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Anaren keeping an eye on federal-budget situation [Business Journal, The (Central New York)]
(Business Journal, The (Central New York) Via Acquire Media NewsEdge) DeWITT - Like all companies that work with the Department of Defense, Anaren, Inc. (NASDAQ: ANEN) is monitoring the federal-budget situation closely.
The DeWitt-based company develops and manufactures components and subsystems for applications in sectors including satellite communications, defense, and wireless communications.
Anaren employs about 1,200 people at facilities in the Syracuse area, New Hampshire, Colorado, and China.
Finalizing federal contracts has been challenging lately as the government had been operating under a series of stopgap funding measures. That meant agencies didn't know what they'd ultimately be able to spend for the year, Anaren Chairman, President, and CEO Lawrence Sala said during a conference call April 27 discussing the firm's latest quarterly results.
Although Congress and the president agreed on a spending deal for the current fiscal year in April, future battles over next year's budget and overall federal expenditures loom.
Sala said he wasn't aware of any Anaren projects in danger of cancellation at the moment, but that the company was still watching things closely.
"Obviously, our concern is high," he said.
Profit at Anaren fell 25 percent in its most recent quarter to $3.4 million, or 23 cents a share.
The company's fiscal third quarter ended March 31. Spending on research and development and an unfavorable mix of business in the firm's space and defense group contributed to the dip in income:
Anaren also implemented some price reductions on some of its wireless components during the quarter, which also affected its results.
Net sales in the firm's third quarter rose 4.3 percent to $44 million. Sales in its wireless business increased 6.7 percent from the third quarter last year to $15.2 million and space and defense sales rose 3.1 percent to $28.8 million.
Anaren has been seeing strong demand lately for components it produces that are used in wireless infrastructure and consumer applications. The company's customers are continuing to forecast strong demand, Sala said.
He also said the company is seeing a rapid shift to fourth-generation (4G) technology in wireless base stations. That helps Anaren as it generates more revenue from 4G base stations than earlier versions.
The shift to 4G is taking place faster than the company had expected and is coming as overall demand in the wireless sector is in creasing as well, Sala added. The company expects improved profitability in its wireless business in the coming months, he said.
On the space and defense side, the company finalized a $24 million contract during the quarter with French company Thales-Alenia-Space. The deal is for development and production of assemblies for a new communications satellite.
In April, Anaren was outbid in its attempt to acquire AML Communications, Inc. of Camarillo, Calif. for $2.15 per share. Another company, Microsemi Corp. (NASDAQ: MSCC) of Irvine, Calif. offered $2.50 and AML accepted.
Anaren, which had announced plans to acquire AML in February, received $800,000 in termination fees and expenses from AML as a result of the deal's cancellation.
AML (OTC BB: AMLJ.OB) produces microwave amplifiers and assemblies for applications in defense electronics. Anaren leaders had said the deal would bolster the company's space and defense business.
(c) 2011 Central New York Business Journal
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