Net income for the quarter was $2,751,806, an increase of 24% over net income of $2,216,431 for the third quarter of the prior fiscal year. Diluted earnings per share for the third quarter were $0.12, equal to the $0.12 reported for the third quarter of last fiscal year.

Lawrence A. Sala, Anaren President and CEO said, the rapid downturn in the wireless market has negatively affected our net sales and financial performance for the third quarter. As we reported in our March 5, 2001 press release and subsequent conference call, an increasing number of reductions in demand forecasts and delivery push-outs late in February and continuing through the month of March had a severe negative impact on each of our wireless product lines.

We believe that the current lack of visibility and continued unfavorable wireless market conditions will continue throughout and potentially beyond the current fiscal 2001 fourth quarter. As a result, we have taken stringent measures including workforce reductions to reduce expenses while continuing to invest aggressively in R&D and new business development. We will continue to monitor market demand and take the necessary action to eliminate non-essential spending and maximize operating efficiencies, while maintaining an engineering, manufacturing and management infrastructure that can effectively respond to a resurgence in demand.

Looking forward, we are projecting net sales and earnings per share for the fourth quarter ending June 30th, 2001 to be in the ranges of $15 to $17 million and $0.02 to $0.06 respectively.

On a more positive note, despite current adverse market conditions, Anaren has remained profitable and generated an impressive $7.8 million in cash flow from operations during the third quarter. In addition, we have initiated new product and business development activity supporting customer needs for higher levels of integration in 3G platforms. Anaren is currently working closely with Ericsson, Motorola, Lucent, Nortel, and Powerwave for splitter/combiner networks, back planes, and Adrenalineä applications, as well as standard components. Additionally, there has been much interest in Japan, and Asia in general, to incorporate Anaren Adrenalineä and back plane technology into amplifiers and base stations, respectively. The push out of 3G equipment deployment has allowed us the opportunity to gain additional content as well as support further cost reduction efforts by our major OEM customers.

Mr. Sala also added that, we are committed to being an innovative leader in wireless component and subsystem products and we expect to continue our current dollar rate of spending on R&D as well as partnering with or acquiring companies with synergistic product lines or technologies. We believe that our market penetration and financial strength position us well for long-term growth.

For the fiscal 2001 third quarter, Wireless Group net sales were $16.1 million, up 57% from the third quarter of fiscal 2000, but down 18.7% sequentially from the second quarter of fiscal 2001. In the Space and Defense Group, net sales for the quarter were $5.6 million, up 4.3% from the third quarter of fiscal 2000, and up 4.2% sequentially from the second quarter of fiscal 2001. Space and Defense Backlog at March 31, 2001 was $37.2 million.

For the nine months ended March 31, 2001, net sales were $69,128,296, up 67% from net sales of $41,354,170 for the nine months ended March 31, 2000. Net income was $11,027,397, an increase of 87%, over net income of $5,889,095 for the nine months ended March 31, 2000, while diluted earnings per share were $0.47, compared to diluted earnings per share of $0.33 for the first nine months of the prior fiscal year.