Anaren Inc. Reports Operating Results (10-Q)

Anaren Inc. (ANEN, Financial) filed Quarterly Report for the period ended 2010-03-31.

Anaren Inc. has a market cap of $218.4 million; its shares were traded at around $14.68 with a P/E ratio of 16.9 and P/S ratio of 1.3. ANEN is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Cost of sales 60.1% 65.3% 62.9% 68.4%

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Gross profit 39.9% 34.7% 37.1% 31.6%

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Operating expenses:

Marketing 5.7% 5.4% 5.7% 5.3%

Research and development 9.5% 7.8% 9.0% 7.7%

General and administrative 12.1% 10.6% 11.5% 11.4%

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Total operating expenses 27.3% 23.8% 26.2% 24.4%

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Interest expense (0.3)% (0.7)% (0.4)% (1.0)%

Other, primarily interest income 0.2% 0.6% 0.2% 0.8%

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Total other income (expense), net (0.1)% (0.1)% (0.2)% (0.2)%

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Income before income taxes 12.5% 10.8% 10.7% 7.0%

Income taxes 1.7% 2.8% 2.7% 1.8%

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Net income 10.8% 8.0% 8.0% 5.2%

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Income Taxes. Income taxes for the third quarter of fiscal 2010 were $0.7

million (1.7% of net sales), representing an effective tax rate of 13.4%. This

compares to income tax expense of $1.2 million (2.8% of net sales) for the third

quarter of fiscal 2009, representing an effective tax rate of 25.7%. The

effective tax rate for the third quarter of fiscal 2010 was a result of the

inclusion of the effects of the settlement of the IRS examination of the

Company's fiscal 2007 and 2008 returns, as well as, adjustments to the balances

for uncertain tax positions related to the results of the examination amounting

to a reduction in tax expense of approximately $1.0 million, or $0.07 per

diluted share. The projected effective tax rate for fiscal 2010 absent IRS

settlements and reserve adjustments, is expected to be approximately 32.0%.



Income Taxes. Income taxes for the first nine months of fiscal 2010 were $3.3

million (2.7% of net sales), representing an effective tax rate of 25.1%. This

compares to income tax expense of $2.3 million (1.8% of net sales) for the first

nine months of fiscal 2009, representing an effective tax rate of 26.2%. The

effective tax rate for the first nine months of fiscal 2010 was a result of the

inclusion of the effects of the settlement of the IRS examination of the

Company's fiscal 2007 and 2008 returns, as well as, adjustments to reserves for

uncertain tax positions related to the results of the examination amounting to a

reduction in tax expense of approximately $1.0 million, or $0.07 per diluted

share in the current third quarter. The projected effective tax rate for fiscal

2010 absent adjustments described above, is expected to be approximately 32.0%.



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