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» Anaren's CEO Discusses F4Q 2011 Results - Earnings Call Transcript
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» Anaren CEO Discusses F1Q2011 Results – Earnings Call Transcript
Net sales for the first quarter were $38.7 million down 13% from the first quarter of last year. The decline in counter-IED related business and delays in approvals per shipments within the Space & Defense group more than offset an increase in sales of our wireless products.Non-GAAP operating income for the quarter was $4.8 million or 12.5% of net sales down 37% from the first quarter of last year. Margins were negatively impacted by the overall decline in net sales as well as unfavorable mix of business within our Space & Defense group. Wireless group net sales for the quarter were $18.2 million up 17% from the first quarter of last year despite the very strong demand for the first half of calendar 2011, demand for our wireless infrastructure products declined significantly in the second half of the first quarter and its projected to remain at these lower levels throughout the second quarter. Despite this current decline in demand, our customers are forecasting strong demand for calendar 2012. Based on the results of our recent purchasing negotiations for calendar 2012 production, we believe that we continue to retain high market share for our wireless infrastructure products and that our current dollar content in 4G applications is significantly higher than our content and prior generations of base station equipment. During the quarter several new Anaren integrated radio or air modules were introduced and the number of air product design-ins continues to increase. In the second quarter, we are launching a significant joint marketing initiative at the AIR product line in partnership with Texas Instruments that we believe will greatly increase customer awareness at the AIR product line as well as the number of potential new design-ins. Our new product and technology development efforts remain focused on expanding our wireless product portfolio. Customers that exceeded 10% of wireless group net sales for the quarter were E.G. Components, Huawei, Nokia and Richardson.
For the Space & Defense group, net sales for the quarter were $20.5 million down 29% from the first quarter of last year. The decline in net sales is driven largely by the decline in counter-IED and LTCC related business as well as delays in approval for shipments on to subsystem contracts. The decline in sales and unfavorable sales mix and operating performance issues negatively impacted the group’s profitability for the quarter.We anticipate improved sales and margins for the group in the second half of fiscal 2012 due to the strong order backlog of more favorable sales mix and improved operating performance. Product and technology development initiatives for the group remained focused on expanding the RAD-hard hybrid electronic module product lines for space applications and advancing our advancing our RF manifold and integrated microwave technology for defense applications. New orders for the quarter were $25 million and were driven largely by radar and satellite applications. In addition, the group renewed its five-year supply agreement for Passive Ranging Subsystem or our PRSS which is deployed on numerous air-borne applications. So, the defense market it has been slow, the opportunity environment for space applications remains robust. Space & Defense order backlog at September 30th, 2011 was $95 million. Customers has generated greater than 10% of Space & Defense net sales for the quarter were Lockheed Martin, Northrop and Raytheon. George? George Blanton The highlights for the first quarter income statement and balance sheet as of September 30, 2011 are presented on a non-GAAP basis. These non-GAAP measures are each adjusted from GAAP results and to exclude certain non-cash items including equity based compensation and intangible amortization. The presentation of this additional information should not be considered in isolation or the substitute for results prepared in accordance with accounting principles generally accepted in the United States. Please refer to our Q1 earnings release for a reconciliation of GAAP and non-GAAP measures.
Non-GAAP gross margin was 14.8 million or 38.1% for the current quarter compared to 17.8 million or 40.1% for the first quarter of last year. Gross profit as a percent of sales decreased by 200 basis points compared to the first quarter of last year due to significantly lower sales volume and less favorable Space & Defense sales mix including lower margin startup program and lower yields at our circuit board facility.Read the rest of this transcript for free on seekingalpha.com