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| 8-K - FORM 8-K FILING DOCUMENT - ANAREN INC | document.htm |
EXHIBIT 99.1
Anaren Reports 4th Quarter and 2012 Fiscal Year-End Results
SYRACUSE, N.Y., Aug. 6, 2012 (GLOBE NEWSWIRE) -- Anaren, Inc. (Nasdaq:ANEN) today reported net sales for the fiscal 2012 fourth quarter ended June 30, 2012 of $38.2 million, down 19.1% from $47.2 million for the fourth quarter of last year.
GAAP (U.S. generally accepted accounting principles) net income for the fourth quarter of fiscal 2012 was $2.9 million, or $0.20 per diluted share, compared to $4.2 million, or $0.29 per diluted share for the fourth quarter of last year.
Non-GAAP diluted earnings per share, excluding non-cash equity based compensation and intangible amortization, was $0.26 for the fourth quarter of fiscal 2012 compared to non-GAAP earnings per share of $0.34 for the fourth quarter of fiscal 2011.
GAAP operating income for the fourth quarter of fiscal 2012 was $3.6 million, or 9.4% of net sales, compared to $5.3 million, or 11.2% of net sales for the fourth quarter of last year.
Non-GAAP operating income for the fourth quarter of fiscal 2012, which excludes non-cash equity based compensation and intangible asset amortization was $4.9 million, or 12.7% of net sales, compared to $6.4 million, or 13.7% of net sales for the fourth quarter of fiscal 2011.
Income taxes for the fourth quarter of fiscal 2012 were $0.9 million, representing an effective tax rate of 22.6% compared to income tax expense of $1.7 million for the fourth quarter of fiscal 2011, representing an effective tax rate of 28.0%. The projected effective tax rate for fiscal 2013, absent one-time events, is expected to be 32.0%.
Lawrence A. Sala, Anaren's Chairman, President and CEO said, "While current quarter revenue and profitability remains below fiscal 2011 fourth quarter levels, we were pleased to see 10% sequential quarterly sales growth, driven by strengthening demand for Wireless infrastructure products. In addition, non-GAAP operating income improved 64% over third quarter levels, due to the higher sales volume and the actions taken in the first half of the fiscal year to reduce operating expenses. Given the reduction in manufacturing and operating expenses, improving Wireless customer forecasts and a record Space & Defense order backlog, we believe that we are well positioned for improving sales and profitability in fiscal 2013."
Net sales for the year ended June 30, 2012, were $147.3 million, compared to net sales of $179.2 million for last year. GAAP net income for fiscal 2012 was $8.6 million, or $0.59 per diluted share, compared to $16.4 million, or $1.11 per diluted share for fiscal 2011.
Non-GAAP diluted earnings per share, which excludes non-cash equity based compensation and intangible amortization, was $0.81 for fiscal 2012 compared to non-GAAP diluted earnings per share of $1.34 for fiscal 2011.
During the fourth quarter of fiscal 2012, the Company generated $10.4 million in operating cash flow compared to $8.4 million in the fourth quarter of fiscal 2011. Additionally, during the current quarter the Company repurchased approximately 901,000 shares of its common stock for a total of $17.0 million and expended $2.1 million for capital additions. Cash, cash equivalents and marketable debt securities at June 30, 2012 were $43.9 million.
Wireless Group
Wireless Group net sales for the fourth quarter of fiscal 2012 were $13.4 million, down 32.5% from $19.7 million for the fourth quarter of fiscal 2011, driven by the continuing softness in demand from wireless infrastructure customers. While year over year comparisons with the record demand in fiscal 2011 are unfavorable, fourth quarter fiscal 2012 Wireless Group sales improved 30% sequentially over third quarter fiscal 2012 levels as inventory in the distribution channel was liquidated and demand ramped in the quarter. Demand for our Wireless infrastructure products continues to improve and current customer forecasts indicate increased Wireless sales for fiscal 2013.
New product investments for the quarter continued to be focused on expansion of the wireless infrastructure components and low power wireless Anaren Integrated Radio (AIR) module product lines.
Customers that generated greater than 10% of Wireless Group net sales for the quarter were E.G. Components, Huawei, Nokia and Richardson.
Space & Defense Group
Space & Defense Group net sales for the fourth quarter of fiscal 2012 were $24.8 million, down 9.5% from $27.5 million for the fourth quarter of fiscal 2011, due primarily to an expected decline in Low Temperature Co-fired Ceramics ("LTCC") sales.
New orders for the quarter totaled $34.8 million and were driven by ground-based radar, satellite and passive ranging applications, resulting in a book-to-bill ratio of 1.16 to 1.0 for the Group in fiscal 2012. The space and defense opportunity environment remains robust with numerous new satellite and radar applications. Space & Defense Group order backlog at June 30, 2012 was a record $105 million.
Customers that generated greater than 10% of Space & Defense Group net sales for the quarter were Lockheed Martin, Northrop Grumman and Raytheon.
Non-GAAP Financial Measures
In addition to presenting financial results calculated in accordance with GAAP, Anaren's earnings release contains non-GAAP financial measures including: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP net income per diluted share. These non-GAAP measures are each adjusted from GAAP results to exclude certain non-cash items including equity-based compensation and intangible asset amortization.
The Company believes these non-GAAP financial measures provide useful information to both management and investors to help understand and compare business trends among reporting periods on a consistent basis. Additionally, these non-GAAP financial measurements are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
Outlook
For the first quarter of fiscal 2013, we anticipate comparable sales for both the Space & Defense Group and Wireless Group compared to fourth quarter levels. As a result, we expect net sales to be in the range of $36 to $41 million. We expect GAAP net earnings per diluted share, absent one-time events, to be in the range of $0.13 - $0.24, using an anticipated tax rate of approximately 32.0% and inclusive of approximately $0.05 per share related to expected equity based compensation expense and amortization of intangibles. Non-GAAP net earnings per diluted share are expected to be in the range of $0.18 - $0.29 for the first quarter of fiscal 2013.
Forward-Looking Statements
The statements contained in this news release which are not historical information are "forward-looking statements." These and other forward-looking statements are based on management's current expectations and are subject to business, market and economic risks and uncertainties that could cause actual results to differ materially from those discussed. You are encouraged to review Anaren's filings with the Securities and Exchange Commission to learn more about the various risks and uncertainties facing Anaren's business and their potential impact on Anaren's revenue, earnings and stock price. Unless required by law, Anaren disclaims any obligation to update or revise any forward-looking statement.
Conference Call
Anaren will host a live teleconference, open to the public on the Anaren Investor Info, Live Webcast Web Site (www.anaren.com) on August 7, 2012 at 8:30 a.m. (ET). A replay of the conference call will be available at 9:30 a.m. (ET) beginning August 7, 2012 through 11:30 p.m. on August 14, 2012. To listen to the replay, interested parties may dial in the U.S. at 1-855-859-2056 and International at 1-404-537-3406. The passcode is 88718325. If you are unable to access the Live Webcast, the dial in number for the U.S. is 1-877-734-4580 and International is 1-678-905-9378.
Company Background
Anaren designs, manufactures and sells complex microwave components and subsystems for the wireless communications, satellite communications and defense electronics markets. For more information on Anaren's products, visit our Web site at www.anaren.com.
The Anaren, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5360
| ANAREN, INC. | ||||
| Condensed Consolidated Statements of Income | ||||
| (in thousands except per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | Twelve Months Ended | |||
| June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |
| Sales | $ 38,172 | $ 47,172 | $ 147,346 | $ 179,170 |
| Cost of sales | 24,305 | 29,280 | 95,924 | 111,264 |
| Gross profit | 13,867 | 17,892 | 51,422 | 67,906 |
| 36.3% | 37.9% | 34.9% | 37.9% | |
| Operating expenses: | ||||
| Marketing | 2,742 | 2,975 | 10,328 | 10,592 |
| Research and development | 3,035 | 4,741 | 13,217 | 16,765 |
| General and administration | 4,511 | 4,915 | 17,549 | 19,299 |
| Total operating expenses | 10,288 | 12,631 | 41,094 | 46,656 |
| Operating income | 3,579 | 5,261 | 10,328 | 21,250 |
| 9.4% | 11.2% | 7.0% | 11.9% | |
| Other income (expense): | ||||
| Other income | 203 | 738 | 656 | 1,174 |
| Interest expense | (19) | (105) | (170) | (498) |
| Total other income, net | 184 | 633 | 486 | 676 |
| Income before income tax expense | 3,763 | 5,894 | 10,814 | 21,926 |
| Income tax expense | 850 | 1,650 | 2,200 | 5,525 |
| Net income | $ 2,913 | $ 4,244 | $ 8,614 | $ 16,401 |
| 7.6% | 9.0% | 5.8% | 9.2% | |
| Earnings per share: | ||||
| Basic | $ 0.21 | $ 0.30 | $ 0.61 | $ 1.17 |
| Diluted | $ 0.20 | $ 0.29 | $ 0.59 | $ 1.11 |
| Weighted average common shares outstanding: | ||||
| Basic | 13,767 | 14,032 | 14,050 | 13,988 |
| Diluted | 14,457 | 14,849 | 14,702 | 14,746 |
| ANAREN, INC. | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
| (unaudited) | ||
| June 30, 2012 | June 30, 2011 | |
| Assets: | ||
| Cash, cash equivalents and short-term investments | $ 32,232 | $ 67,702 |
| Receivables, less allowances | 29,521 | 30,931 |
| Inventories | 36,443 | 33,733 |
| Prepaid expenses and other assets | 6,650 | 6,120 |
| Total current assets | 104,846 | 138,486 |
| Securities held to maturity | 11,657 | 13,441 |
| Property, plant, and equipment, net | 47,171 | 47,627 |
| Other assets | -- | 1,741 |
| Goodwill | 42,343 | 42,389 |
| Other intangibles, net | 7,770 | 8,961 |
| Total assets | $ 213,787 | $ 252,645 |
| Liabilities and Stockholders' Equity | ||
| Liabilities: | ||
| Current installments of long-term debt obligation | $ -- | $ 10,000 |
| Accounts payable | 8,604 | 9,535 |
| Accrued expenses | 3,926 | 6,340 |
| Customer advance payments | 1,307 | 222 |
| Other liabilities | 2,068 | 2,290 |
| Total current liabilities | 15,905 | 28,387 |
| Long-term debt obligation | -- | 20,000 |
| Other non-current liabilities | 12,379 | 9,154 |
| Total liabilities | 28,284 | 57,541 |
| Stockholders' Equity: | ||
| Common stock and additional paid-in capital | 223,326 | 214,467 |
| Retained earnings | 143,126 | 134,512 |
| Accumulated other comprehensive loss | (3,026) | (603) |
| Less: cost of treasury shares | (177,923) | (153,272) |
| Total stockholders' equity | 185,503 | 195,104 |
| Total liabilities and stockholders' equity | $ 213,787 | $ 252,645 |
| ANAREN, INC. | ||||
| Reconciliation of GAAP and Non-GAAP Gross Profit, Operating Income, Net Income and Dilluted Earnings Per Share | ||||
| (in thousands except per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | Twelve Months Ended | |||
| June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |
| Sales | $ 38,172 | $ 47,172 | $ 147,346 | $ 179,170 |
| GAAP gross profit | $ 13,867 | $ 17,892 | $ 51,422 | $ 67,906 |
| Equity-based compensation expense (1) | 209 | 190 | 814 | 741 |
| Amortization of intangibles (2) | 39 | 39 | 156 | 156 |
| Non-GAAP gross profit | $ 14,115 | $ 18,121 | $ 52,392 | $ 68,803 |
| % of sales | 37.0% | 38.4% | 35.6% | 38.4% |
| GAAP operating income | $ 3,579 | $ 5,261 | $ 10,328 | $ 21,250 |
| Equity-based compensation expense (1) | 984 | 882 | 3,853 | 4,097 |
| Amortization of intangibles (2) | 298 | 298 | 1,192 | 1,192 |
| Non-GAAP operating income | $ 4,861 | $ 6,441 | $ 15,373 | $ 26,539 |
| % of sales | 12.7% | 13.7% | 10.4% | 14.8% |
| GAAP net income | $ 2,913 | $ 4,244 | $ 8,614 | $ 16,401 |
| Equity-based compensation expense (1) | 984 | 882 | 3,853 | 4,097 |
| Amortization of intangibles (2) | 298 | 298 | 1,192 | 1,192 |
| Tax effect | (462) | (425) | (1,816) | (1,904) |
| Non-GAAP net income | $ 3,733 | $ 4,999 | $ 11,843 | $ 19,786 |
| % of sales | 9.8% | 10.6% | 8.0% | 11.0% |
| Diluted earnings per share | ||||
| GAAP diluted earnings per share | $ 0.20 | $ 0.29 | $ 0.59 | $ 1.11 |
| Equity-based compensation expense (1) | 0.07 | 0.06 | 0.26 | 0.28 |
| Amortization of intangibles (2) | 0.02 | 0.02 | 0.08 | 0.08 |
| Tax adjustments | (0.03) | (0.03) | (0.12) | (0.13) |
| Non-GAAP diluted earnings per share | $ 0.26 | $ 0.34 | $ 0.81 | $ 1.34 |
| Weighted average common shares outstanding | ||||
| Diluted | 14,457 | 14,849 | 14,702 | 14,746 |
| 1) These costs represent expense recognized in accordance with the share-based compensation accounting rules. | ||||
| 2) These costs represent amortization of intangible assets for the three months and twelve months ended June 30, 2012 and 2011. | ||||
| ANAREN, INC. | |||
| Reconciliation of GAAP and Non-GAAP Gross Profit, Operating Income, Net Income and Dilluted Earnings Per Share | |||
| (in thousands except per share data) | |||
| (unaudited) | |||
| The following table details the Non-GAAP, Non-Cash expenses related to equity-based compensation and intangible asset amortization by expense category. | |||
| Three Months Ended June 30, 2012 | |||
| (in thousands) | |||
| (unaudited) | |||
| Equity Based | Amortization | ||
| Compensation | of Intangibles | Total | |
| Cost of sales | $ 209 | $ 39 | $ 248 |
| Marketing | 71 | -- | 71 |
| Research and development | 101 | -- | 101 |
| General and administrative | 603 | 259 | 862 |
| $ 984 | $ 298 | $ 1,282 | |
| Twelve Months Ended June 30, 2012 | |||
| (in thousands) | |||
| (unaudited) | |||
| Equity Based | Amortization | ||
| Compensation | of Intangibles | Total | |
| Cost of sales | $ 814 | $ 156 | $ 970 |
| Marketing | 245 | -- | 245 |
| Research and development | 409 | -- | 409 |
| General and administrative | 2,385 | 1,036 | 3,421 |
| $ 3,853 | $ 1,192 | $ 5,045 | |
| Three Months Ended June 30, 2011 | |||
| (in thousands) | |||
| (unaudited) | |||
| Equity Based | Amortization | ||
| Compensation | of Intangibles | Total | |
| Cost of sales | $ 190 | $ 39 | $ 229 |
| Marketing | 18 | -- | 18 |
| Research and development | 124 | -- | 124 |
| General and administrative | 550 | 259 | 809 |
| $ 882 | $ 298 | $ 1,180 | |
| Twelve Months Ended June 30, 2011 | |||
| (in thousands) | |||
| (unaudited) | |||
| Equity Based | Amortization | ||
| Compensation | of Intangibles | Total | |
| Cost of sales | $ 741 | $ 156 | $ 897 |
| Marketing | 212 | -- | 212 |
| Research and development | 543 | -- | 543 |
| General and administrative | 2,601 | 1,036 | 3,637 |
| $ 4,097 | $ 1,192 | $ 5,289 | |
| ANAREN, INC. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (in thousands) | ||
| (unaudited) | ||
| Three months ended | Twelve months ended | |
| June 30, 2012 | June 30, 2012 | |
| Cash flows from operating activities: | ||
| Net income | $ 2,913 | $ 8,614 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation | 2,053 | 8,265 |
| Amortization | 457 | 1,894 |
| Deferred income taxes | 1,046 | 1,385 |
| Equity-based compensation | 984 | 3,853 |
| Receivables | (662) | 1,410 |
| Inventories | 1,690 | (2,710) |
| Accounts payable | 2,228 | (931) |
| Other assets and liabilities | (285) | (1,171) |
| Net cash provided by operating activities | 10,424 | 20,609 |
| Cash flows from investing activities: | ||
| Capital expenditures | (2,080) | (7,810) |
| Net purchases of marketable debt securities | (320) | (824) |
| Net cash used in investing activities | (2,400) | (8,634) |
| Cash flows from financing activities: | ||
| Payments on long-term debt | -- | (30,000) |
| Proceeds from stock options exercised | 251 | 4,512 |
| Excess tax (expense) benefit | (192) | 494 |
| Purchase of treasury shares | (16,978) | (24,651) |
| Net cash used in financing activities | (16,919) | (49,645) |
| Effect of exchange rates on cash | 8 | 294 |
| Net decrease in cash and cash equivalents | $ (8,887) | $ (37,376) |
| Cash and cash equivalents at beginning of period | $ 29,899 | $ 58,388 |
| Cash and cash equivalents at end of period | $ 21,012 | $ 21,012 |
CONTACT: George Blanton, CFO
315-362-0436
Joseph E. Porcello, VP-Accounting
315-362-0514