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

                                    FORM 10-K

(Mark One)

|_|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

For the fiscal year ended June 30, 2009

                                       OR

|_|   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 or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


               6635 Kirkville Road, East Syracuse, New York 13057
               --------------------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (315) 432-8909

           Securities registered pursuant to Section 12(b) of the Act:

Title of each class                    Name of each exchange on which registered
Common Stock, $0.01 par value          The NASDAQ Stock Market LLC

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 Par Value
                                (Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or15(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 checkmark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of regulation S-T (Section
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files. Yes |_|
No |_|

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<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule12b-2 of the Exchange Act. (Check One):

Large Accelerated Filer |_|    Accelerated Filer |X|   Non-accelerated Filer |_|
Smaller reporting company |_|

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

The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant, based on the closing sale price of the Common
Stock on December 31, 2008, as reported on the NASDAQ Global market, was
approximately $173,589,488.

The number of shares of the Registrant's Common Stock outstanding on September
9, 2009 was 14,765,930.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement to be delivered in
connection with its 2009 Annual Meeting of Shareholders are incorporated by
reference into Part III of this Annual Report on Form 10-K.

================================================================================

<PAGE>

PART I
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Item 1.       Business                                                         1
Item 1A.      Risk Factors                                                     8
Item 1B.      Unresolved Staff Comments                                       12
Item 2.       Properties                                                      12
Item 3.       Legal Proceedings                                               12
Item 4.       Submission of Matters to a Vote of Security Holders             12
              Executive Officers of the Registrant                            13

PART II
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Item 5.       Market for Registrant's Common Equity, Related Stockholder
              Matters and Issuer Purchases of Equity Securities               15
Item 6.       Selected Consolidated Financial Data                            16
Item 7.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                       19
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk      32
Item 8.       Financial Statements and Supplementary Data                     32
Item 9.       Changes in and Disagreements with Accountants and
              Financial Disclosure                                            32
Item 9A.      Controls and Procedures                                         32
Item 9B.      Other Information                                               34

PART III
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Item 10.      Directors, Executive Officers and Corporate Governance          35
Item 11.      Executive Compensation                                          35
Item 12.      Security Ownership of Certain Beneficial Owners and Management
              and Related Stockholder Matters                                 35
Item 13.      Certain Relationships and Related Transactions, and Director
              Independence                                                    35
Item 14.      Principal Accountant Fees and Services                          35

PART IV
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Item 15.      Exhibits and Financial Statement Schedules                      36
Index to Exhibits                                                             73
Signatures                                                                    77

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<PAGE>

                                     PART I

Item 1. Business

General Overview

The Company was incorporated in New York in 1967. The Company's executive
offices are located at 6635 Kirkville Road, East Syracuse, New York 13057. The
telephone number of the Company at that location is (315) 432-8909. The
Company's website is located at www.anaren.com. The Company makes its periodic
and current reports available, free of charge, on its website as soon as
reasonably practicable after such material is electronically filed with, or
furnished to, the Securities and Exchange Commission. The information contained
on the Company's website is not included as part of, or incorporated by
reference into, this Report. The Company's common stock is listed on the NASDAQ
Global Market under the symbol "ANEN." Unless the context otherwise provides,
the "Company" or "Anaren" refers to Anaren, Inc. and its subsidiaries.

The Company is a leading provider of microelectronics, and microwave components
and assemblies for the wireless and space and defense electronic markets. The
Company's distinctive engineering, manufacturing and packaging techniques enable
it to cost-effectively produce compact, lightweight microwave products for use
in wireless communication and space and defense systems covering a broad range
of frequencies (from 100 MHz to more than 30 GHz) and power levels (small signal
to more than 500 watts).

Through its focused research and development efforts, Anaren continues to design
components and subsystems for wireless communication systems including wireless
infrastructure, wireless consumer and medical applications, as well as advanced
radar, beamforming, jamming, motion control and receiver applications for the
space and defense markets.

The Company conducts business in two business segments. See segment and related
information in Item 8 of this report.

Wireless Segment

Industry Overview

The Company's Wireless products are used primarily in communication systems,
either in user equipment, such as Wireless Local Area Network (WLAN), Cellular
Handsets, or Satellite Television Reception applications, or on the network
infrastructure side such as Cellular Telephone Base Stations or Television
Broadcast equipment applications.

A typical wireless communications network is comprised of a geographic region
containing a number of cells, each of which contains one or more base stations,
which are linked in a network to form a service provider's coverage area. Each
base station is comprised of the equipment that receives incoming telephone
calls and broadcasts calls to the wireless users within the cell. A base station
can process a fixed number of radio channels through the use of multiple
transceivers, power amplifiers, filters, and combiners - along with an antenna
to transmit and receive signals to and from the wireless user.

Global System for Mobile communications (GSM) and the higher data rate overlay
Enhanced Data Rates for GSM Evolution (EDGE) is the industry leading technology
in terms of equipment shipped, users served, and countries covered. In support
of major equipment roll-outs primarily in India and China, demand for GSM/EDGE
equipment was at all time highs during fiscal 2007 and remained at those levels
in fiscal 2008. This resulted in increased demand for both the Company's
components and higher level custom assemblies. During fiscal 2009, demand
declined for GSM/EDGE equipment as a result of the overall worldwide economic
decline.

GSM is referred to as a second generation (2G) wireless network. For higher data
rates, third generation networks (3G) are utilized. In the years to come, the
number of persons requiring high data rates to support using internet and email
from mobile terminals is also expected to continue to grow. Fueled by this
demand, deployment of new high data rate networks should continue. Demand for 3G
related products is estimated to be similar to 2G equipment in the near future.
The Company's products are utilized in both 2G and 3G equipment.

Strategy

The Company's strategy for the Wireless segment is to continue to use its
microwave expertise, proprietary technologies, extensive microwave design
libraries and low cost manufacturing capabilities to further expand its
penetration in the wireless industry. Key components of the Company's strategy
include the following:

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      Pursue Large Addressable Markets. The Company has successfully  penetrated
      the mobile wireless infrastructure market and is using its market position
      to pursue other wireless markets such as WLAN, Mobile Handsets, Bluetooth,
      Satellite Television, medical and other consumer electronics markets. This
      is enabled by advances made in the Company's  design and  manufacturing of
      sub miniature Multi-Layer Stripline components.

      Focus on value added products. The Company intends to expand its component
      offerings to enable the Company to increase the number of products
      addressing each wireless application. In addition, with its Multi-Layer
      Stripline, ferrite devices, and Thick Film Ceramic manufacturing
      technologies, the Company intends to continue to increase the
      functionality of its products, thereby enabling its wireless customers to
      continue to reduce the size and cost of their platforms, while the Company
      increases its content value.

      Strengthen and Expand Customer Relationships. Today, a limited number of
      large OEMs drive the wireless market. The Company has developed, and plans
      to continue to expand, customer relationships with many of these
      manufacturers including Alcatel Lucent, Ericsson, Huawei, Motorola, Nokia
      Siemens Networks, ZTE and Samsung. The Company intends to further
      strengthen its customer relationships by offering complete outsourcing
      solutions, from research and development to product design and production,
      thereby increasing the customers' reliance on the Company.

      Pursue Price Leadership Position. The Company aspires to use its
      technological leadership, low cost manufacturing, and sourcing
      capabilities to be one of, if not the lowest cost provider of components
      and higher level assemblies for the wireless markets.

      Pursue Strategic Acquisitions. The Company intends to continue to pursue
      opportunistic acquisitions of companies, product lines and technologies.
      The Company will focus on acquisitions that compliment its technical
      expertise and business development resources and provide a competitive
      advantage for its targeted markets.

Products and Technologies

The Company provides components and assemblies to leading wireless industry
equipment manufacturers. These products range from subminiature components for
consumer electronics to custom assemblies for high power wireless infrastructure
applications.

The Company has developed its product offerings to enable customers to reduce
the size and cost, while enhancing the performance of their equipment. The
Company continually invests capital and human resources to enhance existing
products and develop new products to address the latest market demands. The
Company has developed and continues to market a full line of standard products,
as well as custom products, to wireless original equipment manufacturers. A
brief description of the Company's major product categories is as follows:

      Passive Surface Mount Components. The Company's Xinger(R) line of products
      consists of off-the-shelf surface mount microwave components which provide
      passive microwave signal distribution functions. These products were
      developed to provide a low-cost high performance signal distribution
      component, which could be placed on standard printed circuit boards with
      automated production equipment. The primary applications of these products
      are in equipment for cellular base stations and in WLAN, Bluetooth, and
      Satellite Television.

      In cellular base stations, the Company's surface mount products are
      utilized in radio frequency (RF) power amplifiers, and are also found in
      low-noise amplifiers and radios. Based on its research, the Company
      believes it is currently the market leader in this product area, supplying
      industry leading original equipment manufacturers and leading power
      amplifier manufacturers. The Company continues to invest in the expansion
      of this product line as well as its addressable market. The Company's
      surface mount product line offers significantly improved RF performance
      and power handling in a package that supports the latest global
      environmentally friendly initiatives.

      The Company has also recently introduced several products specifically
      designed to address WLAN, cellular telephone handsets and Bluetooth
      applications. These innovative products are 1/100th the size of our
      typical Xinger(R) type of product and offer performance and cost
      advantages over traditional consumer electronic components.

      Ferrite Products. The Company's ferrite components are used in various
      wireless base station applications. They are a key component in base
      station amplifiers, and their primary function is to protect the sensitive
      amplifier electronics from damage by isolating them electronically from
      potentially harmful high power signals.

      Resistive Products. The Company's resistive product line includes
      resistors, power terminations, and attenuators for use in high


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      power wireless, industrial, and medical applications. These products range
      from very small components for implantable medical devices to high power
      products used in power amplifiers. These products are frequently used in
      conjunction with ferrite products as well as Xinger(R) surface mount
      components.

      Custom Splitting and Combining Products. In addition to its standard
      products, the Company offers a wide range of custom signal splitting and
      combining solutions. These custom solutions are typically used to
      distribute signals to and from antennas, radio transceivers and power
      amplifiers in wireless base station applications. The Company's custom
      assemblies typically integrate several of the Company's components such as
      Xinger(R), ferrite, and resistive products. Given this vertical
      integration, the Company's Custom Splitting and combining products offer
      very high performance and can be designed in unique configurations,
      allowing base station designers an opportunity to greatly reduce space,
      complexity and cost while enhancing performance.

      Custom Radio Frequency Backplane Assemblies. The Company's RF backplanes
      provide efficient connections of microwave signals between subsystems in
      wireless base stations. RF backplanes are conceptually similar to the
      motherboard in a personal computer, which efficiently connects signals
      between multiple subsystems. These assemblies range from RF-only to fully
      integrated RF, direct current power, and digital signal routing solutions.
      They are typically used in conjunction with radio transceivers and RF
      power amplifiers. The Company also offers backplane assemblies with fully
      integrated radio-frequency signal switching capability.

      Hybrid Matrix Assemblies. The Company's hybrid matrix assemblies allow
      customers to effectively reduce the number of amplifiers in a base
      station. Base station amplifier systems are designed to handle peak usage
      when maximum calls are being made over a network. Due to the sector
      coverage of typical base stations, some amplifiers are heavily used while
      others are not. The Company's matrices allow the spreading of high usage
      volume over all base station amplifiers, permitting a reduction in the
      total number of amplifiers needed. These products are offered in a number
      of packaging configurations, including backplanes.

Customers

The Company believes that the strength of its customer support and depth of its
customer relationships provide the Company a competitive advantage. To this end,
the Company endeavors to become an integral part of its key customers'
operations by working closely with them through the entire development and
production process. The Company assigns a dedicated multi-disciplined team
including project engineering, design engineering and customer service to each
customer to ensure a high level of responsiveness and customer service. This
team assists the customer from the conceptual design stages through the
development and manufacturing process. By maintaining close contact with the
customers' design engineering, manufacturing, purchasing and project management
personnel, the Company can better understand their needs, rapidly develop
customer-specific solutions, and more effectively design the Company's solutions
into the customers' systems and networks.

The Company sells its standard line of Xinger(R) components, custom products,
resistive components, and ferrite components to leading original equipment
manufacturers and a broad range of other wireless equipment contract
manufacturers. In general, customers have purchased the Company's products
directly from the Company or through distributors or sales representatives.
During the fiscal year ending June 30, 2009, the Wireless Group accounted for
41% of the Company's total revenues. No Wireless customer accounted for more
than 10% of the Company's fiscal 2009 net sales. The following is a list of
customers who generated $1 million or more in revenues for the Company in the
fiscal year ended June 30, 2009:

      o     Avnet Electronics

      o     Celestica Corp.

      o     EG Components

      o     Flextronics International, Ltd.

      o     Huawei Technologies Co., Ltd.

      o     Motorola, Inc.

      o     Nokia Siemens Networks

      o     Richardson Electronics, Ltd.


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      o     Solectron Tech

      o     St. Jude Medical

      o     Radiance Electronics

      o     Symbol Technologies

      o     Solectron Tech

Competition

The microwave component and assembly industry continues to be highly
competitive. Direct competitors of the Company in the wireless market include
Aeroflex, Smith Industries, SDP, and Soshin Electric Co. As a direct supplier to
original equipment manufacturers, the Company also faces significant competition
from the in-house capabilities of its customers. However, the current trend in
the wireless marketplace has been for the original equipment manufacturers to
outsource more design and production work.

The principal competitive factors in both the foreign and domestic markets are
technical performance, reliability, ability to produce in volume, on-time
delivery and most critically, price. It is anticipated that this pricing
pressure will continue indefinitely.

Based on these factors, the Company believes that it competes favorably in its
markets. The Company believes that it is particularly strong in the area of
technical performance in the wireless marketplace. With its manufacturing
capability in Suzhou, China, and new innovative design techniques, the Company
believes that it now competes favorably on price as well.

Backlog

The Company's backlog of orders for the Wireless segment was $8.0 million as of
June 30, 2009, versus $13.0 million as of June 30, 2008. Backlog for the
Wireless segment primarily represents firm orders for component products and
signed purchase orders (i.e., orders for specific custom sub-assemblies) for
custom components due to ship within eight to twelve weeks. The Company does not
believe that its Wireless backlog as of any particular date is representative of
actual sales for any succeeding period. Typically, large original equipment
manufacturers (OEM) including Ericsson, Motorola, and Nokia, who use the
Company's component and custom products, negotiate set prices for estimated
annual volumes. The Company then receives a firm delivery commitment prior to
shipment. The Company does not recognize backlog until it has received a firm
order.

As part of the Company's close working relationships with major wireless
communications customers, the customers expect the Company to respond quickly to
changes in the volume and delivery schedule of their orders and, if necessary,
to inventory products at its facilities for just-in-time delivery. Therefore,
although contracts with these customers typically specify aggregate dollar
volumes of products to be purchased over an extended time period, these
contracts also provide for delivery flexibility, on short notice. In addition,
these customers may cancel orders with some financial penalty or defer orders
without significant penalty.

Space & Defense Group

Industry Overview

The U.S. Department of Defense (DOD) and major U.S. Defense OEM's continue to be
committed to ensure a high state of military readiness. The DOD funding
priorities focus on the safety and effectiveness of our troops, national defense
programs, homeland security, and battlefield command and communication systems.
Funding for advanced radar systems, advanced jamming systems, smart munitions,
electronic surveillance systems and satellite and ground based communication
systems has remained strong. Therefore, we see a favorable outlook for defense
industry spending and demand for our products and technologies.

Strategy

The Company's strategy for the Space & Defense Group is to continue to use its
microwave expertise, proprietary design libraries, technologies, and
manufacturing capabilities to further expand its customer penetration. Key
components of the Company's strategy include the following:

      Strengthen and Expand Strategic Customer Relationships. Today, a limited
      number of large OEMs drive the Space & Defense Group's business. The
      Company has developed, and plans to continue to expand customer
      relationships with many of these OEM's including, Raytheon, Lockheed
      Martin, Northrop Grumman, ITT, Harris, Rockwell and Boeing. The Company
      intends to


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      further strengthen its customer relationships by offering complete
      solutions, from research and development to product design and
      manufacturing.

      Focus on value added products. The Company intends to expand its product
      and technology offerings to increase the added value for next generation
      space and defense systems. The Company intends on leveraging investments
      in advanced microwave packaging technologies to meet the demands of our
      customers for increased levels of integration and functionality.

      Pursue Strategic Acquisitions. The Company intends to continue to pursue
      opportunistic acquisitions of companies (similar to M. S. Kennedy Corp.
      (MSK) and Unicircuit, Inc. (Unicircuit)), product lines and technologies
      that provide synergistic opportunities for its Space & Defense Group. The
      Company will also focus on acquisitions that compliment its technical
      expertise and business development resources and provide a competitive
      advantage for its targeted markets.

Products and Technology

Our Space & Defense Group principally designs and manufactures advanced
microwave-based hardware for use in advanced radar systems, advanced jamming
systems, smart munitions, electronic surveillance systems and satellite and
ground based communication systems.

      Radar Countermeasure Subsystems. Defense radar countermeasure subsystems
      digitally measure, locate and counter enemy radar systems. Our Digital
      Radio Frequency Measurement (DRFM) devices are used for storing and
      retrieving RF signals as part of military aircraft self protection
      systems. Our Digital Frequency Discriminators (DFD) are employed in
      electronic warfare (EW) systems to detect and measure the RF signals
      emitted by enemy radar systems. Our Company also manufactures a suite of
      electronic subassemblies designed to process radar signals detected by a
      receiver. This technology is a major component of Electronic Support
      Measure (ESM) systems used on helicopters and fixed winged aircraft to
      detect, locate and identify enemy radar. This technology is called a
      Passive Ranging Subsystem.

      Beamformers. Beamformers determine the number, size and quality of beams
      that are produced from an antenna array. The Company supplies passive and
      active beamformers and has unique expertise in designing and manufacturing
      high performance beamformers in industry leading small size packages.
      Passive beamformers produce fixed beam locations while active beamformers
      allow for real-time reconfiguration of the beam pattern. Beamforming
      technology is implemented on military and commercial phased array
      communication systems and radar systems.

      Switch Matrices. Switch matrices route RF signals from a single location
      to one or multiple end user locations. These products allow system
      operators to allocate capacity as required, thereby increasing utilization
      and revenue generation.

      Radar Feed Networks. Radar feed networks distribute RF energy to the
      antenna elements of the radar. Radar Feed Networks are integrated into
      radar platforms for airborne, shipborne, ground base radars and missile
      guidance applications.

      Analog Hybrid Modules. Analog Hybrid Modules are used in the electronic
      control and power supply systems for commercial and military aircraft,
      satellites, communication systems and sensor platforms. Analog components
      are used to accurately control the movement of flight surfaces on aircraft
      and missiles, steer antennas for communication systems and provide highly
      accurate regulated voltages for on board power systems. The product
      portfolio consists of motor controllers, amplifiers, and power supply
      components.

      Mixed Signal Printed Circuit Boards. Mixed signal printed circuit boards
      are essential to the operation of all commercial and military aircraft,
      satellite systems, communication systems and sensor platforms. Mixed
      signal printed circuits route RF, analog, digital and power signals to
      mission critical components and systems.

Customers

The Company currently sells passive components and electronic subsystems to
prime contractors serving the United States and foreign governments. During the
fiscal year ending June 30, 2009, the Space & Defense Group accounted for 59% of
the Company's revenues. Lockheed Martin accounted for 14.8% of the Company's net
sales. No other customer in the Space & Defense Group accounted for more than
10% of the Company's fiscal 2009 net sales. The following is a list of Space &
Defense customers who generated $1 million or more in revenues in the fiscal
year ending June 30, 2009:

      o     ITT Corporation

      o     Lockheed Martin Corporation


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      o     Ridge Engineering, Inc.

      o     Northrup Grumman Corporation

      o     Raytheon Company

      o     Thales Alenia Space France

      o     Rockwell Collins, Inc.

      o     Analog Modules

      o     L3 Communications Holdings, Inc.

      o     Richardson Electronics, Ltd.

      o     Wellking

      o     SRC Tec Inc.

Competition

As a direct supplier to the large defense contracting corporations, the Company
faces significant competition from the in-house capabilities of its customers.
In some cases, we are approached after a customer has had limited success with
an internal design effort or to supply a solution in parallel with an internal
effort as a form of risk mitigation.

Direct competitors of the Company in the space and defense market include EMS
Technologies, Cobham, Inc., Herley Industries, KOR Electronics, Smith
Industries, TTM Technologies, International Rectifier, Aeroflex and Merrimac
Industries.

Backlog

Backlog of orders for the Space & Defense Group was $87.0 million as of June 30,
2009, including approximately $25.0 million from M. S. Kennedy Corp. and
Unicircuit, Inc., versus $64.6 million as of June 30, 2008. All of the orders
included in the Space & Defense Group backlog are covered by signed contracts or
purchase orders. However, backlog is not necessarily indicative of future sales.
Accordingly, the Company does not believe that its backlog as of any particular
date is representative of actual sales for any succeeding period.

Sales and Marketing

The Company markets its products worldwide to original equipment manufacturers
in the wireless and space and defense markets primarily through a sales and
marketing force of 37 people as of June 30, 2009. The Company has regional sales
offices located in Sacramento, California; Waterlooville, England; and Suzhou
and Shenzen, China. In addition, as of June 30, 2009, the Company had contracts
with three major distributors, with seventeen manufacturers' representatives in
the United States and Canada, and with ten international representatives located
in Western Europe, the Middle East and Asia. As part of its marketing efforts,
the Company advertises in major trade publications and attends major industry
shows. The Company has also invested significantly in its Internet website which
contains an electronic version of its entire catalog. In addition, the website
enables users to download important device parameter files. These files contain
the performance information for catalog components in a format which is
compatible with commonly used computer aided design/computeraided modeling, or
CAD/CAM equipment. The Company also provides mechanical drawings and
applications notes for proper use of the parts. This service allows designers to
get the information they require and to easily incorporate the Company's parts
into their designs.

After identifying key potential customers, the Company makes sales calls with
its own sales, management and engineering personnel and with manufacturers'
representatives. To promote widespread acceptance of the Company's products and
provide customers with support for their technical and commercial needs, the
sales and engineering teams work closely with the customers to develop solutions
tailored for their particular requirements. The Company believes that its
engineering team, comprised of 209 design and engineering professionals as of
June 30, 2009, is a key competitive advantage.

The Company uses distributors for its standard products, most notably the
Xinger(R) line of surface mount components. Richardson Electronics is a
worldwide distributor of Anaren products. Avnet distributes components in North
America and Asia, meanwhile, BFI Optilus distributes Company products in Europe.
The Scandinavian countries are serviced by E.G. Components, Inc., a subsidiary
of


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Elektronikgruppen. Distribution has become an important part of the Company's
sales efforts by providing the Company with a larger sales force to promote its
catalog product offerings.

Employees

As of June 30, 2009, the Company employed 1,060 full-time people, including 68
temporary employees. Of these employees, 209 were members of the engineering
staff, 735 were in manufacturing positions, 37 were in sales and marketing
positions, and 79 were in management and support functions. None of these
employees are represented by a labor union, and the Company has not experienced
any work stoppages. The Company considers its employee relations to be
excellent.

Manufacturing

The Company currently maintains manufacturing locations in East Syracuse, New
York; Salem, New Hampshire; Liverpool, New York; Littleton, Colorado and Suzhou,
China. During fiscal 2009, the Company acquired MS Kennedy who currently
occupies 43,000 square foot facility in Liverpool, New York, and Unicircuit in
Littleton, Colorado, who owns 30,500 square feet and leases 18,000 square feet
of manufacturing space. During fiscal 2007, the Company moved its Suzhou
operation from a leased 25,000 square foot facility to a leased 76,000 square
foot facility, and built a 54,000 square foot addition to its 105,000 square
foot East Syracuse, NY facility. The facility move in Suzhou provides the
Company with ample manufacturing space and ability to readily respond to future
wireless infrastructure business expansion needs. The addition in Syracuse will
facilitate expansion of the Space & Defense Group's manufacturing and
engineering areas to support current and future growth. During fiscal 2005, the
Company consolidated its Amitron operation located in North Andover,
Massachusetts and its RF Power operation located in Bohemia, New York into one
65,000 square foot facility located in Salem, New Hampshire, operating under a
wholly owned subsidiary, Anaren Ceramics, Inc. This facility includes
significantly more space for future expansion and a state-of-the-art Class
10,000 clean room for manufacturing.

The Company continues to develop capability to produce highly engineered,
complex microwave subassemblies to support its Space & Defense business. In
fiscal 2007, the Company invested in state-of-the-art Low Temperature Co-fired
Ceramic (LTCC) equipment for its Salem, New Hampshire facility. This technology
supports the manufacture of multi-layer ceramic circuits which perform well at
RF and Microwave frequencies and provides the high level of integration required
in today's advanced military electronic systems. Additionally, in fiscal 2009
the acquisition of MS Kennedy added high-reliability hybrid module manufacturing
to the Company's manufacturing capabilities. This capability will be leveraged
with the Company's existing RF design expertise to provide highly integrated
multi-function RF and microwave modules to the major space and defense OEM's.
The addition of Unicircuit provides the Company with state-of-the art RF and
Microwave printed circuit board capability supporting design to print
manufacturing for direct OEM business as well as design to specification
capability when combined with the Company's existing RF design expertise.

The Company is committed to providing the lowest cost manufacturing solutions.
Part of this strategy has evolved with the continued investment in its Suzhou,
China operation. Most high volume, labor intensive wireless product lines from
the Syracuse and the Salem operations have been successfully transitioned to
Suzhou over the past three years. The Company has also successfully implemented
a material sourcing function in Suzhou, facilitating the identification,
qualification, and procurement of lower cost raw materials to support the
wireless infrastructure products being manufactured in Suzhou.

All of the Company's facilities (Syracuse, New York; Salem, New Hampshire;
Liverpool, New York; Littleton, Colorado; and Suzhou, China) are ISO 9001
certified.

The Company manufactures its products from standard components, as well as from
items which are manufactured by vendors to its specifications. The raw materials
utilized in the various product areas are generally accessible and common to
both of the Company's business segments. The Company purchases most of its raw
materials from a variety of vendors and most of these raw materials are
available from a number of sources. During fiscal year 2009, the Company had no
single vendor from which it purchased more than 10% of its total raw materials,
and the Company believes that alternate sources of supply are generally
available for all raw materials supplied by all Company vendors.

Research and Development

The Company's research and development efforts are focused on the design,
development and engineering of both products and manufacturing processes. The
current development efforts of the Company include:

      o     products for use in mobile and fixed wireless infrastructure
            applications;


--------------------------------------------------------------------------------

                                       7
<PAGE>

      o     advanced manufacturing technology to produce microwave stripline
            structures for broadband millimeter wave, or extremely high
            frequency, communications satellite applications;

      o     advanced low temperature co-fired ceramic to produce light weight,
            highly integrated microwave integrated substrates for advanced
            military applications;

      o     miniature components for wireless networking, subscriber and
            broadcast applications; and

      o     High performance analog microelectronics including custom hybrids,
            power hybrids, and multi-chip modules.

These activities include customer-funded design and development, as well as
efforts funded directly by the Company. Research and development expenses funded
by the Company were $13.0 million in fiscal 2009, $10.4 million in fiscal 2008
and $9.1 million in fiscal 2007. Research and development costs are charged to
expense as incurred.

Intellectual Property

The Company's success depends to a significant degree upon the preservation and
protection of its product and manufacturing process designs and other
proprietary technology. To protect its proprietary technology, the Company
generally limits access to its technology, treats portions of such technology as
trade secrets, and obtains confidentiality or non-disclosure agreements from
persons with access to the technology. The Company's agreements with its
employees prohibit them from disclosing any confidential information, technology
developments and business practices, and from disclosing any confidential
information entrusted to the Company by other parties. Consultants engaged by
the Company who have access to confidential information generally sign an
agreement requiring them to keep confidential and not disclose any non-public
confidential information.

The Company currently has 13 active patents and has 11 other patent applications
that are currently pending before the United States Patent and Trademark Office
to protect both the construction and design of its products. The Company also
has registered trademarks covering certain products; most notably is the
Wireless Group's Xinger(R) product family.

By agreement, Company employees who initiate or contribute to a patentable
design or process are obligated to assign their interest in any patent or
potential patent to the Company.

Government Regulation

The Company's products are incorporated into wireless communications systems
that are subject to regulation domestically by the Federal Communications
Commission and internationally by other government agencies. In addition,
because of its participation in the defense industry, the Company is subject to
audit from time to time for compliance with government regulations by various
governmental agencies. The Company is also subject to a variety of local, state
and federal government regulations relating to environmental laws, as they
relate to toxic or other hazardous substances used to manufacture the Company's
products. The Company believes that it operates its business in material
compliance with applicable laws and regulations. However, any failure to comply
with existing or future laws or regulations could have a material adverse effect
on the Company's business, financial condition and results of operations.

Item 1A. Risk Factors

In an effort to provide investors a balanced view of our current condition and
future growth opportunities, this Annual Report on Form 10-K includes comments
by our management about future performance. These statements which are not
historical information, are "forward-looking statements" pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
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 that we face. 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. You
are encouraged to review our 2009 Annual Report, this Form 10-K for the fiscal
year ended June 30, 2009 and exhibits hereto filed with the Securities and
Exchange Commission, to learn more about the various risks and uncertainties
facing our business and their potential impact on our revenue, earnings and
stock price. Unless required by law, we disclaim any obligation to update or
revise any forward-looking statement.

The two acquisitions completed by the Company in Fiscal Year 2009 present
integration challenges and significantly increased its long term debt.

The Company's acquisition of M. S. Kennedy Corp. and Unicircuit, Inc. present
management challenges and substantially increased


--------------------------------------------------------------------------------

                                       8
<PAGE>

our long term indebtedness. The Company has integrated both MSK's and
Unicircuit's businesses into its Space & Defense Group. In doing so, there are
risks and uncertainties that the expected benefits of the acquisition may not be
realized (including the realization of the accretive effects from the
acquisitions), risks of potential loss of key management employees of the
acquired companies, and the potential risks of realization of unknown
liabilities not identified during due diligence. We also significantly increased
our long term indebtedness when we acquired MSK and Unicircuit, and the
applicable loan agreement with our lender contains certain financial covenants
that we are required to meet.

Our Wireless business group has a significant concentration of business with one
OEM customer, Nokia Siemens Networks (Nokia), who accounts for over 8% of net
sales.

Our Wireless group currently derives a significant amount of revenue from
production of one combiner subassembly that is used in a Nokia single base
station platform. Because of this relatively high concentration of business with
one customer and for only one platform, the Company's revenue and profitability
could be materially and adversely impacted by cancellation, postponement, or end
of life of this particular combiner subassembly.

We depend on a small number of suppliers for many of our component parts and
services.

In some cases we rely on a limited group of suppliers to provide us with
services and materials necessary for the manufacture of our products. While we
believe that substitute sources of supply at reasonably similar costs are
available for these and other products purchased, our reliance on a limited
group of suppliers involves several risks, including potential inability to
timely obtain critical materials or services; potential increase in raw
materials costs or production costs; potential delays in delivery of raw
materials or finished products; and reduced control over reliability and quality
of components or assemblies, as outsourcing continues. We do not have binding
contractual commitments or other controls over our suppliers, and therefore
cannot always rely upon the guaranteed availability of the materials necessary
for the manufacture of our products. If we are required to seek alternative
contract manufacturers or suppliers because we are unable to obtain timely
deliveries of acceptable quality from existing manufacturers or suppliers, we
could be forced to delay delivery of our products to our customers. In addition,
if our suppliers and contract manufacturers increase their prices, we could
suffer losses because we may be unable to recover these cost increases under
fixed price production commitments to our customers.

Capital expenditures by wireless service providers for infrastructure equipment
are volatile.

Demand for the Company's Wireless infrastructure equipment products continues to
fluctuate and visibility remains relatively unpredictable. Despite this
fluctuation and poor visibility, sales across all wireless product lines were
strong throughout fiscal year 2008 and relatively strong although somewhat
weaker, in fiscal year 2009. Future decreases in capital expenditures for
Wireless infrastructure equipment could significantly adversely impact the
success of the Company's Wireless business.

The Company's results may be negatively affected by changing interest rates.

The Company is subject to market risk from exposure to changes in interest rates
based on the Company's financing activities. The Company's $50.0 million dollar
demand note agreement with Key Bank National Association (Keybank), which
provided the financing for the MSK and Unicircuit acquisitions bears interest at
the Company's choice at LIBOR, plus 100 to 450 bases points, or at Key Bank's
prime rate, minus 100 to plus 225 bases points, depending upon the Company's
EBITDA performance at the end of each quarter as measured by a defined formula.
Therefore, a ten percent change in the LIBOR interest rate at September 30, 2009
would have the effect of increasing or decreasing interest expense by
approximately $60,000 annually.

Changes in funding for defense procurement programs could adversely affect our
ability to grow or maintain our revenues and profitability.

The demand for many of our Space & Defense products has been favorably impacted
by an upward trend in defense spending in the last few years for, among other
things, advanced radar systems, advanced jamming systems, smart munitions,
electronic surveillance systems and satellite and ground based communication
systems. Although the ultimate size of future defense budgets remains uncertain,
current indications are that the total defense budget may decline over the next
few years. The specific programs in which we participate, or in which we may
seek to participate in the future, must compete with other programs for
consideration during the budget formulation and appropriation processes. While
we believe that our products are a high priority for national defense, there
remains the possibility that one or more of the programs we serve will be
reduced, extended or terminated. Reductions in these existing programs, unless
offset by other programs and opportunities, could adversely affect our ability
to grow our revenues and profitability.

We face continuing pressure to reduce the average selling price of our Wireless
products.

Many of our wireless customers are under continuous pressure to reduce costs
and, therefore, we expect to continue to experience pressure from these
customers to reduce the prices of the products that we sell to them. Our
customers frequently negotiate volume supply arrangements well in advance of
delivery dates, requiring us to commit to price reductions before we can
determine whether the assumed cost reductions or the negotiated supply volumes
can be achieved. To offset declining average sales


--------------------------------------------------------------------------------

                                       9
<PAGE>

prices, we believe that we must achieve manufacturing cost reductions and
increase our sales volumes. If we are unable to offset declining average selling
prices, our gross margins will decline, and this decline could materially harm
our business, financial condition and operating results. During fiscal year 2009
this pricing pressure intensified, particularly affecting our ferrite and
resistor product lines.

We depend on the future development of the wireless and satellite communications
markets, which is difficult to predict.

We believe that our future growth depends in part on the success of the wireless
and satellite communications markets. A number of the markets for our products
in the wireless and satellite communications area have only recently begun to
develop. It is difficult to predict the rate at which these markets will grow,
if at all. Existing or potential wireless and satellite communications
applications for our products may fail to develop or may erode. If the markets
for our products in wireless and satellite communications fail to grow, or grow
more slowly than anticipated, our business, financial condition and operating
results could be harmed.

The markets which we serve are very competitive, and if we do not compete
effectively in our markets, we will lose sales and have lower margins.

The markets for our products are extremely competitive and are characterized by
rapid technological change, new product development and evolving industry
standards. In addition, price competition is intense and significant price
erosion generally occurs over the life of a product. We face competition from
component manufacturers which have integration capabilities, as well as from the
internal capabilities of large communications original equipment manufacturers
and defense prime contractors. Our future success will depend in part upon the
extent to which these parties elect to purchase from outside sources rather than
manufacture their own microwave components. Many of our current and potential
competitors have substantially greater financial, technical, marketing,
distribution and other resources than us, and have greater name recognition and
market acceptance of their products and technologies. Our competitors may
develop new technologies or products that may offer superior price or
performance features, and new products or technologies may render our customers'
products obsolete.

If we are unable to meet the rapid technological changes in the wireless and
satellite communications markets, our existing products could become obsolete.

The markets in which we compete are characterized by rapidly changing
technologies, evolving industry standards and frequent improvements in products
and services. If technologies supported by our products become obsolete or fail
to gain widespread acceptance, as a result of a change in the industry standards
or otherwise, our business could be harmed. Our future success will depend in
part on factors including our ability to enhance the functionality of our
existing products in a timely and cost-effective manner; our ability to
establish close working relationships with major customers for the design of
their new wireless transmission systems that incorporate our products; our
ability to identify, develop and achieve market acceptance of new products that
address new technologies and meet customer needs in wireless communications
markets; our ability to continue to apply our expertise and technologies to
existing and emerging wireless and satellite communications markets; and our
ability to achieve acceptable product costs on new products.

We must also continue to make significant investments in research and
development efforts in order to develop necessary product enhancements, new
designs and technologies. We may not be able to obtain a sufficient number of
engineers, or other technical support staff, or the funds necessary to support
our research and development efforts when needed. In addition, our research and
development efforts may not be successful, and our new products may not achieve
market acceptance. Wireless and satellite technologies are complex and new
products and enhancements developed by our customers can in turn require long
development periods for our new products or for enhancement or adaptation of our
existing products. If we are unable to develop and introduce new products or
enhancements in a timely manner in response to changing market conditions or
customer requirements, or if our new products do not achieve market acceptance,
our business, financial condition and operating results could suffer.

We rely on a limited number of original equipment manufacturers as customers and
the loss of one or more of them could harm our business.

We depend upon a small number of customers for a majority of our revenues.
During fiscal 2009, we had one customer that accounted for more than 10% of our
net sales (Lockheed Martin Corporation, who represented 14.8% of net sales). We
anticipate that we will continue to sell products to a relatively small group of
customers. Delays in manufacturing or supply procurement or other factors,
including consolidation of customers, could potentially cause cancellation,
reduction or delay in orders by a significant customer or in shipments to a
significant customer. Our future success depends significantly on the decision
of our current customers to continue to purchase products from us, as well as
the decision of prospective customers to develop and market space and defense
and wireless communications systems that incorporate our products.

We must continue to attract and retain qualified engineers and other key
employees to grow our business.

Our continued success depends on our ability to continue to attract and retain
qualified engineers, particularly microwave engineers, and management personnel.
Attracting and retaining qualified engineers, including microwave engineers,
particularly in Upstate New


--------------------------------------------------------------------------------

                                       10
<PAGE>

York, is very challenging. If we are unable to successfully hire, train and
retain qualified engineers and experienced management personnel, it could
jeopardize our ability to develop new products for the wireless and space and
defense markets, and could also negatively impact our ability to grow our
business.

Failure to meet market expectations could impact our stock price.

The market price for our common stock is based, in part, on market expectations
for our sales growth, margin improvement, earnings per share and cash flow.
Failure to meet these expectations could cause the market price of our stock to
decline, potentially rapidly and sharply.

Current worldwide economic downturn could significantly impact demand for
Company products.

The current global economic downturn and financial credit crisis continues to
adversely effect business conditions. The recession in the U.S. and key foreign
markets could substantially effect Company sales, profitability and financial
condition. The dramatic downturn has reduced economic activity particularly in
some of the Wireless product markets in which we operate and cannot be predicted
when, or to what extent economic recovery might occur. Recent actions taken by
numerous governments throughout the world to restore equity, including
aggressive monetary and fiscal stimulus actions by the U.S. government may not
be effective in addressing the economic problems that are the underlying causes
of our current recession.

The Company's Wireless business significantly depends upon its China operations

To compete globally against low cost manufacturers who primarily operate in the
Asia Pacific rim the Company has established an assembly and test facility in
Suzhou, China and also maintains a sales and marketing group based in Suzhou.
Conducting operations in China could be impacted by the political environment
within China and trade relations between the U.S. and Chinese governments. To
the extent products manufactured in Suzhou, China are sold outside of China the
Company may be impacted by currency fluctuations and therefore to the extent the
U.S. dollar weakens significantly against Chinese currency, the Company's
results of operations could be adversely affected.

The location of the Company's Suzhou, China facility is in an economic
development area which may be impacted by expansion of China's mass transit
system. If the Company was required to relocate the Suzhou facility as a result
of a government mandate, the Company's ability to locate a suitable facility
within the Suzhou Office Park and its ability to successfully transition
operations to the new facility may adversely impact sales and profitability of
the Company's Wireless business group.

The Company could experience an impairment of goodwill or tradenames.

As the result of the two acquisitions completed in fiscal year 2009, and
acquisitions made in previous years, goodwill and other intangibles incurred as
a percentage of the Company's total assets increased. At June 30, 2009, the
total assets of the Company were $237.1 million, which included $45.6 million of
goodwill and tradenames. The goodwill arose from the excess of the purchase
price of each acquisition over the fair value of the net assets of the business
acquired. The tradenames were valued separately from goodwill at the amount
which an independent third party would be willing to pay for use of the MSK and
Unicircuit names. The Company performs annual evaluations for potential
impairment of the carrying value of goodwill and tradenames in accordance with
Statement of Financial Accounting Standards No. 142 Goodwill and Other
Intangible Assets. To date, these evaluations have not resulted in the need to
recognize an impairment charge. However, if the Company's financial performance
were to decline significantly, especially in the Company's Wireless business
group, the Company could incur a non-cash charge in its income statement for the
impairment of goodwill or tradenames.

We have been unable to procure a new tenant for our U.K. leased facility.

We currently lease approximately 20,000 square feet in a building located in
Frimley, England, pursuant to a lease agreement that expires in February 2014,
with an annual rent expense, property taxes, and fees amounting to approximately
$625,000. Despite our efforts since October 2007, we have been unable to secure
a new tenant(s) to take occupancy of the leased space. As a result, we have
taken an impairment charge for 50% of the remaining liability and if we remain
unsuccessful in procuring a new tenant, we may be required to take additional
impairment charges related to this lease. Most recently, we have marketed the
property at 50% of the lease hold rate and to date have not identified any
prospective tenant(s).

Other Risks

In addition to the risks identified above, other risks we face include, but are
not limited to, the following:

      o     the effect of significant changes in monetary and fiscal policies in
            the U.S. and abroad, including significant income tax changes,
            currency fluctuations and unforeseen inflationary pressures,
            unforeseen intergovernmental conflicts or actions, including but not
            limited to military conflict and trade wars;

      o     potential inability to timely ramp up to meet some of our customers'
            increased demands;


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                                       11
<PAGE>

      o     order cancellations or extended postponements;

      o     unanticipated delays and/or difficulties increasing procurement of
            raw materials in Asia through our Suzhou, China facility;

      o     technological shifts away from our technologies and core
            competencies;

      o     unanticipated impairments of assets including investment values and
            goodwill; and

      o     litigation involving antitrust, intellectual property,
            environmental, product warranty, product liability, and other
            issues.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The principal real estate of the Company is a 159,000 square foot building,
which the Company owns, located on a 30-acre parcel in East Syracuse, New York.
The Company's principal subsidiary, Anaren Microwave, Inc., utilizes this
facility which houses a substantial portion of the Company's marketing,
manufacturing, administrative, research and development, systems design and
engineering activities. During fiscal 2007, the Company constructed a 54,000
square foot addition to this existing building bringing it to 159,000 square
feet to accommodate, primarily, the growth of its Space & Defense business. The
building was completed in the first quarter of fiscal 2008.

Anaren Ceramics, Inc., a wholly owned subsidiary of the Company, operates in a
65,000 square foot building, which the Company owns, situated on approximately
12 acres in Salem, New Hampshire.

M. S. Kennedy Corp., a wholly owned subsidiary of the Company, operates in a
43,000 square foot building which it owns, situated on approximately 5 acres in
Liverpool, New York.

Unicircuit, Inc., a wholly owned subsidiary of the Company, operates in a 31,000
square foot building which it owns, situated on 3 acres in Littleton, Colorado.
Additionally, Unicircuit, Inc. leases 18,000 square feet in an adjacent facility
which houses administrative offices and additional manufacturing space at an
annual cost of $0.2 million, with a lease term through November 2011.

The Company leases a 76,000 square foot facility in Suzhou, China which houses
light manufacturing and assembly activities of the Company's Anaren
Communications Suzhou Co. Ltd. subsidiary. This facility has an annual rent of
approximately $0.2 million. The initial lease period on the new building runs
through April 2013 and is renewable through April 2023.

The Company leases a 20,000 square foot building in Frimley, England which is
currently not used in its operations. Annual cost of this facility is
approximately $0.6 million and the Company is currently attempting to sublet the
building. The existing lease term on this building runs to 2014 and the Company
has not yet secured a new tenant. There is no assurance that the Company will be
able to continuously sublet the building during the remaining lease term.

Management considers the foregoing facilities, with the expansion activity,
adequate for the current and anticipated mid-term future requirements of the
Company, and expects that suitable additional space will be available to the
Company, as needed, at reasonable commercial terms.

Item 3. Legal Proceedings

There are no material legal proceedings pending against the Company.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of the fiscal year ended June 30, 2009, there were no
matters submitted to a vote of security holders.


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                                       12
<PAGE>

Executive Officers of the Registrant

Executive officers of Anaren, Inc., their respective ages as of June 30, 2009,
and their positions held with the Company are as follows:

<TABLE>
<CAPTION>
NAME                         AGE         OFFICE OR POSITION HELD
----                         ---         -----------------------
<S>                          <C>         <C>
Lawrence A. Sala             46          President, Chief Executive Officer, Chairman and Director

Carl W. Gerst, Jr            72          Chief Technical Officer, Vice Chairman and Director

Gert R. Thygesen             54          Senior Vice President, Technology

George A. Blanton            48          Senior Vice President, Chief Financial Officer,
                                         Treasurer

Mark P. Burdick              51          Senior Vice President and General Manager

Timothy P. Ross              50          Senior Vice President, Business Development

Amy B. Tewksbury             45          Senior Vice President, Human Resources

David M. Ferrara             54          Secretary and General Counsel
</TABLE>

Lawrence A. Sala joined the Company in 1984. He has been President since May
1995, has served as Chief Executive Officer since September 1997, and has been
Chairman of the Board of Directors since November 2001. Mr. Sala became a member
of the Board of Directors of the Company in 1995. He holds a Bachelor's Degree
in Computer Engineering, a Master's Degree in Electrical Engineering and a
Master's Degree in Business Administration, all from Syracuse University.

Carl W. Gerst, Jr. has been a member of the Board of Directors of the Company
since its founding. Mr. Gerst has served as Chief Technical Officer and Vice
Chairman of the Board since May 1995 and served as Treasurer from May 1992 to
November 2001. Mr. Gerst previously served as Executive Vice President of the
Company from its founding until May 1995. He holds a Bachelor's Degree from
Youngstown University and a Master's Degree in Business Administration from
Syracuse University.

Gert R. Thygesen joined the Company in 1981 and has served as Sr. Vice President
of Technology since November 2005 and Vice President of Technology from
September 2000 until November 2005. He previously served as Vice President,
Operations from April 1995 to September 2000, and as Operations Manager from
1992 until 1995. Mr. Thygesen holds a Bachelor of Science Degree and a Master's
Degree in Electrical Engineering from Aalborg University Center, Denmark.

George A. Blanton joined the Company in 2008 as the Company's Senior Vice
President, Chief Financial Officer and Treasurer. Prior to his appointment, Mr.
Blanton served as the Assistant General Manager of Sonic Industries, a
subsidiary of Dover Corporation. From 1995 to 2006, Mr. Blanton served as the
Chief Financial Officer of Sargent, a subsidiary of Dover Corporation. Mr.
Blanton holds a Bachelor of Science Degree in Business Administration from
University of Southern California, and a Master's Degree in Business
Administration from Loyola Marymount University, Los Angeles, CA.

Mark P. Burdick has been with the Company since 1978 and has served as Sr. Vice
President and General Manager since 2005 and Vice President and General Manager
from September 2000 until November 2005. He served as Vice President and General
Manager, Wireless segment from November 1999 until September 2000, as Business
Unit Manager -- Commercial Products from 1994 to 1999, and as Group Manager for
Defense Radar Countermeasure Subsystems from 1991 to 1994. Mr. Burdick holds a
Bachelor of Science Degree in Electrical Engineering from the Rochester
Institute of Technology, and a Master's Degree of Business Administration from
the University of Rochester.

Timothy P. Ross has been with the Company since 1982 and has served as Sr. Vice
President -- Business Development since November 2005 and Vice President --
Business Development from September 2000 until November 2005. He served as Vice
President and General Manager, Space & Defense Group, from November 1999 until
September 2000. Mr. Ross served as Business Unit Manager -- Satellite
Communications from 1995 to 1999 and as a Program Manager from 1988 to 1995. Mr.
Ross holds an Associate's Degree in Engineering Science, a Bachelor of Science
in Electrical Engineering from Clarkson University, and a Master's Degree in
Business Administration from the University of Rochester.


--------------------------------------------------------------------------------

                                       13
<PAGE>

Amy Tewksbury has served as Sr. Vice President of Human Resources since November
2005 and joined the Company in October 2002 as Vice President of Human
Resources. Prior to joining Anaren, Ms. Tewksbury was employed by Wegmans Food
Markets, Inc. for 16 years. She held various positions with Wegmans including
Syracuse Division Human Resources Manager, Corporate Human Resources Project
Manager, and Store Operations. Ms. Tewksbury holds a Bachelor of Science Degree
in Management from Syracuse University.

David M. Ferrara has served as the Company's Secretary and General Counsel since
February 1996, and became a part-time employee of the Company in January, 2008.
Mr. Ferrara is a member of the law firm Bond Schoeneck & King, PLLC, and
practices in the areas of labor and employment and corporate law. Mr. Ferrara
holds a Bachelor's Degree in Labor Relations from LeMoyne College, a Master's
Degree in Industrial Labor Relations from Michigan State University and a Juris
Doctor Degree from Indiana University.


--------------------------------------------------------------------------------

                                       14
<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
        Issuer Purchases of Equity Securities

The common stock of the Company is quoted on the NASDAQ Global under the symbol
"ANEN." The following table sets forth the range of quarterly high and low sales
prices reported on the NASDAQ Global Market for the Company's common stock for
the quarters indicated. Quotations represent prices between dealers and do not
include retail mark-ups, mark-downs or commissions.

                                           CLASS A STOCK
                      --------------------------------------------------------
                      1st Quarter    2nd Quarter    3rd Quarter    4th Quarter

Fiscal 2008
  High                   $19.30         $17.40         $16.78         $14.87
  Low                    $13.44         $13.98         $11.97         $10.50

Fiscal 2009
  High                   $11.76         $12.77         $13.30         $18.49
  Low                    $ 8.47         $ 7.80         $ 9.00         $10.53

The Company had approximately 456 holders of record of its common stock at
September 10, 2008.

The Company has never declared or paid any cash dividends on its capital stock.
The Company currently intends to retain earnings, if any, to support the
development of its business and does not anticipate paying cash dividends for
the foreseeable future. Payment of future dividends, if any, will be at the
discretion of the Board of Directors after taking into account various factors,
including the Company's financial condition, operating results and current and
anticipated cash needs.

Issuer Purchases of Equity Securities

On May 16, 2007, the Board of Directors increased by 2,000,000 the number of
shares that the Company was authorized to repurchase in open market or 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. There were no shares purchased from April 1, 2009 through June
30, 2009; and on June 30, 2009, approximately 1,100,000 shares remained
authorized for purchase.


--------------------------------------------------------------------------------

                                       15
<PAGE>

Performance Graph

The following graph presents the cumulative total shareholder return for the
five years ending June 30, 2009 for our common stock, as compared to the NASDAQ
Composite Index and to the NASDAQ Electronic Components Index. The starting
value of each index and the investment in common stock was $100.00 on June 30,
2004.

[The following information was also depicted as a line chart in the printed
material]

                 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
                 Among Anaren, Inc., The NASDAQ Composite Index
                   And the NASDAQ Electronic Components Index

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                          6/04          6/05          6/06          6/07         6/08          6/09
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>          <C>           <C>           <C>          <C>
Anaren, Inc.                                            100.00         80.48        125.40        107.77        64.69        108.20
NASDAQ Composite                                        100.00        101.09        109.49        132.47       117.33         92.91
NASDAQ Electronic Components                            100.00         89.67         84.92        100.02        90.32         64.98
</TABLE>

----------
*     $100 invested on 6/30/04 in stock or index, including reinvestment of
      dividends. Fiscal year ending June 30.

Item 6. Selected Consolidated Financial Data

The selected consolidated financial data set forth below with respect to the
Company's statements of operations for each of the years in the three year
period ended June 30, 2009, and with respect to the balance sheets at June 30,
2009 and 2008 are derived from the consolidated financial statements that have
been audited by Deloitte & Touche LLP (for statements of operations for year
ended June 30, 2009 and balance sheet as of June 30, 2009) and KPMG LLP (for
statements of operations for years ended June 30, 2007 and 2008 and balance
sheet as of June 30, 2008), independent registered public accounting firms,
which are included elsewhere in this Annual


--------------------------------------------------------------------------------

                                       16
<PAGE>

Report on Form 10-K, and are qualified by reference to such consolidated
financial statements. The statements of operations data for the years ended June
30, 2005 and June 30, 2006, and the balance sheet data at June 30, 2005, June
30, 2006 and June 30, 2007, are derived from audited consolidated financial
statements not included in this Annual Report on Form 10-K. The following
selected financial data should be read in conjunction with the consolidated
financial statements for the Company and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere herein.


--------------------------------------------------------------------------------

                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                              For the Years Ended
                                                      --------------------------------------------------------------------
                                                      June 30,       June 30,       June 30,       June 30,       June 30,
Statement of Income Data:                               2009           2008           2007           2006           2005
                                                      --------       --------       --------       --------       --------
(in thousands, except per share amounts)
<S>                                                   <C>            <C>            <C>            <C>            <C>
Net Sales                                             $166,905       $131,316       $128,987       $105,464       $ 94,461
Cost of sales                                          112,289         90,838         83,125         67,494         64,591
                                                      --------       --------       --------       --------       --------
Gross Profit                                            54,616         40,478         45,862         37,970         29,870
                                                      --------       --------       --------       --------       --------
Operating expenses:
  Marketing                                              8,967          7,019          7,416          7,036          6,858
  Research and development                              12,986         10,410          9,134          8,748          6,288
  General and administrative                            18,636         13,592         12,298         10,345          8,685
  Restructuring                                             --            255             --             --            458
                                                      --------       --------       --------       --------       --------
  Total operating expenses                              40,589         31,276         28,848         26,129         22,289
                                                      --------       --------       --------       --------       --------
Operating income                                        14,027          9,202         17,014         11,841          7,581
                                                      --------       --------       --------       --------       --------
Other income (expense):
  Interest expense                                      (1,482)           (79)           (24)           (25)           (29)
  Other, primarily interest income                       1,088          2,322          3,571          2,453          1,599
                                                      --------       --------       --------       --------       --------
  Total other income, net                                 (394)         2,243          3,547          2,428          1,570
                                                      --------       --------       --------       --------       --------
  Income from continuing operations before              13,633         11,445         20,561         14,269          9,151
Income taxes                                             3,774          2,982          5,211          3,252          1,738
                                                      --------       --------       --------       --------       --------
Income from continuing operations                        9,859          8,463         15,350         11,017          7,413
                                                      --------       --------       --------       --------       --------
Discontinued operations:
Income from discontinued
  operations of Anaren Europe                               --             --             --             82             --
Income tax benefit                                          --            770             --             --             --
                                                      --------       --------       --------       --------       --------
Net income from discontinued operations                     --            770             --             82             --
                                                      --------       --------       --------       --------       --------
Net income                                            $  9,859       $  9,233       $ 15,350       $ 11,099       $  7,413
                                                      ========       ========       ========       ========       ========
Basic earnings per share:
  Income from continuing operations                   $    .71       $    .57       $    .89       $    .64       $    .38
  Income from discontinued operations                 $     --       $    .05       $     --       $    .01       $     --
                                                      --------       --------       --------       --------       --------
Net income                                            $    .71       $    .62       $    .89       $    .65       $    .38
                                                      ========       ========       ========       ========       ========
Diluted earnings per share:
Income from continuing operations                     $    .70       $    .56       $    .87       $    .62       $    .37
Income from discontinued operations                   $     --       $    .05       $     --       $    .01       $     --
                                                      --------       --------       --------       --------       --------
Net income                                            $    .70       $    .61       $    .87       $    .63       $    .37
                                                      ========       ========       ========       ========       ========
Shares used in computing net Earnings per share:
  Basic                                                 13,911         14,827         17,319         17,157         19,346
  Diluted                                               14,179         15,068         17,721         17,682         19,832
Balance Sheet Data:
Cash and cash equivalents                             $ 49,893       $ 10,711       $  7,912       $ 15,733       $  5,901
Working capital                                        102,212         71,163         72,858        112,160         84,554
Total assets                                           237,055        172,103        191,204        189,026        175,482
Long-term debt, less current installments               40,000             --             --             --             --
Stockholders' equity                                   160,945        150,864        166,794        172,118        159,079
</TABLE>


--------------------------------------------------------------------------------

                                       18
<PAGE>

Item 7. 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-K. 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 Annual Report.

Overview

The consolidated financial statements present the financial condition of the
Company as of June 30, 2009 and 2008, and the consolidated results of operations
and cash flows of the Company for the years ended June 30, 2009, 2008 and 2007.

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 and subscriber equipment for wireless
communications as well as, in satellites and in defense electronics systems. The
Company is also a leading provider of high performance analog microelectronics
including custom hybrids, power hybrids, and multi-chip modules. The Company
sells its products to leading wireless communications equipment manufacturers
such as Ericsson, Motorola, Nokia Siemens Networks, Nortel Networks, and Huawei,
and to satellite communications and defense electronics companies such as Boeing
Satellite, ITT, Lockheed Martin, Northrop Grumman and Raytheon.

Net sales are derived from sales of the Company's products to other
manufacturers or systems integrators. Net sales are recognized when units are
shipped.

Net sales under certain long-term contracts of the Space & Defense Group, many
of which provide for periodic payments, are recognized under the
percentage-of-completion method using the units of delivery method. Estimated
manufacturing cost-at-completion for these contracts are reviewed on a routine
periodic basis, and adjustments are made periodically to the estimated
cost-at-completion based on actual costs incurred, progress made, and estimates
of the costs required to complete the contractual requirements. When the
estimated manufacturing cost-at-completion exceeds the contract value, the
contract is written down to its net realizable value, and the loss resulting
from cost overruns is immediately recognized. To properly match net sales with
costs, certain contracts may have revenue recognized in excess of billings
(unbilled revenues), and other contracts may have billings in excess of net
sales recognized (billings in excess of contract costs). Under long-term
contracts, the prerequisites for billing the customer for periodic payments
generally involve the Company's achievement of contractually specific, objective
milestones (e.g., completion of design, testing, or other engineering phase,
delivery of test data or other documentation, or delivery of an engineering
model or flight hardware).

On July 31, 2008, the Company cancelled its previous $50.0 million demand note
loan agreement with no balance outstanding on the loan; and on the same day, the
Company signed a loan agreement with its bank for a $50.0 million declining
revolving line of credit to be used to finance acquisitions and working capital
needs. On July 31 and August 29, 2008, the Company took advances totaling $49.8
million on this line to finance the acquisitions of M. S. Kennedy Corp. and
Unicircuit, Inc. Advances under this line, at the Company's choice, bear
interest at LIBOR, plus 100 to 450 basis points or at the Prime Rate, minus
(100) to plus 225 basis points, depending upon the Company's EBITDA performance
at the end of each quarter as measured by the formula: EBITDA divided by the
Current Portion of Long-term debt plus interest expense. Availability of credit
under the line declines 20% annually on the anniversary date of the note and any
outstanding principal balance in excess of the new line limit is due and payable
at that time.

On August 1, 2008, the Company completed the acquisition of M. S. Kennedy, Corp.
(MSK), located in Syracuse, New York. MSK is a leading provider of high
performance analog microelectronics to the Defense and Space markets and is a
leading designer and producer of custom analog hybrids, power hybrids, and
multi-chip modules. MSK offers broad electronic component design, packaging, and
integration capability with net sales of $22.4 million in calendar 2007. MSK
will be integrated into Anaren's existing Space & Defense Group. Anaren acquired
MSK for a purchase price of $27.7 million, net of cash acquired, and earnings
from MSK were accretive in fiscal year 2009. The Company financed this
transaction through a five year, $50.0 million revolving debt facility. Goodwill
and intangible assets related to this acquisition were $12.5 million.

On August 30, 2008, the Company completed the acquisition of Unicircuit Inc.
located in Littleton, Colorado. Unicircuit is a manufacturer of printed circuit
boards (PCB) used in various military and aerospace applications with net sales
of $18.7 million in calendar 2007. Unicircuit is a leader in high frequency PCB
technology and will enhance Anaren's ability to capture integrated


--------------------------------------------------------------------------------

                                       19
<PAGE>

microwave assembly opportunities in the defense, satellite and aerospace
markets. Unicircuit will be integrated into Anaren's existing Space & Defense
Group. Anaren acquired Unicircuit, Inc. for a purchase price of approximately
$20.8 million, net of cash acquired, and earnings from Unicircuit were accretive
in fiscal year 2009. The Company financed this transaction by utilizing its
existing five year, $50.0 million revolving debt facility. Goodwill and
intangible assets related to this acquisition were $11.8 million.

Results of Operations

Net sales from continuing operations for the year ended June 30, 2009 were
$166.9 million, up 27.1% from $131.3 million for fiscal 2008. Income from
continuing operations for fiscal 2009 was $9.9 million, or 5.9% of net sales, up
$1.4 million, or 16% from income from continuing operations of $8.5 million in
fiscal 2008.

The following table sets forth the percentage relationships of certain items
from the Company's consolidated statements of operations as a percentage of net
sales for the periods indicated:

                                                         Years Ended June 30,
                                                         --------------------
                                                     2009       2008       2007
                                                    -----      -----      -----
Net sales                                           100.0%     100.0%     100.0%
Cost of sales                                        67.3       69.2       64.4
                                                    -----      -----      -----
Gross Profit                                         32.7       30.8       35.6
                                                    -----      -----      -----
Operating expenses:
  Marketing                                           5.4        5.3        5.8
  Research and development                            7.8        7.9        7.1
  General and administrative                         11.1       10.4        9.5
  Restructuring                                        --        0.2         --
                                                    -----      -----      -----
    Total operating expenses                         24.3       23.8       22.4
                                                    -----      -----      -----
Operating income                                      8.4        7.0       13.2
                                                    -----      -----      -----
Other income (expense):
  Interest expense                                   (0.9)      (0.1)        --
  Other, primarily interest income                    0.7        1.8        2.7
                                                    -----      -----      -----
    Total other income (expense)                     (0.2)       1.7        2.7
                                                    -----      -----      -----
Income from continuing operations
  before income taxes                                 8.2        8.7       15.9
Income taxes                                          2.3        2.3        4.0
                                                    -----      -----      -----
Net income from continuing operations                 5.9        6.4       11.9
Discontinued operations:
  Income from discontinued
    operations of Anaren Europe                        --         --         --
  Income tax benefit                                   --       (0.6)        --
                                                    -----      -----      -----
  Net income from discontinued operations              --        0.6         --
                                                    -----      -----      -----
  Net income                                          5.9%       7.0%      11.9%
                                                    =====      =====      =====

The following table sets forth the Company's net sales by industry segment for
the periods indicated:

<TABLE>
<CAPTION>
                                                                       Years Ended June 30,
                                                                       --------------------
                                                    2009                       2008                     2007
                                               (In thousands)             (In thousands)            (In thousands)
                                             ------------------        -------------------        ------------------
<S>                                          <C>           <C>         <C>            <C>         <C>           <C>
Wireless                                     $ 68,622      41.1%       $ 78,741       60.0%       $ 77,800      60.3%
Space & Defense                                98,283      58.9%         52,575       40.0%         51,187      39.7%
                                             --------     -----        --------      -----        --------     -----
                                             $166,905     100.0%       $131,316      100.0%       $128,987     100.0%
                                             ========     =====        ========      =====        ========     =====
</TABLE>

Year Ended June 30, 2009 Compared to Year Ended June 30, 2008

Net sales. Net sales were $166.9 million for the year ended June 30, 2009, up
27.1% compared to $131.3 million for the fiscal 2008 and included $37.5 million
of sales from M.S. Kennedy Corp. and Unicircuit, Inc. in fiscal 2009. Shipments
of Wireless Group products fell $10.1 million, or 12.9%, and sales of Space &
Defense Group products rose $45.7 million, or 86.9%, in fiscal 2009 compared to
fiscal 2008.

Wireless Group products consist of standard components, ferrite components and
custom subassemblies for use in building wireless


--------------------------------------------------------------------------------

                                       20
<PAGE>

base station and consumer equipment. The decline in Wireless Group sales was the
result of a decline in demand for custom components during fiscal 2009 compared
to fiscal 2008. Sales of custom products fell $12.1 million, or 38.0% in fiscal
2009 compared to fiscal 2008, reflecting the overall worldwide economic slowdown
and delays in a new platform introduction at a large Wireless customer. This
decline was partially off-set by a $1.6 million, or 41%, increase in consumer
product sales in fiscal 2009 compared to fiscal 2008 resulting from new design
wins in the handset sector and a $0.5 million increase in standard component
sales year over year in fiscal 2009.

Custom Wireless products are tied to specific base station designs and are much
more sensitive to actual customer design wins making future order levels
difficult to predict. Sales of custom products in fiscal 2010 are expected to be
relatively flat, but may be further impacted by the current state of the economy
and its impact on the level of worldwide infrastructure spending. The company's
standard component products enjoy wide spread use in base station applications
across many different platforms and original equipment manufacturers. Sales of
these products in fiscal 2010 are tied to the overall infrastructure spending
and through fiscal 2009 were not significantly impacted by the current economic
downturn.

Space & Defense Group products consist of custom components and assemblies for
communication satellites and defense radar, receiver, and countermeasure systems
for the military. Sales of Space & Defense Group products rose $45.7 million, or
86.9% in fiscal year 2009 compared to fiscal year 2008. Space & Defense Group
sales in fiscal year included $37.5 million of sales from M.S. Kennedy and
Unicircuit. Additionally, sales of catalog and passive devices rose due to
shipments of Counter-Improvised Explosive Device (Counter-IED) products, which
rose to $6.7 million in fiscal 2009 compared to $1.0 million in fiscal 2008.
Existing Space & Defense Group product sales continue to benefit from the higher
level of business won by the Company over the past few fiscal years, with orders
in fiscal 2009 exceeding $98.0 million.

Through fiscal 2009, the Company's defense business felt little or no impact
from the current down turn in the economy as we experienced no cancellations or
significant push outs in deliveries under specific contracts other than a six
month delay in a commercial space job. Based on the current proposed defense
budget for fiscal 2010, the Company does not expect any contract cancellations
or program discontinuations related to existing or expected orders.

Gross Profit. Cost of sales consists primarily of engineering design costs,
materials, material fabrication costs, assembly costs, acquisition inventory
step-up amortization, intangible amortization, direct and indirect overhead, and
test costs. Gross profit represents net sales minus cost of sales. Gross profit
for fiscal 2009 was $54.6 million (32.7% of net sales), up from $40.5 million
(30.8% of net sales) for the prior year. Gross profit, as a percent of sales,
increased in fiscal 2009 compared to last year due to the decrease in sales of
lower margin custom Wireless Group products, a more favorable sales mix in the
Space & Defense Group and, comparable gross margin at M. S. Kennedy Corp. and
Unicircuit, Inc. compared to the Company's other operations. The improvement in
gross margins of approximately 2.0% for fiscal 2009 resulted from fairly equal
percentage improvements at all of the Company's operations.

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 in the current fiscal
year were $9.0 million (5.4% of net sales), compared to $7.0 million (5.3% of
net sales), a $2.0 million increase which included the addition of $1.9 million
of marketing expenses from Unicircuit and M. S. Kennedy as well as expenses for
additional sales and marketing personnel and higher commission expenses
resulting from the overall sales mix. This increase was partially offset by an
accounting adjustment in the second quarter resulting in the reduction of
commission expense of $275,000 to correct an over accrual that was accumulated
over a number of prior periods.

Research and Development. Research and development expenses consist of materials
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 $13.0 million
(7.8% of net sales) in fiscal 2009, up 24.7% from $10.4 million (7.9% of net
sales) for fiscal 2008. Research and development expenditures are supporting
further development of the Wireless Group infrastructure and consumer component
opportunities, as well as new technology development in the Space & Defense
Group. Research and Development expenditures have increased in fiscal 2009
versus last year due to the higher level of opportunities in both the Wireless
Group and Space & Defense Group marketplaces which resulted in approximately
$977,000 in additional spending at our Anaren Ceramics and Anaren Microwave
operations. The addition of M. S. Kennedy Corp. and Unicircuit, Inc. accounted
for the remaining $1.6 million of the increase. The Company does not expect to
reduce its current research and development efforts through year-end and is
presently working on a number of new standard and custom Wireless Group and
Space & Defense Group opportunities.

General and Administrative. General and administrative (G&A) expenses consist of
employee related expenses, professional services, intangible amortization,
travel related expenses and other corporate costs. General and administrative
expenses increased $5.0 million, to $18.6 million (11.2% of net sales) for
fiscal 2009, from $13.6 million (10.4% of net sales) for fiscal 2008. The
increase in


--------------------------------------------------------------------------------

                                       21
<PAGE>

general and administrative expense in fiscal 2009 compared to last year resulted
from additional personnel in the Finance, Human Resource and Information
Technology functions, and the inclusion of $5.6 million in additional G&A costs
including intangible amortization of $933,000 from the acquisition of M. S.
Kennedy and Unicircuit. This increase was partially off-set by a decline in G&A
costs by consolidating subsidiary operations at the Ceramics operations of $0.7
million.

Operating Income. Operating income rose 52.2% in fiscal 2009 to $14.0 million,
(8.4% of net sales), compared to $9.2 million (7.0% of net sales) for fiscal
2008. This increase was due mainly to the improvement in profitability in the
second half of fiscal 2009 resulting from the higher overall sales volume and
$2.5 million in operating profitability contributed by M. S. Kennedy Corp and
Unicircuit, Inc., the Company's new subsidiaries acquired in the first quarter
of fiscal 2009. Operating income as a percent of sales increased year over year
due to a significant increase in third and fourth quarter profitability, despite
the inclusion of $3.2 million of combined acquisition related inventory step-up
costs and intangible amortization for fiscal 2009, due to a higher margin
product mix compared to fiscal 2008.

On an operating segment basis, Wireless Group operating income was $6.6 million
for fiscal 2009, up $3.0 million from $3.6 million in fiscal 2008. The increase
in Wireless Group operating income in fiscal 2009 compared to fiscal 2008,
despite the decline in Wireless Group sales, was due to a more favorable sales
mix which included more standard component sales and the overall increase in
corporate sales volume which had a positive impact on overhead absorption.

Space & Defense Group's operating income was $8.2 million in fiscal 2009, up
$2.0 million, or 33.3%, from $ 6.2 million for fiscal 2008. Operating margins in
this Group rose in fiscal 2009 due to the large increase in sales and the
addition of the two new subsidiaries, M. S. Kennedy Corp. and Unicircuit, Inc.
Operating margin as a percent of sales was 8.3% in fiscal 2009 compared to 11.7%
in fiscal 2008. The drop in operating income as a percent of sales in fiscal
2009 was due to the inclusion of $3.2 million (3.3% of Space & Defense sales) of
combined acquisition related inventory step-up and intangible amortization costs
resulting from the acquisition of M. S. Kennedy and Unicircuit and a $2.0
million increase in Space & Defense Group R&D expense at the Company's East
Syracuse operation for a number of new defense projects.

Other Income. Other income primarily consists of interest income received on
invested cash balances and rental income. Other income decreased 53.2% to $1.1
million in fiscal 2009 compared to $2.3 for last year. This decrease was caused
by the decline in available investable cash due to the purchase of treasury
shares in the first quarter of fiscal 2009 and the decline in interest rates
year over year. Other income will fluctuate based on short term market interest
rates and the level of investable cash balances.

Interest Expense. Interest expense consists mainly of interest on Company
borrowings and deferred items. Interest expense in fiscal 2009 was $1.5 million
(0.9% of net sales), compared to $79,000 for fiscal 2008. This increase was due
to the interest expense generated by the Company's borrowings starting in the
first quarter of fiscal 2009 to finance the acquisitions of M. S. Kennedy Corp.
and Unicircuit, Inc. The Company borrowed a total of $49.8 million under its
$50.0 million revolving declining line of credit in the first quarter. These
borrowings bear interest at the 90 day LIBOR, plus 100 to 425 basis points,
depending upon the Company's rolling twelve month EBITDA performance. The rate
is reset quarterly and was approximately 2.5% for the fourth quarter. The
interest rate on the outstanding loan balance for the first quarter of fiscal
2010 is expected to be approximately 1.5%.

Income Taxes. Income taxes for fiscal 2009 were $3.8 million (2.3% of net
sales), representing an effective tax rate of 27.7%. This compares to income tax
expense of $3.0 million (2.3% of net sales) for fiscal 2008, representing an
effective tax rate of 26.1%. The projected effective tax rate for fiscal year
2010 is now expected to be approximately 32.0%. 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 United
States and foreign taxable income or loss and in fiscal 2009 reflects
adjustments and provisions of completed and ongoing state and federal tax
audits.

Discontinued Operations. Income from discontinued operations for fiscal 2008
included $770,000 due to the reduction of an unrecognized tax benefit resulting
from the lapse of the applicable statute of limitations related to the prior
dissolution of the Company's European subsidiary, Anaren Europe, B.V.

Year Ended June 30, 2008 Compared to Year Ended June 30, 2007

Net Sales. Net sales increased $2.3 million, or 1.8% to $131.3 million for
fiscal 2008 compared to $129.0 million for fiscal 2007. This increase resulted
from a $1.4 million rise in shipments of Space & Defense products and a $940,000
increase in shipments of Wireless products in fiscal 2008.

Sales of Wireless products were relatively flat in fiscal 2008, rising $940,000
over fiscal 2007. The small increase was led by a $2.1 million rise in standard
component sales which offset a $1.3 million decline in consumer product sales
year over year. Sales of


--------------------------------------------------------------------------------

                                       22
<PAGE>

Wireless custom products were unchanged in fiscal 2008 compared to fiscal 2007
and included sales to Nokia Corp. of $22.4 million, which represented 28% of
total Wireless sales and 17% of total Company net sales.

Sales of Space & Defense products rose $1.4 million, or 2.7% in fiscal 2008
compared to fiscal2007. Sales of Space & Defense products in fiscal 2007
benefited from $11.4 million in shipments of Counter-Improvised Explosive Device
(Counter-IED) products, which dropped to slightly more than $1.0 million in
fiscal 2008. This drop in sales was offset by higher sales in receiver and space
products resulting from the higher level of business won by the Company over
fiscal 2006 through fiscal 2008, which has resulted in the record level of
backlog for this group of $64.6 million at June 30, 2008.

Gross Profit. Gross profit represents net sales minus cost of sales. Gross
profit for fiscal 2008 was $40.5 million (30.8% of net sales), down $5.4 million
from $45.9 million (35.6% of net sales) for fiscal 2007. Gross profit on sales
decreased in fiscal 2008 over fiscal 2007 due to the decline in sales of higher
margin defense Counter-IED products, and continuing losses at the Company's
Salem, New Hampshire facility due to lower than planned sales volume and product
yield. Additionally, yield and production efficiency problems in fiscal 2008 in
the Space & Defense Group and a $450,000 charge for an anticipated cost overrun
on an engineering prototype contract in the fourth quarter added further to the
decline in gross margin.

Marketing. Marketing expenses were $7.0 million (5.3% of net sales) for fiscal
2008, down $398,000 from $7.4 million (5.8% of net sales) for fiscal 2007.
Marketing expenses in the current fiscal year were below fiscal 2007 due to
lower commission expense on defense products and lower payroll costs from a
reduction in sales personnel.

Research and Development. Research and development expenses were $10.4 million
(7.9% of net sales) in fiscal 2008, up 14.0% from $9.1 million (7.1% of net
sales) for fiscal 2007. Research and development expenditures are supporting
further development of Wireless infrastructure and consumer component
opportunities, as well as new technology development in the Space & Defense
Group. Research and development expenditures have increased in fiscal 2008
versus fiscal 2007 due to the higher level of opportunities in both the Wireless
and Space & Defense Group marketplaces, which has resulted in the hiring of
additional personnel in the 12 month period in 2008 to perform development
activities.

General and Administrative. General and administrative expenses increased 10.5%
to $13.6 million (10.4% of net sales) for fiscal 2008 from $12.3 million (9.5%
of net sales) for fiscal 2007. The increase resulted primarily from additional
professional service costs ($350,000) associated with the restatement of the
Company's second and third quarter fiscal 2007 financial statements that were
incurred during the first quarter of fiscal 2008, additional costs from new
restricted stock grants issued in August 2007 that have a shorter vesting
schedule than the traditional stock option grants issued in the comparable prior
period, and additional personnel in Finance, Human Resources and Information
Technology functions.

Restructuring. Restructuring expense consists of payroll, outplacement, and
benefit costs associated with the termination of nine employees at the Company's
Salem, New Hampshire facility in the fourth quarter of fiscal 2008.

Operating Income. Operating income fell 45.9% in fiscal 2008 to $9.2 million,
(7.0% of net sales) compared to $17.0 million (13.2% of net sales) for fiscal
2007. On an operating segment basis, Wireless operating income was $3.6 million
for fiscal 2008, down 55% from the Wireless operating income of $8.0 million in
fiscal 2007. The decline in Wireless operating income in fiscal 2008 compared to
fiscal 2007 resulted from a number of factors including: price erosion on
standard components products sold to large customers, lower margins on custom
products due to platform transitions at Nokia, and continuing losses at our
Salem, New Hampshire facility due to product yield and inefficiencies.
Additionally, 2008 Wireless operating margins were further eroded compared to
fiscal 2007 due to end of program life scrap charges of $250,000, a $350,000
charge for anticipated costs to repair a custom assembly product in the Wireless
group and a $255,000 restructuring charge for severance pay related to a
reduction in workforce at the Company's ceramic facility in Salem, New
Hampshire.

The Space & Defense Group's operating income was $6.2 million in fiscal 2008
down $3.4 million from $9.6 million for fiscal 2007. Operating margins in this
segment declined due to manufacturing inefficiencies encountered on some
programs which suffered procurement delays, engineering cost overruns, a change
in product mix due to a decline in higher margin Counter-IED products, a higher
level of internal research and development spending for the segment year over
year and the increase in general and administrative expense in fiscal 2008.

Interest Expense. Interest expense represents interest incurred on deferred
obligations. Interest expense for fiscal 2008 was approximately $79,000,
compared to $25,000 for fiscal 2007.

Other Income. Other income is primarily interest income received on invested
cash balances and rental income. Other income decreased 34.9% to $2.3 million in
fiscal 2008 compared to $3.6 million for fiscal 2007. This decrease was caused
by the decline in


--------------------------------------------------------------------------------

                                       23
<PAGE>

available investable cash due to the use of $30.2 million to purchase treasury
shares over the last twelve months. Other income will fluctuate based on short
term market interest rates and the level of investable cash balances.

Income Taxes. Income taxes on income from continuing operations for fiscal 2008
were $3.0 million (2.3% of net sales), representing an effective tax rate of
26.1%. This compares to income tax expense of $5.2 million (4.0% of net sales)
for fiscal 2007, representing an effective tax rate of 25.3%. 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 United States and foreign taxable income or loss. The projected
effective tax rate for fiscal 2009 is approximately 30.0% compared to an actual
effective tax rate of 26.1% for fiscal 2008.

Discontinued Operations. Income from discontinued operations for fiscal 2008
included a $770,000 tax benefit due to the reduction of an unrecognized tax
benefit resulting from the lapse of the applicable statute of limitations
related to the prior dissolution of the Company's European subsidiary, Anaren
Europe, B.V.


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                                       24
<PAGE>

Critical Accounting Policies and Estimates

The Company prepares the consolidated financial statements in accordance with
accounting principles generally accepted in the U.S. In doing so, the Company
has to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, as well as related disclosure of
contingent assets and liabilities. In some cases, the Company could have
reasonably used different accounting policies and estimates. In some cases,
changes in the accounting estimates are reasonably likely to occur from period
to period. Accordingly, actual results could differ materially from the
estimates made in the financial statements. To the extent that there are
material differences between these estimates and actual results, the Company's
financial condition or results of operations will be affected. Estimates are
based on past experience and other assumptions that the Company believes are
reasonable under the circumstances, and they are evaluated on an ongoing basis.
The Company refers to accounting estimates of this type as critical accounting
policies and estimates, which are discussed further below. The Company has
reviewed the critical accounting policies and estimates with the audit committee
of the board of directors.

Income Taxes

In accordance with the liability method of accounting for income taxes specified
in Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes, the provision for income taxes is the sum of income taxes both
currently payable and deferred. The changes in deferred tax assets and
liabilities are determined based upon the changes in differences between the
bases of assets and liabilities for financial reporting purposes and the tax
bases of assets and liabilities as measured by the enacted tax rates that
management estimates will be in effect when the differences reverse.

Beginning in 2007, the Company adopted Financial Accounting Standards Board
(FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes--an
interpretation of FASB Statement No. 109 (FIN No. 48), to assess and record
income tax uncertainties. FIN No. 48 prescribes a recognition threshold and
measurement attribute for financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return and also provides
guidance on various related matters such as derecognition, interest and
penalties, and disclosure.

In relation to recording the provision for income taxes, management must
estimate the future tax rates applicable to the reversal of temporary
differences, make certain assumptions regarding whether book/tax differences are
permanent or temporary and if temporary, the related timing of expected
reversal. Also, estimates are made as to whether taxable operating income in
future periods will be sufficient to fully recognize any gross deferred tax
assets. If recovery is not likely, the Company must increase its provision for
taxes by recording a valuation allowance against the deferred tax assets that
are estimated will not ultimately be recoverable. Alternatively, the Company may
make estimates about the potential usage of deferred tax assets that decreases
the valuation allowances.

The calculation of our tax liabilities involves dealing with uncertainties in
the application of complex tax regulations. Significant judgment is required in
evaluating our tax positions and determining our provision for income taxes.
During the ordinary course of business, there are many transactions and
calculations for which the ultimate tax determination is uncertain. The Company
establishes reserves for uncertain tax positions when it believes that certain
tax positions do not meet the more likely than not threshold. The Company adjust
these reserves in light of changing facts and circumstances, such as the outcome
of a tax audit or the lapse of the statute of limitations. The provision for
income taxes includes the impact of reserve provisions and changes to the
reserves that are considered appropriate. The Company follows FIN No. 48 for
accounting for our uncertain tax positions.

Changes could occur that would materially affect our estimates and assumptions
regarding deferred taxes. Changes in current tax laws and tax rates could affect
the valuation of deferred tax assets and liabilities, thereby changing the
income tax provision. Also, significant declines in taxable income could
materially impact the realizable value of deferred tax assets. At June 30, 2009,
we had $8.1 million of deferred tax assets on our balance sheet and a valuation
allowance of $0.6 million has been established for certain deferred tax assets
as it is more likely than not that they will not be realized.

A 1% increase in the effective tax rate would increase the current year
provision by $0.1 million, reducing diluted earnings per share by $0.01 based on
shares outstanding at June 30, 2009.

Equity Based Compensation

The Company records compensation costs related to stock-based awards in
accordance with FASB SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No.
123(R)), and related Securities and Exchange Commission rules included in Staff
Accounting Bulletin No. 107. Under the fair value recognition provisions of SFAS
No. 123(R), the Company measures stock-based compensation cost at the grant date
based on the fair value of the award.

Compensation cost for service-based awards is recognized ratably over the
applicable vesting period. Compensation cost for performance-based awards is
reassessed each period and recognized based upon the probability that the
performance targets will be


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                                       25
<PAGE>

achieved. The amount of stock-based compensation expense recognized during a
period is based on the portion of the awards that are ultimately expected to
vest. The total expense recognized over the vesting period will only be for
those awards that ultimately vest.

The Company utilizes the Black-Scholes Options Pricing Model to determine the
fair value of stock options under SFAS No. 123(R). The Company is required to
make certain assumptions with respect to selected Black Scholes model inputs,
including expected volatility, expected life, expected dividend yield and the
risk-free interest rate. Expected volatility is based on the historical
volatility of the Company's stock over the most recent period commensurate with
the estimated expected life of the stock options. The expected life of stock
options granted, which represents the period of time that the stock options are
expected to be outstanding, is based, primarily, on historical data. The
expected dividend yield is based on history and the expectation of dividend
payouts. The risk-free interest rate is based on the U.S. Treasury yield curve
in effect at the time of grant for a period commensurate with the estimated
expected life.

For restricted stock and restricted stock unit awards, the fair market value is
determined based upon the closing value of the Company's stock price on the
grant date.

Compensation cost for performance-based stock options and restricted stock units
is reassessed each period and recognized based upon the probability that the
performance targets will be achieved. That assessment is based upon the
Company's actual and expected future performance as well as that of the
individuals who have been granted performance-based awards.

Stock-based compensation expense is only recorded for those awards that are
expected to vest. Forfeiture estimates for determining appropriate stock-based
compensation expense are estimated at the time of grant based on historical
experience and demographic characteristics. Revisions are made to those
estimates in subsequent periods if actual forfeitures differ from estimated
forfeitures.

Option pricing models were developed for use in estimating the value of traded
options that have no vesting restrictions and are fully transferable. Because
our share-based payments have characteristics significantly different from those
of freely traded options, and because changes in the subjective input
assumptions can materially affect our estimates of fair values, existing
valuation models may not provide reliable measures of the fair values of our
share-based compensation. Consequently, there is a risk that our estimates of
the fair values of our share-based compensation awards may bear little
resemblance to the actual values realized upon the exercise, expiration or
forfeiture of those share-based payments in the future. Stock options may expire
worthless or otherwise result in zero intrinsic value as compared to the fair
values originally estimated on the grant date and reported in our consolidated
financial statements. Alternatively, value may be realized from these
instruments that are significantly in excess of the fair values originally
estimated on the grant date and reported in our consolidated financial
statements. There are significant differences among valuation models. This may
result in a lack of comparability with other companies that use different
models, methods and assumptions.

There is a high degree of subjectivity involved in selecting assumptions to be
utilized to determine fair value and forfeiture assumptions. If factors change
and result in different assumptions in the application of SFAS No. 123(R) in
future periods, the expense that we record for future grants may differ
significantly from what we have recorded in the current period. Additionally,
changes in performance of the Company or individuals who have been granted
performance-based awards that affect the likelihood that performance based
targets are achieved could materially impact the amount of stock-based
compensation expense recognized.

A 1% change in our stock based compensation expense would increase/decrease
current year net income by approximately $0.04 million, or approximately $0.002
per diluted share.


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                                       26
<PAGE>

Impairment of Marketable and Non-Marketable Securities

The Company periodically reviews the marketable securities, as well as the
non-marketable securities for impairment. If we conclude that any of these
investments are impaired, we determine whether such impairment is
"other-than-temporary" as defined under FASB Staff Position (FSP) SFAS 115-1 and
SFAS 124-1, The Meaning of Other -Than-Temporary Impairment and Its Application
to Certain Investments, and FSP SFAS 115-2 and SFAS 124-2, Recognition and
Presentation of Other -Than-Temporary Impairments. Factors we consider to make
such determination include the duration and severity of the impairment, the
reason for the decline in value and the potential recovery period, and our
intent and ability to hold an investment. If any impairment is considered
"other-than-temporary," the Company will write down the asset to its fair value
and take a corresponding charge to our Consolidated Statement of Income. At June
30, 2009, the Company has $0.4 million recorded in accumulated other
comprehensive income related to a write-down of its available-for-sale security.
Currently this write-down is at the value that is guaranteed by the federal
government. A 1% change in the valuation of the security would increase/decrease
the Company's net assets by an immaterial amount.

Valuation of Inventory

Inventories are stated at the lower of cost, determined using the first-in,
first-out method, or market. Inventory standard costing requires complex
calculations that include assumptions for overhead absorption, scrap, sample
calculations, manufacturing yield estimates and the determination of which costs
are capitalizable. The valuation of inventory requires the Company to estimate
obsolete or excess inventory as well as inventory that is not of saleable
quality. Variations in methods or assumptions could have a material impact on
the Company's results. If the Company's demand forecast for specific products is
greater than actual demand and it fails to reduce manufacturing output
accordingly, the Company could be required to record additional inventory
reserves, which would have a negative impact on net income.

A 1% write-down of our inventory would decrease current year net income by
approximately $0.2 million, or approximately $0.02 per diluted share. As of June
30, 2009 we have $35.3 million of inventory recorded on our balance sheet
representing 15% of total assets.

Employee Benefit Plan

The Company's noncontributory pension plan (the "Pension Plan") covers U.S.
employees who became eligible after one year of service. The benefit formula is
dependent upon employee earnings and years of service. Additionally, certain
healthcare benefits are available to eligible domestic employees who are
participants in the Pension Plan and meet certain age and service requirements
upon termination of employment (the "Postretirement Health Care Benefits Plan").
For eligible employees, the Company offsets a portion of the postretirement
medical costs to the retired participant based on length of service. Effective
August 15, 2000, the Pension Plan and the Postretirement Health Care Benefits
Plan were closed to new participants.

Accounting methodologies use an attribution approach that generally spreads
individual events over the service lives of the employees in the plan. Examples
of "events" are plan amendments and changes in actuarial assumptions such as
discount rate, expected long-term rate of return on plan assets, and rate of
compensation increases. The principle underlying the required attribution
approach is that employees render service over their service lives on a
relatively consistent basis and, therefore, the income statement effects of
pension benefits or postretirement health care benefits are earned in, and
should be expensed in, the same pattern.

There are various assumptions used in calculating the net periodic benefit
expense and related benefit obligations. One of these assumptions is the
expected long-term rate of return on plan assets. The required use of expected
long-term rate of return on plan assets may result in recognized pension income
that is greater or less than the actual returns of those plan assets in any
given year. Over time, however, the expected long-term returns are designed to
approximate the actual long-term returns and therefore result in a pattern of
income and expense recognition that more closely matches the pattern of the
services provided by the employees.

The Company uses longer-term historical actual return experience with
consideration of the expected investment mix of the plans' assets, as well as
future estimates of long-term investment returns, to develop its expected rate
of return assumption used in calculating the net periodic pension cost and the
net retirement healthcare expense. The Company's investment return assumption
for the Pension Plan was 8.5% for both fiscal 2009 and 2008. At June 30, 2009,
the Regular Pension Plan was approximately 48% equity investments and 52% cash
and fixed income investments, while the Post Retirement health Care Plan was
unfunded.

A second key assumption is the discount rate. The discount rate assumptions used
for pension benefits and postretirement health care benefits accounting
reflects, at June 30 of each year, the prevailing market rates for high-quality,
fixed-income debt instruments that, if the obligation was settled at the
measurement date, would provide the necessary future cash flows to pay the
benefit obligation when due. The Company's discount rates for measuring its
pension obligations were 6.85% and 6.35% at June 30, 2009 and 2008,
respectively. The Company's discount rates for measuring the Postretirement
Health Care Benefits Plan obligation were 6.37% and 6.86% at June 30, 2009 and
2008, respectively.


--------------------------------------------------------------------------------

                                       27
<PAGE>

A final set of assumptions involves the cost drivers of the underlying benefits.
The rate of compensation increase is a key assumption used in the actuarial
model for pension accounting and is determined by the Company based upon its
long-term plans for such increases. The Company's fiscal 2009, 2008 and 2007
rate for future compensation increase for the Regular Pension Plan was 4%. For
Postretirement Health Care Benefits Plan accounting, the Company reviews
external data and its own historical trends for health care costs to determine
the health care cost trend rates. Based on this review, the health care cost
trend rates used to determine the June 30, 2009 accumulated postretirement
benefit obligation are 7.5% - 10.5% for 2009, with a declining trend rate of
about 0.8% - 0.4% each year until it reaches 5% by fiscal 2016, with a flat 5%
rate for fiscal 2016 and beyond.

For the fiscal years ended June 30, 2009, 2008 and 2007, the Company recognized
net periodic pension expense of $0.3 million, $0.1 million and $0.3 million,
respectively, related to its pension plan. Cash contributions of $.130 million
were made to the U.S. pension plans in fiscal 2009. The Company expects to make
cash contributions of approximately $0 to its pension plan during fiscal 2010.

The 2009 and 2008 fiscal year Postretirement Health Care Benefits Plan actual
expenses were $0.2 million in both periods. Cash contributions of $0.2 million
were made to this plan in fiscal 2009. The Company expects to make $.2 million
in cash contributions to the Postretirement Health Care Benefits Plan in fiscal
2009.

Recent market conditions have resulted in an unusually high degree of volatility
and increased the risks and illiquidity associated with certain investments held
by the pension plans, which could impact the value of investments after the date
of this filing. The Company's measurement date of its plan assets and
obligations is June 30.

Long Term Contract Accounting

Net sales under certain long-term contracts of the Space & Defense Group, many
of which provide for periodic payments, are recognized under the
percentage-of-completion method. Estimated manufacturing cost-at-completion for
these contracts are reviewed on a routine periodic basis, and adjustments are
made periodically to the estimated cost-at-completion, based on actual costs
incurred, progress made, and estimates of the costs required to complete the
contractual requirements. When the estimated manufacturing cost-at-completion
exceeds the contract value, the contract is written down to its net realizable
value, and the loss resulting from cost overruns is immediately recognized.

To properly match net sales with costs, certain contracts may have revenue
recognized in excess of billings (unbilled revenues), and other contracts may
have billings in excess of net sales recognized (billings in excess of contract
costs). Under long-term contracts, the prerequisites for billing the customer
for periodic payments generally involve the Company's achievement of
contractually specific, objective milestones (e.g., completion of design,
testing, or other engineering phase, delivery of test data or other
documentation, or delivery of an engineering model or flight hardware). The
amount of unbilled accounts receivable at June 30, 2009 and 2008 is $0.5 million
and $0.2 million, respectively.

An award or incentive fee is usually variable, based upon specific performance
criteria stated in the contract. Award or incentive fees are recognized only
upon achieving the contractual criteria and after the customer has approved or
granted the award or incentive.

Assessment of Recoverability of Intangible and Long-Lived Assets

When the Company makes an acquisition, it allocates the purchase price to the
assets that are acquired and liabilities that are assumed based on their
estimated fair value at the date of acquisition. The Company then allocates the
purchase price in excess of net tangible assets acquired to identifiable
intangible assets. Other indefinite lived intangible assets, such as tradenames,
are considered non-amortizing intangible assets as they are expected to generate
cash flows indefinitely. Goodwill is recorded when the purchase price paid for
an acquisition exceeds the estimated fair value of the net identified tangible
and intangible assets acquired. Indefinite lived intangibles and goodwill are
required to be assessed for impairment on an annual basis or more frequent if
certain indicators are present. Definite-lived intangible assets are amortized
over their estimated useful lives.

The Company bases the fair value of identifiable tangible and intangible assets
on detailed valuations that use information and assumptions provided by
management. The fair values of the assets acquired and liabilities assumed are
determined using one of three valuation approaches: market, income and cost. The
selection of a particular method for a given asset depends on the reliability of
available data and the nature of the asset, among other considerations. The
market approach values the subject asset based on available market pricing for
comparable assets. The income approach values the subject asset based on the
present value of risk adjusted cash flows projected to be generated by the
asset. The projected cash flows for each asset considers multiple factors,
including current revenue from existing customers, attrition trends, reasonable
contract renewal assumptions from the perspective of a marketplace participant,
and expected profit margins giving consideration to historical and expected
margins. The cost approach values the subject asset by determining the current
cost of replacing that asset with another of equivalent economic utility. The
cost to replace a given asset reflects the estimated reproduction or replacement
cost for the asset, less an allowance for loss in value due to depreciation or
obsolescence, with specific consideration given to economic obsolescence if
indicated.

The Company performs an annual review on the last day of its third fiscal
quarter, or more frequently if indicators of potential


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                                       28
<PAGE>

impairment exist, to determine if the recorded goodwill and other indefinite
lived intangible assets are impaired. The Company assesses goodwill for
impairment by comparing the fair value of the reporting units to their carrying
value to determine if there is potential impairment. If the fair value of a
reporting unit is less than its carrying value, an impairment loss is recorded
to the extent that the implied fair value of the goodwill within the reporting
unit is less than its carrying value. Fair values for reporting units are
determined based primarily on the income approach, however where appropriate,
the market approach or appraised values are also used. Definite-lived intangible
assets such as purchased technology, non-compete agreements, and customer lists
are reviewed at least quarterly to determine if any adverse conditions exist or
a change in circumstances has occurred that would indicate impairment or a
change in their remaining useful life. Indefinite lived intangible assets, such
as tradenames, are evaluated for impairment by using the income approach.

The use of alternative valuation assumptions, including estimated cash flows and
discount rates, and alternative estimated useful life assumptions could result
in different purchase price allocations. Significant changes in these estimates
and assumptions could impact the value of the assets and liabilities recorded
which would change the amount and timing of future intangible asset amortization
expense.

The Company makes certain estimates and assumptions that affect the
determination of the expected future cash flows from a reporting units for its
goodwill impairment testing. These include sales growth, cost of capital, and
projections of future cash flows. Significant changes in these estimates and
assumptions could create future impairment losses to goodwill.

For indefinite lived assets, such as tradenames, the Company makes certain
estimates of revenue streams, royalty rates and other future benefits.
Significant changes in these estimates could create future impairments of these
indefinite lived intangible assets.

Estimation of the useful lives of definite-lived intangible assets requires
significant management judgment. Events could occur that would materially affect
the estimates of the useful lives. Significant changes in these estimates and
assumptions could change the amount of future amortization expense or could
create future impairments of these definite-lived intangible assets.

A 1% change in the amortization of our intangible assets would increase/decrease
current year would have an immaterial impact on net income and earnings per
diluted share. As of June 30, 2009 the Company has $54.0 million of intangible
assets recorded on our balance sheet representing 18% of total assets. This
includes $83.0 million of amortizing intangible assets, $3.0 million of
indefinite lived intangible assets and $42.6 million of goodwill.

Liquidity and Capital Resources

Net cash provided by operations for the years ended June 30, 2009, 2008 and 2007
was $28.4 million, $12.0 million and $21.8 million, respectively. The positive
cash flow from operations in fiscal 2009 was due to profit before depreciation
and equity based compensation expense and was further enhanced by a combined
decrease in inventory and accounts receivable of $7.9 million. In fiscal years
2007 and 2008 the positive cash flow from operations was due primarily to income
before depreciation and equity based compensation in both years, and was
partially off-set by a combined increase in inventory and accounts receivable
amounting to $6.0 million in fiscal 2008 and $6.3 million in fiscal 2007.
Additionally, in fiscal 2009, 2008 and 2007, cash flow from operations rose due
to $4.0 million, $3.7 million and $3.5 million in equity based compensation
expense, respectively, which did not require cash and in fiscal 2007 operating
cash flow was further enhanced by a $3.4 million increase in accounts payable.

Net cash used in investing activities in fiscal 2009 was $35.7 million and
consisted of net maturities of marketable debt securities of $19.3 million, net
of capital expenditures of $6.8 million and payments of $48.2 million used to
purchase M. S. Kennedy Corp and Unicircuit, Inc in the first quarter.

Net cash provided by investing activities in fiscal 2008 was $20.1 million and
consisted of net maturities of marketable debt securities of $32.5 million, less
capital expenditures of $12.4 million.

Net cash used in investing activities in fiscal 2007 was $6.8 million and
consisted of capital expenditures of $13.2 million, including $5.3 million in
expenditures to construct and equip a 54,000 square foot addition to our East
Syracuse, New York manufacturing facility, less funds provided by net maturities
of marketable debt securities of $6.2 million.

Net cash  provided by financing  activities in fiscal 2009 was $46.4 million and
consisted  of $2.7  million  received  from the  exercise  of stock  options and
borrowings  of $49.8 million under the  Company's  revolving  declining  line of
credit to finance the acquisitions of M. S. Kennedy and Unicircuit,  net of $1.2
million  used to pay off an acquired  mortgage and $5.0 million used to purchase
471,000  treasury shares.  Net cash used in financing  activities in fiscal 2008
and 2007 was $29.5  million and $23.1  million,  respectively.  In fiscal  2008,
$784,000  was  provided by cash and tax  benefits  resulting  from stock  option
exercises  and $30.2  million  was used to purchase  2.0  million  shares of the
Company's  common stock for  treasury,  while in fiscal  2007,  $2.6 million was
provided by cash and


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                                       29
<PAGE>

tax benefits resulting from the exercise of stock options and $25.7 million was
used to purchase 1.5 million shares for treasury.

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 June 30, 2009, there
were approximately 1,100,000 shares remaining under the current Board repurchase
authorization.

At June 30, 2009, the Company had approximately $64.8 million in cash, cash
equivalents, and marketable securities and has had positive operating cash flow
for over ten consecutive years. The Company believes that its cash requirements
for the foreseeable future will be satisfied by currently invested cash
balances, expected cash flows from operations and its newly secured line of
credit.

At June 30, 2009, as a result of the decline in the stock market, the assets in
the Company's defined benefit plan declined more than approximately 20% from
July 1, 2007 when the plan was considered to be fully funded. Due to this
decline, the Company was required to make a $0.1 million deposit into the plan
by March 15, 2009 to meet the 92% funding requirement for the July 1, 2008
measurement date and further expects the need to make a contribution of
approximately $1.0 to 2.0 million by March 2010 to meet the 94% funding
requirement for the July 1, 2009 measurement date valuation. Additionally, due
to defined benefit plan's losses, it is expected that the net periodic pension
benefit cost will be approximately $0.7 million in fiscal 2010.

At June 30, 2009, the Company had $49.8 million outstanding under its note of
which $9.8 million was scheduled for repayment on July 31, 2009, the anniversary
of the note. The Company expects to make this payment from its currently
available cash balances. Availability of credit under the line declines 20%
annually on the anniversary date of the note and any outstanding principal
balance in excess of the new line limit is due and payable at that time.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements within the meaning of Item 303(a) (4)
of Reg S-K.

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 and lease
agreements, and under contingent commitments, such as debt guarantees. The
Company's obligations and commitments are as follows:

<TABLE>
<CAPTION>
(in thousands)                                                                         Payment Due by Period
                                                                           Less
                                                         Total          Than 1 Yr.       2 - 3 Yrs.       4 - 5 Yrs.    Over 5 Yrs.
Contractual Obligations                                 -------         ----------       ----------       ----------    -----------
<S>                                                     <C>              <C>              <C>              <C>            <C>
Contractual obligations
Debt and Interest Payments                              $52,403          $10,820          $21,292          $20,291        $  --
Operating Lease Obligations                             $ 3,091          $   692          $ 1,512          $   887        $  --
Other Long-Term Liabilities(1)                          $   390          $    65          $   130          $   130        $  65
</TABLE>

The unrecognized tax benefits that are recorded in other long-term liabilities
in the Company's condensed consolidated balance sheet are not anticipated to be
paid within one year of the balance sheet date; and the time period for when a
cash payout on these unrecognized tax benefits can not be anticipated or
estimated do to the uncertainty and as such are not included in the above table.

      (1) Deferred Compensation

Recent Accounting Pronouncements

In December 2007, the FASB issued Statement of Financial Accounting Standard No.
141 (revised 2007), "Business Combinations" (SFAS 141(R)). The objective of this
Statement is to improve the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial reports about a business combination. Specifically, it establishes
principles and requirements over how the acquirer (1) recognizes and measures
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (2) recognizes and measures goodwill
acquired in the business combination or a gain from a bargain purchase, and; (3)
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This Statement is effective for fiscal years beginning after
December 15, 2008. The adoption of this Statement at July 1, 2009 has not had a
material impact on the Company's financial statements.

In April 2008, the FASB issued a FASB Staff Position No. 142-3 "Determination of
the Useful Life of Intangible Assets" (FSP). This Position amends the factors
that should be considered in the developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under FASB
Statement No. 142, "Goodwill and Other Intangible Assets." The intent of the FSP
is


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                                       30
<PAGE>

to improve the consistency between the useful life of a recognized intangible
asset and the period of expected cash flows used to measure the fair value of
the asset under FASB Statement No. 141 (revised 2007), "Business Combinations,"
and other U.S. generally accepted accounting principles. This Statement is
effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2008. The adoption of this Statement at July 1,
2009 has not had a material impact on the Company's financial statements.

In December 2008, the FASB issued FSP FAS 132(R)-1, "Employers' Disclosures
about Postretirement Benefit Plan Assets." This FSP amends SFAS No. 132 (revised
2003), "Employers' Disclosures about Pensions and Other Postretirement
Benefits," to provide guidance on an employer's disclosures about plan assets of
a defined benefit pension or other postretirement plan on investment policies
and strategies, major categories of plan assets, inputs and valuation techniques
used to measure the fair value of plan assets and significant concentrations of
risk within plan assets. This FSP shall be effective for fiscal years ending
after December 15, 2009, with earlier application permitted. Upon initial
application, the provisions of this FSP are not required for earlier periods
that are presented for comparative purposes. The Company does not believe this
Statement will have a material impact on its financial statements.

In April 2009, the FASB issued FSP FAS 157-4, "Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" (FSP FAS 157-4).
FSP FAS 157-4 amends SFAS 157 and provides additional guidance for estimating
fair value in accordance with SFAS 157 when the volume and level of activity for
the asset or liability have significantly decreased and also includes guidance
on identifying circumstances that indicate a transaction is not orderly for fair
value measurements. This FSP shall be applied prospectively with retrospective
application not permitted. This FSP shall be effective for interim and annual
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009. An entity early adopting this FSP must also early
adopt FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of
Other-Than-Temporary Impairments" (FSP FAS 115-2 and FAS 124-2). Additionally,
if an entity elects to early adopt either FSP FAS 107-1 and APB 28-1, "Interim
Disclosures about Fair Value of Financial Instruments" (FSP FAS 107-1 and APB
28-1) or FSP FAS 115-2 and FAS 124-2, it must also elect to early adopt this
FSP. The adoption of this Statement has not had a material impact on the
Company's financial statements.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2. This FSP amends SFAS
115, "Accounting for Certain Investments in Debt and Equity Securities," SFAS
124, "Accounting for Certain Investments Held by Not-for-Profit Organizations,"
and EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on
Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held
by a Transferor in Securitized Financial Assets," to make the
other-than-temporary impairments guidance more operational and to improve the
presentation of other-than-temporary impairments in the financial statements.
This FSP will replace the existing requirement that the entity's management
assert it has both the intent and ability to hold an impaired debt security
until recovery with a requirement that management assert it does not have the
intent to sell the security, and it is more likely than not it will not have to
sell the security before recovery of its cost basis. This FSP provides increased
disclosure about the credit and noncredit components of impaired debt securities
that are not expected to be sold and also requires increased and more frequent
disclosures regarding expected cash flows, credit losses, and an aging of
securities with unrealized losses. Although this FSP does not result in a change
in the carrying amount of debt securities, it does require that the portion of
an other-than-temporary impairment not related to a credit loss for a
held-to-maturity security be recognized in a new category of other comprehensive
income and be amortized over the remaining life of the debt security as an
increase in the carrying value of the security. This FSP shall be effective for
interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. An entity may early adopt
this FSP only if it also elects to early adopt FSP FAS 157-4. Also, if an entity
elects to early adopt either FSP FAS 157-4 or FSP FAS 107-1 and APB 28-1, the
entity also is required to early adopt this FSP. The adoption of this Statement
has not had a material impact on the Company's financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1. This FSP amends SFAS
No. 107, "Disclosures about Fair Value of Financial Instruments," to require
disclosures about fair value of financial instruments not measured on the
balance sheet at fair value in interim financial statements as well as in annual
financial statements. Prior to this FSP, fair values for these assets and
liabilities were only disclosed annually. This FSP applies to all financial
instruments within the scope of SFAS 107 and requires all entities to disclose
the method(s) and significant assumptions used to estimate the fair value of
financial instruments. This FSP shall be effective for interim periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. An entity may early adopt this FSP only if it also elects to
early adopt FSP FAS 157-4 and FSP FAS 115-2 and FAS 124-2. This FSP does not
require disclosures for earlier periods presented for comparative purposes at
initial adoption. In periods after initial adoption, this FSP requires
comparative disclosures only for periods ending after initial adoption. The
adoption of this Statement has not had a material impact on the Company's
financial statements.

The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
165, "Subsequent Events" (SFAS 165) effective for the periods ending after June
15, 2009 (the Company's fiscal 2009) and have evaluated for disclosure
subsequent events that have


--------------------------------------------------------------------------------

                                       31
<PAGE>

occurred up to September 14, 2009, the date of issuance for the financial
statements.

Item 7A. 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 Annual Report on Form 10-K.

As of June 30, 2009, the Company had cash, cash equivalents and marketable
securities of $64.8 million, all of which consisted of 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 rate of 10.0% from June 30, 2009
rates, or 0.125%, would have reduced net income and cash flow by approximately
$81,000, or $0.0057 per diluted share for the year. 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 decrease in interest
rates would have a material effect on its financial condition or results of
operations. Over time, however, declines in interest rates will reduce the
Company's interest income.

As of June 30, 2009, the Company had $49.8 million in outstanding debt under its
revolving line of credit with Keybank. The line consists of a $50.0 million
revolving credit note (Note) for which principal amounts are due on August 1,
2009, and on each anniversary date thereafter through July 31, 2013. Borrowings
under the Note, at the Company's choice, bear interest at LIBOR, plus 100 to 425
basis points or at the Keybank's prime rate, minus (100) to plus 225 basis
points, depending upon the Company's EBITDA performance at the end of each
quarter as measured by the formula: EBITDA divided by the Current Portion of
Long-term Debt plus interest expense. For the three months ended June 30, 2009,
the weighted average interest rate on the outstanding borrowings was 2.35%.
Interest expense for these borrowings is exposed to interest rate risk and will
increase if market interest rates rise. A hypothetical increase in market
interest rate of 10.0% from June 30, 2009 rates, or 0.235%, would have reduced
net income and cash flow by approximately $29,000, or $.002 per diluted share
for the year ending June 30, 2009.

Item 8. Financial Statements and Supplementary Data

The financial statements called for by this Item are provided under "Item 15.
Exhibits, Financial Statement Schedules and Reports on Form 8-K," which
information is incorporated herein by reference. The unaudited supplementary
financial information required by this Item is contained in note 22 to the
consolidated financial statements of the Company which are included elsewhere in
this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants and Financial Disclosure

Not Applicable.

Item 9A. Controls and Procedures

A. Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (Exchange Act)) was
carried out under the supervision and with the participation of the Company's
management, including the President and Chief Executive Officer and the Chief
Financial Officer (the Certifying Officers) as of June 30, 2009. Based on that
evaluation, the Certifying Officers concluded that the Company's disclosure
controls and procedures were effective as of June 30, 2009.

B. Changes in Internal Control Over Financial Reporting

There were no other changes in the registrant's internal control over financial
reporting that occurred during the fourth quarter that materially affected, or
are reasonably likely to materially affect, the Company's internal control over
financial reporting. However the Company completed the following acquisitions
during the fiscal year 2009:

      MSK on August 1, 2008
      Unicircuit on August 31, 2008

We believe that the internal controls and procedures of the above mentioned
subsidiaries are reasonably likely to materially affect our internal control
over financial reporting. We are currently in the process of incorporating the
internal controls and procedures of these


--------------------------------------------------------------------------------

                                       32
<PAGE>

acquisitions into our internal controls over financial reporting.

The Company continues to extend its Section 404 compliance program under the
Sarbanes-Oxley Act of 2002 (the "Act) and the applicable rules and regulations
under such Act to include these acquisitions. The Company has excluded the
fiscal 2009 acquisitions listed above, whose total assets, net assets, total
revenues and net income on a combined basis constitute approximately 26.4%,
19.3%, 22.5% and 16.7%, respectively, of the consolidated financial statement
amounts as of and for the year ended June 30, 2009, as permitted by the guidance
issued by the Office of the Chief Accountant of the Securities and Exchange
Commission. The Company will report on its assessment of the internal controls
of its combined operations within the time period provided by the Act and the
applicable SEC rules and regulations concerning business combinations.

     MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Anaren, Inc. is responsible for establishing and maintaining an
adequate system of internal control over financial reporting. This system is
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States of
America.

The Company's internal control over financial reporting includes those policies
and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company's assets that could have a
material effect on the financial statements.

Because of its inherent limitations, a system of internal control over financial
reporting can provide only reasonable assurance and may not prevent or detect
misstatements. Further, because of changes in conditions, effectiveness of
internal controls over financial reporting may vary over time. Our system
contains self-monitoring mechanisms, and actions are taken to correct
deficiencies as they are identified.

As permitted by guidance issued by the Office of the Chief Accountant, Division
of Corporation Finance of the Securities and Exchange Commission, the Company
has excluded from its evaluation of the Company's internal control over
financial reporting the internal control over financial reporting of the two
subsidiaries acquired in the first quarter of the fiscal 2009 year. Both MSK and
Unicircuit's internal control over financial reporting have not been included in
Management's determination set forth below.

Management conducted an evaluation of the effectiveness of the system of
internal control over financial reporting based on the framework in Internal
Control -- Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on this evaluation,
management concluded that the Company's system of internal control over
financial reporting was effective as of June 30, 2009.

The effectiveness of the Company's internal control over financial reporting has
been audited by Deloitte and Touche LLP, an independent registered public
accounting firm, as stated in their report which is included herein.


--------------------------------------------------------------------------------

                                       33
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Anaren, Inc.
East Syracuse, New York

We have audited the internal control over financial reporting of Anaren, Inc.
and subsidiaries (the "Company") as of June 30, 2009, based on criteria
established in Internal Control -- Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. As described in
Management's Annual Report on Internal Control Over Financial Reporting,
management excluded from its assessment the internal control over financial
reporting at M.S. Kennedy Corp. and Unicircuit, Inc., which were acquired on
August 1, 2008 and August 29, 2008, respectively, and whose financial statements
constitute 15 % and 26 % of net and total assets, respectively, 22 % of
revenues, and 17 % of net income of the consolidated financial statement amounts
as of and for the year ended June 30, 2009. Accordingly, our audit did not
include the internal control over financial reporting at M.S. Kennedy Corp. and
Unicircuit, Inc. The Company's management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the
accompanying Management's Annual Report on Internal Control Over Financial
Reporting. Our responsibility is to express an opinion on the Company's internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.

A company's internal control over financial reporting is a process designed by,
or under the supervision of, the company's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of June 30, 2009, based on the
criteria established in Internal Control -- Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial
statements as of and for the year ended June 30, 2009 of the Company and our
report dated September 14, 2009 expressed an unqualified opinion on those
financial statements.

/s/ Deloitte & Touche LLP

Rochester, New York
September 14, 2009

Item 9B. Other Information

Not Applicable.


--------------------------------------------------------------------------------

                                       34
<PAGE>

                                    PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information regarding the Company's executive officers is reported in Part I of
this Report. Information regarding the Company's directors, compliance with
Section 16(a) of the Exchange Act and Corporate governance is contained in the
Company's proxy statement to be filed with respect to the 2009 Annual Meeting of
Shareholders and is incorporated by reference herein.

The Board of Directors adopted Anaren's Code of Ethics and Business Conduct
(Code), which outlines the ethical principles that provide the foundation for
the Company's dealings with customers, suppliers, shareholders, the investment
community and employees. The Code is applicable to all employees including
executive officers, and to the Company's directors. The Code, as revised in
February 2006, has been distributed to all employees and is publically available
for review on the Company's website, www.anaren.com under Investors/Governance.
If the Company makes any substantive amendments to the Code or grants any
waiver, including any implicit waiver, from a provision of the Code to an
executive officer, the Company will disclose the nature of the amendment or
waiver on its website at www.anaren.com under Investors/Governance.

Item 11. Executive Compensation

Information required by this Item is contained in the Company's proxy statement
to be filed with respect to the 2009 Annual Meeting of Shareholders and is
incorporated by reference herein.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters

Information required by this Item is contained in the Company's proxy statement
to be filed with respect to the 2009 Annual Meeting of Shareholders and is
incorporated by reference herein.

Item 13. Certain Relationships and Related Transactions, and Director
         Independence

Information required by this Item is contained in the Company's proxy statement
to be filed with respect to the 2009 Annual Meeting of Shareholders and is
incorporated by reference herein.

Item 14. Principal Accounting Fees and Services

Information  required by this Item is contained in the Company's proxy statement
to be filed with  respect to the 2009  Annual  Meeting  of  Shareholders  and is
incorporated by reference herein.


--------------------------------------------------------------------------------

                                       35
<PAGE>

                                     PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this Report:

1. Financial Statements

                                                                           Page
                                                                           ----
   Reports of Independent Registered Public Accounting Firms             39 - 40

   Consolidated Balance Sheets as of June 30, 2009 and 2008                 41

   Consolidated Statements of Income for the years ended                    42
   June 30, 2009, 2008 and 2007

   Consolidated Statements of Stockholders' Equity and                      43
   Comprehensive Income for the years ended June 30, 2009,
   2008 and 2007

   Consolidated Statements of Cash Flows for the years ended                44
   June 30, 2009, 2008 and 2007

   Notes to Consolidated Financial Statements                            46 - 72

2. Financial Statement Schedules

None

3. Exhibits

The exhibit list in the Index to Exhibits is incorporated herein by reference as
the list of exhibits required as part of this Report.


--------------------------------------------------------------------------------

                                       36
<PAGE>

                                  ANAREN, INC.

                        Consolidated Financial Statements

                             June 30, 2009 and 2008

     (With Report of Independent Registered Public Accounting Firms Thereon)


--------------------------------------------------------------------------------

                                       37
<PAGE>

                                  ANAREN, INC.

                                      Index

The following documents are filed as part of this report:                 Page

Reports of Independent Registered Public Accounting Firms                39 - 40

Consolidated Balance Sheets as of June 30, 2009 and 2008                   41

Consolidated Statements of Income for the years ended                      42
  June 30, 2009, 2008 and 2007

Consolidated Statements of Stockholders' Equity and                        43
  Comprehensive Income for the years ended June 30, 2009,
  2008 and 2007

Consolidated Statements of Cash Flows for the years ended                  44
  June 30, 2009, 2008 and 2007

Notes to Consolidated Financial Statements                               46 - 72


--------------------------------------------------------------------------------

                                       38
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Anaren, Inc.
East Syracuse, New York

We have audited the accompanying consolidated balance sheet of Anaren, Inc. and
subsidiaries (the "Company") as of June 30, 2009, and the related consolidated
statement of income, stockholders' equity and comprehensive income, and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such 2009 consolidated financial statements present fairly, in
all material respects, the financial position of Anaren, Inc. and subsidiaries
at June 30, 2009, and the results of their operations and their cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the Company's internal control over
financial reporting as of June 30, 2009, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated September 14, 2009
expressed an unqualified opinion on the Company's internal control over
financial reporting.

/s/ Deloitte & Touche LLP

Rochester, New York
September 14, 2009


--------------------------------------------------------------------------------

                                       39
<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Anaren, Inc.:

We have audited the accompanying consolidated balance sheet of Anaren, Inc. and
subsidiaries (the Company) as of June 30, 2008, and the related consolidated
statements of income, stockholders' equity and comprehensive income, and cash
flows for the years ended June 30, 2008 and 2007. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Anaren, Inc. and
subsidiaries as of June 30, 2008, and the results of their operations and their
cash flows for each of the years in the two-year period ended June 30, 2008, in
conformity with U.S. generally accepted accounting principles.

As discussed in note 17 to the consolidated financial statements, the Company
adopted Financial Accounting Standards Board Interpretation No. 48, Accounting
for Uncertainty in Income Taxes, effective July 1, 2007.

As discussed in note 16, the Company adopted Statement of Financial Accounting
Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans, effective June 30, 2007.

/s/ KPMG LLP

Syracuse, New York
September 15, 2008


--------------------------------------------------------------------------------

                                       40
<PAGE>

                                  ANAREN, INC.
                           Consolidated Balance Sheets
                             June 30, 2009 and 2008
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                                        2009                 2008
                                                                                                      ---------           ---------
<S>                                                                                                   <C>                 <C>
                                  ASSETS
Assets:
      Cash and cash equivalents                                                                       $  49,893           $  10,711
      Securities held to maturity                                                                        11,810              21,074

      Receivables, less allowances of $397 and $419
         in 2009 and 2008, respectively                                                                  24,466              23,101
      Inventories                                                                                        35,282              26,981
      Prepaid expenses and other current assets                                                           4,033               3,269
      Deferred income taxes                                                                               1,547               1,646
                                                                                                      ---------           ---------
         Total current assets                                                                           127,031              86,782
      Securities available-for-sale                                                                       1,050                 314
      Securities held to maturity                                                                         2,079              11,994
      Property, plant, and equipment, net                                                                52,889              42,266
      Deferred income taxes                                                                                  27                  31
      Goodwill                                                                                           42,635              30,716
      Other intangible assets, net of accumulated amortization                                           11,344                  --
                                                                                                      ---------           ---------
      Total assets                                                                                    $ 237,055           $ 172,103
                                                                                                      =========           =========

                   LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities and Shareholders' Equity:
       Current installments of long-term obligation                                                   $   9,800                  --
       Accounts payable                                                                                   6,991           $   9,160
       Accrued expenses                                                                                   5,208               2,581
       Deferred income taxes                                                                                177                  --
       Customer advance payments                                                                            118               1,259
       Other current liabilities                                                                          2,525               2,618
                                                                                                      ---------           ---------
         Total current liabilities                                                                       24,819              15,618
      Deferred income taxes                                                                               2,103                 814
      Pension and postretirement benefit obligation                                                       6,496               3,315
      Long-term obligation                                                                               40,000                  --
      Other Liabilities                                                                                   2,692               1,492
                                                                                                      ---------           ---------
      Total liabilities                                                                                  76,110              21,239
                                                                                                      ---------           ---------
Commitments and contingencies (notes 19 and 20)
Stockholders' Equity:
       Common stock, $0.01 par value. Authorized 200,000 shares; issued
       28,007 and 27,393 at June 30, 2009 and 2008, respectively                                            280                 274
       Additional paid-in capital                                                                       199,597             192,314
       Retained earnings                                                                                104,399              94,540
       Accumulated other comprehensive loss                                                              (2,397)               (344)
                                                                                                      ---------           ---------
                                                                                                        301,879             286,784
         Less 13,251 and 12,780 treasury shares at
           June 30, 2009 and 2008, respectively, at cost                                                140,934             135,920
                                                                                                      ---------           ---------
         Total stockholders' equity                                                                     160,945             150,864
                                                                                                      ---------           ---------
       Total liabilities and stockholders' equity                                                     $ 237,055           $ 172,103
                                                                                                      =========           =========
</TABLE>

           See accompanying notes to consolidated financial statements


--------------------------------------------------------------------------------

                                       41
<PAGE>

                                  ANAREN, INC.
                        Consolidated Statements of Income
                    Years ended June 30, 2009, 2008 and 2007
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                           2009                2008                2007
<S>                                                                      <C>                 <C>                 <C>
Net Sales                                                                $166,905            $131,316            $128,987
Cost of Sales                                                             112,289              90,838              83,125
                                                                         --------            --------            --------
         Gross profit                                                      54,616              40,478              45,862
Operating Expenses:
   Marketing                                                                8,967               7,019               7,416
   Research and development                                                12,986              10,410               9,134
   General and administrative                                              18,636              13,592              12,298
   Restructuring                                                               --                 255                  --
                                                                         --------            --------            --------
         Total operating expenses                                          40,589              31,276              28,848
                                                                         --------            --------            --------
         Operating income                                                  14,027               9,202              17,014
Other income (expense):
   Interest expense                                                        (1,482)                (79)                (24)
   Other, primarily interest income                                         1,088               2,322               3,571
                                                                         --------            --------            --------
         Total other income, net                                             (394)              2,243               3,547
                                                                         --------            --------            --------
         Income from continuing                                            13,633              11,445              20,561
           operations before income taxes
Income tax expense                                                          3,774               2,982               5,211
                                                                         --------            --------            --------
         Income from continuing operations                                  9,859               8,463              15,350
Discontinued operations:
   Income tax benefit                                                          --                 770                  --
                                                                         --------            --------            --------
         Net income from discontinued
           operations                                                          --                 770                  --
                                                                         --------            --------            --------
         Net income                                                         9,859            $  9,233            $ 15,350
                                                                         ========            ========            ========
Basic earnings per share:
   Income from continuing operations                                     $   0.71            $   0.57            $   0.89
   Income from discontinued operations                                         --                0.05                  --
                                                                         --------            --------            --------

       Net income                                                        $   0.71            $   0.62            $   0.89
                                                                         ========            ========            ========
Diluted earnings per share:
   Income from continuing operations                                     $   0.70            $   0.56            $   0.87
   Income from discontinued operations                                         --                0.05                  --
                                                                         --------            --------            --------

       Net income                                                        $   0.70            $   0.61            $   0.87
                                                                         ========            ========            ========
Weighted average common shares
   Outstanding:
       Basic                                                               13,911              14,827              17,319
                                                                         ========            ========            ========
       Diluted                                                             14,179              15,068              17,721
                                                                         ========            ========            ========
</TABLE>

           See accompanying notes to consolidated financial statements


--------------------------------------------------------------------------------

                                       42
<PAGE>

                                  ANAREN, INC.
    Consolidated Statements of Stockholders' Equity and Comprehensive Income
                    Years ended June 30, 2009, 2008 and 2007
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                               Accumulated
                                                              Common   Additional                 Other                    Total
                                              Comprehensive   Stock     Paid-in     Retained  Comprehensive  Treasury  Stockholders'
                                              Income (loss)   Amount    Capital     Earnings      (Loss)      Stock       Equity
                                              -------------   ------   ----------   --------  ------------- ---------- -------------
<S>                                               <C>         <C>      <C>          <C>          <C>        <C>          <C>
Balance at July 1, 2006                                       $  268   $ 181,781    $ 69,957     $  (442)   $ (79,983)   $ 171,581
Comprehensive income:
     Net income                                   $15,350         --          --      15,350          --           --       15,350
     Other comprehensive loss:
      Foreign currency translation
      adjustment                                      259         --          --          --          --           --           --
      Minimum pension liability
        adjustment, net of tax of $282                547         --          --          --          --           --           --
                                                  -------
Other comprehensive income                            806         --          --          --         807           --          807
                                                  -------
         Total comprehensive income               $16,156
                                                  =======
Purchase of treasury stock (1,503 shares)                         --          --          --          --      (25,694)     (25,694)
Exercise of stock options under the
  equity plans                                                     3       2,196          --          --           --        2,199
Adjustment to initially apply SFAS No.
  158, net of tax benefit of $696                                 --          --          --      (1,350)          --       (1,350)
Tax benefit from exercise of stock
  options                                                         --         433          --          --           --          433
Equity based compensation                                         --       3,468          --          --           --        3,468
                                                              ------   ---------    --------     -------    ---------    ---------
Balance at June 30, 2007                                      $  271   $ 187,878    $ 85,307     $  (985)   $(105,677)   $ 166,794
Comprehensive income:
     Net income                                   $ 9,233         --          --       9,233          --           --        9,233
     Other comprehensive loss:
      Foreign currency translation
        adjustment                                  1,005         --          --          --          --           --           --
      Minimum pension liability
        adjustment, net of tax of $92                (179)        --          --          --          --           --           --
      Mark to market available-for-sale
        investments                                  (185)        --          --          --          --           --           --
                                                  -------
Other comprehensive income                            641         --          --          --         641           --          641
                                                  -------
         Total comprehensive income               $ 9,874
                                                  =======
Purchase of treasury stock (2,028 shares)                         --          --          --          --      (30,243)     (30,243)
Exercise of stock options under the
  equity plans                                                     3         663          --          --           --          666

Tax benefit from exercise of stock
  options                                                         --         119          --          --           --          119
Equity based compensation                                         --       3,654          --          --           --        3,654
                                                              ------   ---------    --------     -------    ---------    ---------
Balance at June 30, 2008                                      $  274   $ 192,314    $ 94,540     $  (344)   $(135,920)   $ 150,864
Comprehensive income:
     Net income                                   $ 9,859         --          --       9,859          --           --        9,859
     Other comprehensive loss:
      Foreign currency translation
        adjustment                                     34         --          --          --          --           --           --
      Minimum pension liability
        adjustment, net of tax of $970             (1,883)        --          --          --          --           --           --
      Mark to market available-for-sale
        investments                                  (204)        --          --          --          --           --           --
                                                  -------
Other comprehensive loss                           (2,053)        --          --          --      (2,053)          --       (2,053)
                                                  -------
         Total comprehensive income               $ 7,806
                                                  =======
Purchase of treasury stock (471 shares)                           --          --          --          --       (5,014)      (5,014)
Exercise of stock options under the
  equity plans                                                     3       3,074          --          --           --        3,077
Issuance of restricted stock                                       3          (3)                                               --
Tax benefit from exercise of stock options                        --         200          --          --           --          200
Equity based compensation                                         --       4,012          --          --           --        4,012
                                                              ======   ---------    --------     -------    ---------    ---------
Balance at June 30, 2009                                      $  280   $ 199,597    $104,399     $(2,397)   $(140,934)   $ 160,945
                                                              ======   =========    ========     =======    =========    =========
</TABLE>

          See accompanying notes to consolidated financial statements.


--------------------------------------------------------------------------------

                                       43
<PAGE>

                                  ANAREN, INC.
                      Consolidated Statements of Cash Flows
                    Years ended June 30, 2009, 2008 and 2007
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                              2009           2008            2007
                                                                                            --------       --------       ---------
<S>                                                                                         <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                                                           $  9,859       $  9,233       $  15,350
       Net income from discontinued operations                                                    --            770              --
                                                                                            --------       --------       ---------
           Net income from continuing operations                                               9,859          8,463          15,350
       Adjustments to reconcile net income from continuing operations to
         net cash provided by operating activities:
       Depreciation                                                                            8,400          6,764           5,205
       Loss (gain) on property, plant, and equipment                                              64            152             (78)
       Amortization                                                                            1,425            605             303
       Deferred income taxes                                                                    (352)          (936)           (179)
       Equity based compensation                                                               4,027          3,676           3,469
       Provision (reduction) in accounts receivable allowances                                   (22)           164               4

       Changes in operating assets and liabilities:
           Receivables                                                                         5,078         (3,341)         (3,799)
           Inventories                                                                         2,818         (2,671)         (2,504)
           Prepaid expenses and other current assets                                            (474)           230            (727)
           Accounts payable                                                                   (2,802)        (1,594)          3,374
           Accrued expenses                                                                    1,646         (1,327)            653
           Customer advance payments                                                          (1,381)           (60)            835
           Other liabilities                                                                  (2,157)         1,740             799
           Pension and postretirement benefit obligation                                       2,268             90            (932)
                                                                                            --------       --------       ---------
             Net cash provided by operating activities                                        28,397         11,955          21,773
                                                                                            --------       --------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Capital expenditures                                                                   (6,831)       (12,383)        (13,175)
       Payment for purchase of M. S. Kennedy and Unicircuit, net
         of cash acquired                                                                    (48,166)
       Proceeds from sale of property, plant, and equipment                                       --             --             135
       Maturities of held to maturity and available-for-sale securities                       22,459         64,831         136,151
       Purchases of held to maturity and available-for-sale securities                        (3,130)       (32,324)       (129,902)
                                                                                            --------       --------       ---------
             Net cash provided by (used in) investing activities                             (35,668)        20,124          (6,791)
                                                                                            --------       --------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Payments on mortgage payable                                                           (1,209)            --              --
       Proceeds from note payable                                                             49,800             --              --
       Stock options exercised                                                                 2,641            666           2,198
       Excess tax benefit from exercise of stock options                                         200            118             433
       Purchase of treasury stock                                                             (5,014)       (30,243)        (25,694)
                                                                                            --------       --------       ---------

             Net cash provided by (used in) financing activities                              46,418        (29,459)        (23,063)
                                                                                            --------       --------       ---------
Effect of exchange rates on cash                                                                  35            179             260
                                                                                            --------       --------       ---------
             Net increase (decrease) in cash and cash equivalents                             39,182          2,799          (7,821)
Cash and cash equivalents, beginning of year                                                  10,711          7,912          15,733
                                                                                            --------       --------       ---------
Cash and cash equivalents, end of year                                                      $ 49,893       $ 10,711       $   7,912
                                                                                            ========       ========       =========
</TABLE>

           See accompanying notes to consolidated financial statements


--------------------------------------------------------------------------------

                                       44
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(1) Summary of Significant Accounting Policies:

(a) Principles of Consolidation

The consolidated financial statements include the accounts of Anaren, Inc. and
its wholly owned subsidiaries (the Company). Intercompany accounts and
transactions have been eliminated.

(b) Operations

The Company is engaged in the design, development, and manufacture of microwave
and RF components, assemblies, and subsystems which receive, process, and
transmit radar, wireless communications, and other wireless signals and other
microwave transmissions. The Company is also a leading provider of high
performance analog microelectronics including custom hybrids, power hybrids, and
multi-chip modules. Its primary products include devices and systems used in the
wireless communications, satellite communications, and defense electronics
markets.

(c) Revenue Recognition

Net sales are derived from sales of the Company's products to other
manufacturers or systems integrators. Net sales are recognized when there is a
persuasive evidence of an arrangement, delivery has occurred, the selling price
is fixed or determinable, and collectability is reasonably assured which
generally occurs when units are shipped.

Net sales under certain long-term contracts of the Space & Defense Group, many
of which provide for periodic payments, are recognized under the
percentage-of-completion method. Estimated manufacturing cost-at-completion for
these contracts are reviewed on a routine periodic basis, and adjustments are
made periodically to the estimated cost-at-completion, based on actual costs
incurred, progress made, and estimates of the costs required to complete the
contractual requirements. When the estimated manufacturing cost-at-completion
exceeds the contract value, the contract is written down to its net realizable
value, and the loss resulting from cost overruns is immediately recognized.

To properly match net sales with costs, certain contracts may have revenue
recognized in excess of billings (unbilled revenues), and other contracts may
have billings in excess of net sales recognized (billings in excess of contract
costs). Under long-term contracts, the prerequisites for billing the customer
for periodic payments generally involve the Company's achievement of
contractually specific, objective milestones (e.g., completion of design,
testing, or other engineering phase, delivery of test data or other
documentation, or delivery of an engineering model or flight hardware). The
amount of unbilled accounts receivable at June 30, 2009 and 2008 is $0.5 million
and $0.2 million, respectively.

An award or incentive fee is usually variable, based upon specific performance
criteria stated in the contract. Award or incentive fees are recognized only
upon achieving the contractual criteria and after the customer has approved or
granted the award or incentive.

The allowance for sales returns is the Company's best estimate of probable
customer credits for returns of previously shipped products, and is based on
historical rates of returns by customers.

(d) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, certificates of deposit and
short-term cash investments that are highly liquid in nature and have original
maturities of three months or less at the date acquired.

(e) Marketable Securities

The Company classifies its securities as either available-for-sale or held to
maturity, as the Company does not hold any securities considered to be trading.
Held to maturity securities are those debt securities for which the Company has
the positive intent and the ability to hold until maturity. All other securities
not included in held to maturity are classified as available-for-sale.
Management determines the appropriate classification of securities at the time
of purchase and reevaluates such designation as of each balance sheet date.

Held to maturity securities are recorded at amortized cost adjusted for the
amortization or accretion of premiums or discounts. Available-for-sale
securities are recorded at fair value. Unrealized holding gains and losses, net
of the related tax effect, on available-for-sale securities are excluded from
earnings and are reported as accumulated other comprehensive income or loss
until realized.


--------------------------------------------------------------------------------

                                       45
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

The Company invests its excess cash principally in municipal bonds, commercial
paper, corporate bonds and notes, and U.S. government agency securities. The
Company also has an investment in an auction rate security. The auction rate
security has a long-term underlying maturity, and the interest rate resets every
365 days.

A decline in the fair value of any available-for-sale or held to maturity
security, that is deemed other than temporary, is charged to earnings resulting
in the establishment of a new cost basis for the security, and dividend and
interest income are recognized when earned. The Company records their
available-for-sale securities at market value through accumulated other
comprehensive income. The reduction in market value of the available-for-sale
securities at June 30, 2009 and 2008 is $0.4 million and $0.2 million,
respectively.

(f) Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear
interest. The allowance for doubtful accounts is the Company's best estimate of
the amount of probable credit losses in the Company's existing accounts
receivable. The Company reviews its allowance for doubtful accounts monthly by
reviewing balances over 90 days for collectibility. Account balances are charged
off against the allowance after all means of collection have been exhausted and
the potential for recovery is considered remote. The Company does not have any
off-balance-sheet credit exposure related to its customers.

(g) Inventories

Inventories are stated at the lower of cost or market, cost being determined on
a first-in, first-out basis. We record a provision for estimated obsolescence of
inventory. Our estimates consider the cost of inventory, forecasted demand, the
estimated market value, the shelf life of the inventory and our historical
experience. Because of the subjective nature of this estimate, it is reasonably
likely that circumstances may cause the estimate to change due to any of the
factors described previously.

(h) Warranty

In accordance with FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others," the Company provides warranty policies on its products.
In addition, the Company incurs costs to service our products in connection with
specific product performance issues. Liability for product warranties are based
upon expected future product performance and durability, and is estimated
largely based upon historical experience. Adjustments are made to accruals as
claim data and historical experience warrant. The changes in the carrying amount
of product warranty reserves for the year ended June 30, 2009, is as follows:

               (amounts in thousands)
               Balance as of June 30, 2008              $   855
               Additions                                    381
               Costs incurred                              (657)
               Adjustments                                 (144)
                                                        -------
               Balance as of June 30, 2009              $   434
                                                        =======

(i) Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Depreciation of land
improvements and buildings is calculated by the straight-line method over an
estimated service life of 25-30 years. Machinery and equipment, and furniture
and fixtures are depreciated by the straight-line method based on estimated
useful lives of 5 to 10 years. Leasehold improvements are depreciated over the
remaining lives of the improvements or the lease term.

(j) Goodwill and Tradenames

Goodwill represents the excess of cost over the fair value of the net tangible
assets and identifiable intangible assets of businesses acquired. Tradenames
represent the estimated fair value of corporate and product names acquired from
the M. S. Kennedy Corp. and Unicircuit, Inc. acquisitions, which will be
utilized by the Company in the future.


--------------------------------------------------------------------------------

                                       46
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

Goodwill and tradenames are tested annually for impairment at the operating
segment level in the fourth quarter, using March 31, 2009 as the test date, of
the Company's fiscal year, or more frequently if there is an indication of an
impairment, 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
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. During 2009, 2008 and
2007, the Company did not record any impairments on goodwill; and did not record
any impairments on tradenames during fiscal 2009.

(k) Long-Lived Assets

The Company accounts for impairment and disposal of long-lived assets, excluding
goodwill, in accordance with the provisions of Statement of Financial Accounting
Standards No. 144 (SFAS 144), Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS 144 sets forth criteria to determine when a long-lived
asset is held for sale and held for use. Such criteria specify that the asset
must be available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such assets. In addition, the
sale of the asset must be probable, and its transfer expected to qualify for
recognition as a completed sale, generally within one year. SFAS 144 requires
recognition of an impairment loss if the carrying amount of a long-lived asset
is not recoverable from its undiscounted cash flows. An impairment loss is
measured as the difference between the carrying amount and fair value of the
asset. The Company evaluates its long-lived assets if impairment indicators
arise. During 2009, 2008 and 2007, the Company did not record any impairment on
its long-lived assets.

(l) Foreign Currency Translation

The financial statements of the Company's subsidiary in China have been
translated into U.S. dollars in accordance with Statement of Financial
Accounting Standards (SFAS) No. 52, "Foreign Currency Translation." All balance
sheet accounts have been translated using the exchange rates in effect at the
balance sheet date. Income statement amounts have been translated using the
average exchange rate for the year. The resulting cumulative translation
adjustment of approximately $1.4 million and $1.4 million at June 30, 2009 and
2008, respectively, is reflected as accumulated other comprehensive income, a
component of stockholders' equity.

(m) 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 stock option
and restricted stock plans. The weighted average number of common shares
utilized in the calculation of the diluted earnings per share does not include
antidilutive shares aggregating 792,000, 1,682,000, and 1,053,000 at June 30,
2009, 2008, and 2007, 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.

The following table sets forth the computation of basic and diluted shares for
use in the calculation of earnings per share as of June 30:

                                                         For the Years Ended
                                                     ---------------------------
                                                       2009      2008      2007
                                                     -------   -------   -------
(amounts in thousands)

Numerator:
Earnings available to common stockholders            $ 9,859   $ 9,233   $15,350
                                                     =======   =======   =======
Denominator:
Denominator for basic earnings per share
outstanding                                           13,911    14,827    17,319
                                                     =======   =======   =======
Denominator for diluted earnings per share:
   Weighted average shares outstanding                13,911    14,827    17,319
Common stock options and restricted stock                268       241       402
                                                     -------   -------   -------
Weighted average shares                               14,179    15,068    17,721
                                                     =======   =======   =======


--------------------------------------------------------------------------------

                                       47
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(n) Equity Based Compensation

New option grants made after July 1, 2006, as well as option grants issued prior
to that date, have been valued using a Black-Scholes option valuation model. For
the grant issued during fiscal year 2007, the Company used the Simplified Method
to estimate the expected term of the expected life of stock option grants as
defined by SEC Accounting Staff Bulletin No. 110 for each award granted;
expected volatility was based on historical volatility levels of the Company's
common stock; the risk-free interest rate was based on the implied yield
currently available on U.S. Treasury zero coupon issues with the remaining term
equal to the expected life.

(o) Research and Development Costs

Research and development costs are expensed as incurred. These costs are costs
of salaries, support, benefits, and materials used in the research and
development of new products or processes.

(p) Income Taxes

The Company utilizes the asset and liability method of accounting for income
taxes. Under this method, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

The Company applies the guidance of Financial Accounting Standards Board (FASB)
Interpretation No. 48 (FIN No. 48), "Accounting for Uncertainty in Income Taxes
- an interpretation of FASB Statement No. 109." FIN No. 48 clarifies the
accounting for uncertainty in income taxes recognized in an enterprise's
financial statements in accordance with FASB Statement No. 109. FIN No. 48
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken on a tax return.

(q) Cash Flow Supplemental Disclosure

<TABLE>
<CAPTION>
                                                                                                      For the Years Ended
                                                                                       ---------------------------------------------
                                                                                         2009                2008              2007
                                                                                       --------             ------            ------
<S>                                                                                    <C>                  <C>               <C>
(amounts in thousands)
Cash paid during the year for:
   Interest                                                                            $  1,204             $   25            $   25
   Taxes paid (net of refunds)                                                            3,470              3,319             4,938
Fixed asset purchases included in accounts payable                                           --                581             1,544
      Fair value of assets acquired, including cash
         acquired                                                                      $ 59,884             $   --            $   --
      Less - liabilities assumed                                                         (8,832)                --                --
                                                                                       --------             ------            ------
      Net assets acquired                                                                51,052                 --                --
      Less - acquisition costs from fiscal 2008                                            (330)                --                --
      Less - cash acquired                                                               (2,556)                --                --
                                                                                       --------             ------            ------
      Net cash paid for purchases of businesses                                        $ 48,166             $   --            $   --
                                                                                       --------             ------            ------
</TABLE>


--------------------------------------------------------------------------------

                                       48
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(r) Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of certain assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of sales and expenses during
the reporting period. Actual results could differ from those estimates.
Significant estimates or assumptions are made in assessing the Company's
accounts receivable allowances, inventory reserves, warranty liability, pension
and postretirement liabilities, and valuations of tangible assets, intangible
assets, and auction rate security.

(s) Reclassification

Certain reclassifications have been made in the consolidated balance sheets,
consolidated statements of stockholders' equity and comprehensive income, and
consolidated statements of cash flows to conform with current year presentation.

(t) Accounting Pronouncements Not Yet Adopted

In December 2007, the FASB issued Statement of Financial Accounting Standard No.
141 (revised 2007), "Business Combinations" (SFAS 141(R)). The objective of this
Statement is to improve the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial reports about a business combination. Specifically, it establishes
principles and requirements over how the acquirer (1) recognizes and measures
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (2) recognizes and measures goodwill
acquired in the business combination or a gain from a bargain purchase, and; (3)
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This Statement is effective for fiscal years beginning after
December 15, 2008. The adoption of this Statement at July 1, 2009 has not had a
material impact on the Company's financial statements.

In April 2008, the FASB issued a FASB Staff Position No. 142-3 "Determination of
the Useful Life of Intangible Assets" (FSP). This Position amends the factors
that should be considered in the developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under FASB
Statement No. 142, "Goodwill and Other Intangible Assets." The intent of the FSP
is to improve the consistency between the useful life of a recognized intangible
asset and the period of expected cash flows used to measure the fair value of
the asset under FASB Statement No. 141 (revised 2007), "Business Combinations,"
and other U.S. generally accepted accounting principles. This Statement is
effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2008. The adoption of this Statement at July 1,
2009 has not had a material impact on the Company's financial statements.

In December 2008, the FASB issued FSP FAS 132(R)-1, "Employers' Disclosures
about Postretirement Benefit Plan Assets." This FSP amends SFAS No. 132 (revised
2003), "Employers' Disclosures about Pensions and Other Postretirement
Benefits," to provide guidance on an employer's disclosures about plan assets of
a defined benefit pension or other postretirement plan on investment policies
and strategies, major categories of plan assets, inputs and valuation techniques
used to measure the fair value of plan assets and significant concentrations of
risk within plan assets. This FSP shall be effective for fiscal years ending
after December 15, 2009, with earlier application permitted. Upon initial
application, the provisions of this FSP are not required for earlier periods
that are presented for comparative purposes. The Company does not believe this
Statement will have a material impact on its financial statements.

In April 2009, the FASB issued FSP FAS 157-4, "Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly" (FSP FAS 157-4).
FSP FAS 157-4 amends SFAS 157 and provides additional guidance for estimating
fair value in accordance with SFAS 157 when the volume and level of activity for
the asset or liability have significantly decreased and also includes guidance
on identifying circumstances that indicate a transaction is not orderly for fair
value measurements. This FSP shall be applied prospectively with retrospective
application not permitted. This FSP shall be effective for interim and annual
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009. An entity early adopting this FSP must also early
adopt FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of
Other-Than-Temporary Impairments" (FSP FAS 115-2 and FAS 124-2). Additionally,
if an entity elects to early adopt either FSP FAS 107-1 and APB 28-1, "Interim
Disclosures about Fair Value of Financial Instruments" (FSP FAS 107-1 and APB
28-1) or FSP FAS 115-2 and FAS 124-2, it must also elect to early adopt this
FSP. The adoption of this Statement has not had a material impact on the
Company's financial statements.


--------------------------------------------------------------------------------

                                       49
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2. This FSP amends SFAS
115, "Accounting for Certain Investments in Debt and Equity Securities," SFAS
124, "Accounting for Certain Investments Held by Not-for-Profit Organizations,"
and EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on
Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held
by a Transferor in Securitized Financial Assets," to make the
other-than-temporary impairments guidance more operational and to improve the
presentation of other-than-temporary impairments in the financial statements.
This FSP will replace the existing requirement that the entity's management
assert it has both the intent and ability to hold an impaired debt security
until recovery with a requirement that management assert it does not have the
intent to sell the security, and it is more likely than not it will not have to
sell the security before recovery of its cost basis. This FSP provides increased
disclosure about the credit and noncredit components of impaired debt securities
that are not expected to be sold and also requires increased and more frequent
disclosures regarding expected cash flows, credit losses, and an aging of
securities with unrealized losses. Although this FSP does not result in a change
in the carrying amount of debt securities, it does require that the portion of
an other-than-temporary impairment not related to a credit loss for a
held-to-maturity security be recognized in a new category of other comprehensive
income and be amortized over the remaining life of the debt security as an
increase in the carrying value of the security. This FSP shall be effective for
interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. An entity may early adopt
this FSP only if it also elects to early adopt FSP FAS 157-4. Also, if an entity
elects to early adopt either FSP FAS 157-4 or FSP FAS 107-1 and APB 28-1, the
entity also is required to early adopt this FSP. The adoption of this Statement
has not had a material impact on the Company's financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1. This FSP amends SFAS
No. 107, "Disclosures about Fair Value of Financial Instruments," to require
disclosures about fair value of financial instruments not measured on the
balance sheet at fair value in interim financial statements as well as in annual
financial statements. Prior to this FSP, fair values for these assets and
liabilities were only disclosed annually. This FSP applies to all financial
instruments within the scope of SFAS 107 and requires all entities to disclose
the method(s) and significant assumptions used to estimate the fair value of
financial instruments. This FSP shall be effective for interim periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. An entity may early adopt this FSP only if it also elects to
early adopt FSP FAS 157-4 and FSP FAS 115-2 and FAS 124-2. This FSP does not
require disclosures for earlier periods presented for comparative purposes at
initial adoption. In periods after initial adoption, this FSP requires
comparative disclosures only for periods ending after initial adoption. The
adoption of this Statement has not had a material impact on the Company's
financial statements.

The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
165, "Subsequent Events" (SFAS 165) effective for the periods ending after June
15, 2009 (the Company's fiscal 2009) and have evaluated for disclosure
subsequent events that have occurred up to September 14, 2009, the date of
issuance for the financial statements.

(2) Acquisitions

Acquisition of M. S. Kennedy, Corp.

On August 1, 2008, the Company completed the acquisition of M. S. Kennedy, Corp.
(MSK), located in Syracuse, New York. The transaction was accounted for under
the purchase method of accounting, and the results of MSK's operations have been
included in the Company's consolidated financial statements since that date. MSK
is a leading provider of high performance analog microelectronics to the Defense
and Space markets and is a leading designer and producer of custom analog
hybrids, power hybrids, and multi-chip modules. MSK offers broad electronic
component design, packaging, and integration capability. MSK was integrated into
Anaren's existing Space & Defense Group.

The Company acquired MSK for a purchase price, net of cash acquired, of $27.7
million. The Company financed this transaction through its existing $50.0
million revolving debt facility and cash from operations. In accordance with the
purchase method of accounting, the acquired net assets are recorded at estimated
fair value at the date of acquisition. The purchase price was based primarily on
the estimated future operating results of MSK.

The following table summarizes the Company's estimated fair values of the assets
acquired and liabilities assumed in the MSK acquisition at August 1, 2008, the
date of acquisition:


--------------------------------------------------------------------------------

                                       50
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

             (amounts in thousands)
             Current assets                                      $13,605
             Property, plant and equipment                         4,016
             Goodwill                                              3,079
             Intangible assets                                     9,410
             Other assets                                          1,441
                                                                 -------

                    Total assets acquired                        $31,551

             Current liabilities                                 $ 2,642
             Long-term liabilities                                    --
                                                                 -------
                 Total liabilities assumed                         2,642
                                                                 -------

             Net assets acquired                                 $28,909
                                                                 =======

The fair value of the assets acquired was preliminarily determined using one of
three valuation approaches: market, income and cost. The selection of a
particular method for a given asset depended on the reliability of available
data and the nature of the asset, among other considerations. The market
approach, which estimates the value of a subject asset based on available market
pricing for comparable assets, was utilized for land, auction rate security, and
in-process and finished inventory. The income approach, which estimates the
value for a subject asset based on the present value of cash flows projected to
be generated by the asset, was used for certain intangible assets, such as
developed technology, customer relationships, tradenames, and for the noncompete
agreements with employees acquired in connection with the MSK transaction. The
projected cash flows were discounted at a rate of return necessary to reflect
the relative risk of the MSK transaction and the time value of money. The
projected cash flows for each asset valued using the cost method required
consideration of multiple factors, including current revenue from existing
customers, attrition trends, reasonable contract renewal assumptions from the
perspective of a marketplace participant, and expected profit margins giving
consideration to historical and expected margins. The cost approach was used to
determine the estimated fair market value of the majority of real and personal
property and raw materials inventory. The cost to replace a given asset reflects
the estimated reproduction or replacement cost for the property, less an
allowance for loss in value due to depreciation or obsolescence, with specific
consideration given to economic obsolescence if indicated.

Current assets and current liabilities - The fair value of current assets
(except inventory) and current liabilities was assumed to approximate their
carrying value as of the acquisition date due to the short-term nature of these
assets and liabilities.

The fair value of the in-process and finished inventory acquired was estimated
by applying a version of the market valuation approach called the comparable
sales method. This valuation method estimates the fair value of the asset by
calculating the potential sales that could be generated from selling the
inventory and then subtracting the costs related to completion and sale of that
inventory and a reasonable profit allowance. Based upon this methodology, the
Company recorded the inventory acquired at fair value, resulting in an increase
in inventory of $2.0 million. During the first and second fiscal quarters of
2009, the Company expensed, in Cost of sales, the step-up value of the acquired
MSK inventory in the period in which the stepped up inventory was sold. Raw
materials inventory was valued at replacement cost.

Property, plant and equipment (PP&E) - The fair value of PP&E acquired was
estimated by applying the cost approach for personal property, buildings and
building improvements and the market approach for land. The cost approach was
applied by estimating a replacement cost and adjusting for depreciation and
obsolescence. The value of the land acquired was derived from market prices for
comparable properties.

The tradename included in the intangible assets is not subject to amortization.
The goodwill and intangible assets related to the MSK transaction, exclusive of
the tradename, are deductible for tax purposes.

Acquisition of Unicircuit Inc.

On August 29, 2008, the Company completed the acquisition of Unicircuit Inc.
(Unicircuit), located in Littleton, Colorado. The transaction was accounted for
under the purchase method of accounting, and the results of Unicircuit's
operations have been included in the Company's consolidated financial statements
since that date. Unicircuit is a manufacturer of printed circuit boards (PCB)
used in various military and aerospace applications. Unicircuit is a leader in
high frequency PCB technology and is expected to enhance the Company's ability
to capture integrated microwave assembly opportunities in the defense, satellite
and aerospace markets. Unicircuit was integrated into Anaren's existing Space &
Defense Group.

The Company acquired Unicircuit for a purchase price, net of cash acquired, of
$20.8 million. The Company financed this transaction


--------------------------------------------------------------------------------

                                       51
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

by utilizing its existing $50.0 million revolving debt facility and cash from
operations. In accordance with the purchase method of accounting, the acquired
net assets are recorded at estimated fair value at the date of acquisition. The
purchase price was based primarily on the estimated future operating results of
Unicircuit.

The following table summarizes the Company's estimated fair values of the assets
acquired and liabilities assumed in the Unicircuit transaction at August 29,
2008, the date of acquisition:

             (amounts in thousands)
             Current assets                                  $ 6,723
             Property, plant and equipment                     8,822
             Goodwill                                          8,882
             Intangible assets                                 3,010
             Other assets                                        896
                                                             -------
                    Total assets acquired                    $28,333

             Current liabilities                             $ 2,183
             Long-term liabilities                             4,007
                                                             -------
                 Total liabilities assumed                     6,190

             Net assets acquired                             $22,143
                                                             =======

The fair value of the assets acquired was preliminarily determined using one of
three valuation approaches: market, income and cost. The selection of a
particular method for a given asset depended on the reliability of available
data and the nature of the asset, among other considerations. The market
approach, which estimates the value of a subject asset based on available market
pricing for comparable assets, was utilized for land and in-process and finished
inventory. The income approach, which estimates the value for a subject asset
based on the present value of cash flows projected to be generated by the asset,
was used for certain intangible assets, such as customer relationships,
tradenames, and for the noncompete agreements with employees acquired in
connection with the Unicircuit transaction. The projected cash flows were
discounted at a rate of return necessary to reflect the relative risk of the
Unicircuit transaction and the time value of money. The projected cash flows for
each asset value using the cost method required consideration of multiple
factors, including current revenue from existing customers, attrition trends,
reasonable contract renewal assumptions from the perspective of a marketplace
participant, and expected profit margins giving consideration to historical and
expected profit margins. The cost approach was used to determine the estimated
fair market value of the majority of real and personal property and raw
materials inventory. The cost to replace a given asset reflects the estimated
reproduction or replacement cost for the property, less an allowance for loss in
value due to depreciation or obsolescence, with specific consideration given to
economic obsolescence if indicated.

Current assets and current liabilities - The fair value of current assets
(except inventory) and current liabilities was assumed to approximate their
carrying value as of the acquisition date due to the short-term nature of these
assets and liabilities.

The fair value of the in-process and finished inventory acquired was estimated
by applying a version of the market valuation approach called the comparable
sales method. This valuation method estimates the fair value of the asset by
calculating the potential sales that could be generated from selling the
inventory and then subtracting the costs related to completion and sale of that
inventory and a reasonable profit allowance. Based upon this methodology, the
Company recorded the inventory acquired at fair value, resulting in an increase
in inventory of $0.2 million. During the first and second fiscal quarters of
2009, the Company expensed, in Cost of sales, the step-up value of the acquired
Unicircuit inventory in the period in which the inventory was sold. Raw
materials inventory was valued at replacement cost.

Property, plant and equipment (PP&E) - The fair value of PP&E acquired was
estimated by applying the cost approach for personal property, buildings and
building improvements and the market approach for land. The cost approach was
applied by estimating a replacement cost and adjusting for depreciation and
obsolescence. The value of the land acquired was derived from market prices for
comparable properties.

The goodwill and intangible assets related to the Unicircuit transaction are not
deductible for tax purposes.

Intangible Assets - The purchase price for the M. S. Kennedy and Unicircuit
acquisitions was allocated to specific identifiable


--------------------------------------------------------------------------------

                                       52
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

intangible assets on a preliminary basis as follows:

                                                             Weighted
                                               Fair           average
                                               value       amortization
(amounts in thousands)                       assigned     period (years)
Amortizing intangible assets:
    Customer relationships                    $ 7,530           10
    Developed technology                          780            5
    Non-competition agreements                  1,130            4
                                              -------
       Total                                  $ 9,440

Non-amortizing intangible assets:
    Tradenames                                  2,980           --
                                              -------
       Total                                    2,980
                                              -------
Total intangible assets                       $12,420
                                              =======

Customer relationships - Customer relationships represent the estimated fair
value of both the contractual and non-contractual customer relationships MSK and
Unicircuit had as of the acquisition date. The primary customers include
Lockheed Martin, Rockwell, and other large OEM's, some of which are also
customers of the Company. These relationships were valued separately from
goodwill at the estimated amount which an independent third party would be
willing to pay for these relationships. The fair value of customer relationships
was determined using the multi-period excess-earnings method, a form of the
income approach. The Company determined that the estimated useful life of the
intangible assets associated with the existing customer relationships is
approximately 10 years. This life was based upon historical customer attrition
and the Company's understanding of the industry and regulatory environment. The
expected cash flows associated with these customer relationships were nominal
after 10 years.

Developed technology - Developed technology consists of technical processes,
patented and unpatented technology, manufacturing know-how and the understanding
with respect to products or processes that have been developed by MSK and that
will be leveraged in current and future products. The fair value of technology
and patents acquired was determined utilizing a form of the income approach. The
Company determined that the estimated useful life of the technology and patents
is approximately 5 years. This life is based upon management's estimate of the
product life cycle associated with technology and patents before they will be
replaced by new technologies. The expected cash flows associated with technology
and patents were nominal after 5 years.

The noncompetition agreements are amortized over their contractual life of 4
years.

Tradenames - Tradenames represent the estimated fair value of corporate and
product names acquired from MSK and Unicircuit, which will be utilized by the
Company in the future. These tradenames were valued separately from goodwill at
the estimated amount which an independent third party would be willing to pay
for use of these names. The fair value of the trademarks and tradenames was
determined by applying the relief from the income approach. The tradenames are
inherently valuable as the Company believes they convey favorable perceptions
about the products with which they are associated. This in turn generates
consistent and increased demand for the products, which provides the Company
with greater revenues, as well as greater production and operating efficiencies.
Thus, the Company will realize larger profit margins than companies without the
tradenames. At this time, the Company intends to utilize these trademarks for an
indefinite period of time given that the Company is new to the specific markets
that the subsidiaries operate. Thus these intangible assets are not being
amortized but are tested for impairment on an annual basis, or more frequently
if there is an indicator of impairment.

Goodwill - The excess of the purchase price over the fair value of net tangible
and intangible assets acquired of $12.0 million was allocated to goodwill.

The following table sets forth the unaudited pro forma results of operations of
the Company for the years ended June 30, 2009 and 2008, as if the M. S. Kennedy
and the Unicircuit acquisition transactions occurred at the beginning of each
fiscal year.


--------------------------------------------------------------------------------

                                       53
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

                                                             For the Year
                                                            Ended June 30,
                                                              (unaudited)
(in thousands, except per share amounts)                  2009         2008
                                                        --------     --------
Net sales                                               $171,358     $173,790
Income from continuing operations before income tax
    expense                                             $ 16,250     $ 16,364
Net income                                              $ 12,027     $ 11,125

Earnings per share:
    Basic                                               $    .86     $    .75
    Diluted                                             $    .85     $    .74

Weighted average common shares outstanding:
    Basic                                                 13,911       14,827
    Diluted                                               14,179       15,068

The pro forma results are presented for illustrative purposes only and do not
include inventory step-up expenses for the year ended June 30, 2009; and do not
include certain inventory adjustments related made by the acquired companies as
part of the acquisition process (approximately $1.5 million) for the year ended
June 30, 2008. Although certain cost savings have resulted from the acquisition
transactions, there can be no assurance that additional cost savings will be
achieved. These pro forma results do not purport to be indicative of the results
that would have actually been obtained if the acquisition transactions had
occurred as of the dates indicated, nor do the pro forma results intend to be a
projection of results that may be obtained in the future.

(3) Intangible Assets

The major components of intangible assets are as follows:

<TABLE>
<CAPTION>
                                                                        June 30, 2009                    June 30, 2008
                                                                    Gross              Net             Gross          Net
                                                                  Carrying          Carrying         Carrying      Carrying
(amounts in thousands)                                             Amount            Amount           Amount        Amount
<S>                                                                <C>              <C>               <C>            <C>
Amortizable intangible assets:
    Customer relationships (10 years)                              $7,530           $ 6,852           $  --          $  --
    Developed technology (5 years)                                    780               637              --             --
    Non-competition agreements (4 years)                            1,130               875              --             --
                                                                   ------           -------           -----          -----
       Total                                                       $9,440             8,364           $  --             --

Nonamortizable intangible assets:
    Tradenames                                                                        2,980                             --
                                                                                    -------                          -----
       Total                                                                          2,980                             --
                                                                                    -------                          -----
Total intangible assets                                                             $11,344                          $  --
                                                                                    =======                          =====
</TABLE>

Intangible asset amortization expense for the years ended June 30, 2009, 2008
and 2007 aggregated $1.1 million and $0, and $0.3 million, respectively. The
June 30, 2008 table was updated to reflect fully amortized intangibles that have
no net value at June 30, 2008. Amortization expense related to developed
technology is recorded in cost of sales, and amortization expense for
non-compete agreements and customer relationships is recorded in general and
administrative expense.

The following table represents the amortization expense for each of the five
succeeding fiscal years and thereafter is as follows:

              (amounts in thousands)
              2010                                     $ 1,192
              2011                                     $ 1,192
              2012                                     $ 1,192
              2013                                     $   937
              2014                                     $   766
              Thereafter                               $ 3,085


--------------------------------------------------------------------------------

                                       54
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

The changes in the carrying amount of goodwill for the year ended June 30, 2009,
are as follows:

(amounts in thousands)
Balance, July 1, 2008                                             $30,716
Purchase accounting allocations                                    11,961
Tax adjustment resulting from acquisition                             (42)
                                                                  -------
Balance, June 30, 2009                                            $42,635
                                                                  -------

The Company's accounting allocations totaling $12.0 million consist primarily of
preliminary purchase accounting allocations associated with the M. S. Kennedy
Corp. acquisition of $3.1 million and purchase accounting allocations associated
with the acquisition of Unicircuit, Inc. of $8.9 million. All of the purchase
accounting allocations made in the year ended June 30, 2009 relate to the Space
& Defense Group.

(4) Securities

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

<TABLE>
<CAPTION>
                                                                                                June 30, 2009
                                                                        ------------------------------------------------------------
                                                                                           Gross          Gross
                                                                        Amortized        unrealized     unrealized
                                                                           cost            gains          losses          Fair value
                                                                        ---------        ----------     ----------        ----------
<S>                                                                       <C>               <C>            <C>              <C>
(amounts in thousands)
Securities available-for-sale:
   Auction rate securities                                                $ 1,440           $ --           $(389)           $ 1,051

Securities held to maturity:
    Municipal bonds                                                       $13,889           $310           $  --            $14,199
    Corporate bonds                                                            --             --              --                 --
    Federal agency bonds                                                       --             --              --                 --
                                                                          -------           ----           -----            -------
      Total securities held to maturity                                   $13,889           $310           $  --            $14,199
                                                                          =======           ====           =====            =======
<CAPTION>
                                                                                                June 30, 2008
                                                                        ------------------------------------------------------------
                                                                                           Gross          Gross
                                                                        Amortized        unrealized     unrealized
                                                                           cost            gains          losses          Fair value
                                                                        ---------        ----------     ----------        ----------
<S>                                                                       <C>               <C>            <C>              <C>
(amounts in thousands)
Securities available-for-sale:
   Auction rate securities                                                $   500           $ --           $(186)           $   314

Securities held to maturity:
    Municipal bonds                                                       $32,567           $247           $  --            $32,814
    Corporate bonds                                                           201              1              --                202
    Federal agency bonds                                                      300             --              --                300
                                                                          -------           ----           -----            -------
      Total securities held to maturity                                   $33,068           $248           $  --            $33,316
                                                                          =======           ====           =====            =======
</TABLE>

--------------------------------------------------------------------------------

                                       55
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

Contractual maturities of marketable debt securities held to maturity at June 30
are summarized as follows:

<TABLE>
<CAPTION>
                                                                            2009                                   2008
                                                                 -------------------------------------------------------------------
                                                                                      Fair                                    Fair
                                                                                      market                                  market
                                                                  Cost                value               Cost                value
                                                                 -------             -------             -------             -------
<S>                                                              <C>                 <C>                 <C>                 <C>
(amounts in thousands)
Within one year                                                  $11,810             $12,075             $21,074             $21,147
One year to five years                                             2,079               2,124              11,994              12,169
                                                                 -------             -------             -------             -------
    Total                                                        $13,889             $14,199             $33,068             $33,316
                                                                 =======             =======             =======             =======
</TABLE>

Contractual  maturities of auction rate securities available for sale at June 30
are summarized as follows:

<TABLE>
<CAPTION>
                                                                            2009                                   2008
                                                                 -------------------------------------------------------------------
                                                                                      Fair                                    Fair
                                                                                      market                                  market
                                                                  Cost                value               Cost                value
                                                                 -------             -------             -------             -------
<S>                                                              <C>                 <C>                 <C>                 <C>
(amounts in thousands)
One year to five years                                           $ 1,440             $ 1,051             $   500             $   314
</TABLE>

The Company invests in auction rate securities. Auction rate securities have
long-term underlying maturities and the interest rates reset every 365 days.

(5) Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157), which is effective for fiscal years beginning after November 15, 2007 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. This statement applies under other accounting
pronouncements that require or permit fair value measurements. The statement
indicates, among other things, that a fair value measurement assumes that the
transaction to sell an asset or transfer a liability occurs in the principal
market for the asset or liability or, in the absence of a principal market, the
most advantageous market for the asset or liability. SFAS 157 defines fair value
based upon an exit price model.

Relative to SFAS 157, the FASB issued FASB Staff Positions (FSP) FAS 157-1, FAS
157-2, and FAS 157-3. FSP FAS 157-1 amends SFAS 157 to exclude SFAS No. 13,
"Accounting for Leases" (SFAS 13), and its related interpretive accounting
pronouncements that address leasing transactions, while FSP FAS 157-2 delays the
effective date of the application of SFAS 157 to fiscal years beginning after
November 15, 2008 for all nonfinancial assets and nonfinancial liabilities that
are recognized or disclosed at fair value in the financial statements on a
non-recurring basis. FSP FAS 157-3 clarifies the application of SFAS 157 as it
relates to the valuation of financial assets in a market that is not active for
those financial assets. This FSP is effective immediately and includes those
periods for which financial statements have not been issued.

The Company adopted SFAS 157 as of July 1, 2008, with the exception of the
application of the statement to nonfinancial assets and nonfinancial liabilities
recognized at fair value on a non-recurring basis. Nonfinancial assets and
nonfinancial liabilities recognized at fair value on a non-recurring basis for
which the Company has not applied the provisions of SFAS 157 include those
measured at fair value in goodwill impairment testing, indefinite lived
intangible assets measured at fair value for impairment testing, asset
retirement obligations initially measured at fair value, and those nonfinancial
assets and nonfinancial liabilities initially measured at fair value in a
business combination.

Valuation Hierarchy

SFAS 157 establishes a valuation hierarchy for disclosure of the inputs to
valuation used to measure fair value. This hierarchy prioritizes the inputs into
three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in
active markets for identical


--------------------------------------------------------------------------------

                                       56
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

assets or liabilities. Level 2 inputs are quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or similar assets in
markets that are not active, inputs other than quoted prices that are observable
for the asset or liability, including interest rates, yield curves and credit
risks, or inputs that are derived principally from or corroborated by observable
market data through correlation. Level 3 inputs are unobservable inputs based on
our own assumptions used to measure assets and liabilities at fair value. A
financial asset or liability's classification within the hierarchy is determined
based on the lowest level input that is significant to the fair value
measurement.

The following table provides the assets and liabilities carried at fair value as
measured on a recurring basis as of June 30, 2009:

<TABLE>
<CAPTION>
                                                                               Significant other      Significant
                                       Total Carrying     Quoted prices in        observable         unobservable
                                          Value at         active markets           inputs              inputs
(amounts in thousands)                 June 30, 2009          (Level 1)            (Level 2)           (Level 3)
<S>                                       <C>                   <C>                  <C>                <C>
Available for sale securities             $ 1,051               $  --                $  --              $1,051
</TABLE>

Valuation Techniques.

The Company's available-for-sale security is a debt security that is traded in
an inactive market. After analyzing the underlying assets and structure of the
student loan auction rate security, the Company has determined that the most
appropriate method of deriving a value indication was a discounted cash flow
analysis. The Company found that collateral characteristics, redemption
probability, credit rating, and discount rates are the most important value
drivers to determine an estimated fair value of the underlying security, and is
classified within Level 3 of the valuation hierarchy. Upon adoption, the Company
had a Level 3 security valued on the balance sheet at $0.5 million, gross value,
with $0.2 million of accumulated other comprehensive loss recorded against it.
This security refinanced in the first quarter, and the accumulated other
comprehensive income was reversed. Also in the first quarter, the Company
acquired another Level 3 security, as noted in the table above, in an
acquisition with an estimated fair value of $1.4 million. As of June 30, 2009,
this security was valued at $1.1 million.

(6) Inventories

Inventories at June 30 are summarized as follows:

 (amounts in thousands)                                2009                2008
                                                     -------             -------
Raw Materials                                        $18,533             $14,277
Work in process                                       12,664               9,077
Finished goods                                         4,085               3,627
                                                     -------             -------
                                                     $35,282             $26,981
                                                     =======             =======

(7) Property, Plant, and Equipment

Components of property, plant, and equipment at June 30 consist of the
following:

(amounts in thousands)                                   2009            2008
                                                       --------        --------
Land and land improvements                             $  5,260        $  4,157
Construction in process                                     964           3,022
Buildings, furniture, and fixtures                       33,872          25,242
Machinery and equipment                                  58,865          48,383
                                                       --------        --------
                                                         98,961          80,804
Less accumulated depreciation                           (46,072)        (38,538)
                                                       --------        --------
                                                       $ 52,889        $ 42,266
                                                       ========        ========

(8) Debt

The following table summarizes the long-term debt of the Company as of June 30,
2009 and June 30, 2008:


--------------------------------------------------------------------------------

                                       57
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

                                                       June 30,       June 30,
                                                         2009           2008
                                                       --------       --------
(amounts in thousands)
Revolving credit note                                  $ 49,800        $   --

Less current maturities                                  (9,800)           --
                                                       --------        ------
Long-term debt, less current maturities                $ 40,000        $   --
                                                       ========        ======

The following table summarizes the payments to be made on the long-term debt of
the Company for the next five years:

         (amounts in thousands)
         2010                                                 $ 9,800
         2011                                                 $10,000
         2012                                                 $10,000
         2013                                                 $10,000
         2014                                                 $10,000

On July 31, 2008, the Company entered into a loan agreement (the "Agreement)
with Keybank National Association. The Agreement consists of a $50,000 revolving
credit note (the "Note), for which principal amounts are due on August 1, 2009,
and on each anniversary date thereafter through July 31, 2013 in accordance with
the above schedule. Availability of credit under the Note declines 20% annually
on each anniversary date and any outstanding principal balance in excess of the
credit availability is due and payable at that time. The Company's indebtedness
and obligations are guaranteed by three of the Company's domestic subsidiaries,
as well as, an assignment of the Company's interest in its foreign subsidiary.

Borrowings under the Note, at the Company's choice, bear interest at LIBOR, plus
100 to 425 basis points, or at Keybank prime rate, minus (100) to plus 225 basis
points, depending upon the Company's EBITDA performance at the end of each
quarter as measured by the formula: EBITDA divided by the Current Portion of
Long-term Debt plus interest expense. For the year ended June 30, 2009, the
weighted average interest rate on the outstanding borrowings was approximately
3.2%.

Borrowings under the Agreement are subject to certain financial and operating
covenants. The Company was in compliance with covenants as of June 30, 2009.

The Company is also required to pay a commitment fee between 0.20 - 0.35% per
annum on the unused portion of the Note. Available borrowing capacity under the
Note was $200 at June 30, 2009.

(9) Accrued Expenses

Accrued expenses at June 30 consist of the following:

(amounts in thousands)                                  2009               2008
                                                       ------             ------
Compensation                                           $3,638             $1,401
Commissions                                               760                805
Health insurance                                          685                242
Other                                                     125                133
                                                       ------             ------
                                                       $5,208             $2,581
                                                       ======             ======

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.


--------------------------------------------------------------------------------

                                       58
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(10) Restructuring

On July 8, 2008, the Company reduced its headcount at the New Hampshire
facility. The headcount reduction was communicated or implied prior to June 30,
2008. The table below shows the activity as it relates to the restructuring
reserve:

<TABLE>
<CAPTION>
                                                                                  Year ending June 30, 2009
                                                            ----------------------------------------------------------------------
(amounts in thousands)                                      Balance                                                       Balance
                                                            June 30,             Costs                 Cash               June 30,
                                                              2008              incurred           expenditures             2009
                                                            --------            --------           ------------           --------
<S>                                                           <C>                 <C>                  <C>                  <C>
Severance accrual                                             $255                $  --                $ 255                $ --
                                                              ====                =====                =====                ====
<CAPTION>
                                                                                  Year ending June 30, 2008
                                                            ----------------------------------------------------------------------
(amounts in thousands)                                      Balance                                                       Balance
                                                            June 30,             Costs                 Cash               June 30,
                                                              2007              incurred           expenditures             2008
                                                            --------            --------           ------------           --------
<S>                                                           <C>                 <C>                  <C>                  <C>
Severance accrual                                             $  0                $ 255                $  --                $255
                                                              ====                =====                =====                ====
</TABLE>

(11) Other Liabilities

Other liabilities as of June 30 consist of the following:

(amounts in thousands)                                  2009             2008
                                                       -------          -------
Deferred compensation                                  $   243          $   967
Supplemental Retirement Plan                               584              538
Accrued lease                                            1,184              890
Warranty accrual                                           434              855
Income tax liability                                     1,747              510
Loss on contracts                                           --              350
Deferred revenue                                           375               --
Interest                                                   350               --
Other                                                      300               --
                                                       -------          -------
                                                         5,217            4,110
Less current portion                                    (2,525)          (2,618)
                                                       -------          -------
                                                       $ 2,692          $ 1,492
                                                       =======          =======

The Company is currently paying to a former employee's beneficiary approximately
$0.1 million annually through 2015, or until the death of the employee's
beneficiary.

In fiscal year 2004, the Company began accruing for a deferred compensation
agreement that the Company entered into with an employee in March 2004, and
extended the agreement in May 2007. During fiscal year 2008, the Company entered
into a final agreement with this employee, and the employee was paid the $0.7
million during the third quarter of fiscal 2009.

In fiscal year 2007, the Company accrued for a sublease obligation due to the
loss of a tenant in the leased European facility in the second quarter of fiscal
year 2008. The amount accrued for as of June 30, 2009 and 2008 is approximately
$1.2 million and $0.9 million, respectively, and represents the full amount of
the estimated liability, net of sublease income.


--------------------------------------------------------------------------------

                                       59
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(12) Stock-Based Compensation

The Company applies the fair-value recognition provisions of Statement of
Financial Accounting Standards No. 123R (SFAS 123R) Share-Based Payment. This
standard requires the Company to measure the cost of employee services received
in exchange for equity awards based on the grant-date fair value of the awards.
The cost is recognized as compensation expense on a straight-line basis over the
requisite service period of the awards.

Total stock-based compensation expense recognized for the years ended June 30,
2009, 2008, and 2007, broken out by operating expense category, is as follows
for the year ended:

<TABLE>
<CAPTION>
                                                                                                     June 30, 2009

(amounts in thousands)                                                                Stock           Restricted            Total
                                                                                     option              stock           stock-based
                                                                                     program            program         compensation
                                                                                     -------          ----------        ------------
<S>                                                                                  <C>                 <C>               <C>
Cost of goods sold                                                                   $   503             $  388            $   891
Marketing                                                                                157                133                290
Research and development                                                                 321                248                569
General and administrative                                                               726              1,536              2,262
                                                                                     -------             ------            -------
      Total cost of stock-based compensation                                           1,707              2,305              4,012

Amounts expensed out of inventory for the year                                             9                  6                 15
                                                                                     -------             ------            -------
Net stock-based compensation expense                                                 $ 1,716             $2,311            $ 4,027
                                                                                     =======             ======            =======
Amount of related income tax benefit
  recognized in income                                                               $   381             $1,211            $ 1,592
                                                                                     =======             ======            =======
<CAPTION>
                                                                                                     June 30, 2008

(amounts in thousands)                                                                Stock           Restricted            Total
                                                                                     option              stock           stock-based
                                                                                     program            program         compensation
                                                                                     -------          ----------        ------------
<S>                                                                                  <C>                 <C>               <C>
Cost of goods sold                                                                   $   527             $  298            $   825
Marketing                                                                                179                 49                228
Research and development                                                                 377                213                590
General and administrative                                                             1,229                782              2,011
                                                                                     -------             ------            -------
      Total cost of stock-based compensation                                           2,312              1,342              3,654
Amounts expensed out of inventory for the year                                            14                  8                 22
                                                                                     -------             ------            -------
Net stock-based compensation expense                                                 $ 2,326             $1,350            $ 3,676
                                                                                     =======             ======            =======
Amount of related income tax benefit
  recognized in income                                                               $   453             $  486            $   939
                                                                                     =======             ======            =======
<CAPTION>
                                                                                                     June 30, 2007

(amounts in thousands)                                                                Stock           Restricted            Total
                                                                                     option              stock           stock-based
                                                                                     program            program         compensation
                                                                                     -------          ----------        ------------
<S>                                                                                  <C>                 <C>               <C>
Cost of good sold                                                                    $   681             $  249            $   930
Marketing                                                                                234                 --                234
Research and development                                                                 464                 --                464
General and administrative                                                             1,669                172              1,841
                                                                                     -------             ------            -------
      Total cost of stock-based compensation                                           3,048                421              3,469
Amounts capitalized in inventory for the year                                            (53)                --                (53)
                                                                                     -------             ------            -------
Net stock-based compensation expense                                                 $ 2,995             $  421            $ 3,416
                                                                                     =======             ======            =======
Amount of related income tax benefit
  recognized in income                                                               $   483             $  151            $   634
                                                                                     =======             ======            =======
</TABLE>


--------------------------------------------------------------------------------

                                       60
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

Nonvested Shares Issued Under the Plan

 (amounts in thousands)                             Number      Weighted-Average
                                                      of           Grant-Date
                                                    Shares         Fair Value
                                                    ------      ----------------
Nonvested at June 30, 2008                            542            $15.16
Granted                                                --                --
Forfeited                                             (17)            16.11
Vested                                               (252)            16.00
                                                     ----            ------
Nonvested at June 30, 2009                            273            $15.69
                                                     ====            ======

As of June 30, 2009 and 2008, there were 1,869,000 and 2,249,000 stock options
outstanding, respectively. At June 30, 2009, the aggregate value of unvested
options, as determined on respective grant dates using a Black-Scholes option
valuation model, was $1.2 million (net of estimated forfeitures), all of which
is expected to be recognized as compensation expense in fiscal years 2010 and
2011. The aggregate intrinsic value of both vested and unvested options at June
30, 2009 was $0.4 million (net of forfeitures). As of June 30, 2009, 1,596,000
stock options were exercisable, which represents an aggregate intrinsic value of
$0.

Share activity and value for the years ending:

                                                                June 30

(amounts in thousands)                                  2009     2008     2007
                                                       ------    ----    -------
Options granted                                            --      --        187
Fair value per share of options granted                $   --    $ --    $ 13.53
Forfeited or expired options                              110      25         20
Exercised options                                         264      73        211
Aggregate intrinsic value of exercised options         $1,068    $425    $ 1,871

Stock Option Plans

In November 2004, the shareholders approved the amendment and restatement of the
Company's three existing stock option plans, which combined these plans under
one single consolidated equity compensation plan, the Anaren, Inc. Comprehensive
Long-Term Incentive Plan. The effect of the amendment and restatement was to
combine the separate share pools available for grant under the three existing
plans into a single grant pool, expand the type of equity-based awards the
Company may grant, and extend the term of the combined plan to October 31, 2014.
Under the restated plan, the Company may issue incentive stock options,
nonstatutory stock options, stock appreciation rights, restricted stock,
performance shares, and performance units that can vest immediately or up to
five years. Under this plan, the Company reserved 1,326,000 new common shares
available for grant. On June 30, 2009, the Company had 420,000 shares available
for grant under the restated plan.

Information with respect to this plan is as follows:

<TABLE>
<CAPTION>
                                                                                                     Weighted
                                                                  Total            Option             average
(in thousands, except per share amounts)                         shares            price         exercising price
                                                                --------      ---------------    ----------------
<S>                                                                <C>        <C>                    <C>
Outstanding at June 30, 2007                                       2,348      $ 5.73 to 56.13        $ 16.65
   Issued                                                             --                   --             --
   Exercised                                                         (73)       5.73 to 15.00           9.67
   Expired                                                            (3)       9.51 to 19.56           5.77
   Forfeited                                                         (23)       9.51 to 19.56          15.09
                                                                 -------
Outstanding at June 30, 2008                                       2,249      $ 5.73 to 53.00        $ 16.91
                                                                 =======
   Issued                                                             --                   --             --
   Exercised                                                        (264)       5.73 to 15.00          11.93
   Expired                                                           (98)       9.51 to 56.13          18.33
   Forfeited                                                         (18)      12.05 to 19.56          16.11
                                                                 -------
Outstanding at June 30, 2009                                       1,869      $ 9.51 to 53.00        $ 17.45
                                                                 =======

Shares exercisable at June 30, 2009                                1,596      $ 9.51 to 53.00        $ 17.75
                                                                 =======
</TABLE>


--------------------------------------------------------------------------------

                                       61
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

The following table summarizes significant ranges of outstanding and exercisable
options at June 30, 2009 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                  Options outstanding                      Options exercisable
------------------------------------------------------     -------------------
                                Weighted      Weighted                Weighted
    Range of                     average       Average                average
    exercise                    remaining     Exercise                exercise
     prices         Shares    life in years     price      Shares      price
----------------    ------    -------------   --------     ------     --------
<S>                  <C>          <C>          <C>          <C>        <C>
$  9.51 - $15.00     1,404        3.34         $13.06       1,234      $13.02
  15.01 -  20.00       293        4.31          19.33         190       19.22
  20.01 -  53.00       172        1.34          50.04         172       50.04
                     -----                                  -----
                     1,869                                  1,596
                     =====                                  =====
</TABLE>

There were no grants made during the years ended June 30, 2009 and 2008 under
this plan. During the year ended June 30, 2007, the per-share weighted average
fair value of the nonstatutory stock options granted was $13.89.

(13) Restricted Stock Program

The following table summarizes the restricted stock issuances that have not yet
vested:

<TABLE>
<CAPTION>
                                                                                                     Weighted
                                                                  Total            Share              average
(in thousands, except per share amounts)                         shares            price            share price
                                                                --------      ---------------       -----------
<S>                                                                <C>        <C>                    <C>
Outstanding at June 30, 2007                                       206        $13.00 to 21.15        $ 16.65
   Issued                                                          211         12.06 to 16.49          16.47
   Vested                                                          (24)                 13.00          13.00
   Forfeited                                                       (20)        13.82 to 21.15          19.52
                                                                ------
Outstanding at June 30, 2008                                       373        $12.06 to 21.15        $ 18.00
                                                                ======
   Issued                                                          360                   9.09           9.09
   Vested                                                          (12)                 16.27          16.27
   Forfeited                                                       (11)         9.09 to 19.56          13.96
                                                                ------
Outstanding at June 30, 2009 *                                     710        $ 9.09 to 21.15        $ 13.56
                                                                ======
</TABLE>

* In fiscal 2006 and fiscal 2009, the Company issued restricted stock grants to
management, totaling approximately 120,000 and 14,000, respectively. Of the
shares issued, 124,000 are outstanding to participants as of June 30, 2009. The
per-share value of each grant was $21.15 and $9.09, respectively. These shares
are subject to a forfeiture period which expires as of the later of May 17, 2009
and the last day of the Company's single fiscal year during which the Company
has both net sales from operations of at least $250 million and operating income
of at least 12 percent of net sales. These grant agreements expire if both
financial performance conditions above are not met by June 30, 2011. Presently,
the Company has recognized no compensation expense for this grant and the shares
have not been included in the current diluted earnings per share calculation as
the Company believes that it is probable that these goals will not be met within
the time period specified. In the future, if it becomes probable that the sales
and earnings goals will be achieved, the compensation cost associated with the
grant will be immediately recognized for the period through the date it becomes
probable, and ratably over the remaining vesting period for the remainder of the
grant value.


--------------------------------------------------------------------------------

                                       62
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(14) Accumulated Other Comprehensive Income (Loss)

The cumulative balance of each component of accumulated other comprehensive
income (loss) is as follows:

<TABLE>
<CAPTION>
                                                             Foreign            Minimum             Mark to            Accumulated
                                                             currency           pension              Market               other
                                                           translation         liability       Available for Sale     comprehensive
                                                            adjustment         adjustment          Securities         income (loss)
                                                           -----------         ----------      ------------------     -------------
<S>                                                           <C>                <C>                  <C>                <C>
(amounts in thousands)
Balances at June 30, 2007                                     $  365             $(1,350)             $  --              $  (985)
Current period change                                          1,005                (179)              (185)                 641
                                                              ------             -------              -----              -------
Balances at June 30, 2008                                     $1,370             $(1,529)             $(185)             $  (344)
Current period change                                             34              (1,883)              (204)              (2,053)
                                                              ------             -------              -----              -------
Balances at June 30, 2009                                     $1,404             $(3,412)             $(389)             $(2,397)
                                                              ======             =======              =====              =======
</TABLE>

(15) Shareholder Protection Rights Plan

In April 2001, the board of directors adopted a Shareholder Protection Rights
Plan. The plan provides for a dividend distribution of one right on each
outstanding share of the Company's stock, distributed to shareholders of record
on April 27, 2001. The rights will be exercisable and will allow the
shareholders to acquire common stock at a discounted price if a person or group
acquires 20% or more of the outstanding shares of common stock. Rights held by
persons who exceed the 20% threshold will be void. In certain circumstances, the
rights will entitle the holder to buy shares in an acquiring entity at a
discounted price. The board of directors may, at its option, redeem all rights
for $0.001 per right at any time prior to the rights becoming exercisable. The
rights will expire on April 27, 2011, unless earlier redeemed, exchanged or
amended by the Board.

(16) Employee Benefit Plans

The Company adopted 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). Upon adoption, the Company has recognized a $1.4
million reduction in accumulated other comprehensive income on the balance
sheet, net of tax benefit of $0.7 million.

Defined Benefit Plan

The Company has a noncontributory defined benefit pension plan covering eligible
employees. Effective August 15, 2000 the plan was closed for new participants.
Benefits under this plan generally are based on the employee's years of service
and compensation. The following table presents the changes in the defined
benefit pension plan and the fair value of the Plan's assets for the years ended
June 30:

<TABLE>
<CAPTION>
(amounts in thousands)                                                                               2009                   2008
                                                                                                   --------               --------
<S>                                                                                                <C>                    <C>
Change in benefit obligation:
  Benefit obligation at beginning of year                                                          $ 11,175               $ 11,161
  Service cost                                                                                          264                    272
  Interest cost                                                                                         760                    705
  Actuarial (gain) loss                                                                               1,199                   (572)
  Benefits paid                                                                                        (395)                  (391)
                                                                                                   --------               --------
  Benefit obligation at end of year                                                                $ 13,003               $ 11,175
                                                                                                   ========               ========
Change in plan assets:
  Fair value of plan assets at beginning of year                                                   $ 10,223               $ 11,006
  Actual return on plan assets                                                                         (878)                  (542)
  Employer contributions                                                                                130                    150
  Benefits paid                                                                                        (395)                  (391)
                                                                                                   --------               --------
  Fair value of plan assets at end of year                                                         $  9,080               $ 10,223
                                                                                                   ========               ========
  Unfunded status                                                                                  $ (3,923)              $   (952)
                                                                                                   ========               ========
Amounts Recognized in Accumulated Other Comprehensive Income
  Net actuarial loss                                                                                  3,269                  1,455
Weighted average assumptions:
  Discount rate at year-end                                                                            6.85%                  6.35%
  Rate of increase in compensation levels at year end                                                  4.00%                  4.00%
  Expected return on plan assets during the year                                                       8.50%                  8.50%
  Measurement date                                                                                  June 30                June 30
</TABLE>


--------------------------------------------------------------------------------

                                       63
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

Components  of net  periodic  pension  cost for the years  ended  June 30 are as
follows:

<TABLE>
<CAPTION>
(amounts in thousands)                                                                    2009              2008              2007
                                                                                         -----             -----             -----
<S>                                                                                      <C>               <C>               <C>
Service cost                                                                             $ 264             $ 273             $ 286
Interest cost                                                                              760               705               659
Expected return on plan assets                                                            (849)             (918)             (740)
Amortization of unrecognized prior service cost                                             --                --                (1)
Amortization of unrecognized loss                                                          102                31                73
                                                                                         -----             -----             -----
Net periodic pension cost                                                                $ 277             $  91             $ 277
                                                                                         =====             =====             =====
Weighted average assumptions:
   Discount rate                                                                          6.85%             6.35%             6.25%
   Expected increase in compensation levels at year end                                   4.00%             4.00%             4.00%
   Expected return on plan assets during the year                                         8.50%             8.50%             8.50%
</TABLE>

The estimated amount of net actuarial loss that will be amortized from
accumulated other comprehensive income into net periodic pension cost in 2009 is
$0.3 million.

Plan Assets

<TABLE>
<CAPTION>
                                                                   2009                        2008
                                                        -------------------------    -------------------------
                                                          Actual       Percentage      Actual       Percentage
                                                        allocation     allocation    allocation     allocation
                                                        ----------     ----------    ----------     ----------
<S>                                                       <C>              <C>         <C>             <C>
(amounts in thousands)
Money market                                              $  454           5.00%       $   961         9.40%
Common equities                                              306           3.37            398         3.89
Corporate debt securities                                  1,589          17.50          1,550        15.16
Government debt securities                                 2,693          29.66          3,020        29.54
Global equity mutual fund                                    618           6.80            862         8.43
Closed end equity mutual funds                             3,310          36.46          3,432        33.58
Closed end global equity mutual funds                        110           1.21             --           --
                                                          ------         ------        -------       ------
                                                          $9,080         100.00%       $10,223       100.00%
                                                          ======         ======        =======       ======
</TABLE>

Plan's Investment Policy: Investments shall be made pursuant to the following
objectives: 1) preserve purchasing power of plan's assets base adjusted for
inflation; 2) provide long term growth; 3) avoid significant volatility. Asset
allocation shall be determined based on a long term target allocation having 30%
of assets invested in Large-Cap domestic equities, 11% in mid-cap domestic
equities, 11% in small-cap domestic equities, 8% international equities, and 40%
in the broad bond market, with little or none invested in cash. Both investment
allocation and performance shall be reviewed periodically.


--------------------------------------------------------------------------------

                                       64
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

Determination of Assumed Rate of Return

The Corporation has selected the assumed rate of return based on the following:

<TABLE>
<CAPTION>
                                                              Expected
                                                              compound     Expected
                                                Target       annualized    weighted
                                              percentage       5-year       average
                                              allocation   (index) return   return
                                              ----------   --------------  --------
<S>                                              <C>            <C>          <C>
Large-cap stocks                                 30.00%         9.10%        2.73%
Mid-cap stocks                                   11.00         10.80         1.19
Small-cap stocks                                 11.00         11.00         1.21
International common stocks                       8.00          9.00         0.72
Broad bond market                                40.00          4.10         1.64
                                                ------                     ------
   Total                                        100.00%                      7.49%
                                                ======                     ======
</TABLE>

The Company estimated investment expenses of approximately 0.5% of the portfolio
annually.

Expected Contributions

The Company had no minimum requirements to fund the pension plan for the fiscal
year ended June 30, 2009, however, discretionary contributions amounting to $0.1
million were made. Expected contributions for fiscal 2010 are approximately $1.0
million.

Estimated Future Benefit Payments

(amounts in thousands)

The following estimated benefit payments, which reflect future service, as
appropriate, are expected to be paid:

      July 1, 2009 - June 30, 2010....................       $  560
      July 1, 2010 - June 30, 2011....................          575
      July 1, 2011 - June 30, 2012....................          616
      July 1, 2012 - June 30, 2013....................          627
      July 1, 2013 - June 30, 2014....................          653
      Years 2015 - 2018...............................        3,697

Defined Contribution Plan

The Company maintains a voluntary contributory salary savings plan to which
participants may contribute. The Company's matching contribution is 100% of the
participants' contribution up to a maximum of 5% of the participants'
compensation. During fiscal 2009, 2008, and 2007 the Company contributed $1.5
million, $1.1 million, and $0.9 million, respectively, to this plan. The Company
also contributed approximately $0.1 million in each of the fiscals year 2009 and
2008 to purchase Company's stock for each participant.

Profit Sharing Plan

The Company maintains a profit sharing plan which provides an annual
contribution by the Company based upon a percentage of operating earnings, as
defined. Eligible employees are allocated amounts under the profit sharing plan
based upon their respective earnings, as defined. Contributions under the plan
were approximately $0.6 million, $0.2 million, and $0.5 million in fiscal 2009,
2008, and 2007, respectively. While the Company intends to continue this plan,
it reserves the right to terminate or amend the plan at any time.

Postretirement Health Benefit Plan

The Company has a contributory postretirement health benefit plan covering
eligible employees. Effective August 15, 2000 the plan was closed for new
participants. The Company provides medical coverage for current and future
eligible retirees of the Company plus their eligible dependents. Employees
generally become eligible for retiree medical coverage by retiring from the
Company after attaining at least age 55 with 15 years of service (active
employees at June 27, 1993 were eligible by retiring after attaining at least
age 55 with 10 years of service). Retirees at June 27, 1993 pay approximately
$30 per month for health care coverage and the Company is responsible for paying
the remaining costs. For this group, any increase in health care coverage costs
for retired employees will be shared by the Company and retirees on a
fifty-fifty basis, while any increase in coverage costs for retiree dependents
will be totally paid by the retirees. For eligible employees retiring after June
27, 1993, the Company contributes a fixed dollar amount towards the cost of the
medical plan. Any future cost increases for the retiree medical program for
these participants will be charged to the retiree.


--------------------------------------------------------------------------------

                                       65
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

The following table presents the changes in the postretirement benefit
obligation and the funded status of the Plan at June 30:

(amounts in thousands)                                         2009       2008
                                                             -------    -------
Benefit obligation at beginning of year                      $ 2,363    $ 2,799
Service cost                                                      70         69
Interest cost                                                    157        144
Plan participants' contributions                                 134        149
Amendments                                                        --       (195)
Actuarial (gain) loss                                             14       (393)
Benefits paid                                                   (191)      (210)
Medicare Part D prescription drug subsidy                         26         --
                                                             -------    -------
Benefit obligation at the end of year                        $ 2,573    $ 2,363
                                                             =======    =======
Fair value of plan assets                                    $    --    $    --
Under funded status                                           (2,573)    (2,363)
                                                             -------    -------
  Accrued postretirement benefit cost                        $(2,573)   $(2,363)
                                                             =======    =======
Amounts Recognized in Accumulated Other
Comprehensive Income
  Net actuarial loss                                         $    91    $    74

Net periodic postretirement benefit cost includes the following components:

<TABLE>
<CAPTION>
(amounts in thousands)                                                                   2009                2008               2007
                                                                                        -----               -----               ----
<S>                                                                                     <C>                 <C>                 <C>
Service cost                                                                            $  70               $  69               $ 63
Interest cost                                                                             157                 144                158
Amortized loss                                                                              3                  16                 25
Amortization of unrecognized prior service cost                                           (18)                (18)                --
                                                                                        -----               -----               ----
   Net periodic postretirement benefit cost                                             $ 212               $ 211               $246
                                                                                        =====               =====               ====
</TABLE>

The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 6.37%, 6.86%, and 6.28%, at the end of
fiscal 2009, 2008, and 2007, respectively. Effective July 1, 2007, the Company
amended the plan to increase the employee's contribution percentage of certain
retirees in the plan from 30% to 35%.

Assumed health care cost trend rates are as follows:

<TABLE>
<CAPTION>
                                                                               2009             2008
                                                                               ----             ----
<S>                                                                         <C>             <C>
Health care cost trend rate assumed for next year                           7.5 - 10.5%     7.75 - 11.0%

Rate that the cost trend rate gradually declines to                             5%               5%

Year that the rate reaches the rate it is assumed to remain at                 2016             2016
</TABLE>

A one-percentage point change in assumed health care cost trend rates would have
the following effects:

<TABLE>
<CAPTION>
(amounts in thousands)                                                         1% increase    1% decrease
                                                                               -----------    -----------
<S>                                                                                <C>          <C>
Effect on total of service and interest cost components.....................       $ 19         $ (17)
Effect on postretirement benefit obligation.................................        190          (169)
</TABLE>

Estimated Future Benefit Payments

Shown below are the expected gross benefit payments (including prescription drug
benefits) and the expected gross amount of subsidy receipts.

                                                              Gross      Subsidy
(amounts in thousands)                                      payments    receipts
                                                            --------    --------
2010                                                         $  174      $ (31)
2011                                                            180        (35)
2012                                                            196        (38)
2013                                                            193        (43)
2014                                                            200        (49)
Years 2015 - 2019                                             1,049       (127)


--------------------------------------------------------------------------------

                                       66
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(17) Income Taxes

The following table presents the Domestic and Foreign components of income
before income taxes and discontinued operations and the expense (benefit) for
income taxes as well as the taxes charged or credited to stockholders' equity:

<TABLE>
<CAPTION>
                                                                                                Year ended June 30
                                                                                 --------------------------------------------------
(amounts in thousands)                                                             2009                 2008                 2007
                                                                                 --------             --------             --------
<S>                                                                              <C>                  <C>                  <C>
Income before income taxes and
   discontinued operations:
        Domestic                                                                 $ 12,075             $  8,955             $ 18,142
        Foreign                                                                     1,558                2,490                2,418
                                                                                 --------             --------             --------
                                                                                 $ 13,633             $ 11,445             $ 20,560
                                                                                 ========             ========             ========
Income tax expense charged to the
   income statement from continuing operations:
        Current:
           Federal                                                               $  4,218             $  3,272             $  5,027
           State and local                                                           (204)                 191                  216
           Benefit applied to reduce goodwill                                          42                   --                   --
           Foreign                                                                     70                  454                  147
                                                                                 --------             --------             --------
             Total current                                                          4,126                3,917                5,390
                                                                                 --------             --------             --------
        Deferred:
           Federal                                                                   (544)                (813)                (153)
           State and local                                                            (74)                 (42)                 (28)
           Foreign                                                                    266                  (80)                   2
                                                                                 --------             --------             --------
             Total deferred                                                          (352)                (935)                (179)
                                                                                 --------             --------             --------
             Subtotal                                                               3,774                2,982                5,211
                                                                                 --------             --------             --------
Income tax benefit recognized in the income
   statement from discontinued operations:
           Income tax benefit                                                          --                 (770)                  --
                                                                                 --------             --------             --------
             Total income taxes charged to the
             income statement                                                    $  3,774             $  2,212             $  5,211
                                                                                 ========             ========             ========
Income taxes charged (credited) to
   shareholders' equity:
   Current benefit of stock based compensation                                   $   (200)                (119)                (433)
   Deferred tax benefit from recognition
      of pension liability                                                           (970)                 (92)                (414)
                                                                                 --------             --------             --------
           Income taxes credited to
             shareholders' equity                                                $ (1,170)            $   (211)            $   (847)
                                                                                 ========             ========             ========
</TABLE>


--------------------------------------------------------------------------------

                                       67
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

A reconciliation of the expected consolidated income tax expense, computed by
applying a 35% U.S. Federal corporate income tax rate to income before income
taxes and discontinued operations, to income tax expense, is as follows:

<TABLE>
<CAPTION>
(amounts in thousands)                                                             2009                 2008                 2007
                                                                                 --------             --------             --------
<S>                                                                              <C>                  <C>                  <C>
Expected consolidated income tax expense                                         $  4,772             $  4,006             $  7,196
State taxes, net of Federal benefit                                                  (233)                  97                  122
Nontaxable interest income                                                           (289)                (542)                (806)
Change in valuation allowance                                                          81                  150                   38
Effect of foreign operations                                                         (210)                (498)                (697)
Non-deductible stock-based compensation                                               180                  360                  540
Export tax benefits                                                                    --                   26                 (217)
Research credits                                                                     (854)                (124)                (611)
Domestic production tax benefit                                                      (325)                (211)                (166)
Change in uncertain tax positions                                                     732                   --                   --
Other, net                                                                            (80)                (282)                (188)
                                                                                 --------             --------             --------
                                                                                 $  3,774             $  2,982             $  5,211
                                                                                 ========             ========             ========
</TABLE>

The tax effects of  temporary  differences  that give rise to the  deferred  tax
assets and deferred tax liabilities at June 30, are presented below:

<TABLE>
<CAPTION>
(amounts in thousands)                                                                                  2009                  2008
                                                                                                      -------               -------
<S>                                                                                                   <C>                   <C>
Deferred tax assets:
      Inventories                                                                                     $ 1,103               $   954
      Deferred compensation                                                                               297                   542
      Retirement benefits                                                                               1,360                   337
      Postretirement benefits                                                                             876                   810
      Stock-based compensation                                                                          2,854                 1,748
      Nondeductible reserves                                                                              779                 1,013
      Unrealized losses on securities available-for-sale                                                  140                    67
      Federal and state tax attribute carryforwards                                                       472                   198
      State net operating loss carrforwards                                                               177                   120
                                                                                                      -------               -------
        Gross deferred tax assets                                                                       8,058                 5,789
      Valuation deferred tax assets                                                                      (540)                 (386)
                                                                                                      -------               -------
        Net deferred tax assets                                                                         7,518                 5,403
                                                                                                      -------               -------
Deferred tax liabilities:
      Plant and equipment, principally due to differences
        In depreciation                                                                                (3,641)               (1,600)
      Intangible assets including goodwill                                                             (4,365)               (2,940)
      Deferred revenue                                                                                   (218)                   --
                                                                                                      -------               -------
        Gross deferred tax liabilities                                                                 (8,224)               (4,540)
                                                                                                      -------               -------
        Net deferred tax assets (liabilities)                                                         $  (706)              $   863
                                                                                                      =======               =======
<CAPTION>
(amounts in thousands)                                                                                  2009                  2008
                                                                                                      -------               -------
<S>                                                                                                   <C>                   <C>
Presented as:
Current deferred tax asset                                                                            $ 1,547               $ 1,646
Long-term deferred tax asset                                                                               27                    31
Current  deferred tax liability                                                                          (177)                   --
Long-term deferred tax liability                                                                       (2,103)                 (814)
                                                                                                      -------               -------
      Net deferred tax assets (liabilities)                                                           $  (706)              $   863
                                                                                                      =======               =======
</TABLE>

In assessing the realizable value of the deferred tax assets, the Company
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. The Company
considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this assessment. Based on
the level of historical taxable income and projections for future taxable
income, the Company believes it is more likely than not that it will realize the
benefits of the deferred tax assets, net of the existing valuation allowance.

At June 30, 2009, the Company has capital loss carryforwards of $0.3 million,
which may only be used to offset capital gains and expire in 2010. As a result
of these limitations, at June 30, 2009 and 2008, the Company has a valuation
allowance of $0.1 million with respect to these losses. At June 30, 2009 and
2008, the Company has unrealized losses on securities available-for-sale of $0.4


--------------------------------------------------------------------------------

                                       68
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

million and $0.2 million, respectively. If realized, these losses would be
characterized as capital losses and subject to the same limitations. As a result
of the limitations at June 30, 2009, the Company has a valuation allowance with
respect to the unrealized losses of $0.1 million. At June 30, 2009, the Company
has $0.3 million of acquired federal tax credit carryforwards subject to the
utilization limitations under section 383, the majority of which expire
beginning in 2026.

At June 30, 2009 and 2008, the Company has $3.1 million and $2.1 million of
state net operating loss carryforwards, respectively, which begin to expire in
2015. the Company does not believe it is more likely than not that it will
realize the deferred tax benefits of the state net operating losses and at June
30, 2009 has a valuation allowance of $0.2 million, an increase of $0.1 million.
At June 30, 2009, the Company has state tax credit carryforwards of $0.2
million, which expire from 2010 through 2024. $0.2 million of the state tax
credits may only be realized after utilization of the net operating loss
carryforwards. The Company does not believe it is more likely than not that it
will realize the deferred tax benefits of the state tax credits before their
expiration. At June 30, 2009, the Company had a valuation allowance with respect
to the state tax credits of $0.1 million.

The Company's subsidiary in China is eligible for a tax holiday providing
reduced tax rates for the first five tax years after it generates taxable income
in excess of its existing net operating loss carryforwards. The tax benefit
varies over the remaining years of the holiday. Fiscal year ended June 30, 2009,
is the fourth year of its tax holiday. The effect of the tax holiday is
approximately $0.3 million, or $0.02, per diluted share. United States income
taxes have not been provided on undistributed earnings of the China subsidiary
because such earnings are considered to be permanently reinvested and it is not
practicable to estimate the amount of tax that may be payable upon distribution.

In fiscal year 2008 the Company adopted FIN No. 48. The Company did not record a
cumulative effect adjustment to retained earnings as a result of this adoption.

A reconciliation of beginning and ending unrecognized tax benefits is as
follows:

(amounts in thousands)
Balance at June 30, 2008                                                $   477
Increases related to prior years' tax positions                             608
Increases related to acquired tax positions                                 523
Decreases related to prior years' tax positions                              --
Increases related to current years' tax positions                           144
Lapse of statue                                                             (92)
                                                                        -------
Balance at June 30, 2009                                                $ 1,660
                                                                        =======

As of June 30, 2009 and June 30, 2008, the Company had $1.7 million and $0.5
million, respectively, of unrecognized tax benefits that would affect the
Company's effective tax rate if recognized.

In accordance with the Company's accounting policy, the Company recognizes
accrued interest and penalties related to unrecognized tax benefits as a
component of income tax expense. This policy did not change as a result of the
adoption of FIN No. 48. For the year ended June 30, 2009 the Company recognized
an increase of $0.1 million in accrued interest and penalties, which was
recognized as additional tax expense and through acquired tax positions. As of
July 1, 2007 and June 30, 2008, the Company had $0.1 million and $33,000, net of
tax benefit respectively, included in the liability for uncertain tax positions
for the possible payment of interest and penalties.

The Company is subject to income tax examinations for its U.S. federal and
foreign income taxes for the fiscal years 2006 through 2009 and for state and
local taxes for the fiscal years 2002 through 2009. Various IRS and state income
tax examinations are currently in progress. It is reasonably possible that the
liability associated with the Company's unrecognized tax benefits will increase
or decrease within the next twelve months as a result of these examinations or
the expiration of the statutes of limitations. At this time, an estimate of the
range of reasonably possible outcomes cannot be made. However, the Company
anticipates that it is reasonably possible that additional payments of $0.2
million, including interest will be made within 12 months as a result of
settlement of certain examinations. Of the $1.8 million of unrecognized tax
benefit liabilities, interest, and penalties at June 30, 2009, the Company has
classified $0.2 million in current liabilities and $1.6 million in non-current
liabilities on the Company's consolidated balance sheet.


--------------------------------------------------------------------------------

                                       69
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

During fiscal year 2008, income from discontinued operations of $0.8 million was
recognized due to the reduction of an unrecognized tax benefit resulting from
the lapse of the applicable statute of limitations.

(18) Segment and Related Information

(a) Segments

The Company operates predominately in the wireless communications, satellite
communications, and space and defense electronics markets. The Company's two
reportable segments are the Wireless Group and the Space & Defense Group. 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 Group designs, manufactures, and markets commercial products used
mainly by the wireless communications market. The Space & Defense Group of the
business designs, manufactures, and markets specialized products for the radar
and communications markets. The Company's Space & Defense Group aggregates
certain operating segments into one reportable segment, as the operating
segments depict similar products, customers, industries and experience similar
margins on products.

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 &
(amounts in thousands)                                           Wireless           Defense        Unallocated    Consolidated
                                                                ----------        ----------       -----------    ------------
<S>                                                             <C>               <C>              <C>             <C>
Net sales:
     2009                                                       $   68,622        $   98,283       $       --      $  166,905
     2008                                                           78,741            52,575               --         131,316
     2007                                                           77,800            51,187               --         128,987
Operating income (4)
     2009                                                            6,649             8,202             (824)         14,027
     2008                                                            3,639             6,155             (592)          9,202
     2007                                                            7,969             9,588             (543)         17,014
Goodwill and intangible assets:
     June 30, 2009                                                  30,716            23,263               --          53,979
     June 30, 2008                                                  30,716                --               --          30,716
Identifiable assets (1)
     June 30, 2009                                                  18,099            61,135          103,842         183,076
     June 30, 2008                                                  29,048            21,035           91,305         141,388
Depreciation (2)
     2009                                                            4,933             3,467               --           8,400
     2008                                                            3,744             3,020               --           6,764
     2007                                                            2,904             2,301               --           5,205
Intangibles amortization (3)
     2009                                                               --             1,076               --           1,076
     2008                                                               38                --               --              38
     2007                                                              303                --               --             303
</TABLE>

(1)   Segment assets primarily include receivables, inventories and assets
      related to the Company's subsidiaries M. S. Kennedy and Unicircuit. The
      Company does not segregate other assets on a products and services basis
      for internal management reporting and, therefore, such information is not
      presented. Assets included in corporate and unallocated principally are
      cash and cash equivalents, marketable securities, other receivables,
      prepaid expenses, deferred income taxes, and property, plant and equipment
      not specific to business acquisitions.

(2)   Depreciation expense related to acquisition--specific property, plant, and
      equipment is included in the segment classification of the acquired
      business. Depreciation expense related to non-business combination assets
      is allocated departmentally based on an estimate of capital equipment
      employed by each department. Depreciation expense is then further
      allocated within the


--------------------------------------------------------------------------------

                                       70
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

      department as it relates to the specific business segment impacted by the
      consumption of the capital resources utilized. Due to the similarity of
      the property, plant, and equipment utilized, the Company does not
      specifically identify these assets by individual business segment for
      internal reporting purposes.

(3)   Amortization of intangible assets arising from business combinations is
      allocated to the segments based on the segment classification of the
      acquired or applicable operation.

(4)   Unallocated amounts relates to the lease expense incurred on the London
      lease

(b) Geographic Information

Net sales by geographic region are as follows:

<TABLE>
<CAPTION>
                            United        Asia                                       Consolidated
(amounts in thousands)      States      Pacific    Europe     Americas      Other     Net sales
<S>                       <C>          <C>        <C>         <C>         <C>         <C>
2009                      $ 104,152    $ 37,430   $ 15,650    $  2,627    $  7,046    $ 166,905
2008                         66,420      37,801     19,676       1,887       5,532      131,316
2007                         72,620      31,124     16,423       2,889       5,931      128,987
</TABLE>

(c) Customers

In 2009, sales to Lockheed Martin Corp. exceeded 10% of consolidated net sales,
totaling $24.7 million (Space & Defense Group). In 2008, sales to two customers
(Nokia Corp. and Lockheed Martin Corp) both exceeded 10% of consolidated net
sales, totaling approximately $39.4 million ($22.4 million related to the
Wireless Group and $17.0 million related to the Space & Defense Group). In 2007,
sales to two customers (Nokia Corp. and Lockheed Martin Corp) both exceeded 10%
of consolidated net sales, totaling approximately $38.6 million ($21.5 million
related to the Wireless Group and $17.1 million related to the Space & Defense
Group).

(19) Commitments

The Company is obligated under contractual obligations and commitments to make
future payments such as lease agreements and contingent commitments. The
Company's obligations and commitments are as follows:

(amounts in thousands)                           Operating             Other
Year ending June 30:                               Leases           Long-Term(1)
      2010                                       $    692             $    65
      2011                                            806                  65
      2012                                            706                  65
      2013                                            599                  65
      2014                                            288                  65
      Thereafter                                       --                  65
                                                 --------             -------
                                                 $  3,091             $   390
                                                 ========             =======

(1) - Deferred Compensation

Net rent expense for the years ended June 30, 2009, 2008, and 2007 was $1.2
million, $1.6 million, and $0.9 million, respectively. Rent expense for fiscal
2009, 2008, and 2007 was offset by sublease income of $0, $0.2 million, and $0.5
million, respectively.

The minimum lease payments for the Company's operating leases are recognized on
a straight-line basis over the minimum lease term. The Company's China operation
building lease has a step rent provision. Rent expense is recognized on a
straight line basis over the lease term.


--------------------------------------------------------------------------------

                                       71
<PAGE>

                                  ANAREN, INC.
                   Notes to Consolidated Financial Statements
                          June 30, 2009, 2008, and 2007

(20) Concentrations

The Company and others, which are engaged in supplying defense-related equipment
to the United States Government (the Government), are subject to certain
business risks related to the defense industry. Sales to the Government may be
affected by changes in procurement policies, budget considerations, changing
concepts of national defense, political developments abroad, and other factors.
Sales to direct contractors of the United States Government accounted for
approximately 50%, 35%, and 36% of consolidated net sales in fiscal 2009, 2008,
and 2007, respectively. While management believes there is a high probability of
continuation of the Company's current defense-related programs, it is attempting
to reduce its dependence on sales to direct contractors of the United States
Government through development of its commercial electronics business.

The Company maintains and operates a facility in Suzhou, China. During fiscal
year 2009, net external sales totaled $4.1 million. Included in the company's
total assets, as of June 30, 2009, includes $3.5 million of inventory held for
resale, as well as $4.7 million of fixed assets (net of related accumulated
depreciation). As of June 30, 2009, there is no reason to believe that any of
the Company's foreign assets or future operations will be impaired.

(21) Quarterly Financial Data (Unaudited)

The following table sets forth certain unaudited quarterly financial information
for the years ended June 30, 2009 and 2008:

<TABLE>
<CAPTION>
                                                                                  2009 quarter ended
                                                       ----------------------------------------------------------------------
(in thousands, except per share amounts)               September 30*        December 31*         March 31            June 30
                                                       -------------        ------------         --------            --------
<S>                                                      <C>                 <C>                 <C>                 <C>
Net sales                                                $ 38,124            $ 41,443            $ 43,507            $ 43,831
Gross profit                                               11,664              12,299              15,084              15,710
Net income                                                  1,342               1,584               3,476               3,457
Income from continuing operations:
     Basic earnings per share                               $0.09               $0.11               $0.25               $0.25
     Diluted earnings per share                              0.09                0.11                0.25                0.24
Income from discontinued operations:
     Basic earnings per share                               $0.00               $0.00               $0.00               $0.00
     Diluted earnings per share                              0.00                0.00                0.00                0.00
<CAPTION>
                                                                                  2008 quarter ended
                                                       ----------------------------------------------------------------------
(in thousands, except per share amounts)               September 30         December 31          March 31            June 30
                                                       ------------         -----------          --------            --------
<S>                                                      <C>                 <C>                 <C>                 <C>
Net sales                                                $ 32,090            $ 32,368            $ 32,619            $ 34,239
Gross profit                                               10,519              10,400              10,140               9,418
Net income                                                  2,705               2,551               2,817               1,160
Income from continuing operations:
     Basic earnings per share                               $0.17               $0.17               $0.14               $0.08
     Diluted earnings per share                              0.17                0.17                0.14                0.08
Income from discontinued operations:
     Basic earnings per share                               $0.00               $0.00               $0.05               $0.00
     Diluted earnings per share                              0.00                0.00                0.05                0.00
</TABLE>

Income per share amounts for each quarter are required to be computed
independently, and as a result, their sum does not necessarily equal the total
year income per share amounts.

* There was $1.1 million of inventory step-up expense related to the purchase of
MSK and Unicircuit in the first and second quarter ending September 30, 2009 and
December 31, 2009, respectively.

--------------------------------------------------------------------------------

                                       72
<PAGE>

                                INDEX TO EXHIBITS

Exhibit No.                                Description
-----------                                -----------
    2.1           Agreement and Plan of Merger, dated August 18, 2008, among the
                  Company, Anaren Acquisition, Inc., Unicircuit, Inc. and the
                  Stockholders' Agent (1)

    3.1           Certificate of Incorporation, as amended (2)

    3.2           Amended and Restated By-Laws (3)

    4.1           Specimen Certificate of Common Stock (4)

    4.2           Shareholder Protection Rights Agreement dated as of April 20,
                  2001, between the Company and American Stock Transfer & Trust
                  Company, including forms of Rights Certificate and Election to
                  Exercise (5)

    10.1          Employment Agreement, dated as of July 1, 2006, between the
                  Company and Lawrence A. Sala (6)*

    10.2          Pension Plan and Trust (7)*

    10.3          Anaren Microwave, Inc. Incentive Stock Option Plan, as amended
                  (8)*

    10.4          Anaren Microwave, Inc. 1989 Non-statutory Stock Option Plan,
                  as amended (9)*

    10.5          Anaren Microwave, Inc. Incentive Stock Option Plan for Key
                  Employees (10)*

    10.6          Anaren Microwave, Inc. Stock Option Plan (11)*

    10.7          Form of Change of Control Agreements, each dated June 22,
                  2007, with Joseph Porcello, Mark Burdick, Timothy Ross, Amy
                  Tewksbury and Gert Thygesen (12)*

    10.8          Employment Agreement, dated as of February 14, 2004, between
                  the Company and Carl W. Gerst, Jr. (13)*

    10.9          Anaren, Inc .Comprehensive Long-Term Incentive Plan  (14)*

   10.10          Amendment #1 to Anaren, Inc. 2004 Comprehensive Long-Term
                  Incentive Plan, dated November 2, 2006 (15)*

   10.11          Addendum to the Employment Agreement with Carl W. Gerst, Jr.
                  dated as of May 16, 2007, between the Company and Carl W.
                  Gerst, Jr. (16)*

   10.12          Addendum II to the Employment Agreement with Carl W. Gerst,
                  Jr. dated as of June 16, 2008, between the Company and Carl W.
                  Gerst, Jr. (17)*

   10.13          Loan Agreement, dated as of July 31, 2008, between the Company
                  and KeyBank National Association (18)

   10.14          Promissory Note Revolving Credit LIBOR Rate, dated July 31,
                  2008, issued by the Company to KeyBank National Association
                  (18)

   10.15          364 Day LIBOR Grid Note Loan Agreement, dated as of May 1,
                  2008, issued by the Company to Manufacturers and Traders Trust
                  Company (19)

   10.16          Stock Purchase Agreement dated July 30, 2008, among the
                  Company, M. S. Kennedy Corp. and the individual shareholders
                  and seller's representative party thereto (20)


--------------------------------------------------------------------------------

                                       73
<PAGE>

   10.17          Amendment to Employment Agreement, dated December 30, 2008, by
                  and between Lawrence A. Sala and the Company (21)*

   10.18          Amendment #3 to Carl W. Gerst, Jr. Employment Agreement, dated
                  December 30, 2008, by and between Carl W. Gerst, Jr. and the
                  Company (22)*

   10.19          Addendum #4 to Employment Agreement, dated May 31, 2009, by
                  and between Carl W. Gerst, Jr. and the Company (23)

    16.1          Letter from KPMG, LLP, dated December 10, 2008 (24)

     21           Subsidiaries of the Company

    23.1          Consent of KPMG LLP, Independent Registered Public Accounting
                  Firm

    23.2          Consent of Deloitte & Touche LLP, Independent Registered
                  Public Accounting Firm

    31.1          Certifications of Chief Executive Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002

    31.2          Certifications of Chief Financial Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002

    32.1          Certifications of Chief Executive Officer Pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002

    32.2          Certifications of Chief Financial Officer Pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002

*     Management contract or compensatory plan

(1)   Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on August 20, 2008.

(2)   Restated Certificate of Incorporation of the Company, filed on August 11,
      1967, is incorporated herein by reference to Exhibit 3(a) to Company's
      Registration Statement on Form S-1 (Registration No. 2-42704); (B)
      Amendment, filed on December 19, 1980, is incorporated herein by reference
      to Exhibit 4.1(ii) to the Company's Registration Statement on Form S-2
      (Registration No. 2-86025); (C) Amendment, filed on March 18, 1985, is
      incorporated herein by reference to Exhibit 3.1 to the Company's Annual
      Report on Form 10-K (Commission File No. 0-6620) for the fiscal year ended
      June 30, 1987; (D) Amendment, filed on December 14, 1987, is incorporated
      herein by reference to Exhibit 4(a)(iv) to the Company's Registration
      Statement on Form S-8 (Registration No. 33-19618); (E) Amendment, filed on
      April 8, 1999, is incorporated herein by reference to Exhibit 3.1 to the
      Company's Annual Report on Form 10-K (Commission File No. 0-6620) for the
      fiscal year ended June 30, 1999; (F) Amendment, filed on February 8, 2000,
      is incorporated herein reference to Exhibit 4.1 to the Company's
      Registration Statement on Form S-3 (Registration No. 333-31460) filed with
      the Securities and Exchange Commission on March 2, 2000; (G) Amendment,
      filed on November 22, 2000, is incorporated by reference to Exhibit 3.1 to
      the Company's Quarterly Report on Form 10-Q (Commission File No. 0-6620)
      for the three months ended December 31, 2000; and (H) Amendment, filed on
      December 20, 2002, is incorporated by reference to Exhibit 3 to the
      Company's Quarterly Report on Form 10-Q (Commission File No. 0-6620) for
      the three months ended December 31, 2002.

(3)   Incorporated herein by reference to Exhibit 3.2 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on December 20, 2007.


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                                       74
<PAGE>

(4)   Incorporated herein by reference to Exhibit 4.3 to the Company's
      Registration Statement on Form S-3 (Registration No. 333-31460) filed with
      the Securities and Exchange Commission on March 2, 2000.

(5)   Incorporated herein by reference to Exhibits 4.1 and 4.2 to the Company's
      Registration Statement on Form 8-A (Commission File No. 0-6620) filed with
      the Securities and Exchange Commission on April 26, 2001.

(6)   Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K, (Commission File No. 0-6620), filed with the
      Securities and Exchange Commission on July 25, 2006.

(7)   Incorporated herein by reference to Exhibit 4(b) to the Company's
      Registration Statement on Form S-8 (Registration No. 33-19618).

(8)   Incorporated herein by reference to Appendix A to the Company's definitive
      proxy statement for its 1998 annual meeting of the shareholders
      (Commission File No. 0-6620), filed with the Securities and Exchange
      Commission on September 25, 1998.

(9)   Incorporated herein by reference to Appendix B to the Company's definitive
      proxy statement for its 1998 annual meeting of the shareholders
      (Commission File No. 0-6620), filed with the Securities and Exchange
      Commission on September 25, 1998.

(10)  Incorporated herein by reference to Appendix A to the Company's definitive
      proxy statement for its 2000 annual meeting of the shareholders
      (Commission File No. 0-6620), filed with the Securities and Exchange
      Commission on September 18, 2000.

(11)  Incorporated herein by reference to Appendix B to the Company's definitive
      proxy statement for its 2000 annual meeting of the shareholders
      (Commission File No. 0-6620), filed with the Securities and Exchange
      Commission on September 18, 2000.

(12)  Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on June 27, 2007.

(13)  Incorporated herein by reference to Exhibit 10.12 to the Company's
      Quarterly Report on Form 10-Q for the three months ended March 31, 2007.

(14)  Incorporated herein by reference to Appendix A to the Company's definitive
      proxy statement for its 2004 annual meeting of the shareholders
      (Commission File No. 0-6620), filed with the Securities and Exchange
      Commission on September 17, 2004.

(15)  Incorporated herein by reference to Appendix A to the Company's definitive
      proxy statement for its 2006 annual meeting of the shareholders
      (Commission File No. 0-6620), filed with the Securities and Exchange
      Commission on September 15, 2006.

(16)  Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No.0-6620) filed with the Securities
      and Exchange Commission on July 25, 2007.

(17)  Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No.0-6620) filed with the Securities
      and Exchange Commission on June 20, 2008.


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                                       75
<PAGE>

(18)  Incorporated herein by reference to Exhibit 10.2 and 10.3 to the Company's
      Current Report on Form 8-K (Commission File No. 0-6620) filed with the
      Securities and Exchange Commission on August 1, 2008.

(19)  Incorporated herein by reference to Exhibit 99.1 to the Company's
      Quarterly Report on Form 10-Q (Commission File No.0-6620) filed with the
      Securities and Exchange Commission on May 12, 2008.

(20)  Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with The Securities
      and Exchange Commission on August 1, 2008.

(21)  Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on January 5, 2009.

(22)  Incorporated herein by reference to Exhibit 10.2 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on January 5, 2009.

(23)  Incorporated herein by reference to Exhibit 10.1 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on May 14, 2009.

(24)  Incorporated herein by reference to Exhibit 16.1 to the Company's Current
      Report on Form 8-K (Commission File No. 0-6620) filed with the Securities
      and Exchange Commission on December 10, 2008.


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                                       76

<PAGE>

Pursuant to the requirements of Section 13 or 15 (d) 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.

                                    /s/ LAWRENCE A. SALA
                                    ----------------------
                                    Name: Lawrence A. Sala
                                    Title: President and Chief Executive Officer

Date: September 14, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
     Signature                                           Title                                     Date
<S>                               <C>                                                       <C>
/s/ Lawrence A. Sala              President, Chief Executive Officer and Chairman of        September 14, 2009
----------------------            the Board, Director (Principal Executive Officer)
Lawrence A. Sala

/s/ George A. Blanton             Sr. Vice President, Chief Financial Officer,              September 14, 2009
----------------------            Treasurer
George A. Blanton

/s/ Carl W. Gerst, Jr.            Chief Technical Officer, Vice Chairman of the Board       September 14, 2009
----------------------            and Director
Carl W. Gerst, Jr.

/s/ Dale F. Eck                   Director                                                  September 14, 2009
----------------------
Dale F. Eck

/s/ Matthew S. Robison            Director                                                  September 14, 2009
----------------------
Matthew S. Robison

/s/ David L. Wilemon              Director                                                  September 14, 2009
----------------------
David L. Wilemon

/s/ James G. Gould                Director                                                  September 14, 2009
----------------------
James G. Gould

/s/ Robert U. Roberts             Director                                                  September 14, 2009
----------------------
Robert U. Roberts

/s/ John L. Smucker               Director                                                  September 14, 2009
----------------------
John L. Smucker

/s/ Patricia T. Civil             Director                                                  September 14, 2009
----------------------
Patricia T. Civil
</TABLE>


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