SYRACUSE, N.Y., Jan. 29, 2009 (GLOBE NEWSWIRE) -- Anaren, Inc. (Nasdaq:ANEN) today reported net sales for the fiscal 2009 second quarter ended December 31, 2008 of $41.4 million, up 28.0% from $32.4 million for the second quarter of last year. Net sales for the second quarter of fiscal 2009 included $10.0 million of sales from M.S. Kennedy Corp and Unicircuit, Inc.; acquisitions which closed in the Company's first quarter and are reported within the Space & Defense Group.
GAAP (U.S. generally accepted accounting principles) net income for the second quarter of fiscal 2009 was $1.6 million, or $0.11 per diluted share, compared to $2.6 million, or $0.17 per diluted share for the second quarter of last year and $1.3 million, or $0.09 per diluted share for the first quarter of fiscal 2009.
Non-GAAP diluted earnings per share, excluding non-cash equity based compensation, acquisition related inventory step-up and intangible amortization, was $0.23 for the second quarter of fiscal 2009 compared to non-GAAP earnings per share of $0.22 for the second quarter of fiscal 2008 and $0.21 for the first quarter of fiscal 2009.
The effective tax rate for the second quarter of fiscal 2009 was 18.2%, compared to 28.4% for the second quarter of fiscal 2008. The tax rate decline resulted from the reinstatement of the federal research and experimentation credit in the second quarter of fiscal 2009 retroactive to January 1, 2008, resulting in a one-time federal tax benefit of $265,000 in the current second quarter. The projected effective tax rate for all of fiscal 2009 is now anticipated to be approximately 31.0%.
GAAP operating income for the second quarter of fiscal 2009 was $2.3 million, or 5.4% of net sales, down from $3.0 million, or 9.2% of net sales for the second quarter of last year. Non-GAAP operating income for the second quarter of fiscal 2009, excluding non-cash equity based compensation and acquisition related inventory step-up and intangible amortization was $4.8 million, or 11.5% of net sales compared to $3.9 million, or 12.1% of net sales for the second quarter of fiscal 2008.
Lawrence A. Sala, Anaren's President and CEO said, "Despite a less favorable overall sales mix, net sales and earnings for the quarter were in line with our expectations. Space & Defense Group sales growth continued as the integration of the M.S. Kennedy and Unicircuit acquisitions is moving forward according to our plans. Order demand for Space & Defense products remained robust in the second quarter and was driven by increased demand for M.S. Kennedy products. Wireless Group net sales declined in the second quarter due to softening demand in the later part of the second quarter."
Net sales for the first six months ended December 31, 2008 were $79.6 million, up 23.4% from net sales of $64.5 million for the first six months of last year. Sales for the first half of fiscal 2009 included $14.8 million of sales from M.S. Kennedy Corp and Unicircuit, Inc. GAAP net income for the first half of fiscal 2009 was $2.9 million, or $0.21 per diluted share, compared to $5.3 million, or $0.34 per diluted share for the first half of last year.
Non-GAAP diluted earnings per share, excluding non-cash equity based compensation, acquisition related inventory step-up and intangible amortization, was $0.44 for the first six months of fiscal 2009 compared to non-GAAP diluted earnings per share of $0.42 for the first six months of fiscal 2008.
During the second quarter, the Company generated $2.5 million in operating cash flow and did not repurchase any shares of its common stock. Expenditures for capital additions in the second quarter were $1.8 million. Cash, cash equivalents and marketable debt securities at December 31, 2008 were $45.4 million.
Wireless Group
Wireless Group net sales for the quarter were $16.7 million, down 6.6% from the second quarter of fiscal 2008. A general decline in overall demand during the second half of the second quarter negatively impacted net sales for the Group. During the quarter, the Group successfully captured additional standard component market share at several OEM customers and continued to make progress toward production on several new ferrite components and a custom assembly opportunity.
Sales of consumer component products were $1.4 million for the quarter, up 88% from the second quarter of last year and unchanged compared to the first quarter of fiscal 2009, driven by continued demand for satellite television, laptop computer and cellular telephone applications. The Group continued to capture new consumer component design wins for WLAN and other consumer wireless applications during the quarter.
Customers that generated greater than 10% of Wireless Group net sales for the quarter were Nokia, E G Components and Huawei. Shipments to E G Components were predominately for Ericsson.
Space & Defense Group
Space & Defense Group net sales for the quarter were $24.8 million, up 71% from the second quarter of fiscal 2008 and included $10.0 million of net sales from M.S. Kennedy Corp and Unicircuit, Inc. New orders for the quarter totaled $33.3 million and included contracts for components and assemblies for use in military satellite, imaging and targeting, radar and counter IED applications. The Group continues to pursue numerous new and follow-on opportunities. Space & Defense Group order backlog at December 31, 2008 was $86.7 million and included approximately $26.8 million from M.S. Kennedy and Unicircuit.
Customers that generated greater than 10% of Space & Defense Group net sales for the quarter were Lockheed Martin 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 acquisition related inventory step-up and intangible amortization.
The Company believes these non-GAAP financial measures provide useful information to both management and investors to help understand and compare business trends among reporting periods on a consistent basis. Additionally, these non-GAAP financial measurements are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States.
Outlook
For the third quarter of fiscal 2009, we anticipate an increase in sales for the Space & Defense Group and relatively unchanged sales for the Wireless Group. As a result, we expect net sales to be in the range of $41 to $46 million. We expect GAAP net earnings per diluted share to be in the range of $0.17 - $0.20 using an anticipated tax rate of approximately 31% and accounting for approximately $0.06 - $0.07 per share in charges related to expected equity based compensation expense and amortization of acquired intangibles related to the two recent acquisitions. Non-GAAP net earnings per diluted share are expected to be in the range of $0.23 - $0.27 for the third quarter.
Forward-Looking Statements
The statements contained in this news release which are not historical information are "forward-looking statements". These, and other forward-looking statements, are subject to business and economic risks and uncertainties that could cause actual results to differ materially from those discussed. The risks and uncertainties described below are not the only risks and uncertainties facing our Company. Additional risks and uncertainties not presently known to us or that are currently deemed immaterial may also impair our business operations. If any of the following risks actually occur, our business could be adversely affected, and the trading price of our common stock could decline, and you may lose all or part of your investment.
These known risks and uncertainties include, but are not limited to: the Company's ability to successfully integrate the MSK and Unicircuit acquisitions, including but not limited to, the timely installation of appropriate financial controls; unknown liabilities not identified during due diligence; not realizing the expected benefits of the acquisitions, including the realization of the accretive effects from the acquisitions; the Company's increased indebtedness after the acquisitions, and the unanticipated loss of key management employees.
