Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of
in-building wireless, intelligent site management, cell site
optimization, and outside plant solutions, today announced a
comprehensive expense reduction plan and a preliminary revenue
estimate for its fiscal 2017 first quarter ended June 30, 2016
(1Q17). The preliminary revenue estimate is subject to completion
of the Company’s quarterly closing and review process. Management
will host a conference call to discuss the expense reduction plan
and preliminary 1Q17 revenue estimate tomorrow, Thursday, July 28,
2016 at 9:30 AM Eastern Time (details below).
The Company plans to implement a comprehensive program designed
to reduce annual expenses by approximately $11.0 million, including
discontinuing development of the ClearLink Distributed Antenna
System (DAS); consolidating facilities in Manchester, NH and
Aurora, IL; and taking additional actions to reduce SG&A
expenses.
“To accelerate our path to profitable growth and positive cash
flow, we are taking actions to significantly lower our cost
structure including, based on our latest analysis of the market and
expected return, ceasing development of ClearLink DAS. Westell will
continue as a leading supplier of Repeaters, DAS Conditioners,
Antennas, and System Components to the IBW market,” said Tom
Gruenwald, Chairman, CEO, and President of Westell Technologies.
“We believe these actions are necessary to preserve the Company’s
strong balance sheet and position Westell to create shareholder
value. At the same time, we intend to continue to advance our
turnaround by staying focused on operational discipline and
execution on new products and solutions that meet the challenges of
a dynamic market.”
Westell estimates preliminary consolidated revenue for 1Q17 of
$14.8 million, compared to $21.6 million in the year-ago quarter
and $20.9 million in the prior quarter. Cash and short-term
investments were $25.3 million at June 30, 2016, compared to $29.7
million at March 31, 2016. The Company anticipates releasing 1Q17
financial results on Wednesday, August 10, 2016 and hosting its
regular quarterly conference call on Thursday, August 11, 2016
(details will be provided at a later date).
“First quarter revenue weakness reflected a confluence of
factors across our businesses, including a general slowdown in
carrier spending and the adverse impact of a strike-related work
stoppage at a major customer. We believe our strong customer
relationships, recently announced new IBW and Power Distribution
offerings, and opportunities in the Intelligent Site Management
(ISM) and Integrated Cabinet markets can provide profitable
growth,” Gruenwald said.
Expense reduction actions are anticipated to be substantially
completed by March 31, 2017, including work force reductions and
the consolidation of facilities in Manchester, NH and Aurora, IL.
The Company expects to record charges of approximately $4.4
million, consisting of estimated cash payments for severance of
$0.6 million and purchase commitments of $0.6 million, and non-cash
charges of approximately $1.2 million for facility-related costs
and approximately $2.0 million for inventory and fixed asset
write-offs.
Update on Segment
Reporting
Consistent with how Westell began operating and managing its
business in fiscal 2017, the Company has expanded from two to three
segments as follows:
- In-Building
Wireless (IBW), which is unchanged, includes Repeaters, DAS
Conditioners, Antennas, and System Components.
- Intelligent Site
Management and Services (ISMS), formerly part of the
Communication Solutions Group (CSG) segment, includes ISM Remote
units, the ISM Optima network management system, and Westell’s
Services business.
- Communication
Network Solutions (CNS), also formerly part of CSG, includes
Outside Plant Solutions (e.g., Integrated Cabinets, Power
Distribution) and Cell Site Optimization (i.e. Tower Mounted
Amplifiers).
Conference Call
Information
Management will discuss the expense reduction plan and
preliminary 1Q17 revenue estimate tomorrow, Thursday, July 28, 2016
at 9:30 AM Eastern Time. Investors may quickly register online in
advance of the call at https://www.conferenceplus.com/westell. After
registering, participants receive dial-in numbers, a passcode and a
registration ID that is used to uniquely identify their presence
and automatically join them into the audio conference. A
participant may also register by telephone on July 28 by dialing
888-206-4065 no later than 9:15 AM Eastern Time and providing the
operator confirmation number 42806114.
This news release and related information that may be discussed
on the conference call, will be posted on the Investor Relations
section of Westell's website: http://www.westell.com. A digital recording of the
entire conference will be available for replay on Westell's website
by approximately 1:00 PM Eastern Time after the call ends.
About Westell
Westell Technologies, Inc. is a leading provider of in-building
wireless, intelligent site management, cell site optimization, and
outside plant solutions focused on innovation and differentiation
at the edge of communication infrastructure networks, where end
users connect. The Company's comprehensive set of products and
solutions enable service providers and network operators to improve
performance and reduce operating expenses. With millions of
products successfully deployed worldwide, Westell is a trusted
partner for transforming networks into high quality, reliable
systems. For more information, please visit www.westell.com.
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995
Certain statements contained herein that are not historical
facts or that contain the words “believe,” “expect,” “intend,”
“anticipate,” “estimate,” “may,” “will,” “plan,” “should,” or
derivatives thereof and other words of similar meaning are
forward-looking statements that involve risks and uncertainties.
Actual results may differ materially from those expressed in or
implied by such forward-looking statements. Factors that could
cause actual results to differ materially include, but are not
limited to, product demand and market acceptance risks, customer
spending patterns, need for financing and capital, economic
weakness in the United States (“U.S.”) economy and
telecommunications market, the effect of international economic
conditions and trade, legal, social and economic risks (such as
import, licensing and trade restrictions), the impact of
competitive products or technologies, competitive pricing
pressures, customer product selection decisions, product cost
increases, component supply shortages, new product development,
excess and obsolete inventory, commercialization and technological
delays or difficulties (including delays or difficulties in
developing, producing, testing and selling new products and
technologies), the ability to successfully consolidate and
rationalize operations, the ability to successfully identify,
acquire and integrate acquisitions, the effect of the Company's
accounting policies, retention of key personnel and other risks
more fully described in the Company's SEC filings, including the
Form 10-K for the fiscal year ended March 31, 2016, under Item 1A -
Risk Factors. The Company undertakes no obligation to publicly
update these forward-looking statements to reflect current events
or circumstances after the date hereof, or to reflect the
occurrence of unanticipated events, or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160727006461/en/
Westell Investor Relations Contact:Tom MinichielloSenior
Vice President, Chief Financial Officer, Treasurer, and
SecretaryWestell
Technologies630-375-4740tminichiello@westell.com
Westell Technologies (NASDAQ:WSTL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Westell Technologies (NASDAQ:WSTL)
Historical Stock Chart
From Sep 2023 to Sep 2024