Westell Technologies, Inc. (NASDAQ:WSTL), a leading provider of
high-performance wireless infrastructure solutions, announced
results for its fiscal 2018 second quarter ended September 30,
2017 (2Q18). Management will host a conference call to
discuss financial and business results tomorrow, Thursday,
November 2, 2017, at 9:30 AM Eastern Time (details below).
Revenue was $17.2 million, the third consecutive
quarter of sequential growth, and comprised $7.9 million from the
In-Building Wireless (IBW) segment, $4.7 million from the
Intelligent Site Management and Services (ISMS) segment, and $4.6
million from the Communication Network Solutions (CNS) segment.
Westell’s President and Chief Executive Officer
Matthew B. Brady stated, “Positive GAAP earnings and a greater than
twofold sequential improvement of non-GAAP earnings were driven by
revenue growth, a healthy gross margin, and continued expense
management. Revenue highlights included the best IBW results
since the December 2015 quarter, sequential ISMS growth, and solid
CNS performance.”
|
2Q183 months ended 9/30/17 |
1Q183 months ended 6/30/17 |
+ favorable /- unfavorable |
Revenue |
$17.2M |
$16.6M |
$+0.6M |
Gross Margin |
42.2% |
40.8% |
+1.4% |
Operating Expenses |
$7.2M |
$7.4M |
+$0.2M |
Net Income (Loss) |
$0.7M |
($0.6M) |
+$1.3M |
Earnings (Loss) Per Share |
$0.05 |
($0.04) |
+$0.09 |
Non-GAAP Operating Expenses (1) |
$5.7M |
$6.0M |
+$0.3M |
Non-GAAP Net Income (1) |
$1.7M |
$0.8M |
+$0.9M |
Non-GAAP Earnings Per Share (1) |
$0.11 |
$0.05 |
+$0.06 |
Non-GAAP Adjusted EBITDA (1) |
$1.8M |
$1.0M |
+$0.8M |
(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. |
“In fiscal 2Q18, IBW achieved record revenue levels for the
Universal DAS Interface Tray (UDIT) product line, as well as for
our passive system components, which we sell for both commercial
and public safety deployments,” Brady added. “Moving forward,
we are focused on gaining further traction in the IBW public safety
market, the evolving Centralized Radio Access Network (CRAN)
architecture for our ISMS and CNS solutions, and new opportunities
that can deliver consistent and profitable revenue growth.”
Cash and short-term investments were $24.2
million at September 30, 2017, compared to $23.7 million at
June 30, 2017. Efficiencies in inventory management
contributed to the $0.7 million of positive operating cash
flow. This was partly offset by $0.2 million of cash used for
share repurchases and capital expenditures.
In-Building Wireless (IBW)
Segment
IBW’s sequential revenue increase was driven by
record quarterly sales of UDIT and passive system components.
IBW’s segment gross margin increase was driven primarily by the
increased revenue and an improved cost structure.
|
2Q18 3 months ended 9/30/17 |
1Q18 3 months ended 6/30/17 |
+ favorable / - unfavorable |
IBW Segment Revenue |
$7.9M |
$7.0M |
+$0.9M |
IBW Segment Gross Margin |
46.1% |
43.3% |
+2.8% |
IBW Segment R&D Expense |
$1.4M |
$1.5M |
+$0.1M |
IBW Segment Profit |
$2.2M |
$1.6M |
+$0.6M |
Intelligent Site Management &
Services (ISMS) Segment
ISMS’s sequential revenue increase was driven
primarily by increased sales of Remote units. ISMS’s segment
gross margin decrease was primarily due to a less favorable
mix.
|
2Q18 3 months ended 9/30/17 |
1Q18 3 months ended 6/30/17 |
+ favorable / - unfavorable |
ISMS Segment Revenue |
$4.7M |
$4.1M |
+$0.6M |
ISMS Segment Gross Margin |
46.9% |
51.5% |
-4.6% |
ISMS Segment R&D Expense |
$0.5M |
$0.6M |
+$0.1M |
ISMS Segment Profit |
$1.7M |
$1.6M |
+$0.1M |
Communication Network Solutions (CNS)
Segment
CNS’s sequential revenue decrease was primarily
driven by lower sales of Integrated Cabinets. CNS’s gross
margin increase was primarily due to a more favorable mix.
|
2Q18 3 months ended 9/30/17 |
1Q18 3 months ended 6/30/17 |
+ favorable / - unfavorable |
CNS Segment Revenue |
$4.6M |
$5.5M |
-$0.9M |
CNS Segment Gross Margin |
30.7% |
29.6% |
+1.1% |
CNS Segment R&D Expense |
$0.2M |
$0.2M |
$—M |
CNS Segment Profit |
$1.2M |
$1.4M |
-$0.2M |
Conference Call
InformationManagement will discuss financial and business
results during the quarterly conference call on Thursday,
November 2, 2017, 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 November 2,
2017, by calling 888-206-4073 no later than 8:15
AM Central Time (9:15 AM Eastern Time) and providing the operator
confirmation number 45830387.
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:
https://ir.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 following the conclusion of the
conference.
About Westell
TechnologiesWestell 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, 2017, 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.
Westell Technologies,
Inc.Condensed Consolidated Statement of
Operations(Amounts in thousands, except per share
amounts)(Unaudited)
|
|
Three months ended |
|
Six months ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
16,097 |
|
|
$ |
15,545 |
|
|
$ |
15,881 |
|
|
$ |
31,642 |
|
|
$ |
29,494 |
|
|
Services |
|
1,135 |
|
|
1,029 |
|
|
1,899 |
|
|
2,164 |
|
|
3,102 |
|
|
Total revenue |
|
17,232 |
|
|
16,574 |
|
|
17,780 |
|
|
$ |
33,806 |
|
|
$ |
32,596 |
|
|
Cost of
revenue: |
|
|
|
|
|
|
|
|
|
|
|
Products |
|
9,522 |
|
|
9,424 |
|
|
10,380 |
|
|
18,946 |
|
|
19,981 |
|
|
Services |
|
435 |
|
|
383 |
|
|
1,033 |
|
|
818 |
|
|
1,683 |
|
|
Total cost of
revenue |
|
9,957 |
|
|
9,807 |
|
|
11,413 |
|
|
19,764 |
|
|
21,664 |
|
|
Gross profit |
|
7,275 |
|
|
6,767 |
|
|
6,367 |
|
|
14,042 |
|
|
10,932 |
|
|
Gross margin |
|
42.2 |
% |
|
40.8 |
% |
|
35.8 |
% |
|
41.5 |
% |
|
33.5 |
% |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
R&D |
|
2,205 |
|
|
2,276 |
|
|
3,327 |
|
|
4,481 |
|
|
7,604 |
|
|
Sales and
marketing |
|
1,992 |
|
|
2,336 |
|
|
2,896 |
|
|
4,328 |
|
|
6,277 |
|
|
General
and administrative |
|
1,809 |
|
|
1,711 |
|
|
2,218 |
|
|
3,520 |
|
|
4,563 |
|
|
Intangible amortization |
|
1,048 |
|
|
1,047 |
|
|
1,201 |
|
|
2,095 |
|
|
2,401 |
|
|
Restructuring |
|
165 |
|
(1 |
) |
— |
|
|
2,601 |
|
(2 |
) |
165 |
|
(1 |
) |
2,565 |
|
(2 |
) |
Long-lived assets impairment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
(3 |
) |
Total
operating expenses |
|
7,219 |
|
|
7,370 |
|
|
12,243 |
|
|
14,589 |
|
|
24,591 |
|
|
Operating profit
(loss) |
|
56 |
|
|
(603 |
) |
|
(5,876 |
) |
|
(547 |
) |
|
(13,659 |
) |
|
Other income, net |
|
677 |
|
(4 |
) |
43 |
|
|
74 |
|
|
720 |
|
(4 |
) |
91 |
|
|
Income (loss) before
income taxes |
|
733 |
|
|
(560 |
) |
|
(5,802 |
) |
|
173 |
|
|
(13,568 |
) |
|
Income tax expense |
|
(13 |
) |
|
(12 |
) |
|
(8 |
) |
|
(25 |
) |
|
(10 |
) |
|
Net income (loss) |
|
$ |
720 |
|
|
$ |
(572 |
) |
|
$ |
(5,810 |
) |
|
$ |
148 |
|
|
$ |
(13,578 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic net
income (loss) |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.38 |
) |
(5 |
) |
$ |
0.01 |
|
|
$ |
(0.89 |
) |
(5 |
) |
Diluted
net income (loss) |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.38 |
) |
(5 |
) |
$ |
0.01 |
|
|
$ |
(0.89 |
) |
(5 |
) |
Weighted-average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
15,461 |
|
|
15,481 |
|
|
15,299 |
|
(5 |
) |
15,471 |
|
|
15,277 |
|
(5 |
) |
Diluted |
|
15,672 |
|
|
15,481 |
|
|
15,299 |
|
(5 |
) |
15,638 |
|
|
15,277 |
|
(5 |
) |
- 2Q18 restructuring expense related to severance costs for
terminated employees.
- The Company recorded restructuring expense primarily relating
to abandonment of excess office space at its headquarters and in
New Hampshire, and severance costs for terminated employees.
- 1Q17 non-cash impairment related to long-lived assets
associated with the discontinuation of ClearLink DAS.
- During the quarter ended September 30, 2017, the Company
dissolved the NoranTel legal entity which triggered a one-time $0.6
million foreign currency gain with the reversal of a cumulative
translation adjustment.
- All common stock, equity, share and per share amounts have been
retroactively adjusted to reflect a one-for-four reverse stock
split which was effective June 7, 2017.
Westell Technologies,
Inc.Condensed Consolidated Balance
Sheet(Amounts in thousands)
|
|
September 30, 2017 (Unaudited) |
|
March 31, 2017 |
Assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
19,200 |
|
|
$ |
21,778 |
|
Short-term
investments |
|
5,011 |
|
|
— |
|
Accounts receivable,
net |
|
11,038 |
|
|
12,075 |
|
Inventories |
|
9,983 |
|
|
12,511 |
|
Prepaid expenses and
other current assets |
|
1,034 |
|
|
1,409 |
|
Total
current assets |
|
46,266 |
|
|
47,773 |
|
Land, property and
equipment, net |
|
1,798 |
|
|
1,984 |
|
Intangible assets,
net |
|
13,529 |
|
|
15,624 |
|
Other non-current
assets |
|
87 |
|
|
160 |
|
Total
assets |
|
$ |
61,680 |
|
|
$ |
65,541 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Accounts payable |
|
$ |
3,210 |
|
|
$ |
4,163 |
|
Accrued expenses |
|
3,823 |
|
|
4,273 |
|
Accrued
restructuring |
|
415 |
|
|
1,171 |
|
Deferred revenue |
|
1,055 |
|
|
2,359 |
|
Total
current liabilities |
|
8,503 |
|
|
11,966 |
|
Deferred revenue
non-current |
|
929 |
|
|
1,102 |
|
Accrued restructuring
non-current |
|
— |
|
|
63 |
|
Other non-current
liabilities |
|
317 |
|
|
236 |
|
Total
liabilities |
|
9,749 |
|
|
13,367 |
|
Total
stockholders’ equity |
|
51,931 |
|
|
52,174 |
|
Total
liabilities and stockholders’ equity |
|
$ |
61,680 |
|
|
$ |
65,541 |
|
Westell Technologies,
Inc.Condensed Consolidated Statement of Cash
Flows(Amounts in thousands)(Unaudited)
|
|
Three months ended September 30, |
|
Six
months ended September
30, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
Cash flows from operating activities: |
|
|
|
Net income (loss) |
|
$ |
720 |
|
|
$ |
148 |
|
|
$ |
(13,578 |
) |
|
Reconciliation of net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
1,249 |
|
|
2,526 |
|
|
3,230 |
|
|
Long-lived assets impairment |
|
— |
|
|
— |
|
|
1,181 |
|
(1 |
) |
Stock-based compensation |
|
342 |
|
|
672 |
|
|
1,093 |
|
|
Loss on
sale of fixed assets |
|
8 |
|
|
8 |
|
|
11 |
|
|
Restructuring |
|
165 |
|
|
165 |
|
|
2,565 |
|
|
Deferred
taxes |
|
(7 |
) |
|
— |
|
|
14 |
|
|
Gain on
disposal of foreign operations |
|
(608 |
) |
(2 |
) |
(608 |
) |
(2 |
) |
— |
|
|
Exchange
rate loss (gain) |
|
(2 |
) |
|
(6 |
) |
|
— |
|
|
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(723 |
) |
|
1,025 |
|
|
2,722 |
|
|
Inventory |
|
2,207 |
|
|
2,528 |
|
|
820 |
|
|
Accounts
payable and accrued expenses |
|
(2,269 |
) |
|
(2,082 |
) |
|
(4,800 |
) |
|
Accrued
compensation |
|
183 |
|
|
(224 |
) |
|
(1,109 |
) |
|
Deferred
revenue |
|
(800 |
) |
|
(1,477 |
) |
|
(131 |
) |
|
Prepaid
expenses and other current assets |
|
147 |
|
|
375 |
|
|
(23 |
) |
|
Other
assets |
|
66 |
|
|
73 |
|
|
15 |
|
|
Net cash
provided by (used in) operating activities |
|
678 |
|
|
3,123 |
|
|
(7,990 |
) |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Net
maturity (purchase) of short-term investments |
|
(5,011 |
) |
|
(5,011 |
) |
|
10,555 |
|
|
Purchases
of property and equipment, net |
|
(99 |
) |
|
(254 |
) |
|
(498 |
) |
|
Net cash
provided by (used in) investing activities |
|
(5,110 |
) |
|
(5,265 |
) |
|
10,057 |
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Purchase
of treasury stock |
|
(82 |
) |
|
(456 |
) |
|
(141 |
) |
|
Payment
of contingent consideration |
|
— |
|
|
— |
|
|
(175 |
) |
|
Net cash
provided by (used in) financing activities |
|
(82 |
) |
|
(456 |
) |
|
(316 |
) |
|
Gain (loss) of
exchange rate changes on cash |
|
26 |
|
|
20 |
|
|
(3 |
) |
|
Net increase
(decrease) in cash and cash equivalents |
|
(4,488 |
) |
|
(2,578 |
) |
|
1,748 |
|
|
Cash and cash
equivalents, beginning of period |
|
23,688 |
|
|
21,778 |
|
|
19,169 |
|
|
Cash and cash
equivalents, end of period |
|
$ |
19,200 |
|
(3 |
) |
$ |
19,200 |
|
(3 |
) |
$ |
20,917 |
|
|
(1) 1Q17 non-cash impairment related to long-lived assets
associated with the discontinuation of ClearLink DAS.(2) During the
quarter ended September 30, 2017, the Company dissolved the
NoranTel legal entity which triggered a one-time $0.6 million
foreign currency gain with the reversal of a cumulative translation
adjustment. (3) As of September 30, 2017, the Company has $5.0
million of short-term investments in addition to cash and cash
equivalents.
Westell Technologies,
Inc.Segment Statement of
Operations(Amounts in thousands)(Unaudited)
Sequential Quarter Comparison
|
|
Three months ended September 30,
2017 |
|
Three months ended June 30, 2017 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Total revenue |
|
$ |
7,919 |
|
|
$ |
4,730 |
|
|
$ |
4,583 |
|
|
$ |
17,232 |
|
|
$ |
6,956 |
|
|
$ |
4,130 |
|
|
$ |
5,488 |
|
|
$ |
16,574 |
|
Gross profit |
|
3,650 |
|
|
2,219 |
|
|
1,406 |
|
|
7,275 |
|
|
3,014 |
|
|
2,126 |
|
|
1,627 |
|
|
6,767 |
|
Gross margin |
|
46.1 |
% |
|
46.9 |
% |
|
30.7 |
% |
|
42.2 |
% |
|
43.3 |
% |
|
51.5 |
% |
|
29.6 |
% |
|
40.8 |
% |
R&D
expenses |
|
1,443 |
|
|
523 |
|
|
239 |
|
|
2,205 |
|
|
1,463 |
|
|
565 |
|
|
248 |
|
|
2,276 |
|
Segment profit |
|
$ |
2,207 |
|
|
$ |
1,696 |
|
|
$ |
1,167 |
|
|
$ |
5,070 |
|
|
$ |
1,551 |
|
|
$ |
1,561 |
|
|
$ |
1,379 |
|
|
$ |
4,491 |
|
Year-over-Year Quarter Comparison
|
|
Three months ended September 30,
2017 |
|
Three months ended September 30, 2016 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Total revenue |
|
$ |
7,919 |
|
|
$ |
4,730 |
|
|
$ |
4,583 |
|
|
$ |
17,232 |
|
|
$ |
6,644 |
|
|
$ |
5,109 |
|
|
$ |
6,027 |
|
|
$ |
17,780 |
|
Gross profit |
|
3,650 |
|
|
2,219 |
|
|
1,406 |
|
|
7,275 |
|
|
2,233 |
|
|
2,407 |
|
|
1,727 |
|
|
6,367 |
|
Gross margin (1) |
|
46.1 |
% |
|
46.9 |
% |
|
30.7 |
% |
|
42.2 |
% |
|
33.6 |
% |
|
47.1 |
% |
|
28.7 |
% |
|
35.8 |
% |
R&D
expenses |
|
1,443 |
|
|
523 |
|
|
239 |
|
|
2,205 |
|
|
1,594 |
|
|
1,237 |
|
|
496 |
|
|
3,327 |
|
Segment profit |
|
$ |
2,207 |
|
|
$ |
1,696 |
|
|
$ |
1,167 |
|
|
$ |
5,070 |
|
|
$ |
639 |
|
|
$ |
1,170 |
|
|
$ |
1,231 |
|
|
$ |
3,040 |
|
Reconciliation of GAAP to non-GAAP IBW Segment Gross
Margin
|
|
Three months
ended September 30, 2017 |
|
Three months endedJune 30, 2017 |
|
Three months endedSeptember 30, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP - IBW segment |
|
$ |
7,919 |
|
|
$ |
3,650 |
|
|
46.1 |
% |
|
$ |
6,956 |
|
|
$ |
3,014 |
|
|
43.3 |
% |
|
$ |
6,644 |
|
|
$ |
2,233 |
|
|
33.6 |
% |
ClearLink DAS E&O
(1) |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
192 |
|
|
|
Stock-based
compensation (2) |
|
— |
|
|
(2 |
) |
|
|
|
— |
|
|
8 |
|
|
|
|
— |
|
|
2 |
|
|
|
Non-GAAP - IBW
segment |
|
$ |
7,919 |
|
|
$ |
3,648 |
|
|
46.1 |
% |
|
$ |
6,956 |
|
|
$ |
3,022 |
|
|
43.4 |
% |
|
$ |
6,644 |
|
|
$ |
2,427 |
|
|
36.5 |
% |
(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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended September 30,
2017 |
|
Six months ended September 30, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP - IBW segment |
|
$ |
14,875 |
|
|
$ |
6,664 |
|
|
44.8 |
% |
|
$ |
12,765 |
|
|
$ |
3,227 |
|
|
25.3 |
% |
ClearLink DAS E&O
(1) |
|
— |
|
|
— |
|
|
|
|
— |
|
|
1,581 |
|
|
|
Stock-based
compensation (2) |
|
— |
|
|
6 |
|
|
|
|
— |
|
|
5 |
|
|
|
Non-GAAP - IBW
segment |
|
$ |
14,875 |
|
|
$ |
6,670 |
|
|
44.8 |
% |
|
$ |
12,765 |
|
|
$ |
4,813 |
|
|
37.7 |
% |
(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
ended September 30, 2017 |
|
Three months ended June 30, 2017 |
|
Three months ended September 30, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP -
Consolidated |
|
$ |
17,232 |
|
|
$ |
7,275 |
|
|
42.2 |
% |
|
$ |
16,574 |
|
|
6,767 |
|
|
40.8 |
% |
|
$ |
17,780 |
|
|
$ |
6,367 |
|
|
35.8 |
% |
Deferred
revenue adjustment (1) |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
63 |
|
|
63 |
|
|
|
ClearLink
DAS E&O (2) |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
192 |
|
|
|
Stock-based compensation (3) |
|
— |
|
|
(3 |
) |
|
|
|
— |
|
|
25 |
|
|
|
|
— |
|
|
8 |
|
|
|
Non-GAAP -
Consolidated |
|
$ |
17,232 |
|
|
$ |
7,272 |
|
|
42.2 |
% |
|
$ |
16,574 |
|
|
$ |
6,792 |
|
|
41.0 |
% |
|
$ |
17,843 |
|
|
$ |
6,630 |
|
|
37.2 |
% |
|
|
Three months ended |
|
Six months ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated
operating expenses |
|
$ |
7,219 |
|
|
$ |
7,370 |
|
|
$ |
12,243 |
|
|
$ |
14,589 |
|
|
$ |
24,591 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (3) |
|
(345 |
) |
|
(305 |
) |
|
(679 |
) |
|
(650 |
) |
|
(1,079 |
) |
Long-lived asset impairment (4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,181 |
) |
Amortization of intangibles (5) |
|
(1,048 |
) |
|
(1,047 |
) |
|
(1,201 |
) |
|
(2,095 |
) |
|
(2,401 |
) |
Restructuring, separation, and transition (6) |
|
(165 |
) |
|
— |
|
|
(2,601 |
) |
|
(165 |
) |
|
(2,565 |
) |
Total adjustments |
|
(1,558 |
) |
|
(1,352 |
) |
|
(4,481 |
) |
|
(2,910 |
) |
|
(7,226 |
) |
Non-GAAP consolidated
operating expenses |
|
$ |
5,661 |
|
|
$ |
6,018 |
|
|
$ |
7,762 |
|
|
$ |
11,679 |
|
|
$ |
17,365 |
|
|
|
Three months ended |
|
Six months ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated net
income (loss) |
|
$ |
720 |
|
|
$ |
(572 |
) |
|
$ |
(5,810 |
) |
|
$ |
148 |
|
|
$ |
(13,578 |
) |
Less: |
|
|
|
|
|
|
|
|
|
|
Income tax
benefit (expense) |
|
(13 |
) |
|
(12 |
) |
|
(8 |
) |
|
(25 |
) |
|
(10 |
) |
Other income,
net |
|
677 |
|
|
43 |
|
|
74 |
|
|
720 |
|
|
91 |
|
GAAP consolidated
operating profit (loss) |
|
$ |
56 |
|
|
$ |
(603 |
) |
|
$ |
(5,876 |
) |
|
$ |
(547 |
) |
|
$ |
(13,659 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue adjustment (1) |
|
— |
|
|
— |
|
|
63 |
|
|
— |
|
|
126 |
|
ClearLink
DAS E&O (2) |
|
— |
|
|
— |
|
|
192 |
|
|
— |
|
|
1,581 |
|
Stock-based compensation (3) |
|
342 |
|
|
330 |
|
|
687 |
|
|
672 |
|
|
1,093 |
|
Long-lived asset impairment (4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
Amortization of intangibles (5) |
|
1,048 |
|
|
1,047 |
|
|
1,201 |
|
|
2,095 |
|
|
2,401 |
|
Restructuring, separation, and transition (6) |
|
165 |
|
|
— |
|
|
2,601 |
|
|
165 |
|
|
2,565 |
|
Total adjustments |
|
1,555 |
|
|
1,377 |
|
|
4,744 |
|
|
2,932 |
|
|
8,947 |
|
Non-GAAP consolidated
operating profit (loss) |
|
$ |
1,611 |
|
|
$ |
774 |
|
|
$ |
(1,132 |
) |
|
$ |
2,385 |
|
|
$ |
(4,712 |
) |
Depreciation |
|
201 |
|
|
230 |
|
|
444 |
|
|
431 |
|
|
829 |
|
Non-GAAP consolidated
Adjusted EBITDA (7) |
|
$ |
1,812 |
|
|
$ |
1,004 |
|
|
$ |
(688 |
) |
|
$ |
2,816 |
|
|
$ |
(3,883 |
) |
|
|
Three months ended |
|
Six months ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated net
income (loss) |
|
$ |
720 |
|
|
$ |
(572 |
) |
|
$ |
(5,810 |
) |
|
$ |
148 |
|
|
$ |
(13,578 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue adjustment (1) |
|
— |
|
|
— |
|
|
63 |
|
|
— |
|
|
126 |
|
ClearLink
DAS E&O (2) |
|
— |
|
|
— |
|
|
192 |
|
|
— |
|
|
1,581 |
|
Stock-based compensation (3) |
|
342 |
|
|
330 |
|
|
687 |
|
|
672 |
|
|
1,093 |
|
Long-lived asset impairment (4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
Amortization of intangibles (5) |
|
1,048 |
|
|
1,047 |
|
|
1,201 |
|
|
2,095 |
|
|
2,401 |
|
Restructuring, separation, and transition (6) |
|
165 |
|
|
— |
|
|
2,601 |
|
|
165 |
|
|
2,565 |
|
Foreign
currency translation adjustment (8) |
|
(608 |
) |
|
— |
|
|
— |
|
|
(608 |
) |
|
— |
|
Total adjustments |
|
947 |
|
|
1,377 |
|
|
4,744 |
|
|
2,324 |
|
|
8,947 |
|
Non-GAAP consolidated
net income (loss) |
|
$ |
1,667 |
|
|
$ |
805 |
|
|
$ |
(1,066 |
) |
|
$ |
2,472 |
|
|
$ |
(4,631 |
) |
GAAP consolidated net
income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.38 |
) |
|
$ |
0.01 |
|
|
$ |
(0.89 |
) |
Non-GAAP consolidated
net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.11 |
|
|
$ |
0.05 |
|
|
$ |
(0.07 |
) |
|
$ |
0.16 |
|
|
$ |
(0.30 |
) |
Average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
15,672 |
|
|
15,617 |
|
|
15,299 |
|
|
15,638 |
|
|
15,277 |
|
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)
Non-recurring foreign currency translation gain related to the
wind-up of the NoranTel legal entity during the quarter ended
September 30, 2017.
For additional information, contact:
Tom Minichiello Chief
Financial Officer Westell Technologies, Inc. +1 (630) 375
4740tminichiello@westell.com |
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