UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                (Amendment No. 1)

(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, 2007

__    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, 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


--------------------------------------------------------------------------------
              (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 __

Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).

Check One: Large accelerated filer __  Accelerated filer X
Non-accelerated filer __

      Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes __ No X

      The number of shares of Registrant's Common Stock outstanding on
May 4, 2007 was 17,152,600.



<PAGE>


Explanatory Note

The purpose of this amended Quarterly Report on Form 10-Q/A of Anaren, Inc. (the
"Company") is to restate the Company's consolidated condensed financial
statements for the three and nine months ended March 31, 2007 ("the financial
statements") and to modify the related disclosures. See note 1 to the
consolidated condensed financial statements included in this amended Quarterly
Report.

The restatement arose from the Company's determination that accounting errors
had occurred at its China subsidiary. The accounting errors were caused by a
material weakness in the Company's risk assessment and oversight controls as
disclosed in the June 30, 2007 Annual Report Form 10-K. The unapproved and
undetected changes in procedures over accounting for the reconciliation of
inventory and the recording of vendor payables for materials received, but not
yet invoiced at the China facility resulted in a misstatement of pre-tax income
and inventory. Additionally, the Company has corrected certain errors in
accounting for income taxes, equity based compensation and pension expense; and,
as part of the Company's adoption of the Securities and Exchange Commissions
Staff Accounting Bulletin No. 108, the Company has corrected errors in their
warranty expense and allowance for sales returns. As a result of these errors,
the Company has determined that its pre-tax income for the three and nine months
ended March 31, 2007 was overstated by $676,000 and $914,000, respectively.

This amended Quarterly Report does not update or discuss any other Company
developments after the date of the original filing. All information contained in
this amended Quarterly Report and the original Quarterly Report is subject to
updating and supplementing as provided in the periodic reports that the Company
has filed and will file after the original filing date with the Securities and
Exchange Commission.



                                       2
<PAGE>


                                  ANAREN, INC.

                                      INDEX

PART I - FINANCIAL INFORMATION                                          Page No.
------------------------------                                          --------

    Item 1.  Financial Statements

             Consolidated Condensed Balance Sheets as of                      4
             March 31, 2007 (As restated) and
             June 30, 2006 (unaudited)

             Consolidated Condensed Statements of Earnings                    5
             for the Three Months Ended March 31,
             2007 (As restated) and 2006 (unaudited)

             Consolidated Condensed Statements of Earnings                    6
             for the Nine months Ended March 31,
             2007 (As restated) and 2006 (unaudited)

             Consolidated Condensed Statements of Cash Flows                  7
             for the Nine months Ended March 31,
             2007 (As restated) and 2006 (unaudited)

             Notes to Consolidated Condensed Financial                        8
             Statements (unaudited)

    Item 2.  Management's Discussion and Analysis of                         18
             Financial Condition and Results of Operations

    Item 3.  Quantitative and Qualitative Disclosures
             About Market Risk                                               30

    Item 4.  Controls & Procedures                                           31

PART II - OTHER INFORMATION
---------------------------

    Item 1A. Risk Factors                                                    33

    Item 2.  Unregistered Sales of Equity Securities and
             Use of Proceeds                                                 33

    Item 6.  Exhibits                                                        33


   Officer Certifications                                                 35-38




                                       3
<PAGE>


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                                  ANAREN, INC.
                      Consolidated Condensed Balance Sheets
                        March 31, 2007 and June 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                Assets                                                March 31, 2007        June 30, 2006
                ------                                                --------------        -------------
                                                                      (As restated)
<S>                                                                   <C>                   <C>
Current assets:
    Cash and cash equivalents                                         $  14,231,398         $  15,733,214
    Securities available for sale (note 5)                               20,299,973            35,635,000
    Securities held to maturity (note 5)                                 22,305,020            31,124,733
    Receivables, less allowances of $236,140
      at March 31, 2007 and $84,854 at June 30, 2006                     18,710,794            16,362,011
    Inventories (note 6)                                                 25,893,764            21,827,271
    Other receivables                                                     1,384,795             1,336,009
    Prepaid expenses                                                        897,412               584,321
    Deferred income taxes                                                 1,015,287               716,287
    Other current assets                                                  1,143,763               851,863
                                                                      -------------         -------------
                Total current assets                                    105,882,206           124,170,709

Securities held to maturity (note 5)                                     22,522,594             6,131,425
Property, plant and equipment, net (note 7)                              33,042,541            27,635,161
Deferred income taxes                                                        76,902                32,902
Goodwill                                                                 30,715,861            30,715,861
Other intangible assets, net of accumulated amortization
    of $2,913,248 at March 31, 2007
    and $2,684,595 at June 30, 2006 (note 3)                                111,718               340,371
                                                                      -------------         -------------
                Total assets                                          $ 192,351,822         $ 189,026,429
                                                                      =============         =============

      Liabilities and Stockholders' Equity
      ------------------------------------

Current liabilities:
    Accounts payable                                                  $   7,005,908         $   6,798,793
    Accrued expenses (note 8)                                             2,841,617             3,254,816
    Income taxes payable                                                    689,492               703,488
    Customer advance payments                                               483,722               483,722
    Other current liabilities (note 9)                                    1,175,825               769,523
                                                                      -------------         -------------
                Total current liabilities                                12,196,564            12,010,342
Deferred income taxes                                                     2,199,955             1,811,955
Pension and postretirement benefit obligation                             1,481,128             2,356,789
Other liabilities (note 9)                                                  836,841               728,943
                                                                      -------------         -------------
                Total liabilities                                        16,714,488            16,908,029
                                                                      =============         =============

Stockholders' equity:
    Common stock of $.01 par value.  Authorized
       200,000,000 shares; issued 27,112,517 shares
       at March 31, 2007 and 26,857,554 at June 30, 2006                    271,125               268,575
    Additional paid-in capital                                          187,048,261           181,780,660
    Retained earnings                                                    80,989,550            70,493,853
    Accumulated other comprehensive loss                                   (550,014)             (441,397)
                                                                      -------------         -------------
                                                                        267,758,922           252,101,691
    Less cost of 9,966,417 treasury shares
      at March 31, 2007 and 9,249,643 at June 30, 2006                   92,121,588            79,983,291
                                                                      -------------         -------------
                Total stockholders' equity                              175,637,334           172,118,400
                                                                      -------------         -------------
                Total liabilities and stockholders' equity            $ 192,351,822         $ 189,026,429
                                                                      =============         =============
</TABLE>

See accompanying notes to consolidated condensed financial statements.



                                       4
<PAGE>


                                  ANAREN, INC.
                  Consolidated Condensed Statements of Earnings
                               Three Months Ended
                             March 31, 2007 and 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                March 31, 2007        March 31, 2006
                                                                --------------        --------------
                                                                (As restated)
<S>                                                                <C>                   <C>
Net sales                                                        $ 32,600,635          $ 26,701,083

Cost of sales                                                      21,242,154            16,451,676
                                                                 ------------          ------------
        Gross profit                                               11,358,481            10,249,407
                                                                 ------------          ------------
Operating expenses:
        Marketing                                                   1,829,982             1,806,587
        Research and development                                    2,345,034             2,187,966
        General and administrative                                  3,155,894             2,756,279
                                                                 ------------          ------------
              Total operating expenses                              7,330,910             6,750,832
                                                                 ------------          ------------

Operating income                                                    4,027,571             3,498,575

Other income, primarily interest                                      874,297               620,172
Interest expense                                                       (6,143)               (6,143)
                                                                 ------------          ------------
              Total other income                                      868,154          $    614,029
                                                                 ------------          ------------

Income before income taxes                                          4,895,725             4,112,604

Income tax expense                                                  1,385,000               942,000
                                                                 ------------          ------------

Net income from continuing operations                            $  3,510,725          $  3,170,604
                                                                 ------------          ------------

Discontinued operations:
  Income from discontinued operations
    of Anaren Europe (note 14)                                             --                81,713
                                                                 ------------          ------------

Net income                                                       $  3,510,725          $  3,252,317
                                                                 ============          ============
Basic earnings per share:
  Income from continuing operations                              $       0.20          $       0.19
  Income from discontinued operations                                     -                     -
                                                                 ------------          ------------
    Net income                                                   $       0.20          $       0.19
                                                                 ============          ============
Diluted earnings per share:
  Income from continuing operations                              $       0.20          $       0.19
  Income from discontinued operations                                     -                     -
                                                                 ------------          ------------
    Net income                                                   $       0.20          $       0.19
                                                                 ============          ============
Shares used in computing net earnings per share:
        Basic                                                      17,397,647            16,946,993
                                                                 ============          ============
        Diluted                                                    17,699,597            17,547,333
                                                                 ============          ============
</TABLE>

See accompanying notes to consolidated condensed financial statements.



                                       5
<PAGE>


                                  ANAREN, INC.
                  Consolidated Condensed Statements of Earnings
                                Nine months Ended
                             March 31, 2007 and 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                March 31, 2007        March 31, 2006
                                                                --------------        --------------
                                                                (As restated)
<S>                                                              <C>                   <C>

Net sales                                                        $ 93,126,530          $ 76,334,454

Cost of sales                                                      60,030,937            48,684,975
                                                                 ------------          ------------
        Gross profit                                               33,095,593            27,649,479
                                                                 ------------          ------------
Operating expenses:
        Marketing                                                   5,571,546             5,290,326
        Research and development                                    6,676,042             6,491,045
        General and administrative                                  8,684,862             7,771,713
                                                                 ------------          ------------
              Total operating expenses                             20,932,450            19,553,084
                                                                 ------------          ------------
Operating income                                                   12,163,143             8,096,395

Other income, primarily interest                                    2,687,983             1,744,738
Interest expense                                                      (18,429)              (18,429)
                                                                 ------------          ------------
              Total other income                                    2,669,554          $  1,726,309
                                                                 ------------          ------------

Income before income taxes                                         14,832,697             9,822,704

Income tax expense                                                  3,800,000             2,416,000
                                                                 ------------          ------------
Net income from continuing operations                              11,032,697             7,406,704

Discontinued operations:
  Income from discontinued operations
    of Anaren Europe (note 14)                                             --                81,713
                                                                 ------------          ------------

Net income                                                       $ 11,032,697          $  7,488,417
                                                                 ============          ============
Basic earnings per share:
  Income from continuing operations                              $       0.63          $       0.43
  Income from discontinued operations                                      --                   .01
                                                                 ------------          ------------
    Net income                                                   $       0.63          $       0.44
                                                                 ============          ============
Diluted earnings per share:
  Income from continuing operations                              $       0.62          $       0.42
  Income from discontinued operations                                      --                    --
                                                                 ------------          ------------
    Net income                                                   $       0.62          $       0.42
                                                                 ============          ============

Shares used in computing net earnings per share:
        Basic                                                      17,504,946            17,124,494
                                                                 ============          ============
        Diluted                                                    17,921,998            17,623,362
                                                                 ============          ============
</TABLE>

See accompanying notes to consolidated condensed financial statements.



                                       6
<PAGE>


                                  ANAREN, INC.
                 Consolidated Condensed Statements of Cash Flows
                                Nine months Ended
                             March 31, 2007 and 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
Cash flows from operating activities:                                        March 31, 2007     March 31, 2006
                                                                             --------------     --------------
                                                                             (As restated)
<S>                                                                          <C>                 <C>
     Net income                                                              $  11,032,697       $   7,488,417
     Net income from discontinued operations                                            --              81,713
                                                                             -------------       -------------
     Net income from operations                                                 11,032,697           7,406,704
     Adjustments to reconcile net income
       to net cash provided by operating activities:
         Depreciation                                                            3,883,490           3,593,626
         Amortization of intangibles                                               228,653             249,653
         Gain on sale of land                                                      (77,508)                 --
         Loss on sale of equipment                                                      --              15,875
         Deferred income taxes                                                     347,000             247,405
         Stock based compensation                                                2,510,615           2,590,491
         Provision for doubtful accounts                                           (12,714)            (12,613)
         Changes in operating assets and liabilities:
           Receivables                                                          (2,724,070)           (818,955)
           Inventories                                                          (4,066,493)         (2,439,772)
           Other receivables                                                       (48,785)            186,506
           Prepaids and other current assets                                      (604,990)           (186,108)
           Accounts payable                                                        207,115            (876,135)
           Accrued expenses                                                       (413,199)            143,607
           Income taxes payable                                                    (13,996)            (35,292)
           Customer advance payments                                                    --             483,722
           Other liabilities                                                       167,422             700,990
           Pension and postretirement benefit obligation                          (979,883)           (284,533)
                                                                             -------------       -------------
             Net cash provided by operating activities
               from continuing operations                                        9,435,354          10,965,171
     Net cash used in operating activities of discontinued
       operations                                                                       --             (97,241)
                                                                             -------------       -------------
     Net cash provided by operating activities                                   9,435,354          10,867,930
                                                                             -------------       -------------
Cash flows from investing activities:
     Capital expenditures                                                       (9,347,870)         (4,316,623)
     Proceeds from sales of land                                                   134,508                  --
     Proceeds from sale of equity securities                                            --               1,000
     Maturities of marketable debt and auction rate securities                 104,176,555          77,172,784
     Purchase of marketable debt and auction rate securities                   (96,412,984)        (74,269,000)
                                                                             -------------       -------------
             Net cash used in investing activities                              (1,449,791)         (1,411,839)
                                                                             -------------       -------------
Cash flows from financing activities:
     Stock options exercised                                                     2,128,732           1,783,491
     Tax benefit from exercise of stock options                                    630,803             378,318
     Purchase of treasury stock                                                (12,138,297)         (9,803,481)
                                                                             -------------       -------------
             Net cash used in financing activities                              (9,378,762)         (7,641,672)
                                                                             -------------       -------------

     Effect of exchange rates                                                     (108,617)             47,035
                                                                             -------------       -------------
             Net increase (decrease) in cash and cash equivalents               (1,501,816)          1,861,454
Cash and cash equivalents at beginning of period                                15,733,214           5,900,841
                                                                             -------------       -------------
Cash and cash equivalents at end of period                                   $  14,231,398       $   7,762,295
                                                                             =============       =============
Supplemental Disclosures of Cash Flow Information:
     Cash Paid During the Period For:
       Interest                                                              $      18,429       $      12,286
                                                                             =============       =============
       Income taxes, net of refunds                                          $   2,837,396       $   1,802,569
                                                                             =============       =============
</TABLE>

See accompanying notes to consolidated condensed financial statements.



                                       7
<PAGE>


NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

The consolidated condensed financial statements are unaudited and reflect all
adjustments (consisting of normal recurring adjustments and those adjustments
described in note 1 herein) which are, in the opinion of management, necessary
for a fair presentation of the financial position and operating results for the
interim periods. The consolidated condensed financial statements should be read
in conjunction with the consolidated financial statements and notes thereto,
together with management's discussion and analysis of financial condition and
results of operations, contained in the Company's Annual Report on Form 10-K/A
for the fiscal year ended June 30, 2006, as amended. The results of operations
for the nine months ended March 31, 2007 are not necessarily indicative of the
results for the entire fiscal year ending June 30, 2007, or any future interim
period.

The income tax rates utilized for interim financial statement purposes for the
nine months ended March 31, 2007 and 2006 are based on estimates of income and
utilization of tax credits for the entire year.

NOTE 1: Restatement of Financial Statements

The Company has determined that in the fourth quarter of fiscal year 2007,
accounting errors had occurred at its China subsidiary which were caused by
unapproved and undetected changes in procedures over accounting for the
reconciliation of inventory and the recording of vendor payables for materials
received and, but not yet invoiced at the China facility, resulting in a
misstatement of pretax income and inventory. As a result of these errors, the
Company has determined that its inventory was overstated at March 31, 2007 and
its net income for the three and nine months ended March 31, 2007 was
overstated. Additionally, the Company has corrected certain errors in accounting
for income taxes, equity based compensation and pension expense and, as part of
the Company's adoption of the Securities and Exchange Commissions Staff
Accounting Bulletin No. 108, the Company has corrected errors in their warranty
expense and allowance for sales returns.

The Company's previously issued condensed consolidated financial statements for
the three months ended March 31, 2007 have been restated to correct the
accounting for the following items:

      o     Recording in the third quarter of fiscal 2007 an increase in other
            liabilities of $451,000, a reduction in accounts receivable of
            $388,000, an increase in deferred tax benefits of $302,000 and a net
            reduction in retained earnings of $537,000 to reflect the adoption
            of SAB 108 to establish warranty reserve and sales return allowance
            accounts.

      o     Recording in the third quarter and first nine months of fiscal 2007,
            additional cost of sales for the correction of the recording of
            vendor payables for items received but not yet invoiced and
            inventory reconciliation errors of $543,000 and $876,000 for the
            quarter and nine months, respectively. Recording a corresponding
            increase in accounts payable of $625,000 and a decrease in inventory
            of $251,000 at March 31, 2007

      o     Recording in the third quarter of fiscal 2007 additional cost of
            sales for an increase in pension expense of $83,000.

      o     Recording additional cost of sales of $43,000 for the quarter and a
            reduction of cost of sales of $6,000 for the first nine months of
            fiscal 2007 for warranty expense and recording a corresponding
            decrease other liabilities of $49,000 at March 31, 2007.



                                       8
<PAGE>


      o     Recording in the third quarter and first nine months of fiscal 2007
            a reduction in sales of $6,000 and $9,000, respectively, and
            recording a reduction in accounts receivable of $9,000 at March 31,
            2007 to adjust the sales return allowance.

      o     Recording in the third quarter and first nine months of fiscal 2007
            an increase in general and administrative expense of $1,000 and
            $35,000, respectively, and a corresponding $35,000 increase in
            additional paid in capital at March 31, 2007 to correct equity based
            compensation expense for the third quarter and first nine months.

      o     Recording in the third quarter and first nine months of fiscal 2007
            a decrease in income tax expense of $85,000 and $36,000,
            respectively, and recording a decrease in taxes payable of $39,000
            and a decrease in current deferred tax benefits of $3,000 to correct
            taxes payable at March 31, 2007.

The following tables summarize the effect of the restatement adjustments on the
consolidated condensed financial statements as of and for the three and nine
months ended March 31, 2007:


Statement of Earnings:


<TABLE>
<CAPTION>
                                                                    Three Months Ended March 31
                                                                    ---------------------------
                                                           2007                                     2007
                                                           ----                                     ----
                                                        Previously
                                                         Reported          Adjustments           As restated
                                                         --------          -----------           -----------
<S>                                                     <C>                    <C>                <C>
Sales                                                   $32,606,635            (6,000)            $32,600,635
Cost of sales                                            20,573,154           669,000              21,242,154
                                                        -----------          --------             -----------
Gross profit                                             12,033,481          (675,000)             11,358,481
                                                        -----------          --------             -----------
General and administrative                                3,154,894             1,000               3,155,894
                                                        -----------          --------             -----------
Total operating expenses                                  7,329,910             1,000               7,330,910
                                                        -----------          --------             -----------
Operating income                                          4,703,571          (676,000)              4,027,571
                                                        -----------          --------             -----------
Income before income taxes                                5,571,725          (676,000)              4,895,725
Income tax expense                                        1,470,000           (85,000)              1,385,000
                                                        -----------          --------             -----------
Net income from continuing operations                   $ 4,101,725          (591,000)            $ 3,510,725
                                                        -----------          --------             -----------
Net income                                              $ 4,101,725          (591,000)            $ 3,510,725
                                                        ===========          ========             ===========
Basic earnings per share:
     Income from continuing operations                  $      0.24              (.04)            $      0.20
                                                        -----------          --------             -----------
          Net income                                    $      0.24              (.04)            $      0.20
                                                        ===========          ========             ===========
Diluted earnings per share                              $      0.23              (.03)            $      0.20
                                                        -----------          --------             -----------
          Net income                                    $      0.23              (.03)            $      0.20
                                                        ===========          ========             ===========
</TABLE>



                                       9
<PAGE>


<TABLE>
<CAPTION>
                                                                     Nine Months Ended March 31
                                                        ----------------------------------------------------
                                                           2007                                     2007
                                                           ----                                     ----
                                                        Previously
                                                         Reported           Adjustments          As restated
                                                         --------           -----------          -----------
<S>                                                     <C>                     <C>              <C>
Sales                                                   $93,135,530             (9,000)          $93,126,530
Cost of sales                                            59,160,937            870,000            60,030,937
                                                        -----------           --------           -----------
Gross profit                                             33,974,593           (879,000)           33,095,593
                                                        -----------           --------           -----------
General and administrative                                8,649,862             35,000             8,684,862
                                                        -----------           --------           -----------
Total operating expenses                                 20,897,450             35,000            20,932,450
                                                        -----------           --------           -----------
Operating income                                         13,077,143           (914,000)           12,163,143
                                                        -----------           --------           -----------
Income before income taxes                               15,746,697           (914,000)           14,832,697
Income tax expense                                        3,836,000            (36,000)            3,800,000
                                                        -----------           --------           -----------
Net income from continuing operations                   $11,910,697           (878,000)          $11,032,697
                                                        -----------           --------           -----------
Net income                                              $11,910,697           (878,000)          $11,032,697
                                                        ===========           ========           ===========
Basic earnings per share:
     Income from continuing operations                  $      0.68               (.05)          $      0.63
                                                        -----------           --------           -----------
          Net income                                    $      0.68               (.05)          $      0.63
                                                        ===========           ========           ===========
Diluted earnings per share:
     Income from continuing operations                  $      0.66               (.04)          $      0.62
                                                        -----------           --------           -----------
          Net income                                    $      0.66               (.04)          $      0.62
                                                        ===========           ========           ===========


Balance Sheet:
                                                                          As of March 31
                                                       -----------------------------------------------------
                                                           2007                                     2007
                                                           ----                                     ----
                                                        Previously
                                                         Reported           Adjustments          As restated
                                                         --------           -----------          -----------
Accounts receivable                                    $ 19,107,794           (397,000)         $ 18,710,794
Inventories                                              26,144,764           (251,000)           25,893,764
Deferred income taxes                                       716,287            299,000             1,015,287
                                                       ------------         ----------          ------------
Total current assets                                    106,231,206           (349,000)          105,882,206
                                                       ------------         ----------          ------------
Total assets                                            192,700,822           (349,000)          192,351,822
                                                       ============         ==========          ============
Accounts payable                                          6,380,908            625,000             7,005,908
Income taxes payable                                        728,492            (39,000)              689,492
Other current liabilities                                   730,825            445,000             1,175,825
                                                       ------------         ----------          ------------
Total current liabilities                                11,165,564          1,031,000            12,196,564
                                                       ------------         ----------          ------------
Total liabilities                                        15,683,488          1,031,000            16,714,488
                                                       ============         ==========          ============
Additional paid-in capital                              187,013,261             35,000           187,048,261
Retained earnings                                        82,404,550         (1,415,000)           80,989,550
                                                       ------------         ----------          ------------
Total stockholders' equity                              177,017,334         (1,380,000)          175,637,334
                                                       ------------         ----------          ------------
Total liabilities and stockholders' equity             $192,700,822           (349,000)         $192,351,822
                                                       ============         ==========          ============
</TABLE>

The adjustments to the balance sheet and income statements at and for the three
and nine months ended March 31, 2007 had no impact on total cash flows from
operating, investing and financing activities.

The restatement of the consolidated financial statements also affected footnotes
2, 4, 6, 9, 11, and 15.



                                       10
<PAGE>


NOTE 2: New Accounting Pronouncements

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year misstatements when Quantifying
misstatements in Current Year Financial Statements" ("SAB 108"). SAB 108 was
issued to provide interpretive guidance on how the effects of the carryover or
reversal of prior year misstatements should be considered in quantifying a
current year misstatement. Under SAB 108, both the balance sheet and the income
statement approach must be considered when evaluating the materiality of
misstatements. The Company adopted SAB 108 in the fourth quarter of 2007,
effective July 1, 2006. After applying the dual approach, the accounting errors
relating to the warranty accrual and the sales returns reserve, that were
recorded on a cash basis as the events occurred and were deemed immaterial in
the prior years using the income statement approach, were deemed material to the
current year financial statements using the balance sheet approach. In
accordance with SAB 108, the cumulative effect adjustment of these accounting
changes was recorded to the beginning retained earnings as of July 1, 2006. The
impact of the two items noted above on the July 1, 2006 balances are presented
below:

       Accounts receivable                                 $(388,000)
       Other liabilities                                    (451,000)
                                                           ---------
              Total:                                        (839,000)
       Less deferred tax benefit                             302,000
                                                           ---------
       Adjustment to retained earnings                     $(537,000)
                                                           =========

In September 2006, the FASB issued Statement of Financial Accounting Standard
No. 157, "Fair Value Measurements" which is effective for fiscal years beginning
after November 15, 2007 (the Company's 2009 fiscal year) and for interim periods
within those years. This statement defines fair value, establishes a framework
for measuring fair value and expands the related disclosure requirements. The
Company is currently evaluating the potential impact of this statement.

In September 2006, the FASB issued Statement of Financial Accounting Standard
No. 158, "Employer's Accounting for Defined Benefit Pension and Other
Postretirement Plans-an amendment to FASB Statements 87, 88, 106 and 132(R)"
("SFAS 158"), which requires balance sheet recognition of the overfunded or
underfunded status of pension and postretirement benefit plans. Under SFAS 158,
actuarial gains and losses, prior service costs or credits, and any remaining
transition assets or obligations that have not been recognized under previous
accounting standards must be recognized in Accumulated Other Comprehensive
Income, net of tax effects, until they are amortized as a component of net
periodic benefit cost. In addition, the measurement date, the date at which plan
assets and the benefit obligation are measured, is required to be the company's
fiscal year end. This Statement is effective for fiscal years ending after
December 15, 2006 (the Company's 2007 fiscal year). The Company is currently
analyzing the financial statement impact of adopting this pronouncement.

In February 2007, the FASB issued Statement of Financial Accounting Standard No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities -
Including an Amendment of FASB Statement No. 115" (SFAS 159). This Statement
provides companies with an option to measure, at specified election dates, many
financial instruments and certain other items at fair value that are not
currently measured at fair value. A company that adopts SFAS 159 will report
unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date. This Statement also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. This Statement is effective for



                                       11
<PAGE>


fiscal years beginning after November 15, 2007 (the Company's 2009 fiscal year).
The Company is currently evaluating the potential impact of this statement.

NOTE 3: Intangible Assets

Intangible assets as of March 31, 2007 and June 30, 2006 are as follows:

<TABLE>
<CAPTION>

                                               March 31                            June 30
                                    -------------------------------    ----------------------------
                                    Gross Carrying     Accumulated     Gross Carrying   Accumulated
                                       Amount          Amortization         Amount     Amortizationu
                                       ------          ------------         ------     -------------
<S>                                  <C>                <C>               <C>            <C>
Patent                               $  574,966         $  556,998        $  574,966     $  503,095
Customer Relationships                1,350,000          1,256,250         1,350,000      1,087,500
Trade Name                              320,000            320,000           320,000        320,000
Non-Competition Agreements              180,000            180,000           180,000        174,000
Favorable Lease                         600,000            600,000           600,000        600,000
                                     ----------         ----------        ----------     ----------
  Total                              $3,024,966         $2,913,248        $3,024,966     $2,684,595
                                     ==========         ==========        ==========     ==========
</TABLE>

Intangible asset amortization expense for the nine month period ended March 31,
2007 and 2006 aggregated $228,653 and $249,653, respectively, while tangible
asset amortization expense for the three months ended March 31, 2007 and 2006
aggregated $74,217 and $83,218, respectively. Amortization expense related to
intangible assets for the remaining three months of fiscal 2007 is $74,217 and
$37,501 in fiscal 2008. The intangible assets will be fully amortized in 2008.

NOTE 4: Equity Based Compensation

The components of equity based compensation expense in the statements of
earnings are as follows:

<TABLE>
<CAPTION>

                                               Three Months Ended               Nine Months Ended
                                                     March 31                        March 31
                                           --------------------------     ------------------------------
                                           (As restated)                  (As restated)
                                               2007            2006            2007              2006
                                               ----            ----            ----              ----
<S>                                          <C>             <C>            <C>               <C>
Stock option                                 $737,496        $835,013       $2,208,925        $2,503,590
Restricted stock                              110,799          29,634          301,690            86,901
                                             --------        --------       ----------        ----------
Stock based compensation expense             $848,295        $864,647       $2,510,615        $2,590,491
                                             ========        ========       ==========        ==========
</TABLE>

NOTE 5: Securities

The amortized cost and fair value of securities are as follows:

<TABLE>
<CAPTION>

                                                                            March 31, 2007
                                                ---------------------------------------------------------------
                                                                    Gross            Gross
                                                 Amortized        Unrealized       Unrealized
                                                   Cost             Gains            Losses          Fair Value
                                                   ----             -----            ------          ----------
<S>                                             <C>              <C>              <C>               <C>
Securities available for sale:
     Auction securities                         $20,299,973      $        --      $        --       $20,299,973
                                                -----------      -----------      -----------       -----------
         Total securities
         available-for-sale                     $20,299,973      $        --      $        --       $20,299,973
                                                ===========      ===========      ===========       ===========
Securities held to maturity:
     Municipal bonds                            $35,449,302      $       135      $   (63,656)      $35,385,781
     Commercial paper                             2,720,146               --               --         2,720,146
     Corporate bonds                              2,060,065              152               --         2,060,217
     Federal Agency Bond                          4,598,101              213               --         4,598,314
                                                -----------      -----------      -----------       -----------
         Total securities held to maturity      $44,827,614      $       500      $   (63,656)      $44,764,458
                                                ===========      ===========      ===========       ===========
</TABLE>



                                       12
<PAGE>


<TABLE>
<CAPTION>

                                                                            June 30, 2006
                                                ---------------------------------------------------------------
                                                                    Gross            Gross
                                                 Amortized        Unrealized       Unrealized
                                                   Cost             Gains            Losses          Fair Value
                                                   ----             -----            ------          ----------
<S>                                             <C>              <C>              <C>               <C>
Securities available for sale:
     Auction rate securities                    $35,635,000      $        --      $        --       $35,635,000
                                                -----------      -----------      -----------       -----------
         Total securities

           Available-for-sale                   $35,635,000      $        --      $        --       $35,635,000
                                                ===========      ===========      ===========       ===========
Securities held to maturity:
     Municipal bonds                            $29,056,496      $        --      $  (143,144)      $28,913,352
     Commercial paper                             2,976,555               --               --         2,976,555
     Corporate bonds                              1,824,132            1,989           (2,666)        1,823,455
     Federal agency bonds                         3,398,975               --          (41,890)        3,357,085
                                                -----------      -----------      -----------       -----------
         Total securities held to maturity      $37,256,158      $     1,989      $  (187,700)      $37,070,447
                                                ===========      ===========      ===========       ===========
</TABLE>

The unrealized losses on the Company's held to maturity marketable debt
securities were caused by interest rate increases. Because the Company has the
ability and intent to hold these investments until they recover their amortized
cost, the Company does not consider these investments to be
other-than-temporarily impaired at March 31, 2007.

Contractual maturities of marketable debt securities held to maturity at March
31, 2007 and June 30, 2006 are summarized as follows:

                                March 31, 2007            June 30, 2006
                                (As restated)
                         -------------------------   -------------------------
                                           Fair                       Fair
                                          Market                     Market
                             Cost         Value          Cost         Value
                             ----         -----          ----         -----
Within one year          $22,305,020   $22,290,703   $31,124,733   $30,994,480
One year to five years    22,522,594    22,473,755     6,131,425     6,075,967
                         -----------   -----------   -----------   -----------
     Total               $44,827,614   $44,764,458   $37,256,158   $37,070,447
                         ===========   ===========   ===========   ===========

Contractual maturities of auction rate securities available for sale at March
31, 2007 and June 30, 2006 are summarized as follows:

                               March 31, 2007               June 30, 2006
                         -------------------------   -------------------------
                                           Fair                       Fair
                                          Market                     Market
                             Cost         Value          Cost         Value
                             ----         -----          ----         -----
Within one year          $20,299,973   $20,299,973   $35,635,000   $35,635,000
One year to five years            --            --            --            --
                         -----------   -----------   -----------   -----------
     Total               $20,299,973   $20,299,973   $35,635,000   $35,635,000
                         ===========   ===========   ===========   ===========

The Company invests in auction rate securities. Auction rate securities have
long-term underlying maturities; however, the market is highly liquid and the
interest rates reset every 7, 28 or 35 days.



                                       13
<PAGE>


NOTE 6: Inventories

Inventories are summarized as follows:

                                             March 31, 2007   June 30, 2006
                                             --------------   -------------
                                             (As restated)

          Component parts                     $12,842,146      $ 9,936,858
          Work in process                       7,981,777        8,330,110
          Finished goods                        5,069,841        3,560,303
                                              -----------      -----------
            Total                             $25,893,764      $21,827,271
                                              ===========      ===========

NOTE 7: Property, Plant and Equipment

Property, plant and equipment are summarized as follows:

                                             March 31, 2007   June 30, 2006
                                             --------------   -------------
          Land and land improvements          $  4,157,617    $  2,207,823
          Construction in process                3,073,477       1,918,653
          Buildings, furniture and fixtures     17,579,943      16,608,430
          Machinery and equipment               62,390,811      57,176,071
                                              ------------    ------------
                                              $ 87,201,848    $ 77,910,977
          Less accumulated depreciation
           and amortization                    (54,159,307)    (50,275,816)
                                              ------------    ------------
                                              $ 33,042,541    $ 27,635,161
                                              ============    ============

NOTE 8: Accrued Expenses

Accrued expenses consist of the following:

                                             March 31, 2007   June 30, 2006
                                             --------------   -------------
          Compensation                          $1,901,266      $2,082,104
          Commissions                              590,210         732,749
          Health insurance                         332,077         294,500
          Other                                     18,064         145,463
                                                ----------      ----------
                                                $2,841,617      $3,254,816
                                                ==========      ==========

The Company maintains an accrual for incurred, but not reported, claims arising
from self-insured health benefits provided to the Company's employees in the
United States, which is included in accrued expenses in the consolidated balance
sheets. The Company determines the adequacy of this accrual by evaluating its
historical experience and trends related to both health insurance claims and
payments, information provided by its third party administrator, as well as
industry experience and trends.



                                       14
<PAGE>


NOTE 9: Other Liabilities

Other liabilities consist of the following:

                                              March 31, 2007   June 30, 2006
                                              --------------   -------------
                                              (As restated)
      Deferred compensation                    $  901,841       $  793,943
      Pension liability                           223,591          312,660
      Warranty                                    445,000               --
      Other                                       442,234          391,863
                                               ----------       ----------
                                                2,012,666        1,498,466
      Less current portion                      1,175,825          769,523
                                               ----------       ----------
                                               $  836,841       $  728,943
                                               ==========       ==========

NOTE 10: Restructuring

RF Power Components, Inc.

On October 26, 2004, the Company announced its decision to merge its RF Power
Components, Inc. operations into Anaren Ceramics. In doing so, the Company
closed RF Power's Long Island facility and relocated the operation to the Anaren
Ceramics New Hampshire location. All of RF Power's employees were either
terminated or transferred to the New Hampshire facility. Remaining costs
associated with terminating 79 employees included in the restructuring liability
were paid-in-full in the nine months ended March 31, 2006:


                                   Nine months ended March 31, 2006
                       Balance     --------------------------------     Balance
                       June 30,         Costs             Cash         March 31,
                        2005          Incurred        Expenditures       2006
                        ----          --------        ------------       ----
Severance payments     $19,863      $       --         $ 19,863        $     --
                       -------      --------           --------        ------
                       $19,863      $       --         $ 19,863        $     --
                       =======      ========           ========        ======

NOTE 11: Earnings Per Share

Basic earnings per share is based on the weighted average number of common
shares outstanding. Diluted earnings per share is based on the weighted average
number of common shares outstanding, as well as dilutive potential common shares
which, in the Company's case, comprise shares issuable under the Company's
Comprehensive Long-Term Incentive Plan. The weighted average number of common
shares utilized in the calculation of the diluted earnings per share does not
include antidilutive shares aggregating 1,212,732 and 1,346,820 at March 31,
2007 and 2006, respectively. The treasury stock method is used to calculate
dilutive shares, which reduces the gross number of dilutive shares by the number
of shares purchasable from the proceeds of the options assumed to be exercised.



                                       15
<PAGE>


The following table sets forth the computation of basic and fully diluted
earnings per share:

<TABLE>
<CAPTION>

                                                     Three Months Ended          Nine months Ended
                                                          March 31                    March 31
                                                --------------------------  --------------------------
                                                (As restated)               (As restated)
                                                     2007         2006          2007          2006
                                                     ----         ----          ----          ----
<S>                                              <C>           <C>           <C>           <C>
Numerator:
Net income                                       $ 3,510,725   $ 3,252,317   $11,032,697   $ 7,488,417
                                                 ===========   ===========   ===========   ===========
Denominator:
Denominator for basic earnings
         per share:
           Weighted average shares outstanding    17,397,647    16,946,993    17,504,946    17,124,494
                                                 ===========   ===========   ===========   ===========
Denominator for diluted earnings
         per share:
Weighted average shares outstanding               17,397,647    16,946,993    17,504,946    17,124,494
         Common stock options
           and restricted stock                      301,950       600,340       417,052       498,868
                                                 -----------   -----------   -----------   -----------
Weighted average shares and conversions           17,699,597    17,547,333    17,921,998    17,623,362
                                                 ===========   ===========   ===========   ===========
</TABLE>


NOTE 12: Components of Net Periodic Pension Benefit Costs

<TABLE>
<CAPTION>

                                              Three Months Ended             Nine months Ended
                                                   March 31                      March 31
                                           ------------------------       -----------------------
                                              2007           2006           2007           2006
                                              ----           ----           ----           ----
<S>                                         <C>           <C>             <C>            <C>
Service cost                                $71,588       $  85,587       $214,764       $256,761
Interest cost                               164,700         151,795        494,100        455,385
Expected return on plan assets             (185,068)       (173,365)      (555,204)      (520,095)
Amortization of prior service cost             (325)           (808)          (975)        (2,424)
Amortization of the net (gain) loss          18,386          47,436         55,158        142,308
                                            -------        --------       --------       --------
Net periodic benefit cost                   $69,281        $110,645       $207,843       $331,935
                                            =======        ========       ========       ========
</TABLE>

Expected Pension Contributions

The Company has no minimum requirements to fund the pension plan for the fiscal
year 2007, however, discretionary contributions amounting to $1,367,727 were
made during the first nine months of fiscal year 2007.

NOTE 13: Components of Net Periodic Postretirement Health Benefit Costs

<TABLE>
<CAPTION>

                                              Three Months Ended             Nine months Ended
                                                   March 31                      March 31
                                           ------------------------       -----------------------
                                              2007           2006           2007           2006
                                              ----           ----           ----           ----
<S>                                         <C>           <C>             <C>            <C>
Service cost                                $18,677       $ 14,285        $  56,031        $42,855
Interest cost                                36,665         46,327          109,995        138,981
Amortization of the net (gain) loss          13,208         18,788           39,624         56,364
                                            -------       --------         --------       --------
Postretirement Health                       $68,550       $ 79,400         $205,650       $238,200
                                            =======       ========         ========       ========
</TABLE>

Expected Postretirement Health Contributions

Expected contributions for fiscal 2007 are $165,149, net of $39,381 expected
subsidy receipts.



                                       16
<PAGE>


NOTE 14: Discontinued Operations

During the quarter ended March 31, 2006, final liquidation of the Company's
Anaren Europe operation took place. The results of operations for Anaren Europe,
part of the Wireless segment, for the prior fiscal years have been classified as
discontinued operations in the statements of earnings. Components of the income
from discontinued operations of Anaren Europe for the three months and nine
months ended March 31 are as follows:

                                 Three Months Ended           Nine Months Ended
                                       March 31                    March 31
                                --------------------        --------------------
                                  2007         2006           2007        2006
Income from liquidation of
  net assets                    $     0      $81,713        $     0      $81,713

Any tax related effects of such discontinued operations have been recognized in
prior fiscal years.

NOTE 15: Segment Information

The Company operates predominately in the wireless communications, satellite
communications and defense electronics markets. The Company's two reportable
segments are Wireless and Space and Defense. These segments have been determined
based upon the nature of the products and services offered, customer base,
technology, availability of discrete internal financial information, homogeneity
of products and delivery channel, and are consistent with the way the Company
organizes and evaluates financial information internally for purposes of making
operating decisions and assessing performance.

The Wireless segment designs, manufactures and markets commercial products used
mainly by the wireless communications market. The Space and Defense segment of
the business designs, manufactures and markets specialized products for the
defense electronics and satellite communications markets. The revenue
disclosures for the Company's reportable segments depict products that are
similar in nature.



                                       17
<PAGE>


The following table reflects the operating results of the segments consistent
with the Company's internal financial reporting process. The following results
are used in part, by management, both in evaluating the performance of, and in
allocating resources to, each of the segments:

<TABLE>
<CAPTION>

                                                           Space &     Corporate and
                                            Wireless       Defense       Unallocated      Consolidated
                                            --------       -------       -----------      ------------
<S>                                        <C>            <C>                <C>           <C>
Net sales:
Three months ended:
       March 31, 2007 (As restated)        17,841,700     14,758,935         ---           32,600,635
       March 31, 2006                      16,014,209     10,686,874         ---           26,701,083
Nine months ended:
       March 31, 2007 (As restated)        54,667,641     38,458,889         ---           93,126,530
       March 31, 2006                      47,919,045     28,415,409         ---           76,334,454

Operating income:
Three months ended:
       March 31, 2007 (As restated)          539,264       3,488,307         ---            4,027,571
       March 31, 2006                      1,522,071       1,976,504         ---            3,498,575
Nine months ended:
       March 31, 2007 (As restated)         4,473,967      7,689,176         ---           12,163,143
       March 31, 2006                       4,801,295      3,295,100         ---            8,096,395
</TABLE>



Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the consolidated
financial statements and the notes thereto appearing elsewhere in this Form
10-Q/A. The following discussion, other than historical facts, contains
forward-looking statements that involve a number of risks and uncertainties. The
Company's results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including factors
described elsewhere in this Quarterly Report on Form 10-Q/A.

The purpose of this amended Quarterly Report on Form 10-Q/A of Anaren, Inc. (the
"Company") is to restate the Company's consolidated condensed financial
statements for the three and nine months ended March 31, 2007 ("the financial
statements") and to modify the related disclosures. See note 1 to the
consolidated condensed financial statements included in this amended Quarterly
Report. The restatement arose from the Company's determination that accounting
errors had occurred at its China subsidiary. The accounting errors were caused
by a material weakness in the Company's risk assessment and oversight controls
as disclosed in the June 30, 2007 Annual Report Form 10-K. The unapproved and
undetected changes in procedures over accounting for the reconciliation of
inventory and the recording of vendor payables for materials received, but not
yet invoiced at the China facility resulted in a misstatement of pre-tax income
and inventory. Additionally, the Company has corrected certain errors in
accounting for income taxes, equity based compensation and pension expense; and,
as part of the Company's adoption of the Securities and Exchange Commissions
Staff Accounting Bulletin No. 108, the Company has corrected errors in their
warranty expense and allowance for sales returns. As a result of these errors,
the Company has determined that its pre-tax income for the three and nine months
ended March 31, 2007 was overstated by $676,000 and $914,000, respectively.



                                       18
<PAGE>


Overview

The consolidated financial statements present the financial condition of the
Company as of March 31, 2007 and June 30, 2006, and the consolidated results of
operations and cash flows of the Company for the three months and nine months
ended March 31, 2007 and 2006.

The Company designs, develops and markets microwave components and assemblies
for the wireless communications, satellite communications and defense
electronics markets. The Company's distinctive manufacturing and packaging
techniques enable it to cost-effectively produce compact, lightweight microwave
products for use in base stations for wireless communications systems, in
satellites and in defense electronics systems. The Company also produces
microwave components addressing consumer wireless applications such as wireless
local area networks, Bluetooth, WiFi, cellular handsets and satellite
telecommunications. The Company sells its products to leading wireless
communications equipment manufacturers such as Ericsson, Motorola, Nokia, Nortel
Networks, and Andrew, and to satellite communications and defense electronics
companies such as Boeing Satellite, ITT, SRCTec, Lockheed Martin, Northrup
Grumman and Raytheon.

The Company generally recognizes sales at the time products are shipped to
customers, provided that persuasive evidence of an arrangement exists, the sales
price is fixed or easily determinable, collectibility is reasonably assured and
title and risk of loss has passed to the customer. Title and the risks and
rewards of ownership of products are generally transferred at the time of
shipment. Payments received from customers in advance of products delivered are
recorded as customer advance payments until earned. Annually, a small percentage
of sales are derived from fixed-price contracts for the sale of engineering
design and development efforts for space and defense electronics products. Sales
and estimated profits under long-term contracts are recognized according to
customer contractual milestones on a units-of-delivery basis. Profit estimates
are revised periodically based upon changes in sales value and costs at
completion. Any losses on these contracts are recognized in the period in which
such losses are determined.

In April 2006, the Company entered into a lease for a new 76,000 square foot
facility in Suzhou, China, at an annual rent of approximately $178,000 to
replace its 25,000 square foot leased facility. The initial lease period on the
new building runs through April 2013 and is renewable through April 2023. No
additional cost was incurred for termination of the lease on the original
building in the third quarter of fiscal 2007. The Company was fully operational
in this new facility prior to the end of calendar year 2006.

In July 2006, the Company began construction on a 54,000 square foot addition to
its facility in East Syracuse, New York. This addition is needed primarily to
accommodate the growth of the Company's Space and Defense business. The project
is expected to be completed during the third quarter of calendar 2007 at an
estimated cost of $5.8 million for the building addition.

In February 2007, the Company was selected to receive a contract valued in
excess of $8.0 million from Alcatel-Alenia Space (France) for development and
production of integrated beamforming assemblies that will be deployed on the
Globalstar-2 satellite payload. The contract award, expected to be finalized
prior to June 30, 2007, covers design services and manufacture of up to 48
beamforming networks. Work has been authorized to begin immediately, with
production deliveries starting in May 2008.



                                       19
<PAGE>


Fourth Quarter of Fiscal 2007 Outlook

For the fourth quarter, we expect comparable demand for wireless infrastructure
and consumer component products and a decrease in sales for the Space & Defense
segment as a result of the anticipated decline in sales of counter-Improvised
Explosive Device (IED) related components. As a result, we expect net sales to
be in the range of $28.0 - $31.0 million for the fourth quarter of fiscal 2007.
With an anticipated tax rate of approximately 26% and an expected stock based
compensation expense of approximately $0.04 per diluted share, we expect net
earnings per diluted share to be in the range of $0.16 to $0.21 for the fourth
quarter.

Results of Operations

Net sales for the three months ended March 31, 2007 were $32.6 million, up $5.9
million from $26.7 million for the third quarter of fiscal 2006. Net income for
the third quarter of fiscal 2007 was $3.5 million (As restated), or 10.8% (As
restated) of net sales, up $258,000 (As restated), or 7.9% (As restated) from
net income of $3.3 million in the third quarter of fiscal 2006.



                                       20
<PAGE>


The following table sets forth the percentage relationships of certain items
from the Company's consolidated condensed statements of earnings as a percentage
of net sales.

<TABLE>
<CAPTION>

                                                   Three Months Ended                Nine months Ended
                                            -------------------------------   -----------------------------
                                            Mar. 31, 2007     Mar. 31, 2006   Mar. 31, 2007   Mar. 31, 2006
                                            -------------     -------------   -------------   -------------
                                             (As restated)                     (As restated)
<S>                                             <C>               <C>             <C>            <C>
Net Sales                                       100.0%            100.0%          100.0%         100.0%

Cost of sales                                    65.2%             61.6%           64.5%          63.8%
                                                 -----             -----           -----          -----
Gross profit                                     34.8%             38.4%           35.5%          36.2%
                                                 -----             -----           -----          -----
Operating expenses:
   Marketing                                      5.6%              6.8%            6.0%           6.9%
   Research and development                       7.2%              8.2%            7.2%           8.5%
   General and administrative                     9.7%             10.3%            9.3%          10.2%
                                                 -----             -----           -----          -----
     Total operating expenses                    22.5%             25.3%           22.5%          25.6%
                                                 =====             =====           =====          =====
Operating income                                 12.3%             13.1%           13.0%          10.6%
                                                 -----             -----           -----          -----
Other income (expense):
     Other, primarily interest income             2.7%              2.3%            2.9%           2.3%
     Interest expense                             0.0%              0.0%            0.0%           0.0%
                                                 -----             -----           -----          -----
     Total other income (expense), net            2.7%              2.3%            2.9%           2.3%
                                                 =====             =====           =====          =====
Income before income taxes                       15.0%             15.4%           15.9%          12.9%
Income taxes                                      4.2%              3.5%            4.1%           3.2%
                                                 -----             -----           -----          -----
   Net income                                    10.8%             11.9%           11.8%           9.7%
                                                 =====             =====           =====          =====
Discontinued operations:
Income (loss) from discontinued
  operations of Anaren Europe                     0.0%              0.3%            0.0%           0.1%
Income tax benefit                                0.0%              0.0%            0.0%           0.0%
                                                 -----             -----           -----          -----
Net income (loss) from discontinued
  operations                                      0.0%              0.3%            0.0%           0.1%
                                                 =====             =====           =====          =====
Net income                                       10.8%             12.2%           11.8%           9.8%
                                                 =====             =====           =====          =====
</TABLE>

The following table summarizes the Company's net sales by operating segments for
the periods indicated. Amounts are in thousands.

                         Three Months Ended              Nine months Ended
                   -----------------------------   -----------------------------
                   Mar. 31, 2007   Mar. 31, 2006   Mar. 31, 2007   Mar. 31, 2006
                   -------------   -------------   -------------   -------------
                                   (As restated)                   (As restated)
Wireless              $17,842         $16,014         $54,668         $47,919
Space and Defense      14,759          10,687          38,459          28,415
     Total            $32,601         $26,701         $93,127         $76,334


Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006

Net sales. Net sales increased $5.9 million, or 22.1% to $32.6 million for the
third quarter ended March 31, 2007, compared to $26.7 million for the third
quarter of fiscal 2006. This increase resulted from a $4.1 million rise in
shipments of Space and Defense products and a $1.8 million increase of Wireless
products in the current third quarter of fiscal 2007.



                                       21
<PAGE>


The increase in sales of Wireless products, which consist of standard
components, ferrite components and custom subassemblies for use in building
wireless basestation and consumer equipment, was a result of a rise in base
station infrastructure construction which caused an increase in customer demand
for custom Wireless components during the current third quarter compared to the
third quarter of last year.

Wireless product sales rose $1.8 million, or 11.4% in the third quarter of
fiscal 2007 compared to the third quarter of fiscal 2006, due to a $2.2 million
increase in shipments of custom wireless components in the third quarter of
fiscal 2007 due to a continuing high level of demand for infrastructure products
from Nokia. Additionally, new Wireless consumer product sales increased
$283,000, or 48% in the current third quarter compared to the third quarter of
fiscal 2006, reflecting the improving customer acceptance of our new commercial
products. During this same period, sales of standard components fell 6.6%, or
$640,000 compared to the third quarter of fiscal 2006 due to a small decline in
demand for termination products in the current quarter.

Space and Defense products consist of custom components and assemblies for
communication satellites and defense radar, receiver, and countermeasure
subsystems for the military. Sales of Space and Defense products rose $4.1
million, or 38.3% in the third quarter of fiscal 2007 compared to the third
quarter of the previous fiscal year. Space and Defense product sales are
increasing due to the higher level of new business booked by the Company over
the last two fiscal years. Shipments relating to the counter-IED contract
accounted for the large increase in sales for Space and Defense during the
quarter. Shipments under this contract are expected to fall to a rate of
approximately $2.0 million in the fourth quarter and to less than $1.0 million
per quarter thereafter.

Gross Profit. Cost of sales consists primarily of engineering design costs,
materials, material fabrication costs, assembly costs, direct and indirect
overhead, and test costs. Gross profit for the third quarter of fiscal 2007 was
$11.4 million (As restated) (34.8% (As restated) of net sales), up $1.2 million
(As restated) from $10.2 million (38.4% of net sales) for the same quarter of
the prior year. Gross profit as a percent of sales declined in the third quarter
of fiscal 2007 over the third quarter of last year despite the $5.9 million
increase in sales due to a somewhat less favorable Wireless product mix and an
unexpected scrap loss in the Space and Defense group amounting to approximately
1.0% of total sales.

Marketing. Marketing expenses consist mainly of employee related expenses,
commissions paid to sales representatives, trade show expenses, advertising
expenses and related travel expenses. Marketing expenses were $1.8 million (5.6%
of net sales) for the third quarter of fiscal 2007, unchanged compared to $1.8
million (6.8% of net sales) for the third quarter of fiscal 2006. Marketing
expenses in the current third quarter were flat compared to the third quarter of
last fiscal year due to declining commission expense resulting from the maturing
of a number of large programs to lower rate structures. This decline off-set
higher travel and personnel expenses in the current quarter compared to the same
period last year.

Research and Development. Research and development expenses consist of material
and salaries and related overhead costs of employees engaged in ongoing
research, design and development activities associated with new products and
technology development. Research and development expenses were $2.3 million
(7.2% of net sales) in the third quarter of fiscal 2007, up 7.2% from $2.2
million (8.2% of net sales) for the third quarter of fiscal 2006. Research and
development expenditures are supporting further development of Wireless
infrastructure and consumer component opportunities, as well as new technology
development in the Space and Defense



                                       22
<PAGE>


Group. Research and Development expenditures have fluctuated with the level of
opportunities in the marketplace which have resulted in the hiring of additional
personnel over the last twelve months to assist in development initiatives. The
Company does not expect to reduce its current research and development efforts
and is presently working on a number of new standard and custom Wireless and
Space and Defense opportunities.

General and Administrative. General and administrative expenses consist of
employee related expenses, professional services, intangible amortization,
travel related expenses and other corporate costs. General and administrative
expenses increased 14.5% to 3.2 million (9.7% of net sales) for the third
quarter of fiscal 2007, from $2.8 million (10.3% of net sales) for the third
quarter of fiscal 2006. The increase resulted primarily from additional
professional service costs incurred due to the restatements of the Company's
financial statements that were required to be filed with the Securities and
Exchange Commission in January 2007, as well as additional personnel costs due
to the expanded level of the Company's business, and additional outside
consulting services retained by the Company for specific short term initiatives.

Operating Income. Operating income rose 15.1% (As restated) in the third quarter
of fiscal 2007 to $4.0 million (As restated) (12.3% (As restated) of sales),
compared to $3.5 million (13.1% of net sales) for the third quarter of fiscal
2006. On a reporting segment basis, Wireless operating income was $0.5 million
(As restated) for the third quarter of fiscal 2007, down $1.0 million (As
restated), or 64.6% (As restated), from Wireless operating income of $1.5
million in the third quarter of fiscal 2006. Wireless operating income declined
in the current third quarter due to inefficiencies in the Salem, New Hampshire
facility resulting from a decline in net sales at that facility.

Space and Defense operating income was $3.5 million (As restated), (23.6% (As
restated) of Space and Defense net sales), for the third quarter of fiscal 2007,
up $1.5 million (As restated) from $2.0 million for the third quarter of fiscal
2006. Operating margins in this group have improved as a result of efficiencies
realized from both the overall $5.9 million increase in sales volume and the
$4.1 million rise in shipments of Space and Defense Group products in the
current third quarter, which included $5.0 million counter-IED products.

Other Income. Other income is primarily interest income received on invested
cash balances. Other income increased 41.0% to $874,000 in the third quarter of
fiscal 2007 compared to $620,000 for the third quarter of last year. This
increase was caused mainly by the rise in market interest rates over the last
twelve months and off-set partially by a decline in investable cash balances
during the third quarter. Other income will fluctuate based on short term market
interest rates and the level of investable cash balances.

Interest Expense. Interest expense represents interest paid on a deferred
obligation. Interest expense for the third quarter of fiscal 2007 was unchanged
from the third quarter of fiscal 2006.

Income Taxes. Income taxes for the third quarter of fiscal 2007 were $1.4
million (As restated) (4.2% (As restated) of net sales), representing an
effective tax rate of 28.3% (As restated). This compares to income tax expense
of $942,000 (3.5% of net sales) for the third quarter of fiscal 2006,
representing an effective tax rate of 22.9%. The Company's effective tax rate is
a direct result of the proportion of federally exempt state municipal bond
income and federal tax credits and benefits in relation to the levels of taxable
income or loss. The projected effective tax rate for fiscal 2007 is
approximately 26% compared to an actual effective tax rate of 22.8% for fiscal
2006. The increase in the projected effective tax rate is due mainly to the
higher level of taxable



                                       23
<PAGE>


income the Company is currently generating and the continuing phase-out of the
federal extraterritorial tax benefit.

Discontinued Operations. Discontinued operations represents the result of
liquidation and dissolution of the Company's Anaren Europe corporate structure
which ceased operation in December 2003. During the third quarter ended March
31, 2006 and in conjunction with the finalization of Anaren Europe's bankruptcy
proceeding, the Company performed the final liquidation of its Anaren Europe
corporate structure. As a result of this liquidation, the Company recognized a
gain of $81,713 from the liquidation of the remaining assets.

Nine months Ended March 31, 2007 Compared to Nine months Ended March 31, 2006

Net Sales. Net sales increased $16.8 million, or 22.0% to $93.1 million for the
first nine months ended March 31, 2007 compared to $76.3 million for the first
nine months of fiscal 2006. This increase resulted from a $6.8 million rise in
shipments of Wireless infrastructure and consumer products and a $10.0 million
rise in sales of Space and Defense products.

The increase in sales of Wireless products was a result of a rise in worldwide
customer demand for Wireless infrastructure products over the past year.
Wireless product sales rose $6.8 million or 14.1% in the first nine months of
fiscal 2007 compared to the first nine months of fiscal 2006, due to a $3.7
million increase in shipments of custom products resulting from higher demand
from Nokia, as well as a $1.7 million increase (58%) in sales of new consumer
component products and a $1.4 million rise in sales of standard Wireless
components used mainly in power amplifier basestation applications.

Sales of Space and Defense products rose $10.0 million, or 35.3% in the first
nine months of fiscal 2007 compared to the same period last year. Approximately
$8.9 million of the increase resulted from the initial production of a component
used in a jammer system designed to counter IED. Meanwhile, the remainder of the
increase was a result of general business growth in Space and Defense. Shipments
under the counter-IED contract, which began in September 2006, are expected to
drop to approximately $2.0 million in the fourth quarter of fiscal 2007.

Gross Profit. Gross profit for the first nine months of fiscal 2007 was $33.1
million (As restated) (35.5% (As restated) of net sales), up $5.4 million (As
restated) from $27.7 million (36.2% of net sales) for the same period of the
prior year. Gross profit on sales increased in the first nine months of fiscal
2007 over the first nine months of last year due to the substantial rise in
overall sales of $16.8 million. The overall increase in net sales included a
substantial increase in Defense sales which enhanced production efficiencies in
that segment, as well as a more favorable product mix in the Wireless segment
resulting from the increase in sales of higher margin standard components.

Marketing. Marketing expenses were $5.6 million (6.0% of net sales) for the
first nine months of fiscal 2007, up 5.3% from $5.3 million (6.9% of net sales)
for the first nine months of fiscal 2006. Marketing expenses in the first nine
months rose over the first nine months of last fiscal year due to increased
commission expense resulting from the higher sales levels and additional
personnel and travel expenses to serve the expanding Asian and Defense markets.

Research and Development. Research and development expenses were $6.7 million
(7.2% of net sales) in the first nine months of fiscal 2007, up 2.9% from $6.5
million (8.5% of net sales) for the first nine months of fiscal 2006. Research
and development expenditures are supporting further development of Wireless
infrastructure and consumer component opportunities, as well as



                                       24
<PAGE>


new technology development in the Space and Defense Group. Internal Research and
Development expenditures have increased with the higher level of opportunities
in the marketplace. The Company does not expect to reduce its current research
and development efforts and is presently working on a number of new standard and
custom Wireless and Space and Defense opportunities.

General and Administrative. General and administrative expenses increased 11.7%
(As restated) to $8.7 million (9.3% of net sales) for the first nine months of
fiscal 2007, from $7.8 million (10.2% of net sales) for the first nine months of
fiscal 2006. The increase resulted primarily from additional personnel costs due
to the expanded level of Company business, a write down of the China facility
leasehold improvement due to the move to a new facility, additional professional
service costs associated with the restatement of the Company's financial
statements in January 2007, and additional outside consulting services retained
by the Company for specific short-term initiatives.

Operating Income. Operating income rose 50.2% (As restated) in the first nine
months of fiscal 2007 to $12.2 million (As restated) (13.0% (As restated) of
sales), compared to $8.1 million (10.6% of net sales) for the first nine months
of fiscal 2006. On a reporting segment basis, Wireless operating income was $4.5
million (As restated) for the first nine months of fiscal 2007, a decrease of
$327,000 (As restated) from Wireless operating income of $4.8 million in the
first nine months of fiscal 2006.

Space and Defense operating income was $7.7 million (20.0% of Space and Defense
net sales), for the first nine months of fiscal 2007, up $4.4 million from $3.3
million for the first nine months of fiscal 2006. Operating margins in this
group have improved as a result of efficiencies realized from both the overall
$16.8 million increase in sales volume and the $10.0 million rise in shipments
of Space and Defense Group products in the current first nine months. This
increase resulted primarily from $8.9 million in shipments of counter-IED
products in the first nine months of fiscal 2007, compared to the same nine
months of the prior year.

Other Income. Other income is primarily interest income received on invested
cash balances and gains on the sale of land. Other income increased 54.0% to
$2.7 million in the first nine months of fiscal 2007, compared to $1.7 million
for the first nine months of last year. This increase was caused mainly by the
rise in market interest rates over the last twelve months and a gain of $80,000
on the sale of a small parcel of land during the first quarter. Other income
will fluctuate based on short term market interest rates and the level of
investable cash balances.

Interest Expense. Interest expense represents interest paid on a deferred
obligation. Interest expense for the first nine months of fiscal 2007 was
unchanged from the first nine months of fiscal 2006.

Income Taxes. Income taxes for the first nine months of fiscal 2007 were $3.8
million (As restated) (4.1% (As restated) of net sales), including a tax benefit
resulting from the renewal of the federal research and experimentation credit
retroactive to January 1, 2006, representing an effective tax rate of 25.6% (As
restated). This compares to income tax expense of $2.4 million (3.2% of net
sales) for the first nine months of fiscal 2006, representing an effective tax
rate of 24.6%. The Company's effective tax rate is a direct result of the
proportion of federally exempt state municipal bond income and federal tax
credits and benefits in relation to the levels of taxable income or loss. The
projected effective tax rate for fiscal 2007 is approximately 26% compared to an
actual effective tax rate of 22.8% for fiscal 2006. The increase in the
projected



                                       25
<PAGE>


effective tax rate is due mainly to the higher level of taxable income the
Company is currently generating.

Discontinued Operations. Discontinued operations represents the result of
liquidation and dissolution of the Company's Anaren Europe corporate structure
which ceased operation in December 2003. During the third quarter ended March
31, 2006 and in conjunction with the finalization of Anaren Europe's bankruptcy
proceeding, the Company performed the final liquidation of its Anaren Europe
corporate structure. As a result of this liquidation, the Company recognized a
gain of $81,713 from the liquidation of the remaining assets.

Critical Accounting Policies

The methods, estimates and judgments management uses in applying the Company's
most critical accounting policies have a significant impact on the results
reported in the Company's financial statements. The U.S. Securities and Exchange
Commission has defined the most critical accounting policies as the ones that
are most important to the portrayal of the Company's financial condition and
results, and that require management to make the most difficult and subjective
judgments, often as a result of the need to make estimates of matters that are
inherently uncertain. Based on this definition, the Company's most critical
policies include: valuation of accounts receivable, which impacts general and
administrative expense; valuation of inventory, which impacts cost of sales and
gross margin; the assessment of recoverability of goodwill and other intangible
and long-lived assets, which impacts write-offs of goodwill, intangibles and
long-lived assets; accounting for stock based compensation, which impacts
multiple expense components throughout the statement of earnings; and accounting
for income taxes, which impacts the valuation allowance and the effective tax
rate. Management reviews the estimates, including, but not limited to, allowance
for doubtful accounts, inventory reserves and income tax valuations on a regular
basis and makes adjustments based on historical experiences, current conditions
and future expectations. The reviews are performed regularly and adjustments are
made as required by current available information. The Company believes these
estimates are reasonable, but actual results could and have differed at times
from these estimates.

The Company's accounts receivable represent those amounts which have been billed
to its customers but not yet collected. The Company analyzes various factors
including historical experience, credit worthiness of customers and current
market and economic conditions. The allowance for doubtful accounts balance is
established based on the portion of those accounts receivable which are deemed
to be potentially uncollectible. Changes in judgments on these factors could
impact the timing of costs recognized.

The Company states inventories at the lower of cost or market, using a standard
cost methodology to determine the cost basis for the inventory. This method
approximates actual cost on a first-in-first-out basis. The recoverability of
inventories is based on the types and levels of inventory held, forecasted
demand, pricing, competition and changes in technology.

The Company records valuation allowances to reduce deferred tax assets when it
is more likely than not that some portion of the amount may not be realized. The
Company evaluates the need for valuation allowances on a regular basis and
adjusts the allowance as needed. These adjustments, when made, would have an
impact on the Company's financial statements in the period that they were
recorded.

Intangible assets with estimable useful lives are amortized to their residual
values over those estimated useful lives in proportion to the economic benefit
consumed.



                                       26
<PAGE>


Long-lived assets with estimated useful lives are depreciated to their residual
values over those useful lives in proportion to the economic value consumed.
Long-lived assets are tested for impairment at the group level, which is usually
an economic unit such as a manufacturing facility or department, which has a
measurable economic output or product. Long-lived assets are tested for
impairment when events or changes in circumstances indicate that the carrying
amount of a long-lived asset may not be recoverable and exceeds its fair market
value. This circumstance exists if the carrying amount of the assets in question
exceeds the sum of the undiscounted cash flows expected to result from the use
of the asset. The impairment loss is measured as the amount by which the
carrying amount of a long-lived asset exceeds its fair value as determined by
the discounted cash flow or in the case of negative cash flow, an independent
market appraisal of the asset.

Goodwill is tested annually during the fourth fiscal quarter, or sooner if
indicators of impairment exist, for impairment by the Company at the reporting
unit level by comparing the fair value of the reporting unit with its carrying
value. Valuation methods for determining the fair value of the reporting unit
include reviewing quoted market prices and discounted cash flows. If the
goodwill is indicated as being impaired (the fair value of the reporting unit is
less than the carrying amount), the fair value of the reporting unit is then
allocated to its assets and liabilities in a manner similar to a purchase price
allocation in order to determine the implied fair value of the reporting unit
goodwill. This implied fair value of the reporting unit goodwill is then
compared with the carrying amount of the reporting unit goodwill and, if it is
less, the Company would then recognize an impairment loss.

The projection of future cash flows for the goodwill impairment analysis
requires significant judgments and estimates with respect to future revenues
related to the assets and the future cash outlays related to those revenues.
Actual revenues and related cash flows or changes in anticipated revenues and
related cash flows could result in changes in this assessment and result in an
impairment charge. The use of different assumptions could increase or decrease
the related impairment charge.

The Company accounts for stock based compensation by recognizing expense over
the vesting period for any nonvested stock option awards granted. Stock option
grants are valued by using a Black-Scholes method at the date of the grant.
There are assumptions and estimates made by management which go into the
valuation of the options granted, such as volatility, vesting period, and
forfeiture rate. The Company recognizes expense on options granted using a
straight-line method over the vesting period. Restricted stock grants are
expensed over the vesting period, which is determined at the date of the grant.

Liquidity and Capital Resources

Net cash provided by continuing operations for the nine months ended March 31,
2007 was $9.4 million compared to net cash provided by continuing operations for
the first nine months of the prior year of $11.0 million. The positive cash flow
from continuing operations in the current nine months was due to the high level
of net income before depreciation and non cash equity compensation ($17.4
million (As restated)) which more than off-set the $6.8 million (As restated)
used to fund the current inventory and accounts receivable increases. The
positive cash flow from continuing operations in the first nine months of fiscal
2006 was due primarily to income before depreciation and non cash equity
compensation for the period of $13.6 million which more than off-set the $3.3
million used to fund inventory and accounts receivable increases.



                                       27
<PAGE>


Net cash used in, or provided by, investing activities consists of funds used to
purchase capital equipment, proceeds from the sale of land and equipment and
funds used or provided by the net purchase or maturity of marketable debt
securities.

Net cash used in investing activities in the first nine months of fiscal 2007
was $1.5 million and consisted of $7.8 million provided by the settlement of
matured investments, net of $9.3 million used to acquire capital equipment and
fund the Company's current physical plant expansion. Net cash used in investing
activities in the first nine months of fiscal 2006 was $1.4 million and
consisted of funds provided by net purchases and settlement of matured
investments totaling $2.9 million, less capital additions of $4.3 million.

Net cash used in financing activities was $9.4 million in the first nine months
of fiscal 2007 and consisted of funds and tax benefits received from the
exercise of stock options amounting to $2.8 million, less $12.1 million used to
purchase treasury shares. Cash used in financing activities the first nine
months of fiscal 2006 was $7.6 million, which consisted of $9.8 million used for
the purchase of treasury shares, net of $2.2 million received from funds and tax
benefits generated by stock option exercises.

During the remainder of fiscal 2007, the Company anticipates that its main cash
requirements will be for additions to capital equipment and funds for the
current building expansion. Capital expenditures are expected to total between
$11.0 and $12.0 million for fiscal 2007 and will be funded by existing cash
balances.

The Company expects to continue to purchase shares of its common stock in the
open market and/or through private negotiated transactions under the current
Board authorization, depending on market conditions. At March 31, 2007, there
were 361,105 shares remaining under the current Board repurchase authorization.

At March 31, 2007, the Company had approximately $79.4 million in cash, cash
equivalents, and marketable securities. The Company has no debt, and on a fiscal
year basis has had positive operating cash flow for over eight years. The
Company believes that its cash requirements for the foreseeable future will be
satisfied by currently invested cash balances and expected cash flows from
operations.

Disclosures About Contractual Obligations and Commercial Commitments

Accounting standards require disclosure concerning the Company's obligations and
commitments to make future payments under contracts, such as debt, lease
agreements, and under contingent commitments, such as debt guarantees. The
Company's obligations and commitments are as follows:

<TABLE>
<CAPTION>

                                                   Payment Due by Period
                                -------------------------------------------------------------
                                               Less
                                  Total     than 1 Yr.    2-3 Yrs       4-5 Yrs    Over 5 Yrs
                                  -----     ----------    -------       -------    ----------
<S>                             <C>          <C>         <C>          <C>          <C>
Contractual obligations
Operating leases - facilities   $4,626,699   $690,394    $1,380,789   $1,380,789   $1,174,727
Deferred compensation              333,564     65,000       130,000      130,000        8,564
</TABLE>



                                       28
<PAGE>


Recent Accounting Pronouncements

FASB Interpretation 48 was issued in July 2006 to clarify the criteria for
recognizing tax benefits under FASB Statement No. 109, Accounting for Income
Taxes. The Interpretation defines the threshold for recognizing the benefits of
tax-return positions in the financial statements as "more-likely-than-not" to be
sustained by the taxing authority and will affect many companies' reported
results and their disclosures of uncertain tax positions. The Interpretation
does not prescribe the type of evidence required to support meeting the
more-likely-than-not threshold, stating that it depends on the individual facts
and circumstances. The benefit recognized for a tax position meeting the
more-likely-than-not criterion is measured based on the largest benefit that is
more than 50 percent likely to be realized. The measurement of the related
benefit is determined by considering the probabilities of the amounts that could
be realized upon ultimate settlement, assuming the taxing authority has full
knowledge of all relevant facts and including expected negotiated settlements
with the taxing authority. Interpretation 48 is effective as of the beginning of
the first fiscal year beginning after December 15, 2006 (the Company's 2008
fiscal year). The company is currently analyzing the financial statement impact
of adopting this pronouncement.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements" ("SAB 108"). SAB 108 was
issued to provide interpretive guidance on how the effects of the carryover or
reversal of prior year misstatements should be considered in quantifying a
current year misstatement. The Company adopted SAB 108 as of July 1, 2006. (See
Note 16).

In September 2006, the FASB issued Statement of Financial Accounting Standard
No. 157, "Fair Value Measurements" which is effective for fiscal years beginning
after November 15, 2007 (the Company's 2009 fiscal year) and for interim periods
within those years. This statement defines fair value, establishes a framework
for measuring fair value and expands the related disclosure requirements. The
Company is currently evaluating the potential impact of this statement.

In September 2006, the FASB issued Statement of Financial Accounting Standard
No. 158, "Employer's Accounting for Defined Benefit Pension and Other
Postretirement Plans-an amendment to FASB Statements 87, 88, 106 and 132(R)"
("SFAS 158"), which requires balance sheet recognition of the overfunded or
underfunded status of pension and postretirement benefit plans. Under SFAS 158,
actuarial gains and losses, prior service costs or credits, and any remaining
transition assets or obligations that have not been recognized under previous
accounting standards must be recognized in Accumulated Other Comprehensive
Income, net of tax effects, until they are amortized as a component of net
periodic benefit cost. In addition, the measurement date, the date at which plan
assets and the benefit obligation are measured, is required to be the company's
fiscal year end. This Statement is effective for fiscal years ending after
December 15, 2006 (the Company's 2007 fiscal year). The Company is currently
analyzing the financial statement impact of adopting this pronouncement.

In February 2007, the FASB issued Statement of Financial Accounting Standard No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities -
Including an Amendment of FASB Statement No. 115" (SFAS 159). This Statement
provides companies with an option to measure, at specified election dates, many
financial instruments and certain other items at fair value that are not
currently measured at fair value. A company that adopts SFAS 159 will report
unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date. This Statement also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. This Statement is effective for



                                       29
<PAGE>


fiscal years beginning after November 15, 2007 the Company's 2009 fiscal
year).The Company is currently evaluating the potential impact of this
statement.

Forward-Looking Cautionary Statement

The statements contained in this news release which are not historical
information are "forward-looking statements". These, and other forward-looking
statements, are subject to business and economic risks and uncertainties that
could cause actual results to differ materially from those discussed. The risks
and uncertainties described below are not the only risks and uncertainties
facing our Company. Additional risks and uncertainties not presently known to us
or that are currently deemed immaterial may also impair our business operations.
If any of the following risks actually occur, our business could be adversely
affected, and the trading price of our common stock could decline, and you may
lose all or part of your investment. Such known factors include, but are not
limited to: the Company's ability to timely ramp up to meet some of our
customers' increased demands; potential unanticipated liabilities and delays
associated with the physical expansion of the Company's Syracuse, New York
facility; unanticipated delays in successfully completing customer orders within
contractually required timeframes; increased pricing pressure from our
customers; decreased capital expenditures by wireless service providers; the
possibility that the Company may be unable to successfully execute its business
strategies or achieve its operating objectives, generate revenue growth or
achieve profitability expectations; successfully securing new design wins from
our OEM customers, reliance on a limited number of key component suppliers,
unpredictable difficulties or delays in the development of new process and
products including LTCC; order cancellations or extended postponements; the
risks associated with any technological shifts away from the Company's
technologies and core competencies; unanticipated impairments of assets
including investment values and goodwill; diversion of defense spending away
from the Company's products and or technologies due to on-going military
operations; and litigation involving antitrust, intellectual property,
environmental, product warranty, product liability, and other issues. You are
encouraged to review Anaren's 2006 Annual Report, Anaren's Form 10-K for the
fiscal year ended June 30, 2006, as amended, Anaren's Form 10-Q for the three
months ended September 30, 2006, as amended, Anaren's Form 10-Q for the three
months ended December 31, 2006 and exhibits to those Reports filed with the
Securities and Exchange Commission to learn more about the various risks and
uncertainties facing Anaren's business and their potential impact on Anaren's
revenue, earnings and stock price. Unless required by law, Anaren disclaims any
obligation to update or revise any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discusses the Company's possible exposure to market risk related
to changes in interest rates, equity prices and foreign currency exchange rates.
This discussion contains forward-looking statements that are subject to risks
and uncertainties. Results could differ materially from those anticipated in
these forward-looking statements as a result of various factors, including
factors described elsewhere in this Quarterly Report on Form 10-Q.

As of March 31, 2007, the Company had cash, cash equivalents and marketable
securities of $79.4 million, all of which consisted of cash and highly liquid
investments in marketable debt securities. The marketable debt securities at
date of purchase normally have maturities between one and 18 months, are exposed
to interest rate risk and will decrease in value if market interest rates
increase. A hypothetical decrease in market interest rates of 10.0% from March
31, 2007 rates, or 0.375%, would have reduced net income and cash flow by
approximately $67,000, or $0.004 per share for the quarter. Due to the
relatively short maturities of the securities and its ability to hold those
investments to maturity, the Company does not believe that an immediate



                                       30
<PAGE>


decrease in interest rates would have a significant effect on its financial
condition or results of operations. Over time, however, declines in interest
rates will reduce the Company's interest income.

Item 4. Controls and Procedures

A. Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive Officer and its Chief Financial Officer evaluated
the Company's disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this
quarterly report. Management has concluded that their disclosure controls and
procedures were not effective at March 31, 2007 due to the material weaknesses
in internal control over financial reporting as described below:

The Company did not maintain policies and procedures that were sufficient to
assess financial reporting risks on a timely basis. Specifically,

(i)      Management did not have an adequate process to assess risks when
         changes in the internal control system or key finance personnel occur
         and provide the appropriate level of oversight. This material weakness
         contributed to the material weakness listed in item (iii) below.

(ii)     Management did not maintain controls sufficient to assess on a timely
         basis the financial statement impact of significant contracts and
         agreements or to identify, monitor, and measure and accounting
         practices that are not in compliance with generally accepted accounting
         principles. This material weakness contributed to the material
         weaknesses in items (iv) through (vi) below.

These material weaknesses contributed to the material weaknesses listed in items
(iii) through (vi) below.

(iii)    Accounting for Inventory and Cost of Sales in China: The Company's
         accounting personnel in China had insufficient knowledge and experience
         in the application of U.S. generally accepted accounting principles,
         which resulted in inappropriate changes to the policies and procedures
         for the accounting for inventory and cost of sales. As a result, the
         Company did not maintain effective policies and procedures over the
         determination and reporting of its inventory and cost of sales. This
         material weakness resulted in restatement of the Company's 2007 interim
         financial statements.

(iv)     Accounting for Distributor Agreements: The Company's policies and
         procedures were not adequate to properly account for sales transactions
         with distributors. Specifically, the Company's policies allowed for the
         recognition of revenue upon shipment to the distributor rather than
         when earned by the Company in accordance with U.S. generally accepted
         accounting principles. This material weakness resulted in adjustments
         to the fiscal 2007 annual consolidated financial statements.

(v)      Accounting for Stock-Based Compensation: The Company's policies and
         procedures were not adequate to properly recognize stock compensation
         expense. Specifically, the Company's policies allowed for the
         recognition of expense for retirement eligible employees over
         nonsubstantive service periods rather than as incurred in accordance
         with



                                       31
<PAGE>


         U.S. generally accepted accounting principles. This material weakness
         resulted in adjustments to the fiscal 2007 annual consolidated
         financial statements.

(vi)     Accounting for Warranty Reserves, Sales Returns and Allowances and
         Inventory Valuations: The warranty accrual, reserve for sales returns
         and allowances and practices related to the valuation of inventory were
         recognized in the Company's financial statements using non-GAAP
         policies. The Company did not maintain policies and procedures to
         monitor these accounting practices that were sufficient to prevent or
         detect, on a timely basis, a misstatement that could be considered to
         be material to the Company's financial statements. This material
         weakness resulted in adjustments to the fiscal 2007 annual consolidated
         financial statements.

B. Changes in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial
reporting that occurred during the fiscal quarter covered by this report that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.



                                       32
<PAGE>


PART II   OTHER INFORMATION

Item 1A. Risk Factors

The Company is exposed to certain risk factors that may effect operations and/or
financial results. The significant factors known to the Company are described in
the Company's most recently filed Annual Report on Form 10-K, as amended, and
above. There have been no material changes from the risk factors as previously
disclosed in the Company's Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On May 10, 2005, the Board of Directors increased by 2,000,000 the number of
shares that the Company was authorized to repurchase in open market or by
privately negotiated transactions through its previously announced stock
repurchase program. The program, which may be suspended at any time without
notice, has no expiration date. The following table sets forth information
regarding shares repurchased and purchasable under the program during and as of
the end of the periods indicated. On March 31, 2007, 361,105 shares remained
authorized for purchase.

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------
   Period                    Total Number of       Average Price Paid       Total Number of      Maximum Number (or
                            Shares (or Units)     per Share (or Unit)      Shares (or Units)     Approximate Dollar
                                Purchased                                Purchased as Part of   Value) of Shares (or
                                                                          Publicly Announced     Units) that May Yet
                                                                           Plans or Programs     Be Purchased Under
                                                                                                the Plans or Programs
---------------------------------------------------------------------------------------------------------------------
<S>                              <C>                    <C>                     <C>                   <C>
January 2007                           0                   --                         0               1,077,879
---------------------------------------------------------------------------------------------------------------------
February 2007                    416,199                17.20                   416,199                 661,680
---------------------------------------------------------------------------------------------------------------------
March 2007                       300,575                16.57                   300,575                 361,105
---------------------------------------------------------------------------------------------------------------------
Total                            716,774                   --                   716,774                      --
---------------------------------------------------------------------------------------------------------------------
</TABLE>

Item 6.     Exhibits

            31    Rule 13a-14(a) Certifications

            32    Section 1350 Certifications



                                       33
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            Anaren, Inc.
                                            (Registrant)

Date:  October 31, 2007                     /s/Lawrence A. Sala
                                            ------------------------------------
                                            Lawrence A.Sala
                                            President & Chief Executive Officer

Date:  October 31, 2007                     /s/Joseph E. Porcello
                                            ------------------------------------
                                            Joseph E. Porcello
                                            Sr. Vice President of
Finance and Treasurer



                                       34