condensed consolidated financial statements are unaudited and reflect all
adjustments (consisting of normal recurring adjustments) and accruals, which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations,
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2009. The results of operations for the three months ended September
30, 2009 are not necessarily indicative of the results for the entire fiscal
year ending June 30, 2010, or any future interim period.
The income tax rates utilized for interim financial statement purposes for the
nine months ended September 30, 2009 and 2008 are based on estimates of income
and utilization of tax credits for the entire fiscal year ending June 30, 2010.
The Company evaluated all events or transactions that occurred after September
30, 2009 up through October 30, 2009, the date the Company issued these
financial statements. During this period, the Company did not have any
recognizable subsequent events.
(1) New Accounting Pronouncements
In October 2009, new accounting guidance was issued related to the accounting
for revenue recognition from arrangement with multiple deliverables. This
guidance removes the objective-and-reliable-evidence-of-fair-value criterion
from the separation criteria used to determine whether an arrangement involving
multiple deliverables contains more than one unit of accounting, replaces
references to "fair value" with "selling price" to distinguish from the fair
value measurements required under the "Fair Value Measurements and Disclosures"
guidance, provides a hierarchy that entities must use to estimate the selling
price, eliminates the use of the residual method for allocation, and expands the
ongoing disclosure requirements. This update is effective for the company
beginning July 1, 2011 and can be applied prospectively or retrospectively.
Management is currently evaluating the effect that adoption of this update will
have, if any, on the Company's condensed consolidated financial statements when
it becomes effective in 2012.
In September 2009, new accounting guidance was issued, which permits entities to
measure the fair value of certain investments, including those with fair values
that are not readily determinable, on the basis of the net asset value per share
of the investment (or its equivalent) if such net asset value is calculated in a
manner consistent with the measurement principles in "Financial
Services-Investment Companies" as of the reporting entity's measurement date
(measurement of all or substantially all of the underlying investments of the
investee in accordance with the "Fair Value Measurements and Disclosures"
guidance). The update also requires enhanced disclosures about the nature and
risks of investments within its scope that are measured at fair value on a
recurring or nonrecurring basis. The Company does not believe that this update
will have a material effect on the Company's condensed consolidated financial
position and results of operations.
In January 2009, new accounting guidance which requires more detailed
disclosures about employers' plan assets, including employers' investment
strategies, major categories of plan assets, concentrations of risk within plan
assets, and valuation techniques used to measure the fair value of plan assets.
Other than for some additional disclosures in the Annual Report on Form 10-K,
adoption of this guidance will not have an effect on the Company's condensed
consolidated financial statements.
6
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In November 2008, new accounting guidance was proposed that relates to the
milestone method of revenue recognition. This guidance would define a milestone
and to determine whether an entity may recognize consideration earned from the
achievement of a milestone in the period in which the milestone is achieved.
This Issue applies to revenue arrangements under which a vendor satisfies its
performance obligations to a customer over a period of time, when the
deliverable or unit of accounting is not within the scope of other authoritative
literature, and when the arrangement consideration is contingent upon the
achievement of a milestone. The Company is currently evaluating the impact of
this guidance on the condensed consolidated financial statements.
(2) Equity Based Compensation
The components of equity-based compensation expense in the statements of
earnings are as follows:
Three Months Ended
(amounts in thousands) September 30
---------------------
2009 2008
------ ------
Stock option $ 218 $ 549
Restricted stock 484 517
------ ------
Stock-based compensation $ 702 $1,066
====== ======
(3) Securities
The amortized cost and fair value of securities are as follows:
September 30, 2009
-----------------------------------------------
Gross Gross
Amortized unrealized unrealized
(amounts in thousands) cost gains losses Fair value
--------- ---------- ---------- ----------
Securities available-for-sale:
Auction rate securities $1,440 $ -- $ (390) $ 1,050
Securities held to maturity:
Municipal bonds $8,044 $ 225 $ -- $ 8,269
June 30, 2009
-----------------------------------------------
Gross Gross
Amortized unrealized unrealized
(amounts in thousands) cost gains losses Fair value
--------- ---------- ---------- ----------
Securities available-for-sale:
Auction rate securities $ 1,440 $ -- $ (390) $ 1,050
Securities held to maturity:
Municipal bonds $13,889 $ 310 $ -- $14,199
Contractual maturities of marketable debt securities held to maturity are
summarized as follows:
September 30, 2009 June 30, 2009
----------------------------------------------
Fair Fair
Amortized market Amortized market
(amounts in thousands) cost value cost value
--------- -------- ---------- ----------
Within one year $ 5,977 $ 6,116 $11,810 $12,075
One year to five years 2,067 2,153 2,079 2,124
------- ------- ------- -------
Total $ 8,044 $ 8,269 $13,889 $14,199
======= ======= ======= =======
7
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Contractual maturities of auction rate securities available for sale are
summarized as follows:
September 30, 2009 June 30, 2009
-------------------------------------------
Fair Fair
market market
(amounts in thousands) Cost value Cost value
-------- -------- ------- -------
One year to five years $1,440 $1,050 $1,440 $1,050
The Company owns one auction rate security. The security has gone to auction
once every 365 days, and since September 2008, the security has not been
purchased. Therefore based on the outlook of the auction process, the Company
has recorded the security as long term.
(4) Fair Value Measurements
The carrying amount of financial instruments, including cash and cash
equivalents, trade receivables and accounts payable, approximated their fair
value as of September 30, 2009 because of the short maturity of these
instruments. Also, the Company's carrying cost for its revolving credit note
approximates fair value.
Valuations on certain instruments are prioritized into three broad levels as
follows. Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities. Level 2 inputs are quoted prices for similar
assets and liabilities in active markets, quoted prices for identical or similar
assets in markets that are not active, inputs other than quoted prices that are
observable for the asset or liability, including interest rates, yield curves
and credit risks, or inputs that are derived principally from or corroborated by
observable market data through correlation. Level 3 inputs are unobservable
inputs based on our own assumptions used to measure assets and liabilities at
fair value. A financial asset or liability's classification is determined based
on the lowest level input that is significant to the fair value measurement.
The following table provides the assets and liabilities carried at fair value as
measured on a recurring basis as of September 30, 2009:
(amounts in thousands)
Significant
Total Carrying other Significant
Value at Quoted prices in observable unobservable
September 30, Active markets inputs inputs
2009 (Level 1) (Level 2) (Level 3)
-------------- ---------------- ----------- ------------
Available for sale
securities $1,050 $ -- $ -- $1,050
Valuation Techniques.
In the first quarter ended September 30, 2008, the Company acquired this Level 3
security, noted in the table above, with an estimated fair value of $1.4
million. As of September 30, 2009, this security was valued at $1.1 million. The
Company's available-for-sale security is a debt security that is traded in an
inactive market. After analyzing the underlying assets and structure of the
student loan auction rate security, the Company has determined that the most
appropriate method of deriving a value indication was a discounted cash flow
analysis. The Company found that collateral characteristics, redemption
probability, credit rating, and discount rates are the most important value
drivers to determine an estimated fair value of the underlying security, and is
classified within Level 3 of the valuation hierarchy.
8
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(5) Intangible Assets
The major components of intangible assets are as follows:
September 30, 2009 June 30, 2009
------------------ ------------------
(amounts in thousands) Gross Net Gross Net
Carrying Carrying Carrying Carrying
Amount Amount Amount Amount
-------- -------- -------- --------
Amortizable intangible assets:
Customer relationships $ 7,530 $ 6,664 $ 7,530 $ 6,852
Developed technology 780 598 780 637
Non-competition agreements 1,130 804 1,130 875
------- ------- ------- -------
Total $ 9,440 $ 8,066 $ 9,440 $ 8,364
======= ======= ======= =======
Non-amortizable intangible assets:
Trade names 2,980 2,980
------- -------
Total intangible assets $11,046 $11,344
======= =======
Intangible asset amortization expense for the three month period ended September
30, 2009 and 2008 aggregated $0.3 million in each period. Amortization expense
related to developed technology is recorded in cost of sales, and amortization
expense for non-compete agreements and customer relationships is recorded in
general and administrative expense.
There have been no changes in the carrying amount of goodwill for the three
months ended September 30, 2009.
(6) Inventories
Inventories are summarized as follows:
(amounts in thousands) September 30, 2009 June 30, 2009
------------------- -------------
Raw Materials $19,742 $18,533
Work in process 11,344 12,664
Finished goods 3,853 4,085
------- -------
$34,939 $35,282
======= =======
(7) Property, Plant, and Equipment
Components of property, plant, and equipment consists of the following:
(amounts in thousands) September 30, 2009 June 30, 2009
------------------- -------------
Land and land improvements $ 5,260 $ 5,260
Construction in process 1,224 964
Buildings, furniture, and fixtures 33,913 33,872
Machinery and equipment 59,593 58,865
-------- --------
99,990 98,961
Less accumulated depreciation (48,030) (46,072)
-------- --------
$ 51,960 $ 52,889
======== ========
9
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(8) Accrued Expenses
Accrued expenses consists of the following:
(amounts in thousands) September 30, 2009 June 30, 2009
------------------- -------------
Compensation $2,056 $3,638
Commissions 639 760
Health insurance 590 685
Other 134 125
------ ------
$3,419 $5,208
====== ======
The Company maintains an accrual for incurred, but not reported, claims arising
from self-insured health benefits provided to the Company's employees in the
United States, which is included in accrued expenses in the consolidated balance
sheets. The Company determines the adequacy of this accrual by evaluating its
historical experience and trends related to both health insurance claims and
payments, information provided by its third party administrator, as well as
industry experience and trends.
(9) Other Liabilities
Other liabilities consists of the following:
(amounts in thousands) September 30, 2009 June 30, 2009
------------------ -------------
Deferred compensation $ 232 $ 243
Supplemental Retirement Plan 604 584
Accrued lease 1,053 1,184
Warranty accrual 422 434
Income tax liability 1,942 1,747
Deferred revenue 375 375
Interest 176 350
Other 336 300
------- -------
5,140 5,217
Less current portion (2,409) (2,525)
------- -------
$ 2,731 $ 2,692
======= =======
The Company provides warranty policies on its products. In addition, the Company
incurs costs to service our products in connection with specific product
performance issues. Liability for product warranties are based upon expected
future product performance and durability, and is estimated largely based upon
historical experience. Adjustments are made to accruals as claim data and
historical experience warrant. The changes in the carrying amount of product
warranty reserves for the quarter ended September 30, 2009, is as follows:
(amounts in thousands)
Balance as of June 30, 2009 $ 434
Additions 139
Costs incurred (137)
Adjustments (14)
-----
Balance as of September 30, 2009 $ 422
=====
(10) Debt
Borrowings under the revolving credit note (Note), at the Company's choice, bear
interest at LIBOR, plus 100 to 425 basis points, or at Keybank prime rate, minus
(100) to plus 225 basis points, depending upon the Company's EBITDA performance
at the end of each quarter as measured by the formula: EBITDA divided by the
Current Portion of Long-term Debt plus interest expense. For the three months
ended September 30, 2009, the weighted average interest rate on the outstanding
borrowings was approximately 1.3%.
10
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
In the first quarter ending September, 30, 2009, the Company paid $9.8 million
on the Note.
(11) Earning Per Share
Basic earnings per share is based on the weighted average number of common
shares outstanding. Diluted earnings per share is based on the weighted average
number of common shares outstanding, as well as dilutive potential common shares
which, in the Company's case, comprise shares issuable under the Company's
Comprehensive Long-Term Incentive Plan. The weighted average number of common
shares utilized in the calculation of the diluted earnings per share does not
include antidilutive shares aggregating 604,000 and 2,078,000 at September 30,
2009 and 2008, respectively. The treasury stock method is used to calculate
dilutive shares, which reduces the gross number of dilutive shares by the number
of shares purchasable from the proceeds of the options assumed to be exercised.
The following table sets forth the computation of basic and fully diluted
earnings per share:
For the Three Month Ended
September 30,
-------------------------
(amounts in thousands) 2009 2008
------- -------
Numerator:
Earnings available to common stockholders $ 2,857 $ 1,342
======= =======
Denominator:
Denominator for basic earnings per share
outstanding 14,117 14,131
======= =======
Denominator for diluted earnings per share:
Weighted average shares outstanding 14,117 14,131
Common stock options and restricted stock 678 137
------- -------
Weighted average shares 14,795 14,268
======= =======
(12) Employee Benefit Plans
Defined Benefit Plan
Components of net periodic pension cost for the three months ended September 30
are as follows:
(amounts in thousands) 2009 2008
----- -----
Service cost $ 78 $ 60
Interest cost 200 180
Expected return on plan assets (187) (220)
Amortization of unrecognized loss 83 10
----- -----
Net periodic pension cost $ 174 $ 30
===== =====
Required contributions for fiscal 2010 are estimated to be approximately $0.7
million.
Postretirement Health Benefit Plan
Components of net periodic postretirement benefit cost for the three months
ended September 30 are as follows:
(amounts in thousands) 2009 2008
---- ----
Service cost $ 20 $ 17
Interest cost 40 40
Amortized loss 1 1
Amortization of unrecognized prior service cost (5) (4)
---- ----
Net periodic postretirement benefit cost $ 56 $ 54
==== ====
Expected contributions for fiscal 2010 are estimated to be approximately $0.1
million.
11
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(13) Other Comprehensive Income
Other Comprehensive Income
Comprehensive income consists of the following:
Three Months Ended
September 30
--------------------
(amounts in thousands) 2009 2008
------ ------
Net income $2,857 $1,342
Other comprehensive income:
Foreign currency translation gain 14 18
Mark to market adjustment -- 280
------ ------
Comprehensive income $2,871 $1,640
====== ======
Accumulated Other Comprehensive Income (Loss)
The cumulative balance of each component of accumulated other comprehensive
income (loss) is as follows:
Mark to
Foreign Minimum Market Accumulated
currency pension Available other
translation liability for Sale comprehensive
adjustment adjustment Securities income (loss)
----------- ---------- ---------- -------------
(amounts in thousands)
Balances at June 30, 2008 $ 1,370 $(1,529) $ (185) $ (344)
Current period change 35 (1,883) (205) (2,053)
------- ------- ------- -------
Balances at June 30, 2009 $ 1,405 $(3,412) $ (390) $(2,397)
Current period change 14 -- -- 14
------- ------- ------- -------
Balances at September 30, 2009 $ 1,419 $(3,412) $ (390) $(2,383)
======= ======= ======= =======
(14) Segment and Related Information
The Company operates predominately in the wireless communications, satellite
communications, and space and defense electronics markets. The Company's two
reportable segments are the Wireless Group and the Space & Defense Group. These
segments have been determined based upon the nature of the products and services
offered, customer base, technology, availability of discrete internal financial
information, homogeneity of products, and delivery channel, and are consistent
with the way the Company organizes and evaluates financial information
internally for purposes of making operating decisions and assessing performance.
The Wireless Group designs, manufactures, and markets commercial products used
mainly by the wireless communications market. The Space & Defense Group of the
business designs, manufactures, and markets specialized products for the space
and defense electronics markets. The Company's Space & Defense Group aggregates
certain operating segments into one reportable segment, as the operating
segments depict similar products, customers, industries and experience similar
margins on products.
12
ANAREN, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The following table reflects the operating results of the segments consistent
with the Company's internal financial reporting process. The following results
are used in part, by management, both in evaluating the performance of, and in
allocating resources to, each of the segments:
Space &
(amounts in thousands) Wireless Defense Unallocated Consolidated
-------- ------- ----------- ------------
Net sales (Three Months Ended):
September 30, 2009 $14,411 $25,926 $ -- $40,337
September 30, 2008 19,702 18,422 -- 38,124
Operating income (Three Month Ended) (1)
September 30, 2009 1,231 3,050 (68) 4,213
September 30, 2008 1,134 967 (175) 1,926
Goodwill and intangible assets:
September 30, 2009 30,716 22,965 -- 53,681
June 30, 2009 30,716 23,263 -- 53,979
(1) Unallocated amounts relates to the lease expense incurred on the London
lease.
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the consolidated
financial statements and the notes thereto appearing elsewhere in this Form
10-Q. The following discussion, other than historical facts, contains
forward-looking statements that involve a number of risks and uncertainties. The
Company's results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including factors
described elsewhere in this Quarterly Report on Form 10-Q and factors described
in the Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2009.
Overview
The consolidated financial statements present the financial condition of the
Company as of September 30, 2009 and June 30, 2009, and the consolidated results
of operations and cash flows of the Company for the three months ended September
30, 2009 and 2008.
The Company designs, develops and markets microwave components and assemblies
for the wireless communications, satellite communications and defense
electronics markets. The Company's distinctive manufacturing and packaging
techniques enable it to cost-effectively produce compact, lightweight microwave
products for use in base stations and subscriber equipment for wireless
communications as well as, in satellites and in defense electronics systems. The
Company sells its products to leading wireless communications equipment
manufacturers such as Ericsson, Motorola, Nokia Siemens Networks, and Huawei,
and to satellite communications and defense electronics companies such as Boeing
Satellite, ITT, Lockheed Martin, Northrop Grumman and Raytheon. Net sales are
recognized when units are shipped.
Net sales under certain long-term contracts of the Space & Defense Group, many
of which provide for periodic payments, are recognized under the
percentage-of-completion method using the units of delivery method. Estimated
manufacturing cost-at-completion for these contracts are reviewed on a routine
periodic basis, and adjustments are made periodically to the estimated
cost-at-completion based on actual costs incurred, progress made, and estimates
of the costs required to complete the contractual requirements. When the
estimated manufacturing cost-at-completion exceeds the contract value, the
contract is written down to its net realizable value, and the loss resulting
from cost overruns is immediately recognized. To properly match net sales with
costs, certain contracts may have revenue recognized in excess of billings
(unbilled revenues), and other contracts may have billings in excess of net
sales recognized (billings in excess of contract costs). Under long-term
contracts, the prerequisites for billing the customer for periodic payments
generally involve the Company's achievement of contractually specific, objective
milestones (e.g., completion of design, testing, or other engineering phase,
delivery of test data or other documentation, or delivery of an engineering
model or flight hardware).
Second Quarter of Fiscal 2010 Outlook
For the second quarter of fiscal 2010, we anticipate a decline in sales for the
Wireless Group and increased sales for the Space & Defense Group from our just
completed first quarter. As a result, we expect net sales to be in the range of
$40 million to $44 million. We expect GAAP net earnings per diluted share to be
in the range of $0.18 - $0.22, using an anticipated tax rate of approximately
32.0% and inclusive of approximately $0.05 - $0.06 per share related to expected
equity based compensation expense and acquisition related amortization of
acquired intangibles.
Results of Operations
Net sales for the three months ended September 30, 2009 were $40.3 million, up
5.8% from sales of $38.1 million for the first quarter of fiscal 2009. Net
income for the first quarter of fiscal 2010 was $2.9 million, or 7.1% of net
sales, up $1.6 million from net income of $1.3 million in the first quarter of
fiscal 2009. Net income in the first quarter of fiscal 2010 included $0.3
million of acquisition related expense for intangible amortization and no
expense for amortization of inventory step-up compared to $1.3 million of
combined acquisition related intangible amortization and inventory step-up in
the first quarter of fiscal 2009.
14
The following table sets forth the percentage relationships of certain items
from the Company's condensed consolidated statements of earnings as a percentage
of net sales.
Three Months Ended
Sept. 30, Sept. 30,
2009 2008
--------- ---------
Net Sales 100.0% 100.0%
Cost of sales 63.6% 69.4%
----- -----
Gross profit 36.4% 30.6%
----- -----
Operating expenses:
Marketing 5.9% 5.5%
Research and development 9.0% 8.1%
General and administrative 11.1% 11.9%
----- -----
Total operating expenses 26.0% 25.5%
----- -----
Operating income 10.4% 5.1%
----- -----
Other income (expense):
Other, primarily interest income 0.3% 1.1%
Interest expense -0.4% -0.8%
----- -----
Total other income (expense), net -0.1% 0.3%
----- -----
Income before income taxes 10.3% 5.4%
Income taxes 3.3% 1.9%
----- -----
Net income 7.0% 3.5%
===== =====
The following table summarizes the Company's net sales by operating segments for
the periods indicated.
Three Months Ended
Sept. 30, Sept. 30,
2009 2008
--------- ---------
(amounts in thousands)
Wireless Group $14,411 $19,702
Space & Defense Group 25,926 18,422
------- -------
Total $40,337 $38,124
======= =======
Three Months Ended September 30, 2009 Compared to Three Months Ended September
30, 2008
Net sales. Net sales were $40.3 million for the first quarter ended
September 30, 2009, up 5.8% compared to $38.1 million for the first quarter of
fiscal 2009. Sales of Wireless Group products fell $5.3 million, or 26.9%, and
sales of Space & Defense Group products rose $7.5 million, or 40.7%, in the
current first quarter compared to the first quarter of fiscal 2009.
The decline in sales of Wireless Group products, which consist of standard
components, ferrite components and custom subassemblies for use in building
wireless base station and consumer equipment, was the result of a decline in
demand for custom Wireless Group assemblies during the current first quarter
compared to the first quarter of last year. Sales of custom products fell $2.3
million in the current quarter compared to the first quarter last fiscal year,
led by a $1.8 million decline in sales to a major OEM resulting from a general
decline in global wireless infrastructure spending and decreased demand for
second generation GSM equipment. Wireless Group infrastructure component demand
in the first quarter of fiscal 2010, while comparable to fourth quarter 2009
levels, fell $2.9 million from the first quarter of fiscal 2009 due to a general
decline in shipments to both OEMs and distributors resulting from the general
decline in the worldwide economy and infrastructure capital expenditure levels.
The continuing challenging pricing environment for both standard component and
custom assembly products also negatively impacted net sales for the current
quarter compared to last year. Demand for Wireless Group products in the second
quarter of fiscal 2010 is expected to decline compared to first quarter levels.
Space & Defense Group products consist of custom components and assemblies for
commercial and military satellites, as well as radar, receiver, and
countermeasure subsystems for the military. Sales of Space & Defense Group
products rose $7.5 million, or 40.7% in the first quarter of fiscal 2010
compared to the first quarter of the
15
previous fiscal year. Sales of Space & Defense Group products in the first
quarter of the current fiscal year included three months of sales from M. S.
Kennedy Corp. and Unicircuit, Inc., totaling $12.8 million, while sales in the
first quarter of fiscal 2009 included two months and one month of sales from M.
S. Kennedy and Unicircuit, respectively, amounting to $4.8 million. Space &
Defense Group product sales continue to benefit from the higher level of
business won by the Company over the past few fiscal years which has resulted in
the Group's backlog of $85.7 million, including $24.8 million from M. S. Kennedy
and Unicircuit.
Gross Profit. Cost of sales consists primarily of engineering design costs,
materials, material fabrication costs, assembly costs, direct and indirect
overhead, and test costs. Gross profit for the first quarter of fiscal 2010 was
$14.7 million, (36.4% of net sales), up from $11.7 million (30.6% of net sales)
for the same quarter of the prior year. Gross profit as a percent of sales
increased in the first quarter of fiscal 2010 from the first quarter of last
year due to the absence in the current first quarter of $1.1 million (2.6% of
net sales) of amortization of inventory step-up costs related to the acquisition
of M. S. Kennedy and Unicircuit, which were included in the first quarter fiscal
2009 cost of sales. Additionally, gross margins were enhanced by the $2.3
million reduction in sales of lower margin, high material content custom
Wireless Group products and by reduced production overhead costs, including
personnel, freight, and production supplies, in excess of $1.1 million in the
current first quarter compared to the same period last year resulting from
ongoing cost reduction efforts throughout the Company.
Marketing. Marketing expenses consist mainly of employee related expenses,
commissions paid to sales representatives, trade show expenses, advertising
expenses and related travel expenses. Marketing expenses were $2.4 million (5.9%
of net sales) for the first quarter of fiscal 2010, up $0.3 million from $2.1
million (5.5% of net sales) for the first quarter of fiscal 2009. Marketing
expenses in the current first quarter rose $0.3 million from the first quarter
of last fiscal year due to the inclusion of $663,000 of marketing expenses from
Unicircuit and M. S. Kennedy in the current first quarter, compared to $282,000
for these two subsidiaries in the first quarter of last fiscal year, which
include only two months and one month of expense for M. S. Kennedy and
Unicircuit, respectively.
Research and Development. Research and development expenses consist of material
and salaries and related overhead costs of employees engaged in ongoing
research, design and development activities associated with new products and
technology development. Research and development expenses were $3.6 million
(9.0% of net sales) in the first quarter of fiscal 2010, up 17% from $3.1
million (8.1% of net sales) for the first quarter of fiscal 2009. Research and
development expenditures are supporting further development of Wireless Group
infrastructure and consumer component opportunities, as well as new technology
development in the Space & Defense Group. Research and Development expenditures
have increased in the first quarter of fiscal 2010 versus the first quarter of
last year due to the higher level of opportunities in the Space & Defense Group
marketplaces which resulted in approximately $0.5 million in additional spending
at our Anaren Ceramics, Anaren Microwave and M. S. Kennedy operations compared
to the first quarter of fiscal 2009. The Company expects to continue its current
research and development efforts and spending levels through the remainder of
the fiscal year and is presently working on a number of new standard and custom
Wireless Group and Space & Defense Group opportunities.
General and Administrative. General and administrative expenses consist of
employee related expenses, professional services, intangible amortization,
travel related expenses and other corporate costs. General and administrative
expenses decreased to $4.5 million (11.1% of net sales) for the first quarter of
fiscal 2010, from $4.6 million (11.9% of net sales) for the first quarter of
fiscal 2009. The decrease in general and administrative expense in the first
quarter of fiscal 2010 compared to the first quarter last year resulted from the
inclusion of $0.4 million in additional costs and intangible amortization from
the acquisitions of M. S. Kennedy and Unicircuit during the current first
quarter, compared to the first quarter of fiscal 2009 which include only two
months and one month of expense for M. S. Kennedy and Unicircuit, respectively,
which was partially offset by a net $0.3 million decline in compensation and
other administrative expenses.
Operating Income. Operating income increased 119% in the first quarter of fiscal
2010 to $4.2 million, (10.4% of net sales), compared to $1.9 million (5.1% of
net sales) for the first quarter of fiscal 2009. This increase in the first
quarter of fiscal 2010 from the first quarter of last year was due to the
absence in the current first quarter of $1.1 million of amortization of
inventory step-up costs related to the acquisition of M. S. Kennedy and
Unicircuit, which were included in the first quarter fiscal 2009 cost of sales,
as well as, the effect of ongoing cost containment and reduction initiatives
throughout the Company over the last twelve months which have had a significant
positive effect on overall Company expense levels.
On an operating segment basis, Wireless Group operating income was $1.2 million
(8.5% of group sales) for the first quarter of fiscal 2010, up $0.1 million,
from the Group's operating income of $1.1 million (5.8% of group sales) in the
first quarter of fiscal 2009. The increase in Wireless Group operating income in
the first quarter of fiscal
16
2010 compared to the first quarter of fiscal 2009 was achieved despite the
decline in Wireless group sales due to the Company's overall cost reduction
efforts which resulted in a $0.7 million (13%) decline in R&D, marketing and
Administrative expenses within the group in the current first quarter compared
to the first quarter last year. Additionally, Wireless Group profits were
further enhanced by a 6.7 percentage point increase in gross margins within the
group which resulted from $2.3 million of the group's $5.1 million sales decline
coming from lower margin high material content custom products, as well as the
previously discussed companywide cost reduction efforts.
Space & Defense Group operating income was $3.1 million (11.8% of Group sales)
in the first quarter of fiscal 2010, up $2.1 from $1.0 million (5.2% of net
group sales) for the first quarter of fiscal 2009. Operating margins for this
Group increased in the current first quarter, as they included only $0.3 million
of acquisition related intangible amortization costs and no inventory step-up
costs in the first quarter of fiscal 2010, compared to $1.3 million of combined
acquisition related inventory step-up and intangible amortization costs caused
by the acquisition of M. S. Kennedy and Unicircuit during the first quarter of
fiscal 2009 resulting in a 4.1 percentage point improvement in group gross and
operating margins. Additionally, Group operating margins rose an additional 3.2
percentage points due to the efficiencies achieved from the $7.5 million
increase in Space & Defense sales, year over year, in the current first quarter
and as a result of the cost savings achieved through the companywide cost
reduction efforts.
Other Income. Other income primarily consists of interest income received on
invested cash balances and rental income. Other income decreased to $0.1 million
in the first quarter of fiscal 2010 compared to $0.4 million for the first
quarter of last year. This decrease was caused by the substantial decline in
short-term interest rates year over year and a deliberate shortening of the
maturities of the Company's investment portfolio due to the turmoil in the
credit market. Other income will fluctuate based on short term market interest
rates and the level of investable cash balances.
Interest Expense. Interest expense consists mainly of interest on Company
borrowings and deferred items. Interest expense in the first quarter of fiscal
2010 was $0.2 million compared to $0.3 million for the first quarter of fiscal
2009. This decrease, despite a higher average outstanding debt balance over the
current first quarter compared to the first quarter of fiscal 2009, was due to
the substantial decline in the 90 day LIBOR interest rate for the first quarter
of fiscal 2010 (approx. 0.5%) compared to the rate (approx. 2.79%) for the first
quarter of fiscal 2009. The Company borrowed a total of $49.8 million under its
$50.0 million revolving credit facility in the first quarter 2009 and repaid
$9.8 million in the first quarter of fiscal 2010. These borrowings bear interest
at the 90 day LIBOR rate, plus 100 to 425 basis points, depending upon the
Company's rolling twelve month EBITDA performance. The rate is reset quarterly
and for the second quarter of fiscal 2010 is expected to be approximately 1.30%.
Income Taxes. Income taxes for the first quarter of fiscal 2010 were $1.3
million (3.3% of net sales), representing an effective tax rate of 31.3%. This
compares to income tax expense of $0.7 million (1.9% of net sales) for the first
quarter of fiscal 2009, representing an effective tax rate of 35.0%. The
decrease in the effective rate for the quarter is a results of the Federal
Research and Experimentation Credit not being in effect during the first quarter
of fiscal year 2009, as it had expired and was not reinstated until subsequent
to September 30, 2008. The projected effective tax rate for fiscal 2010 is
expected to be approximately 32.0%.
Critical Accounting Policies
There have been no material changes to the company's critical accounting
policies, estimates, or judgments from those discussed in the company's 2009
Annual Report Form 10-K.
Liquidity and Capital Resources
Net cash provided by operations for the first three months of fiscal 2010 was
$5.6 million and resulted from net income before depreciation, amortization and
non-cash equity based compensation expense. The positive cash flow from earnings
for the quarter was further enhanced by a $0.4 million decrease in inventory and
a $2.0 million increase in accounts payable, which more than off-set a $1.8
million increase in accounts receivable. The large fluctuations in the working
capital were a result of the timing of when sales were made during the quarter.
Net cash provided by operations for the first three months of fiscal 2009 was
$5.0 million and resulted from net income before depreciation and non-cash
equity based compensation expense. The positive cash flow from earnings for the
prior year quarter was further enhanced by a $2.3 million decrease in accounts
receivable due to improved collections, which more than off-set a small increase
in inventory and a pay down of current liabilities.
Net cash provided by investing activities in the first three months of fiscal
2010 was $4.6 million and consisted of $5.8 million provided by the maturities
of marketable debt securities, net of $1.2 million used for capital additions.
Net cash used in investing activities in the first three months of fiscal 2009
was $42.0 million and consisted of $7.1 million
17
provided by the maturity of marketable debt securities, $1.8 million used to pay
for capital additions and $47.3 million used to pay for the acquisitions of M.
S. Kennedy and Unicircuit, net of the cash received in both transactions.
Net cash used in financing activities was $7.3 million in the first three months
of fiscal 2010 and consisted of $2.7 million of cash and tax benefits provided
by the exercise of stock options, less $9.8 million used to pay long-term debt
and $0.5 million used to purchase approximately 29,000 treasury shares. Net cash
provided by financing activities in the first three months of fiscal 2009 was
$43.7 million and consisted of borrowings of $49.8 million under the Company's
revolving declining line of credit to finance the acquisitions of M. S. Kennedy
and Unicircuit, net of $1.2 million used to pay off an acquired mortgage and
$5.0 million used to purchase 471,000 treasury shares.
During the remainder of fiscal 2010, the Company anticipates that its main cash
requirement will be for capital expenditures, possible continued repurchase of
the Company's common stock and the $10.0 million principal payment on its line
of credit due in July 2010. Capital expenditures for the remainder of fiscal
2010 are expected to be in the range of $7.0 - $8.0 million and will be funded
from existing cash and investments.
The Company may continue to repurchase shares of its common stock in the open
market and/or through privately negotiated transaction under the current Board
authorization, depending on market conditions. At September 30, 2009, there were
approximately 1.0 million shares remaining under the current Board repurchase
authorization.
At September 30, 2009, the Company had approximately $61.9 million in cash, cash
equivalents, and marketable securities. The Company has had positive operating
cash flow for over ten years, and believes that its cash requirements for the
foreseeable future will be satisfied by currently invested cash balances and
expected cash flows from operations.
Recent Accounting Pronouncements
In October 2009, new accounting guidance was issued related to the accounting
for revenue recognition from arrangement with multiple deliverables. This
guidance removes the objective-and-reliable-evidence-of-fair-value criterion
from the separation criteria used to determine whether an arrangement involving
multiple deliverables contains more than one unit of accounting, replaces
references to "fair value" with "selling price" to distinguish from the fair
value measurements required under the "Fair Value Measurements and Disclosures"
guidance, provides a hierarchy that entities must use to estimate the selling
price, eliminates the use of the residual method for allocation, and expands the
ongoing disclosure requirements. This update is effective for the company
beginning July 1, 2011 and can be applied prospectively or retrospectively.
Management is currently evaluating the effect that adoption of this update will
have, if any, on the Company's condensed consolidated financial statements when
it becomes effective in 2012.
In September 2009, new accounting guidance was issued, which permits entities to
measure the fair value of certain investments, including those with fair values
that are not readily determinable, on the basis of the net asset value per share
of the investment (or its equivalent) if such net asset value is calculated in a
manner consistent with the measurement principles in "Financial
Services-Investment Companies" as of the reporting entity's measurement date
(measurement of all or substantially all of the underlying investments of the
investee in accordance with the "Fair Value Measurements and Disclosures"
guidance). The update also requires enhanced disclosures about the nature and
risks of investments within its scope that are measured at fair value on a
recurring or nonrecurring basis. The Company does not believe that this update
will have a material effect on the Company's condensed consolidated financial
position and results of operations.
In January 2009, new accounting guidance which requires more detailed
disclosures about employers' plan assets, including employers' investment
strategies, major categories of plan assets, concentrations of risk within plan
assets,
18
and valuation techniques used to measure the fair value of plan assets. Other
than for some additional disclosures in the Annual Report on Form 10-K, adoption
of this guidance will not have an effect on the Company's condensed consolidated
financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The following discusses the Company's possible exposure to market risk related
to changes in interest rates, equity prices and foreign currency exchange rates.
This discussion contains forward-looking statements that are subject to risks
and uncertainties. Results could differ materially from those anticipated in
these forward-looking statements as a result of various factors, including
factors described elsewhere in this Quarterly Report.
As of September 30, 2009, the Company had cash, cash equivalents and marketable
securities of $61.9 million, all of which with the exception of the Company's
auction rate security consisted of highly liquid investments in marketable debt
securities. The marketable debt securities at date of purchase normally have
maturities between one and 18 months, are exposed to interest rate risk and will
decrease in value if market interest rates increase. A hypothetical decrease in
market interest rate of 10.0% from September 30, 2009 rates, or 0.1%, would have
reduced net income and cash flow by approximately $15,000, or $.001 per diluted
share for the quarter. Due to the relatively short maturities of the securities
and its ability to hold those investments to maturity, the Company does not
believe that an immediate decrease in interest rates would have a significant
effect on its financial condition or results of operations. Over time, however,
declines in interest rate will reduce the Company's interest income.
As of September 30, 2009, the Company had $40.0 million in outstanding debt
under its revolving line of credit with Keybank National Association. The line
consists of a $50,000,000 revolving credit note (the "Note") for which principal
amounts are due on August 1, 2009, and on each anniversary date thereafter
through July 31, 2013. Borrowings under the Note, at the Company's choice, bear
interest at LIBOR, plus 100 to 425 basis points or at the Keybank's prime rate,
minus (100) to plus 225 basis points, depending upon the Company's EBITDA
performance at the end of each quarter as measured by the formula: EBITDA
divided by the Current Portion of Long-term Debt plus interest expense. For the
three months ended September 30, 2009, the weighted average interest rate on the
outstanding borrowings was 1.3%. Interest expense for these borrowings is
exposed to interest rate risk and will increase if market interest rates rise. A
hypothetical increase in market interest rate of 10.0% from September 30, 2009
rates, or 0.13%, would have reduced net income and cash flow by approximately
$15,000, or $.001 per diluted share for the quarter. Due to the Company's
significant cash reserves and historical positive operating cash flow, the
Company does not believe that an immediate increase in interest rates would have
a material effect on its financial condition or results of operations. Over
time, however, increases in market interest rates will increase the Company's
interest expense.
Forward-Looking Cautionary Statement
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
"forward-looking statements" made by or on behalf of the Company. We may from
time to time make written or oral statements that are "forward-looking,"
including statements contained in this report and other filings with the
Securities and Exchange Commission and in reports to our shareholders. All
forward-looking statements are made on the basis of management's views and
assumptions regarding future events and business performance as of the time the
statements are made and the Company does not undertake any obligation to update
its disclosure relating to forward looking matters. Actual results may differ
materially from those expressed or implied. The uncertainties and risk factors
that could affect our Company, its business and actual results are described
throughout this filing, and particularly in the "Risk Factors" in Part II, Item
1A of this Form 10-Q, and in our 2009 Annual Report on Form 10-K under the Item
1A, "Risk Factors."
Item 4. Controls and Procedures
A. Disclosure Controls and Procedures
An evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended ("Exchange Act")) was
carried out under the supervision and with the participation of the Company's
management, including the President and Chief Executive Officer and the Chief
Financial Officer ("the Certifying Officers") as of September 30, 2009. Based on
that evaluation, the Certifying Officers concluded that the Company's disclosure
controls and procedures were effective as of September 30, 2009.
19
B. Changes in Internal Control Over Financial Reporting
There were no changes in the registrant's internal control over financial
reporting during our fiscal quarter to which this Quarterly Report on Form 10-Q
relates that have materially affected, or are reasonably likely to materially
affect, internal control over financial reporting.
PART II OTHER INFORMATION
Item 1A. Risk Factors
The Company is exposed to certain risk factors that may affect operations and/or
financial results. The significant factors known to the Company are described in
the Company's most recently filed Annual Report on Form 10-K. There have been no
material changes from the risk factors as previously disclosed in the Company's
Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Issuer Purchases of Equity Securities
On November 5, 2007, the Board of Directors increased by an additional 2,000,000
the number of shares that the Company was authorized to repurchase in open
market or by privately negotiated transactions through its previously announced
stock repurchase program. The program (originally announced on March 5, 2001),
which may be suspended at any time without notice, has no expiration date. The
following table sets forth information regarding shares repurchased and
purchasable under the program during and as of the end of the periods indicated.
On September 30, 2009, 1,047,000 million shares remained authorized for
purchase, depending on market conditions.
----------------------------------------------------------------------------------------------------------------------
Period Total Number of Average Price Paid Total Number of Maximum Number (or
Shares (or Units) per Share (or Unit) Shares (or Units) Approximate Dollar
Purchased Purchased as Part of Value) of Shares (or
Publicly Announced Units) that May Yet
Plans or Programs Be Purchased Under
the Plans or Programs
----------------------------------------------------------------------------------------------------------------------
July 2009 0 - 0 1,076,099
----------------------------------------------------------------------------------------------------------------------
August 2009 28,686 16.35 0 1,047,413
----------------------------------------------------------------------------------------------------------------------
September 2009 0 - 0 1,047,413
----------------------------------------------------------------------------------------------------------------------
Total 28,686 16.35 0 1,047,413
----------------------------------------------------------------------------------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits
31 Rule 13a-14(a) Certifications
32 Section 1350 Certifications
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Anaren, Inc.
------------
(Registrant)
Date: October 30, 2009 /s/ Lawrence A. Sala
---------------------------------------
Lawrence A. Sala
President & Chief Executive Officer
Date: October 30, 2009 /s/ George A. Blanton
---------------------------------------
George A. Blanton
Sr. Vice President, Chief Financial Officer
and Treasurer
2
