Anaren Inc. (ANEN, Financial) filed Quarterly Report for the period ended 2010-09-30.
Anaren Inc. has a market cap of $245 million; its shares were traded at around $16.87 with a P/E ratio of 17 and P/S ratio of 1.5. Anaren Inc. had an annual average earning growth of 18.4% over the past 5 years.ANEN is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Sept. 30, 2010 Sept. 30, 2009
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Net Sales 100.0% 100.0%
Cost of sales 60.4% 63.6%
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Gross profit 39.6% 36.4%
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Operating expenses:
Marketing 5.4% 5.9%
Research and development 8.6% 9.0%
General and administrative 11.7% 11.1%
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Total operating expenses 25.7% 26.0%
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Operating income 13.9% 10.4%
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Other income (expense):
Other, primarily interest income 0.2% 0.3%
Interest expense (0.4%) (0.4%)
- -
Total other income (expense), net (0.2%) (0.1%)
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Income before income taxes 13.7% 10.3%
Income taxes 4.5% 3.2%
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Net income 9.2% 7.1%
= =
Net sales. Net sales were $44.5 million for the first quarter ended September
30, 2010, up 10.4% compared to $40.3 million for the first quarter of fiscal
2010. Sales of Wireless Group products rose $1.1 million, or 7.7%, and sales of
Space & Defense Group products rose $3.1 million, or 11.9%, in the current first
quarter compared to the first quarter of fiscal 2010.
General and Administrative. General and administrative expenses consist of
employee related expenses, incentive compensation, professional services,
intangible amortization, travel related expenses and other corporate costs.
General and administrative expenses increased 16.8% to $5.2 million (11.7% of
net sales) for the first quarter of fiscal 2011, from $4.5 million (11.1% of net
sales) for the first quarter of fiscal 2010. The increase in general and
administrative expense in the first quarter resulted from a lease charge of $0.5
million in the current first quarter of fiscal 2011 to recognize additional rent
expense related to the Company's vacant facility in Frimley, U.K. Additionally,
G&A expense rose in the current quarter as a result of a $0.3 million increase
in equity based compensation expense related to the Company returning to its
normal pattern of granting restricted stock in August this year compared to
November in fiscal 2010.
Operating Income. Operating income increased 46.4% in the first quarter of
fiscal 2011 to $6.2 million, (13.9% of net sales), compared to $4.2 million
(10.4% of net sales) for the first quarter of fiscal 2010. This increase in
operating income was a result of the $4.2 million increase in sales volume, the
favorable product mix caused by the rise in sales of Wireless standard
components coupled with the decline in sales of Wireless custom assemblies.
Income Taxes. Income taxes for the first quarter of fiscal 2011 were $2.0
million (4.5% of net sales), representing an effective tax rate of 32.8%. This
compares to income tax expense of $1.3 million (3.2% of net sales) for the first
quarter of fiscal 2010, representing an effective tax rate of 31.3%. The
increase in the effective rate for the quarter is a result of the increase in
taxable income and the mix of foreign and domestic taxable income year over
year. The projected effective tax rate for fiscal 2011 is expected to be
approximately 33.0%.
As of September 30, 2010, the Company had $30.0 million in outstanding debt
under its revolving line of credit with Key Bank National Association. The line
consists of a $50,000,000 revolving credit note for which principal amounts are
due on August 1, 2011, and on each anniversary date thereafter through July 31,
2013. Borrowings under this Note bear interest at LIBOR, plus 100 to 425 basis
points or at the Lender'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, 2010, the
weighted average interest rate on the outstanding borrowings was 1.56%. 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, 2010 rates, or 0.13%, would have reduced net income
and cash flow by approximately $10,000, or $.0007 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 significant effect on its financial condition or
results of operations. Over time, however, increases in market interest rates
will increase the Company's interest expense.
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Anaren Inc. has a market cap of $245 million; its shares were traded at around $16.87 with a P/E ratio of 17 and P/S ratio of 1.5. Anaren Inc. had an annual average earning growth of 18.4% over the past 5 years.ANEN is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Three Months EndedSept. 30, 2010 Sept. 30, 2009
- -
Net Sales 100.0% 100.0%
Cost of sales 60.4% 63.6%
- -
Gross profit 39.6% 36.4%
- -
Operating expenses:
Marketing 5.4% 5.9%
Research and development 8.6% 9.0%
General and administrative 11.7% 11.1%
- -
Total operating expenses 25.7% 26.0%
- -
Operating income 13.9% 10.4%
- -
Other income (expense):
Other, primarily interest income 0.2% 0.3%
Interest expense (0.4%) (0.4%)
- -
Total other income (expense), net (0.2%) (0.1%)
- -
Income before income taxes 13.7% 10.3%
Income taxes 4.5% 3.2%
- -
Net income 9.2% 7.1%
= =
Net sales. Net sales were $44.5 million for the first quarter ended September
30, 2010, up 10.4% compared to $40.3 million for the first quarter of fiscal
2010. Sales of Wireless Group products rose $1.1 million, or 7.7%, and sales of
Space & Defense Group products rose $3.1 million, or 11.9%, in the current first
quarter compared to the first quarter of fiscal 2010.
General and Administrative. General and administrative expenses consist of
employee related expenses, incentive compensation, professional services,
intangible amortization, travel related expenses and other corporate costs.
General and administrative expenses increased 16.8% to $5.2 million (11.7% of
net sales) for the first quarter of fiscal 2011, from $4.5 million (11.1% of net
sales) for the first quarter of fiscal 2010. The increase in general and
administrative expense in the first quarter resulted from a lease charge of $0.5
million in the current first quarter of fiscal 2011 to recognize additional rent
expense related to the Company's vacant facility in Frimley, U.K. Additionally,
G&A expense rose in the current quarter as a result of a $0.3 million increase
in equity based compensation expense related to the Company returning to its
normal pattern of granting restricted stock in August this year compared to
November in fiscal 2010.
Operating Income. Operating income increased 46.4% in the first quarter of
fiscal 2011 to $6.2 million, (13.9% of net sales), compared to $4.2 million
(10.4% of net sales) for the first quarter of fiscal 2010. This increase in
operating income was a result of the $4.2 million increase in sales volume, the
favorable product mix caused by the rise in sales of Wireless standard
components coupled with the decline in sales of Wireless custom assemblies.
Income Taxes. Income taxes for the first quarter of fiscal 2011 were $2.0
million (4.5% of net sales), representing an effective tax rate of 32.8%. This
compares to income tax expense of $1.3 million (3.2% of net sales) for the first
quarter of fiscal 2010, representing an effective tax rate of 31.3%. The
increase in the effective rate for the quarter is a result of the increase in
taxable income and the mix of foreign and domestic taxable income year over
year. The projected effective tax rate for fiscal 2011 is expected to be
approximately 33.0%.
As of September 30, 2010, the Company had $30.0 million in outstanding debt
under its revolving line of credit with Key Bank National Association. The line
consists of a $50,000,000 revolving credit note for which principal amounts are
due on August 1, 2011, and on each anniversary date thereafter through July 31,
2013. Borrowings under this Note bear interest at LIBOR, plus 100 to 425 basis
points or at the Lender'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, 2010, the
weighted average interest rate on the outstanding borrowings was 1.56%. 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, 2010 rates, or 0.13%, would have reduced net income
and cash flow by approximately $10,000, or $.0007 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 significant effect on its financial condition or
results of operations. Over time, however, increases in market interest rates
will increase the Company's interest expense.
Read the The complete Report
