Westell Technologies, Inc. (NASDAQ:WSTL), a leading provider of
high-performance wireless infrastructure solutions, announced
results for its fiscal 2017 fourth quarter ended March 31,
2017 (4Q17). Management will host a conference call to
discuss financial and business results after market close today,
Wednesday, May 24, 2017 at 4:30 PM Eastern Time (details
below).
Consolidated revenue for 4Q17 was $15.4 million,
and consisted of $6.9 million from the In-Building Wireless (IBW)
segment, $4.5 million from the Intelligent Site Management and
Services (ISMS) segment, and $3.9 million from the Communication
Network Solutions (CNS) segment.
IBW recorded its highest quarterly revenue since
December 2015, including record quarterly sales of the
Universal DAS Interface Tray (UDIT) and first revenue for the
recently announced two-watt public safety repeater. Also up
sequentially were product sales within ISMS driven by software
revenue and sales of integrated cabinets within CNS driven by new
projects.
|
4Q17 3 months ended 03/31/17 |
3Q17 3 months ended 12/31/16 |
+ favorable / - unfavorable |
Consolidated Revenue |
$15.4M |
$15.0M |
+3% |
Net Income (Loss) |
($0.6M) |
($1.8M) |
+69% |
Gross Margin |
44.0% |
40.4% |
+3.6% |
Earnings (Loss) Per Share |
($0.01) |
($0.03) |
+69% |
Non-GAAP Net Income (1) |
$1.0M |
$0.2M |
+375% |
Non-GAAP Earnings Per Share (1) |
$0.02 |
$— |
+375% |
Non-GAAP Adjusted EBITDA (1) |
$1.2M |
$0.5M |
+142% |
(1) Please refer to the schedule at the end of
this press release for a complete GAAP to non-GAAP reconciliation
and other information related to non-GAAP financial measures. |
“We once again delivered sequential bottom-line
improvements in 4Q17, as GAAP performance was better by $1.3
million and non-GAAP performance, positive for the second
consecutive quarter, improved $0.8 million. Highlights
included sequential revenue growth, gross margin increase, and
continuous expense control,” said Kirk Brannock, President and CEO
of Westell Technologies. “Our top priority is driving revenue
growth. We continue to expand our IBW public safety product
portfolio. We also expect the emerging centralized radio
access network (CRAN) architecture to present us with growth
opportunities for both our ISMS and CNS products and
solutions.”
GAAP operating expenses were $7.4 million in 4Q17,
a 6% reduction compared to $7.8 million in 3Q17. Non-GAAP
operating expenses, which exclude stock-based compensation,
amortization of acquired intangible assets, and restructuring
charges, were $5.9 million in 4Q17, flat compared to 3Q17.
Cash was $21.8 million at March 31, 2017
compared to $23.8 million at December 31, 2016 and $20.9 million at
September 30, 2016. Cash decreased $2.1 million in 4Q17 due
primarily to a lower accounts payable and higher receivables at
March 31, as well as employee severance payments. Cash
increased $0.9 million during the second half of fiscal 2017, the
period in which the majority of our cost and expense reset took
effect.
In-Building Wireless (IBW)
Segment
IBW’s sequential revenue increase was driven by
higher sales for all product lines in the segment, led by record
quarterly sales of UDIT. IBW’s gross margin increase was
driven primarily by the higher revenue and lower product costs.
|
4Q17 3 months ended 03/31/17 |
3Q17 3 months ended 12/31/16 |
+ favorable / - unfavorable |
IBW Segment Revenue |
$6.9M |
$6.2M |
+12% |
IBW Segment Gross Margin |
42.2% |
40.3% |
+1.9% |
IBW Segment R&D Expense |
$1.5M |
$1.3M |
-13% |
IBW Segment Profit |
$1.5M |
$1.2M |
+21% |
Intelligent Site Management & Services
(ISMS) Segment
ISMS’s sequential revenue decrease was due to lower
services revenue, partially offset by higher sales of both our
remote monitoring units and management systems. ISMS’s gross
margin increase was driven primarily by a more favorable mix and
lower costs.
|
4Q17 3 months ended 03/31/17 |
3Q17 3 months ended 12/31/16 |
+ favorable / - unfavorable |
ISMS Segment Revenue |
$4.5M |
$5.5M |
-18% |
ISMS Segment Gross Margin |
56.2% |
50.6% |
+5.6% |
ISMS Segment R&D Expense |
$0.6M |
$0.8M |
+23% |
ISMS Segment Profit |
$1.9M |
$2.0M |
-3% |
Communication Network Solutions Group (CNS)
Segment
CNS’s sequential revenue increase was driven
primarily by higher sales of integrated cabinets. CNS’s gross
margin increase was driven by the higher revenue and lower
costs.
|
4Q17 3 months ended 03/31/17 |
3Q17 3 months ended 12/31/16 |
+ favorable / - unfavorable |
CNS Segment Revenue |
$3.9M |
$3.2M |
+20% |
CNS Segment Gross Margin |
32.7% |
23.1% |
+9.6% |
CNS Segment R&D Expense |
$0.3M |
$0.3M |
+15% |
CNS Segment Profit |
$1.0M |
$0.4M |
+128% |
Conference Call Information
Management will discuss financial and business
results during the quarterly conference call on Wednesday,
May 24, 2017, at 4:30 PM 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 May 24 by dialing
(888) 206-4065 no later than 4:15 PM Eastern Time and providing the
operator confirmation number 44880238.
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 7:00 PM Eastern Time after the call ends.
About Westell
Westell is a leading provider of high-performance
wireless infrastructure solutions focused on innovation and
differentiation at the edge of communication networks where end
users connect. The Company's portfolio 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.
Financial Tables to Follow:
Westell Technologies, Inc. |
Condensed Consolidated Statement of
Operations |
(Amounts in thousands, except per share amounts) |
(Unaudited) |
|
|
|
Three months ended |
|
Twelve months ended |
|
|
|
March 31, 2017 |
|
December 31, 2016 |
|
March 31, 2016 |
|
March 31, 2017 |
|
March 31, 2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
14,290 |
|
|
$ |
12,746 |
|
|
$ |
19,748 |
|
|
$ |
56,530 |
|
|
$ |
81,238 |
|
|
Services |
|
1,096 |
|
|
2,237 |
|
|
1,156 |
|
|
6,435 |
|
|
6,965 |
|
|
Total
revenue |
|
$ |
15,386 |
|
|
$ |
14,983 |
|
|
$ |
20,904 |
|
|
$ |
62,965 |
|
|
$ |
88,203 |
|
|
Cost of
revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
8,331 |
|
|
7,807 |
|
|
12,566 |
|
|
36,119 |
|
|
50,332 |
|
|
Services |
|
292 |
|
|
1,122 |
|
|
445 |
|
|
3,097 |
|
|
3,355 |
|
|
Total
cost of revenue |
|
8,623 |
|
|
8,929 |
|
|
13,011 |
|
|
39,216 |
|
|
53,687 |
|
|
Gross profit |
|
6,763 |
|
|
6,054 |
|
|
7,893 |
|
|
23,749 |
|
|
34,516 |
|
|
Gross margin |
|
44.0 |
% |
|
40.4 |
% |
|
37.8 |
% |
|
37.7 |
% |
|
39.1 |
% |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
& development |
|
2,349 |
|
|
2,414 |
|
|
4,713 |
|
|
12,367 |
|
|
19,317 |
|
|
Sales
& marketing |
|
2,124 |
|
|
1,943 |
|
|
4,608 |
|
|
10,344 |
|
|
15,817 |
|
|
General
& administrative |
|
1,651 |
|
|
1,777 |
|
|
1,747 |
|
|
7,991 |
|
|
9,836 |
|
|
Intangibles amortization |
|
1,151 |
|
|
1,212 |
|
|
1,305 |
|
|
4,764 |
|
|
5,554 |
|
|
Restructuring |
|
100 |
|
(1 |
) |
490 |
|
(1 |
) |
731 |
|
(2 |
) |
3,155 |
|
(1 |
) |
748 |
|
(2 |
) |
Long-lived assets impairment |
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
(3 |
) |
— |
|
|
Total
operating expenses |
|
7,375 |
|
|
7,836 |
|
|
13,104 |
|
|
39,802 |
|
|
51,272 |
|
|
Operating income (loss)
from continuing operations |
|
(612 |
) |
|
(1,782 |
) |
|
(5,211 |
) |
|
(16,053 |
) |
|
(16,756 |
) |
|
Other income (expense),
net |
|
94 |
|
|
(15 |
) |
|
107 |
|
|
170 |
|
|
169 |
|
|
Income (loss) before
income taxes and discontinued operations |
|
(518 |
) |
|
(1,797 |
) |
|
(5,104 |
) |
|
(15,883 |
) |
|
(16,587 |
) |
|
Income tax benefit
(expense) |
|
(38 |
) |
|
(10 |
) |
|
27 |
|
|
(58 |
) |
|
102 |
|
|
Net income (loss) from
continuing operations |
|
(556 |
) |
|
(1,807 |
) |
|
(5,077 |
) |
|
(15,941 |
) |
|
(16,485 |
) |
|
Income (loss) from
discontinued operations, net of income tax (4) |
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
273 |
|
|
Net income (loss) |
|
$ |
(556 |
) |
|
$ |
(1,807 |
) |
|
$ |
(5,076 |
) |
|
$ |
(15,941 |
) |
|
$ |
(16,212 |
) |
|
Basic and diluted net
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted net income (loss) from continuing operations |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.27 |
) |
|
Basic and
diluted net income (loss) from discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Basic and
diluted net income (loss) |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.27 |
) |
|
Weighted-average number
of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
61,725 |
|
|
61,564 |
|
|
60,847 |
|
|
61,376 |
|
|
60,786 |
|
|
|
(1)
The Company recorded restructuring expense relating to
severance costs for terminated employees and abandonment of excess
office space at its headquarters and in New Hampshire. |
|
(2)
The Company recorded restructuring expense primarily relating to
severance costs for terminated employees. |
|
(3)
Non-cash impairment related to long-lived assets associated with
the previously announced strategic decision related to the
discontinuation of ClearLink DAS. |
|
(4)
Income from discontinued operations resulted from the expiration of
indemnity periods and release of contingency reserves related to
the sale of ConferencePlus. |
|
Westell Technologies, Inc. |
Condensed Consolidated Balance
Sheets |
(Amounts in thousands) |
|
Assets: |
|
March 31,
2017(Unaudited) |
|
March 31, 2016 |
Cash and cash
equivalents |
|
$ |
21,778 |
|
|
|
$ |
19,169 |
|
|
Short-term
investments |
|
|
— |
|
|
|
|
10,555 |
|
|
Accounts receivable,
net |
|
|
12,075 |
|
|
|
|
16,361 |
|
|
Inventories |
|
|
12,511 |
|
|
|
|
13,498 |
|
|
Prepaid expenses and
other current assets |
|
|
1,409 |
|
|
|
|
1,900 |
|
|
Total
current assets |
|
|
47,773 |
|
|
|
|
61,483 |
|
|
Property and equipment,
net |
|
|
1,984 |
|
|
|
|
3,977 |
|
|
Intangible assets,
net |
|
|
15,624 |
|
|
|
|
20,388 |
|
|
Other non-current
assets |
|
|
160 |
|
|
|
|
183 |
|
|
Total
assets |
|
$ |
65,541 |
|
|
|
$ |
86,031 |
|
|
Liabilities and
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
4,163 |
|
|
|
$ |
7,856 |
|
|
Accrued expenses |
|
|
4,273 |
|
|
|
|
5,932 |
|
|
Accrued
restructuring |
|
|
1,171 |
|
|
|
|
1,537 |
|
|
Contingent
consideration |
|
|
— |
|
|
|
|
311 |
|
|
Deferred revenue |
|
|
2,359 |
|
|
|
|
1,601 |
|
|
Total
current liabilities |
|
|
11,966 |
|
|
|
|
17,237 |
|
|
Deferred revenue
non-current |
|
|
1,102 |
|
|
|
|
1,236 |
|
|
Net deferred income tax
liability |
|
|
— |
|
|
|
|
10 |
|
|
Accrued restructuring
non-current |
|
|
63 |
|
|
|
|
550 |
|
|
Other non-current
liabilities |
|
|
236 |
|
|
|
|
314 |
|
|
Total
liabilities |
|
|
13,367 |
|
|
|
|
19,347 |
|
|
Total
stockholders’ equity |
|
|
52,174 |
|
|
|
|
66,684 |
|
|
Total
liabilities and stockholders’ equity |
|
$ |
65,541 |
|
|
|
$ |
86,031 |
|
|
Westell Technologies, Inc. |
Condensed Consolidated Statement of Cash
Flows |
(Amounts in thousands) |
|
|
|
Three months ended March 31, |
|
Six months ended March 31, |
|
Twelve months ended March 31, |
Cash flows from
operating activities: |
|
2017 (Unaudited) |
|
2017 (Unaudited) |
|
2017 (Unaudited) |
|
2016 |
Net
income (loss) |
|
$ |
(556 |
) |
|
$ |
(2,363 |
) |
|
$ |
(15,941 |
) |
|
$ |
(16,212 |
) |
Reconciliation of net income to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
1,430 |
|
|
2,914 |
|
|
6,144 |
|
|
7,098 |
|
Long-lived assets impairment |
|
— |
|
|
— |
|
|
1,181 |
|
|
— |
|
Stock-based compensation |
|
248 |
|
|
501 |
|
|
1,594 |
|
|
1,265 |
|
Restructuring |
|
100 |
|
|
590 |
|
|
3,155 |
|
|
748 |
|
Deferred
taxes |
|
(30 |
) |
|
(24 |
) |
|
(10 |
) |
|
(36 |
) |
Loss
(gain) on sale of fixed assets |
|
(28 |
) |
|
16 |
|
|
27 |
|
|
14 |
|
Exchange
rate loss (gain) |
|
2 |
|
|
2 |
|
|
2 |
|
|
(38 |
) |
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
(817 |
) |
|
1,559 |
|
|
4,281 |
|
|
(4,476 |
) |
Inventories |
|
478 |
|
|
167 |
|
|
987 |
|
|
2,707 |
|
Accounts
payable and accrued expenses |
|
(2,768 |
) |
|
(3,661 |
) |
|
(9,570 |
) |
|
2,192 |
|
Other |
|
(34 |
) |
|
1,278 |
|
|
1,139 |
|
|
1,131 |
|
Net cash
provided by (used in) operating activities |
|
(1,975 |
) |
|
979 |
|
|
(7,011 |
) |
|
(5,607 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Net
purchases of short-term investments and debt securities |
|
— |
|
|
— |
|
|
10,555 |
|
|
13,351 |
|
Proceeds
from sale of assets |
|
— |
|
|
— |
|
|
— |
|
|
264 |
|
Purchases
of property and equipment |
|
(69 |
) |
|
(98 |
) |
|
(596 |
) |
|
(1,932 |
) |
Net cash
provided by (used in) investing activities |
|
(69 |
) |
|
(98 |
) |
|
9,959 |
|
|
11,683 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Payment
of contingent consideration |
|
— |
|
|
— |
|
|
(175 |
) |
|
(808 |
) |
Purchases
of treasury stock |
|
(17 |
) |
|
(22 |
) |
|
(163 |
) |
|
(108 |
) |
Net cash
provided by (used in) financing activities |
|
(17 |
) |
|
(22 |
) |
|
(338 |
) |
|
(916 |
) |
Gain (loss) of
exchange rate changes on cash |
|
(3 |
) |
|
2 |
|
|
(1 |
) |
|
(17 |
) |
Net increase (decrease) in cash and cash
equivalents |
|
(2,064 |
) |
|
861 |
|
|
2,609 |
|
|
5,143 |
|
Cash and cash
equivalents, beginning of period |
|
23,842 |
|
|
20,917 |
|
|
19,169 |
|
|
14,026 |
|
Cash and cash
equivalents, end of period |
|
$ |
21,778 |
|
|
$ |
21,778 |
|
|
$ |
21,778 |
|
|
$ |
19,169 |
|
Westell Technologies, Inc. |
Segment Statement of Operations |
(Amounts in thousands) |
(Unaudited) |
|
Sequential Quarter Comparison |
|
|
|
Three months ended March 31,
2017 |
|
Three months ended December 31, 2016 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Revenue |
|
$ |
6,944 |
|
|
$ |
4,548 |
|
|
$ |
3,894 |
|
|
$ |
15,386 |
|
|
$ |
6,224 |
|
|
$ |
5,525 |
|
|
$ |
3,234 |
|
|
$ |
14,983 |
|
Cost of revenue |
|
4,011 |
|
|
1,991 |
|
|
2,621 |
|
|
8,623 |
|
|
3,713 |
|
|
2,730 |
|
|
2,486 |
|
|
8,929 |
|
Gross profit |
|
2,933 |
|
|
2,557 |
|
|
1,273 |
|
|
6,763 |
|
|
2,511 |
|
|
2,795 |
|
|
748 |
|
|
6,054 |
|
Gross margin |
|
42.2 |
% |
|
56.2 |
% |
|
32.7 |
% |
|
44.0 |
% |
|
40.3 |
% |
|
50.6 |
% |
|
23.1 |
% |
|
40.4 |
% |
Research
& development |
|
1,473 |
|
|
619 |
|
|
257 |
|
|
2,349 |
|
|
1,307 |
|
|
805 |
|
|
302 |
|
|
2,414 |
|
Segment profit |
|
$ |
1,460 |
|
|
$ |
1,938 |
|
|
$ |
1,016 |
|
|
$ |
4,414 |
|
|
$ |
1,204 |
|
|
$ |
1,990 |
|
|
$ |
446 |
|
|
$ |
3,640 |
|
Year-over-Year Quarter Comparison |
|
|
|
Three months ended March 31,
2017 |
|
Three months ended March 31, 2016 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Revenue |
|
$ |
6,944 |
|
|
$ |
4,548 |
|
|
$ |
3,894 |
|
|
$ |
15,386 |
|
|
$ |
5,838 |
|
|
$ |
5,245 |
|
|
$ |
9,821 |
|
|
$ |
20,904 |
|
Cost of revenue |
|
4,011 |
|
|
1,991 |
|
|
2,621 |
|
|
8,623 |
|
|
3,761 |
|
|
2,436 |
|
|
6,814 |
|
|
13,011 |
|
Gross profit |
|
2,933 |
|
|
2,557 |
|
|
1,273 |
|
|
6,763 |
|
|
2,077 |
|
|
2,809 |
|
|
3,007 |
|
|
7,893 |
|
Gross margin |
|
42.2 |
% |
|
56.2 |
% |
|
32.7 |
% |
|
44.0 |
% |
|
35.6 |
% |
|
53.6 |
% |
|
30.6 |
% |
|
37.8 |
% |
Research
& development |
|
1,473 |
|
|
619 |
|
|
257 |
|
|
2,349 |
|
|
2,421 |
|
|
1,471 |
|
|
821 |
|
|
4,713 |
|
Segment profit
(loss) |
|
$ |
1,460 |
|
|
$ |
1,938 |
|
|
$ |
1,016 |
|
|
$ |
4,414 |
|
|
$ |
(344 |
) |
|
$ |
1,338 |
|
|
$ |
2,186 |
|
|
$ |
3,180 |
|
Full-Year Comparison |
|
|
|
Twelve months ended March 31,
2017 |
|
Twelve months ended March 31, 2016 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Revenue |
|
$ |
25,933 |
|
|
$ |
19,321 |
|
|
$ |
17,711 |
|
|
$ |
62,965 |
|
|
$ |
34,407 |
|
|
$ |
21,783 |
|
|
$ |
32,013 |
|
|
$ |
88,203 |
|
Cost of revenue |
|
17,262 |
|
|
9,543 |
|
|
12,411 |
|
|
39,216 |
|
|
20,463 |
|
|
10,661 |
|
|
22,563 |
|
|
53,687 |
|
Gross profit |
|
8,671 |
|
|
9,778 |
|
|
5,300 |
|
|
23,749 |
|
|
13,944 |
|
|
11,122 |
|
|
9,450 |
|
|
34,516 |
|
Gross margin |
|
33.4 |
% |
|
50.6 |
% |
|
29.9 |
% |
|
37.7 |
% |
|
40.5 |
% |
|
51.1 |
% |
|
29.5 |
% |
|
39.1 |
% |
Research
& development |
|
6,738 |
|
|
3,955 |
|
|
1,674 |
|
|
12,367 |
|
|
11,059 |
|
|
5,417 |
|
|
2,841 |
|
|
19,317 |
|
Segment profit |
|
$ |
1,933 |
|
|
$ |
5,823 |
|
|
$ |
3,626 |
|
|
$ |
11,382 |
|
|
$ |
2,885 |
|
|
$ |
5,705 |
|
|
$ |
6,609 |
|
|
$ |
15,199 |
|
Reconciliation of GAAP to non-GAAP IBW Segment Gross
Margin |
|
|
|
Twelve months ended March 31,
2017 |
|
Twelve months ended March 31, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP - IBW segment |
|
$ |
25,933 |
|
|
$ |
8,671 |
|
|
33.4 |
% |
|
$ |
34,407 |
|
|
$ |
13,944 |
|
|
40.5 |
% |
ClearLink DAS E&O
(1) |
|
— |
|
|
1,581 |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
Stock-based
compensation (2) |
|
— |
|
|
9 |
|
|
|
|
|
— |
|
|
(3 |
) |
|
|
|
Non-GAAP - IBW
segment |
|
$ |
25,933 |
|
|
$ |
10,261 |
|
|
39.6 |
% |
|
$ |
34,407 |
|
|
$ |
13,941 |
|
|
40.5 |
% |
(1) Excess and Obsolete inventory charges on
ClearLink DAS inventory and firm purchase commitments. |
(2) Stock-based compensation is a non-cash
expense incurred in accordance with share-based compensation
accounting standards. |
Westell Technologies, Inc. |
Reconciliation of GAAP to non-GAAP Financial
Measures |
(Amounts in thousands, except per share amounts) |
(Unaudited) |
|
|
|
Three months endedMarch 31,
2017 |
|
Three months ended December 31, 2016 |
|
Three months ended March 31, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP -
Consolidated |
|
$ |
15,386 |
|
|
$ |
6,763 |
|
|
44.0 |
% |
|
$ |
14,983 |
|
|
$ |
6,054 |
|
|
40.4 |
% |
|
$ |
20,904 |
|
|
$ |
7,893 |
|
|
37.8 |
% |
Deferred
revenue adjustment (1) |
|
64 |
|
|
64 |
|
|
|
|
|
64 |
|
|
64 |
|
|
|
|
|
63 |
|
|
63 |
|
|
|
|
Stock-based compensation (3) |
|
— |
|
|
10 |
|
|
|
|
|
— |
|
|
10 |
|
|
|
|
|
— |
|
|
(29 |
) |
|
|
|
Non-GAAP -
Consolidated |
|
$ |
15,450 |
|
|
$ |
6,837 |
|
|
44.3 |
% |
|
$ |
15,047 |
|
|
$ |
6,128 |
|
|
40.7 |
% |
|
$ |
20,967 |
|
|
$ |
7,927 |
|
|
37.8 |
% |
|
|
Twelve months endedMarch 31,
2017 |
|
Twelve months ended March 31, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP -
Consolidated |
|
$ |
62,965 |
|
|
$ |
23,749 |
|
|
37.7 |
% |
|
$ |
88,203 |
|
|
$ |
34,516 |
|
|
39.1 |
% |
Deferred
revenue adjustment (1) |
|
254 |
|
|
254 |
|
|
|
|
|
281 |
|
|
281 |
|
|
|
|
ClearLink
DAS E&O (2) |
|
— |
|
|
1,581 |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
Stock-based compensation (3) |
|
— |
|
|
34 |
|
|
|
|
|
— |
|
|
(5 |
) |
|
|
|
Non-GAAP -
Consolidated |
|
$ |
63,219 |
|
|
$ |
25,618 |
|
|
40.5 |
% |
|
$ |
88,484 |
|
|
$ |
34,792 |
|
|
39.3 |
% |
|
|
Three months ended |
|
Twelve months ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated
operating expenses |
|
$ |
7,375 |
|
|
$ |
7,836 |
|
|
$ |
13,104 |
|
|
$ |
39,802 |
|
|
$ |
51,272 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (3) |
|
(238 |
) |
|
(243 |
) |
|
(320 |
) |
|
(1,560 |
) |
|
(1,270 |
) |
Long-lived asset impairment (4) |
|
— |
|
|
— |
|
|
— |
|
|
(1,181 |
) |
|
— |
|
Amortization of intangibles (5) |
|
(1,151 |
) |
|
(1,212 |
) |
|
(1,305 |
) |
|
(4,764 |
) |
|
(5,554 |
) |
Restructuring, separation, and transition (6) |
|
(100 |
) |
|
(490 |
) |
|
(799 |
) |
|
(3,155 |
) |
|
(1,022 |
) |
Total
adjustments |
|
(1,489 |
) |
|
(1,945 |
) |
|
(2,424 |
) |
|
(10,660 |
) |
|
(7,846 |
) |
Non-GAAP consolidated
operating expenses |
|
$ |
5,886 |
|
|
$ |
5,891 |
|
|
$ |
10,680 |
|
|
$ |
29,142 |
|
|
$ |
43,426 |
|
|
|
Three months ended |
|
Twelve months ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated net
income (loss) |
|
$ |
(556 |
) |
|
$ |
(1,807 |
) |
|
$ |
(5,076 |
) |
|
$ |
(15,941 |
) |
|
$ |
(16,212 |
) |
Income tax benefit
(expense) |
|
(38 |
) |
|
(10 |
) |
|
27 |
|
|
(58 |
) |
|
102 |
|
Other income (expense),
net |
|
94 |
|
|
(15 |
) |
|
107 |
|
|
170 |
|
|
169 |
|
GAAP consolidated
operating profit (loss) |
|
$ |
(612 |
) |
|
$ |
(1,782 |
) |
|
$ |
(5,210 |
) |
|
$ |
(16,053 |
) |
|
$ |
(16,483 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue adjustment (1) |
|
64 |
|
|
64 |
|
|
63 |
|
|
254 |
|
|
281 |
|
ClearLink
DAS E&O (2) |
|
— |
|
|
— |
|
|
— |
|
|
1,581 |
|
|
— |
|
Stock-based compensation (3) |
|
248 |
|
|
253 |
|
|
291 |
|
|
1,594 |
|
|
1,265 |
|
Long-lived asset impairment (4) |
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
|
— |
|
Amortization of intangibles (5) |
|
1,151 |
|
|
1,212 |
|
|
1,305 |
|
|
4,764 |
|
|
5,554 |
|
Restructuring, separation, and transition (6) |
|
100 |
|
|
490 |
|
|
799 |
|
|
3,155 |
|
|
1,022 |
|
Total
adjustments |
|
1,563 |
|
|
2,019 |
|
|
2,458 |
|
|
12,529 |
|
|
8,122 |
|
Non-GAAP consolidated
operating profit (loss) from continuing operations |
|
$ |
951 |
|
|
$ |
237 |
|
|
$ |
(2,752 |
) |
|
$ |
(3,524 |
) |
|
$ |
(8,361 |
) |
Depreciation |
|
279 |
|
|
272 |
|
|
458 |
|
|
1,380 |
|
|
1,544 |
|
Non-GAAP consolidated
Adjusted EBITDA (7) from continuing operations |
|
$ |
1,230 |
|
|
$ |
509 |
|
|
$ |
(2,294 |
) |
|
$ |
(2,144 |
) |
|
$ |
(6,817 |
) |
|
|
Three months ended |
|
Twelve months ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated net
income (loss) |
|
$ |
(556 |
) |
|
$ |
(1,807 |
) |
|
$ |
(5,076 |
) |
|
$ |
(15,941 |
) |
|
$ |
(16,212 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue adjustment (1) |
|
64 |
|
|
64 |
|
|
63 |
|
|
254 |
|
|
281 |
|
ClearLink
DAS E&O (2) |
|
— |
|
|
— |
|
|
— |
|
|
1,581 |
|
|
— |
|
Stock-based compensation (3) |
|
248 |
|
|
253 |
|
|
291 |
|
|
1,594 |
|
|
1,265 |
|
Long-lived asset impairment (4) |
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
|
— |
|
Amortization of intangibles (5) |
|
1,151 |
|
|
1,212 |
|
|
1,305 |
|
|
4,764 |
|
|
5,554 |
|
Restructuring, separation, and transition (6) |
|
100 |
|
|
490 |
|
|
799 |
|
|
3,155 |
|
|
1,022 |
|
(Income)
loss from discontinued operations (8) |
|
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
|
(273 |
) |
Total
adjustments |
|
1,563 |
|
|
2,019 |
|
|
2,457 |
|
|
12,529 |
|
|
7,849 |
|
Non-GAAP consolidated
net income (loss) |
|
$ |
1,007 |
|
|
$ |
212 |
|
|
$ |
(2,619 |
) |
|
$ |
(3,412 |
) |
|
$ |
(8,363 |
) |
GAAP consolidated net
income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.27 |
) |
Non-GAAP consolidated
net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.02 |
|
|
$ |
— |
|
|
$ |
(0.04 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
Average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
62,115 |
|
|
61,700 |
|
|
60,847 |
|
|
61,376 |
|
|
60,786 |
|
The Company conforms to U.S. Generally Accepted
Accounting Principles (GAAP) in the preparation of its financial
statements. The schedules above reconcile the Company's
non-GAAP financial measures to the most directly comparable GAAP
measure. The adjustments share one or more of the following
characteristics: they are unusual and the Company does not expect
them to recur in the ordinary course of its business; they do not
involve the expenditure of cash; they are unrelated to the ongoing
operation of the business in the ordinary course; or their
magnitude and timing is largely outside of the Company's
control. Management believes that the non-GAAP financial
information provides meaningful supplemental information to
investors. Management also believes the non-GAAP financial
information reflects the Company's core ongoing operating
performance and facilitates comparisons across reporting
periods. The Company uses these non-GAAP measures when
evaluating its financial results. Non-GAAP measures should
not be viewed as a substitute for the Company's GAAP results.
Footnotes:
(1) On April 1, 2013, the Company
purchased Kentrox. The acquisition required the step-down on
acquired deferred revenue, which resulted in lower revenue that
will not recur once those liabilities have fully settled. The
adjustment removes the step-down on acquired deferred revenue that
was recognized.(2) Non-recurring excess and obsolete
inventory charges on inventory and firm purchase commitments
associated with the previously announced strategic decision related
to the discontinuation of ClearLink DAS.(3) Stock-based
compensation is a non-cash expense incurred in accordance with
share-based compensation accounting
standards.(4) Non-cash impairment related to tangible
long-lived assets associated with the previously announced
strategic decision related to the discontinuation of ClearLink
DAS.(5) Amortization of intangibles is a non-cash
expense arising from previously acquired intangible
assets.(6) Restructuring expenses are not directly
related to the ongoing performance of our fundamental business
operations, including costs relating to abandonment of excess
office space at our headquarters and in New Hampshire, and
severance costs for terminated employees. This adjustment
also includes severance benefits related to the departure of
certain former executives.(7) EBITDA is a non-GAAP
measure that represents Earnings Before Interest, Taxes,
Depreciation, and Amortization. The Company presents Adjusted
EBITDA.(8) This adjustment is a non-recurring charge
related to the release of contingent liabilities related to the
sale of ConferencePlus, which is presented as discontinued
operations.
For additional information, contact:
Tom Minichiello
Chief Financial Officer
Westell Technologies, Inc.
+1 (630) 375-4740
tminichiello@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