UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to ________________________
Commission file number 0-6620
ANAREN MICROWAVE, INC.
(Exact name of Registrant as specified in its Charter)
New York 16-0928561
(State of incorporation) (I.R.S Employer Identification No.)
6635 Kirkville Road 13057
East Syracuse, New York (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: 315-432-8909
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by Check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
The number of shares of Registrant's Common Stock outstanding on May 13,
1996 was 4,093,042.
1
<PAGE>
ANAREN MICROWAVE, INC.
INDEX
PART I - FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statement (Unaudited)
Consolidated Balance Sheets 3
March 31, 1996 and July 1, 1995
Consolidated Statements of Earnings 4
Three months ended March 31, 1996 and
April 1, 1995
Consolidated Statements of Earnings - 5
Nine months ended March 31, 1996 and
April 1, 1995
Consolidated Statements of Cash Flows - 6
Nine months ended March 31, 1996
and April 1, 1995
Notes to Consolidated Condensed Financial
Statements - March 31, 1996 7
Item 2. Management's Discussion and Analysis 10
of Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
2
<PAGE>
ANAREN MICROWAVE, INC.
AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
March 31, 1996 and July 1, 1995
<TABLE>
<CAPTION>
Unaudited
Assets March 31, 1996 July 1, 1995
-------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,903,428 $ 2,139,795
Receivables, less allowance of $13,000 4,095,337 6,112,540
Refundable Income Taxes 330,000 330,000
Inventories 7,019,568 6,853,755
Prepaid expenses 315,654 235,047
----------- -----------
Total current assets 14,663,987 15,671,137
Property, plant and equipment 28,423,426 28,425,703
Less accumulated depreciation and amortization (21,533,341) (20,809,496)
----------- -----------
Net property, plant and equipment 6,890,085 7,616,207
Other assets, net 52,285 77,762
----------- -----------
$21,606,357 $23,365,106
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt $ 448,987 $ 712,264
Accounts payable 443,122 705,101
Accrued expenses 741,411 408,060
Provision for losses on contracts -- 588,031
----------- -----------
Total current liabilities 1,633,520 2,413,456
Postretirement Benefit Obligation 1,075,834 1,075,834
Long-term debt, less current installments 793,334 1,051,881
----------- -----------
Total liabilities 3,502,688 4,541,171
Stockholders' equity:
Common stock of $.01 par value. Authorized
12,000,000 shares; issued 4,965,316 shares
at March 31, 1996 and 4,850,016 shares
at July 1, 1995 49,653 48,500
Additional paid-in capital 15,457,106 15,057,521
Retained earnings 4,608,987 5,729,991
----------- -----------
20,115,746 20,836,012
Less cost of 892,274 shares in treasury
at March 31, 1996 and July 1, 1995 2,012,077 2,012,077
----------- -----------
Total stockholders' equity 18,103,669 18,823,935
----------- -----------
$21,606,357 $23,365,106
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
ANAREN MICROWAVE, INC.
AND SUBSIDIARIES
Consolidated Condensed Statements of Earnings
<TABLE>
<CAPTION>
Unaudited
For the 3 Mos. Ended:
March 31, 1996 April 1, 1995
(Current Year) (Preceding Year)
-------------- ----------------
<S> <C> <C>
Net Sales $4,101,685 $4,684,707
Costs and expenses
Costs of sales 2,913,676 3,191,757
Marketing, including sales commissions 831,023 822,851
General and administrative 528,676 528,165
Research and development 228,996 264,742
Restructuring 810,000 --
---------- ----------
Total costs and expenses 5,312,371 4,807,515
---------- ----------
Income (loss) from operations (1,210,686) (122,808)
Other income 38,736 40,449
Interest expense (25,845) (41,913)
---------- ----------
Earnings (loss) before income taxes (1,197,795) (124,272)
Total taxes on income -- --
---------- ----------
Net earnings (loss) (1,197,795) (124,272)
Earnings (loss) per share $ (.30) $ (.04)
========== ==========
Dividends per share $ -- $ --
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
ANAREN MICROWAVE, INC.
AND SUBSIDIARIES
Consolidated Condensed Statement of Earnings
<TABLE>
<CAPTION>
Unaudited
For the 9 Mos. Ended:
March 31, 1996 April 1, 1995
(Current Year) (Preceding Year)
-------------- ----------------
<S> <C> <C>
Net Sales $12,992,779 $11,794,489
Costs and expenses
Costs of sales 8,467,920 8,679,486
Provision for losses on contracts -- 1,050,000
Marketing, including sales commissions 2,296,744 2,314,563
General and administrative 1,570,284 1,543,332
Research and development 989,413 555,660
Restructuring 810,000 360,000
----------- -----------
Total costs and expenses 14,134,361 14,503,041
----------- -----------
Income (loss) from operations (1,141,582) (2,708,552)
Other income 120,058 119,463
Interest expense (99,480) (157,445)
----------- -----------
Earnings (loss) before income taxes (1,121,004) (2,746,534)
Total taxes on income -- --
----------- -----------
Net earnings (loss) $(1,121,004) (2,746,534)
Earnings (loss) per share $ (.28) $ (.67)
=========== ===========
Dividends per share $ -- $ --
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
ANAREN MICROWAVE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
Nine Months Ended:
March 31, 1996 and April 1, 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income/(loss) $(1,121,004) $(2,746,534)
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization of
property, plant and equipment 1,226,800 1,298,667
Provision for losses on contracts (588,031) (269,163)
Amortization of intangibles 25,477 80,054
Loss on sale of equipment 135,443 --
Changes in:
Receivables 2,017,203 2,170,274
Refundable income taxes -- 31,746
Inventories (165,813) 497,239
Prepaid expenses (80,607) (858)
Accounts payable (261,979) 39,564
Accrued expenses 333,351 123,086
----------- -----------
Net cash provided by
operating activities 1,520,840 1,224,075
Cash Flows From Investing Activities:
Capital expenditures (636,121) (308,087)
Proceeds from sale of equipment -- --
Other Asset Expenditures -- --
----------- -----------
Net cash provided (used in)
investing activities (636,121) (308,087)
Cash Flows From Financing Activities:
Principal payments on long-term debt (517,193) (480,016)
Net borrowings under revolving line
of credit and overdrafts (4,631) (363,505)
Proceeds from issuance of common stock 400,738 7,425
Purchases of treasury stock -- (1,459,278)
----------- -----------
Net cash provided by (used in)
financing activities (121,086) (2,295,374)
Net increase (decrease) in cash
and cash equivalents 763,633 (1,379,386)
Cash and cash equivalents at beginning of period 2,139,795 3,556,517
----------- -----------
Cash and cash equivalents at end of period $ 2,903,428 $ 2,177,131
=========== ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash Paid During the Period For:
Interest $ 84,486 138,351
=========== ===========
Income taxes $ -- $ 30,013
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
6
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying financial statements and notes should be read in conjunction
with the consolidated financial statements and related notes contained in the
Company's annual report for the year ended July 1, 1995.
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
March 31, 1996, and the results of operations and cash flows for the nine months
ended March 31, 1996 and April 1, 1995.
The income tax rate for interim statement purposes is based on estimates of
income and tax credits for the entire year.
NOTE 1: Inventories
Inventories at March 31, 1996 and July 1, 1995 are summarized as
follows:
March 31 July 1
-------- ------
Raw Materials $2,851,878 $ 2,804,720
Work in process 3,196,138 3,266,194
Finished Goods 971,552 782,841
---------- -----------
$7,019,568 $ 6,853,755
========== ===========
NOTE 2: Property, Plant and Equipment
Property, plant and equipment at March 31, 1996 and July 1,
1995 are shown in the following summary:
March 31 July 1
-------- ------
Land and Land improvements $1,362,050 $ 1,362,050
Buildings and improvements 5,094,722 5,094,722
Machinery and equipment 21,966,654 21,968,931
----------- -----------
$28,423,426 $28,425,703
=========== ===========
7
<PAGE>
NOTE 3: Long-Term Debt
Long-term debt at March 31, 1996 and July 1, 1995 is comprised of the
following:
March 31 July 1
-------- ------
75% of prime rate Industrial
Development Revenue Bonds, due
in semi-annual installments
through May 1, 2000 $1,020,001 $1,133,334
Capitalized lease obligations 222,320 630,811
Revolving Line of Credit -- --
---------- ----------
$1,242,321 $1,764,145
Less Current Installments 448,987 712,264
---------- ----------
$ 793,334 $1,051,881
========== ==========
NOTE 4: Per Share Data
Per share data are based on a weighted average of 4,045,323 common
shares issued and outstanding.
NOTE 5: Income Taxes
Effective June 27, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" on a prospective basis. The cumulative effect of the
initial adoption of Statement 109 was insignificant. Under the asset
and liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax
assets and liabilities are measured using enacted tax rates.
Pursuant to the deferred method under APB Opinion 11, which was
applied in fiscal 1993 and prior years, deferred income taxes are
recognized for income and expense items that are reported in
different years for financial reporting purposes and income tax
purposes using the tax rate applicable in the year of the
calculation. Under the deferred method, deferred taxes are not
adjusted for subsequent changes in tax rates.
8
<PAGE>
Deferring tax assets and liabilities at March 31, 1996 and July 1,
1995 are summarized as follows:
March 31 July 1
-------- ------
Gross deferred tax assets $2,822,008 $2,440,867
Less valuation allowance (2,133,988) (1,752,847)
---------- ----------
Net deferred tax assets 688,020 688,020
Gross deferred tax liabilities (688,020) (688,020)
---------- ----------
Net deferred taxes $ 0 $ 0
The valuation allowance for the deferred tax assets as of March 31, 1996
and July 1, 1995 was $2,133,988 and $1,752,847, respectively. The net
change in the total valuation allowance for the nine months ended March
31, 1996 was an increase of $381,141. In assessing the realizability of
deferred tax assets, management considers whether it is more likely than
not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which
those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies in making this assessment. Based
upon the level of historical taxable income and projections for future
taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not the Company
will realize the benefits of these deductible differences, net of the
existing valuation allowances at March 31, 1996.
NOTE 6: 52/53 Weeks Fiscal Year
Beginning with fiscal year 1996, the Company switched to a twelve
month fiscal year from the previous 52/53 week fiscal year. Fiscal
1996 will end on June 30, 1996.
NOTE 7: Restructuring
Included in the results for both the nine months and three months
ended March 31, 1996 was a third quarter restructuring charge of
$810,000 resulting from a provision for the cost of a management
buy-out and liquidation of the Company's EW Simulator business at its
foreign subsidiary in England. This charge includes provisions for
the write-down of EW simulator assets to realizable value, legal and
professional fees and costs to complete an existing EW Simulator
contract in excess of expected revenue.
9
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Results of operations for the first nine months of fiscal 1996 showed a loss of
over $1.1 million due to a poor third period sales performance and a decision by
the company to close its European repair facility at Anaren Microwave Ltd. in
the United Kingdom and liquidate its Electronic Warfare Simulator manufacturing
operation headquartered there.
Net sales for the first nine months of fiscal 1996 rose 10% compared to fiscal
1995 levels. While sales for the third quarter ended March 31, 1996 fell
$584,000 below sales levels in the third quarter of fiscal 1995. The company
suffered $(1,121,004) loss for the first nine months consisting of a loss from
operations of $(311,000) due to the decline in third quarter sales and an
$810,000 charge against earnings related to the divestiture of its EW Simulator
manufacturing operation in England.
To better serve its emerging commercial markets, the company reorganized, during
the first quarter of fiscal 1996, into three internal business units. These
business units are Electronic Warfare, Radar and Telecommunications and
Wireless. This action was taken to optimize responsiveness to customers needs
and to provide extended fiscal accountability downward throughout the
organization. Each business unit is composed of an independent engineering,
marketing and sales teams whose purpose is to develop, market and deliver
product to its customers.
During the first nine months ended March 31, 1996 sales in the Wireless and
Radar and Telecommunications groups rose $1,130,000 and $2,337,000,
respectively, compared to the first three quarters of the previous year, while
sales in the electronic warfare group fell $2,269,000, resulting in an overall
sales increase of $1,198,000.
Sales of Wireless products, which consist of components for use in building
cellular base station equipment, rose from less than $150,000 in the first nine
months of fiscal 1995 to almost $1,300,000 in the first half of the current
fiscal year. These sales consisted mainly of catalog microwave components and
pilot production runs of custom components for base station equipment
manufacturers.
Presently, the company expects to ship approximately $900,000 to $1,000,000 of
catalog Wireless components during fiscal 1996 based on projected customer and
current prices, which range from $1.00 to $50.00. Additionally, the company has
received significant production orders totaling over $3,000,000 from Nortel and
Motorola, Inc. during the past quarter for custom base station components. These
products begin initial low level production runs in the latter part of the
fourth quarter of fiscal 1996 and are expected to reach full production in the
second quarter of fiscal 1997. Firm backlog for Wireless products was
approximately $4,000,000 at March 31, 1996, of which approximately $750,000 is
expected to ship in the fourth quarter of fiscal 1996 and the remainder in
fiscal 1997.
Sales of Radar and Telecommunication products, which consist of customized
commercial multilayer components such as Butler matrices and beamforming
networks for commercial satellites, increased $2,337,000 to $3,928,000 in the
first nine months of fiscal 1996 compared to approximately $1,591,000 in the
first nine months of fiscal 1995. This increase is attributable to over $980,000
in shipments in the first nine months of fiscal 1996 under the Army Ground Based
Radar program (GBR) and over $2,600,000 in shipments of satellite beamforming
networks under a $6,000,000 contract with Raytheon Company for the Iridium
project.
Shipments for the Iridium program, under which the company is building satellite
antenna beamforming networks for Raytheon Company, rose to more than $1,300,000
in the just completed third quarter and over $2,400,000 for the first nine
months of fiscal 1996 as the company moved into the production phase of this
program. This program represents approximately $3,400,000 in firm backlog at
March 31, 1996 and is expected to ship at the rate of approximately $700,000 to
$1,400,000 per quarter over the next twelve months.
10
<PAGE>
Sales of Electronic Warfare products fell $2,269,000 to $7,791,000 in the first
nine months of fiscal 1996, compared to the same period in fiscal 1995.
Shipments in this business area, which include Digital Frequency Discriminators
(DFD's), Digital RF Memories (DRFM's), ESM Receivers, Military Simulators and
Microwave Integrated Circuit components (MIC's) has been steadily declining over
the past three fiscal years due to the decline in the overall worldwide defense
market. The drop in sales in the first three quarters of fiscal 1996 was spread
over all of the above mentioned product areas, except for MIC's and DRFM's due
to the completion of a number of large DFD programs in the latter part of fiscal
1994 and early fiscal 1995, and a drop off in new orders for ESM receivers in
fiscal 1995. Firm backlog in this product area was $6,400,000 at the beginning
of fiscal 1996 down $4,800,000 from the level at the beginning of fiscal 1995.
During the third quarter ended March 31, 1996, the company received a number of
new orders in the Electronic Warfare business area totalling over $15.7 million.
The most significant of these was from the ASPJ Joint Venture Team of I.T.T.
Avionics and Westinghouse for foreign sales of the Airborne Self Protection
Jammer. These orders should serve to stabilize shipments in this business unit
over the next two years. Firm backlog in this product area at March 31, 1996 was
$16,400,000 of which approximately $1,400,000 is expected to ship in the fourth
quarter of fiscal 1996 and the remainder in fiscal 1997 and 1998.
Through the first nine months of fiscal 1996, the company has booked new orders
totaling approximately $23,900,000 compared to new orders of approximately
$15,100,000 for all of fiscal 1995. Present firm backlog for all business lines
as of March 31, 1996 stands at $24,700,000 a 79% increase over firm backlog of
$13,800,000 at the end of fiscal 1995. Due to lead times and customer delivery
requirements, this increase in backlog will not have a significant impact on
quarterly shipment levels until the second quarter of fiscal 1997. Shipment
levels in the coming fourth quarter of current fiscal 1996 are expected to
remain at the level experienced in the just ended third quarter.
Losses for the first nine months of fiscal 1996 were $(1,121,004) compared to
losses of $(2,746,534) for the same period in fiscal 1995. This current loss
consists of a $(311,000) nine month operating loss caused by the low level of
sales and declining margins in the current third quarter and an $810,000
nonrecurring restructuring charge against earnings in the third quarter required
to recognize the divestiture of the company's EW Simulator manufacturing
operation in the United Kingdom.
During the just completed third quarter, the Company recorded a restructuring
charge against income of $810,000 resulting from a provision for the costs
associated with a management buy-out and divestiture of the company's EW
Simulator business at its foreign subsidiary, Anaren Microwave, Ltd., in the
United Kingdom. This charge, which included provisions for the write-down of EW
Simulator assets to realizable value, legal and professional fees and costs to
complete an existing EW Simulator contract in excess of expected revenue,
reduced earnings for both the three months and nine months ended March 31, 1996.
These actions were necessitated by the severe downsizing of the military budgets
in Europe which resulted in a substantial reduction in new orders for EW
simulators during the past two years and has resulted in ongoing losses from
operations at Anaren Microwave, Ltd. including $(577,000) loss for the first
nine months of fiscal 1996. This action will allow the company to focus its
efforts on its growing domestic operations.
Gross margin on sales for the first nine months of fiscal 1996 was 35% compared
to 26% for the comparable period in fiscal 1995. This improvement over fiscal
1995, although substantial, has deteriorated from the 37% margins experienced
during the first six months of the current fiscal year, due to the severely low
level of manufacturing activity at the company's facility in the United Kingdom
during the third quarter, as well as, a small drop in sales of the company's
U.S. facility. This reduced level of manufacturing activity in the third quarter
of fiscal 1996 caused margins to fall to 29% compared to 37% for the first six
months of the current year.
11
<PAGE>
Additionally, during the current first nine months, approximately $588,000 of
costs incurred in building products for shipment during this period were charged
against the allowance for contract losses established in fiscal 1994 and 1995.
These expenses represent cost overruns incurred on products shipped in the first
three quarters which had previously been identified and provided for when the
allowance was established. The company expects that gross margins will improve
from third quarter levels with the closing of its EW Simulator facility and with
increasing shipment levels expected in the first half of fiscal 1997.
Research and development expense was $989,000 for the first nine months of
fiscal 1996, up 78% from $556,000 for the same period in fiscal 1995. This
increase represents a significant rise in the prototype development efforts for
the company's new Wireless commercial product line. Current development efforts
are being targeted on adapting existing company technologies to produce new
component products which fit a specific customer's requirements in the wireless
cellular base station market. Future research and development expenditures are
expected to fluctuate based on sales levels and identified market opportunities.
Marketing expense fell 1% in the first nine months of fiscal 1996 compared to
the first nine months of the previous fiscal year. This decrease was due mainly
to the reassignment of marketing personnel to other functions with the company
due to the business group realignment undertaken in the first quarter of the
current year. Marketing expense is expected to rise during the remainder of
fiscal 1996 and during fiscal 1997 as the company adds personnel and expenses in
order to meet the demands of the wireless marketplace.
General and Administrative expenses rose 2% in the first three quarters of
fiscal 1996 compared to the same period in fiscal 1995. This increase represents
normal period to period fluctuation in expenditures. Current levels of general
and administrative spending reflect the same level or lower of that experienced
by the company in fiscal 1995. General and administrative expense is expected to
remain at current levels during the remainder of the current fiscal year.
Interest expense fell 37% in the first nine months of fiscal 1996 compared to
the same period in fiscal 1995. The decline in interest expense reflects the
continuing reduction in long-term debt over the past year. During this same
period, other income was flat due to comparable investable cash balances during
the current year compared to the previous fiscal year.
Consolidated income tax expense was $0 in the first nine months of fiscal 1996
versus an expected tax benefit of approximately $(381,141) based on 34% of the
loss before income taxes. The difference between the actual tax benefit
recognized in the financial statements and the expected tax benefit calculated
on the loss incurred was due to a decrease in the deferred tax asset valuation
allowance required by the new tax accounting rules (FAS No. 109) adopted by the
company at the beginning of fiscal 1994. Under the new tax accounting rules the
company must assess the realizability of deferred tax assets, considering
whether it is more likely than not that some portion or all of the deferred tax
assets, considering whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income in
the period in which those temporary differences become deductible. Management of
the company has considered the scheduled reversal of deferred tax liabilities
and projected future taxable income in making the assessment of the
realizability of the deferred tax asset balances at March 31, 1996. Based upon
the level of historical taxable income and projections for future taxable income
over the periods which the deferred tax assets are deductible, the company
believes it is more likely than not that it will realize the benefit of these
deductible differences, net of the existing valuation allowances at March 31,
1996.
Liquidity and Capital Resources
During the first nine months of fiscal 1996, the company continued to maintain a
strong and highly liquid financial position. As of March 31, 1996, the company's
cash position has increased $764,000 compared to the end of fiscal 1995 due to a
$2,017,000 decrease in accounts receivable and $401,000 in additional capital
received by the company due to the exercise of stock options by directors and
employees. During this same period, net working capital fell $228,000 due to an
12
<PAGE>
increase in accrued expenses and the write-down of inventory associated with the
$810,000 restructuring charge recorded in the third quarter.
Long-term liabilities declined $259,000 during the first nine months due to
payments on various capitalized lease obligations relating to production
equipment and facilities and no new long-term debt was taken on as the company's
cash balances were more than adequate to fund both long and short-term cash
needs.
During the remainder of fiscal 1996, the company's major cash requirements will
be for additions to capital equipment and repayment of long-term debt. Capital
equipment additions for the current year have been budgeted at $1,000,000 and,
through the first nine months of fiscal 1996, approximately $636,000 has been
expended all of which was funded by cash generated from operations. Capital
equipment additions for the remainder of fiscal 1996 will continue to be funded
through cash generated by operations as projected operating cash flows are
expected to be more than adequate to meet these financing needs.
During fiscal 1994, the company modified its existing loan agreement with its
principal bank in order to obtain better terms and covenants. The modified
agreement provided for a $3.5 million line of credit which was fully secured by
the assets of the company. This credit facility had no annual fees and interest
on any outstanding loan balance was charged at prime +3/4% per annum. Under the
terms of the modified agreement the company was required to maintain a $0 loan
balance for at least thirty days consecutively each fiscal year and meet certain
covenants relating to earnings, retained earnings and capital equipment
acquisitions. This credit facility expired on March 31, 1995.
Presently, the company is negotiating a new credit facility with its bank. Were
this credit facility not available, the company believes that its cash
requirements for the foreseeable future will be satisfied by currently invested
cash balances, expected cash flow from operations and progress payments from
customers.
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Item 6(a) Exhibits
Exhibit No. 27 Financial Data Schedule for the nine month period ended March 31,
1996.
Item 6(b) Reports on Form 8K
The registrant was not required to file an 8-K during the current fiscal period.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
Anaren Microwave, Inc.
(Registrant)
Date: May 13, 1996 Hugh A. Hair
Chairman & Chief Executive Officer
Date: May 13, 1996 Joseph E. Porcello
Vice President of Finance & Controller
15
<PAGE>
Exhibit Index
Number Description
- - ------ -----------
27 Financial Data Schedule for the nine month period ended
March 31, 1996.
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Anaren Microwave, Inc. filed with form 10Q for the Nine
months ended March 31, 1996 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,903,428
<SECURITIES> 0
<RECEIVABLES> 4,095,337
<ALLOWANCES> 13,000
<INVENTORY> 7,019,568
<CURRENT-ASSETS> 14,663,987
<PP&E> 28,423,426
<DEPRECIATION> (21,533,341)
<TOTAL-ASSETS> 21,606,357
<CURRENT-LIABILITIES> 1,633,520
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0
0
<COMMON> 49,653
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<TOTAL-REVENUES> 12,992,779
<CGS> 8,467,920
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<OTHER-EXPENSES> 810,000
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<INTEREST-EXPENSE> 99,480
<INCOME-PRETAX> (1,121,004)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,121,004)
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<CHANGES> 0
<NET-INCOME> (1,121,004)
<EPS-PRIMARY> (0.28)
<EPS-DILUTED> (0.28)
</TABLE>
