SANTA CLARA, Calif.,
Aug. 25 /PRNewswire-FirstCall/ --
Aviat Networks, Inc. ("Aviat," Nasdaq: AVNW), a leading wireless
expert in advanced IP network migration, today reported financial
results for the fourth quarter and fiscal year 2010, which ended
July 2, 2010.
Revenue for the fourth quarter of fiscal 2010 was $116.3 million, compared with $135.2 million in the year ago period. Net
loss was $88.8 million, or
$1.49 per share, compared with a net
loss of $3.4 million, or $0.06 per share, in the year ago quarter. The
results in the fourth quarter of fiscal 2010 include $71.1 million of impairment charges for
intangible assets and property, plant and equipment.
Cash equivalents and short-term investments were $141.7 million, compared with $140.5 million in the prior quarter. The Company
generated positive operating cash flow of $6.5 million in the quarter due to continued
focus on cash management during the period.
Non-GAAP Financial Results
Non-GAAP net loss for the quarter was $7.5 million, or $0.13 per diluted share, compared with non-GAAP
net income of $5.1 million, or
$0.09 per diluted share, in the year
ago quarter. Non-GAAP results exclude $83.5 million of pre-tax charges comprised
primarily of a $75.3 million related
to intangible assets and property, plant and equipment and software
impairment charges, $5.1 million of
restructuring and stock compensation expense and $3.2 million for amortization of purchased
intangibles and partially offset by $2.2
million in gains from settlement of the Telsima acquisition
purchase price and the sale of the San
Antonio facility.
A reconciliation of GAAP to non-GAAP financial measures is
provided on Table 4 along with the accompanying notes.
Fourth Quarter Revenue by Segment
Revenue in the North America
segment was $38.1 million in the
fourth quarter of fiscal 2010, compared with $59.4 million in the year ago period.
International revenue was $78.2
million, compared with $75.8
million in the year ago period.
Fiscal 2010 Results
For fiscal year 2010, the Company reported revenue of
$478.9 million, compared with revenue
of $679.9 million in the prior
year. Net loss for fiscal year 2010 was $130.2 million, or a loss per share of
$2.19, compared with a net loss of
$355.0 million, or a loss per share
of $6.05 for fiscal year 2009.
On a non-GAAP basis, net loss was $14.2
million or $0.24 per diluted
share compared with net income of $28.3
million or $0.48 per diluted
share in the prior year period. Fiscal year 2010 non-GAAP
results exclude $119.8 million of
pre-tax charges comprised primarily of $75.9
million related to intangible assets and property, plant and
equipment and software, impairment charges, $10.3
million of restructuring and stock compensation expense,
$16.9 million in charges for product
transition, $13.8 million for
amortization of purchased intangibles, $2.7
million for Harris transitional and rebranding costs and
partially offset by $2.2 million in
gains from settlement of the Telsima acquisition purchase price and
the sale of the San Antonio
facility.
"While the overall economic environment had an adverse impact on
our business in fiscal 2010, we have recently begun to implement
significant and meaningful strategic and operational changes that
will allow Aviat Networks to stabilize revenues and form a
foundation – based on our core competencies – upon which we can
resume profitable growth," said Chuck
Kissner, Chairman and CEO of Aviat Networks. "In
addition to implementing our restructuring plan, as we had
announced, we have finalized several aspects of our strategic plan.
Where the restructuring plan reduces costs, streamlines our
business and restores future profitability, our strategic plan
refocuses our programs, optimizes our product portfolio and
prioritizes key markets where we have a competitive advantage to
drive long-term sustainable revenue growth."
"During the quarter, as planned, we implemented a change to our
revenue recognition standards, ASU 2009-13 and ASU 2009-14," said
Tom Cronan, CFO of Aviat Networks.
"In addition, we incurred several charges totaling
$83.5 million, including $75.9 million related to intangible assets and
property, plant and equipment and software impairment charges.
With these changes and charges behind us, we can focus on
executing our strategic and operational plan for fiscal 2011.
With our new operating model, strong balance sheet and
consistent cash flow generation, we believe we are well-positioned
to resume profitable growth once our restructuring actions are
complete."
Strategic Plan
The Company has identified several elements of its going-forward
strategic plan which will be complete in September. It will:
- Accelerate innovation in wireless transmission, including
microwave backhaul, in order to extend its performance leadership
over competitive solutions
- Realign its WiMAX business to become more complementary with
and integral to its wireless transmission offerings
- Expand its solutions orientation, increasing focus on its
services business, specifically network operations management and
network design and installation
Operational Objectives for 2011
The Company has established four key objectives for fiscal 2011.
They are to:
- improve operational efficiency,
- improve its ability to serve its customers as a strategic
vendor,
- focus on innovation in the Company's areas of core
competency,
- and achieve profitability post-restructuring.
Outlook
Based on current backlog, business trends and taking into
account operational changes and the uncertain macro-economic
environment, we believe revenue will be in the range of
$100 million to $120 million in the
first fiscal quarter of 2011.
Conference Call
Aviat Networks will host a conference call today at 4:30 p.m. Eastern Time to discuss the Company's
financial results. Those wishing to join the call should dial
480-629-9725 (access code: 4350879) at approximately 4:20 p.m. A replay of the call will be available
starting approximately one hour after the call's completion until
September 1, 2010. To access the
replay, dial 303-590-3030 (Conference ID: 4350879). A live and
archived webcast of the conference call will also be available via
the company's Web site at
http://investors.aviatnetworks.com/events.cfm
Non-GAAP Measures and Comparative Financial
Information
Aviat Networks, Inc. reports information in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP"). Management of
Aviat Networks monitors revenues, cost of product sales and
services, research and development expenses, selling and
administrative expenses, operating income or loss, tax expense or
benefit, net income or loss, and net income or loss per share on a
non-GAAP basis for planning and forecasting results in future
periods, and may use these measures for some management
compensation purposes. These measures exclude certain costs,
expenses and gains as shown on the attached GAAP reconciliation
table. As a result, management is presenting these non-GAAP
measures in addition to results reported in accordance with GAAP to
better communicate underlying operational and financial performance
in each period. Management believes these non-GAAP measures provide
information that is useful to investors in understanding
period-over-period operating results separate and apart from items
that may, or could, have a disproportionate positive or negative
impact on results in any given period. Management also believes
that these non-GAAP measures enhance the ability of an investor to
analyze trends in Aviat Networks' business and to better understand
our performance.
Aviat Networks' management does not, nor does it suggest that
investors should, consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Aviat Networks presents such
non-GAAP financial measures in reporting its financial results to
provide investors with an additional tool to evaluate the Company's
financial performance. Reconciliations of these non-GAAP financial
measures with the most directly comparable financial measures
calculated in accordance with GAAP are included in the tables
below.
About Aviat Networks, Inc.
Aviat Networks, Inc. (Nasdaq: AVNW), previously known as Harris
Stratex Networks, Inc. is a leading wireless expert in advanced IP
network migration, building the foundation for the 4G/LTE broadband
future. We offer best-of-breed wireless transmission solutions
including LTE-ready microwave backhaul and a complete portfolio of
essential service options that enable wireless public and private
telecommunications operators to deliver advanced data, voice and
video and mobility services around the world. Aviat Networks is
agile and adaptive to anticipate what's coming to help our
customers make the right choices, and our products and services are
designed for flexible evolution, no matter what the future brings.
With global reach and local presence on the ground we work by the
side of our customers, allowing them to quickly and cost
effectively seize new market and service opportunities, while
managing migration toward an all- IP future. For more information,
please visit www.aviatnetworks.com or join the dialogue at
www.twitter.com/aviatnetworks.
Forward-Looking Statements
The information contained in this document includes
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 21E of the
Securities Exchange Act and Section 27A of the Securities Act. All
statements, trend analyses and other information contained herein
about the markets for the services and products of Aviat Networks
and trends in revenue, as well as other statements identified by
the use of forward-looking terminology, including "anticipated",
"believe", "plan", "estimate", "expect", "goal", "will", "see",
"continues", "delivering", "view", and "intend", or the negative of
these terms or other similar expressions, constitute
forward-looking statements. These forward-looking statements are
based on estimates reflecting the current beliefs of the senior
management of Aviat Networks. These forward-looking statements
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the
forward-looking statements. Forward-looking statements should
therefore be considered in light of various important factors,
including those set forth in this document. Important factors that
could cause actual results to differ materially from estimates or
projections contained in the forward-looking statements include the
following:
- continued weakness in the global economy affecting customer
spending;
- continued price erosion as a result of increased competition
in the microwave transmission industry;
- the volume, timing and customer, product and geographic mix
of our product orders may have an impact on our operating
results;
- the ability to maintain projected product rollouts, product
functionality, anticipated cost reductions or market acceptance of
planned products;
- the ability to retain key personnel;
- the ability to achieve business plans for Aviat
Networks;
- the ability to manage and maintain key customer
relationships;
- uncertain economic conditions in the telecommunications
sector combined with operator and supplier consolidation which
makes it difficult to estimate growth;
- future costs or expenses related to litigation;
- the ability of our subcontractors to perform or our key
suppliers to manufacture or deliver material;
- customers may not pay for products or services in a timely
manner, or at all;
- the failure of Aviat Networks to protect its intellectual
property rights and its ability to defend itself against
intellectual property infringement claims by others;
- currency and interest rate risks;
- the impact of political, economic and geographic risks on
international sales.
For more information regarding the risks and uncertainties
for our business, see "Risk Factors" in our form 10-K filed with
the U.S. Securities and Exchange Commission ("SEC") on September 4, 2009 as well as other reports filed
by Aviat Networks, Inc., previously known as Harris Stratex
Networks, Inc., with the SEC from time to time. Aviat Networks
undertakes no obligation to update publicly any forward-looking
statement for any reason, except as required by law, even as new
information becomes available or other events occur in the
future.
Financial Tables to Follow:
Table 1
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010 Fourth Quarter
Summary
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Quarter Ended
|
Fiscal Year Ended
|
|
|
July 2, 2010
|
July 3, 2009
|
July 2, 2010
|
July 3, 2009
|
|
|
(In millions, except per share
amounts)
|
|
Revenue from
product sales and services
|
$ 116.3
|
$ 135.2
|
$ 478.9
|
$ 679.9
|
|
Cost of
product sales and services
|
(79.2)
|
(85.4)
|
(320.4)
|
(468.2)
|
|
Charges for
product transition
|
—
|
—
|
(16.9)
|
(29.8)
|
|
Amortization
of purchased technology
|
(1.9)
|
(2.1)
|
(8.2)
|
(7.5)
|
|
Gross
margin
|
35.2
|
47.7
|
133.4
|
174.4
|
|
Research and
development expenses
|
(10.1)
|
(10.8)
|
(41.1)
|
(40.4)
|
|
Selling and
administrative expenses
|
(39.8)
|
(34.3)
|
(141.0)
|
(138.3)
|
|
Amortization
of intangible assets
|
(1.3)
|
(1.4)
|
(5.6)
|
(5.6)
|
|
Acquired
in-process research and development
|
—
|
—
|
—
|
(2.4)
|
|
Intangible
assets, goodwill and other impairment charges
|
(71.9)
|
(10.9)
|
(71.9)
|
(314.8)
|
|
Restructuring charges
|
(3.8)
|
(3.3)
|
(7.1)
|
(8.2)
|
|
Operating
loss
|
(91.7)
|
(13.0)
|
(133.3)
|
(335.3)
|
|
Other
income
|
1.2
|
—
|
1.2
|
—
|
|
Interest
income
|
0.2
|
—
|
0.3
|
0.9
|
|
Interest
expense
|
(0.7)
|
(0.6)
|
(2.2)
|
(2.8)
|
|
Loss before
income taxes
|
(91.0)
|
(13.6)
|
(134.0)
|
(337.2)
|
|
Income tax
benefit (expense)
|
2.2
|
10.2
|
3.8
|
(17.8)
|
|
Net
loss
|
$
(88.8)
|
$
(3.4)
|
$
(130.2)
|
$
(355.0)
|
|
Net loss per
share of Common Stock (Note 1):
|
|
|
|
|
|
Basic and
diluted
|
$ (1.49)
|
$ (0.06)
|
$ (2.19)
|
$ (6.05)
|
|
Basic and
diluted weighted average shares outstanding
|
59.7
|
59.0
|
59.4
|
58.7
|
|
|
|
|
|
|
(1) In
fiscal year 2009, we had Class A and Class B shares of common stock
outstanding. The net loss per common share amounts were the same
for Class A and Class B during fiscal year 2009 because the holders
of each class were legally entitled to equal per share
distributions whether through dividends or in liquidation. There
were no shares of Class B common stock outstanding during fiscal
year 2010. Effective November 19, 2009, under a change to our
certificate of incorporation approved by shareholders, all shares
of our Class A common stock were reclassified on a one-to-one basis
to shares of Common Stock without a class designation; we no longer
have Class A or Class B common stock authorized, issued or
outstanding.
|
|
|
Table 2
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010 Fourth Quarter
Summary
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
(Unaudited)
|
|
|
|
|
July 2, 2010
|
July 3, 2009(1)
|
|
|
(In millions)
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$ 141.7
|
$ 136.8
|
|
Short-term
investments
|
-
|
0.3
|
|
Receivables
|
104.8
|
142.9
|
|
Inventories and unbilled
costs
|
103.7
|
126.4
|
|
Other current assets
|
22.3
|
29.7
|
|
Property, plant and
equipment
|
37.6
|
57.4
|
|
Goodwill
|
6.2
|
3.2
|
|
Identifiable intangible
assets
|
7.5
|
84.1
|
|
Non-current deferred
taxes
|
13.1
|
8.0
|
|
Other assets
|
10.1
|
11.4
|
|
|
$
447.0
|
$
600.2
|
|
Liabilities
and Stockholders’ Equity
|
|
|
|
Short-term debt
|
$ 5.0
|
$ 10.0
|
|
Accounts payable
|
58.6
|
69.6
|
|
Accrued expenses and other
current liabilities
|
97.1
|
114.8
|
|
Restructuring and other
long-term liabilities
|
8.6
|
4.3
|
|
Redeemable preference
shares
|
8.3
|
8.3
|
|
Non-current deferred taxes and
reserve for uncertain tax positions
|
6.2
|
5.3
|
|
Stockholders’ equity
|
263.2
|
387.9
|
|
|
$
447.0
|
$
600.2
|
|
(1)Derived from
audited financial statements.
|
|
|
|
|
Table 3
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010 Fourth Quarter
Summary
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
Fiscal Year Ended
|
|
|
July 2,
2010
|
July 3,
2009
|
|
|
(In millions)
|
|
Operating
Activities
|
|
|
|
Net loss
|
$ (130.2)
|
$ (355.0)
|
|
Adjustments to reconcile net
loss to net cash provided by operating activities:
|
|
|
|
Amortization of identifiable
intangible assets
|
13.8
|
13.8
|
|
Depreciation and amortization of
property, plant and equipment and capitalized software
|
21.9
|
24.3
|
|
Non-cash share-based
compensation expense
|
3.2
|
2.8
|
|
Goodwill impairment
charges
|
-
|
279.0
|
|
Intangible assets impairment
charges
|
63.2
|
32.6
|
|
Property, plant and equipment
impairment charges
|
7.9
|
-
|
|
Charges for product transition
and related impairments, including software
|
13.5
|
29.3
|
|
Acquired in-process research and
development
|
-
|
2.4
|
|
Decrease in fair value of
warrants
|
-
|
(0.6)
|
|
Deferred income tax
expense
|
4.2
|
16.0
|
|
Non-cash other income
|
(1.2)
|
-
|
|
Changes in operating assets and
liabilities:
|
|
|
|
Receivables
|
38.5
|
61.1
|
|
Unbilled costs and
inventories
|
14.6
|
(9.6)
|
|
Accounts payable and accrued
expenses
|
(20.1)
|
(18.7)
|
|
Advance payments and unearned
income
|
(0.1)
|
7.2
|
|
Other assets and liabilities,
net
|
(0.9)
|
(13.3)
|
|
Net cash provided by operating
activities
|
28.3
|
71.3
|
|
Investing
Activities
|
|
|
|
Cash paid related to acquisition
of Telsima
|
(4.2)
|
(4.3)
|
|
Proceeds from sale of property,
plant and equipment
|
5.4
|
-
|
|
Purchases of short-term
investments and available for sale securities
|
-
|
(1.2)
|
|
Sales of short-term investments
and available for sale securities
|
0.3
|
4.0
|
|
Additions of property, plant and
equipment
|
(17.9)
|
(15.8)
|
|
Additions to capitalized
software
|
(2.9)
|
(5.8)
|
|
Net cash used in investing
activities
|
(19.3)
|
(23.1)
|
|
Financing
Activities
|
|
|
|
Proceeds from exercise of stock
options
|
0.1
|
-
|
|
(Decrease) increase in
short-term debt
|
(5.0)
|
10.0
|
|
Payments on long-term
debt
|
-
|
(9.8)
|
|
Payments on capital lease
obligations
|
(0.4)
|
(1.3)
|
|
Net cash used in financing
activities
|
(5.3)
|
(1.1)
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
1.2
|
(5.3)
|
|
Net increase in cash and cash
equivalents
|
4.9
|
41.8
|
|
Cash and cash equivalents,
beginning of year
|
136.8
|
95.0
|
|
Cash and cash equivalents, end
of quarter
|
$
141.7
|
$
136.8
|
|
|
|
|
Table 3
(Continued)
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010 Fourth Quarter
Summary
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
Quarter Ended
|
|
|
July 2,
2010
|
July 3,
2009
|
|
|
(In millions)
|
|
Operating
Activities
|
|
|
|
Net loss
|
$ (88.8)
|
$ (3.4)
|
|
Adjustments to reconcile net
loss to net cash provided by operating activities:
|
|
|
|
Amortization of identifiable
intangible assets
|
3.2
|
3.8
|
|
Depreciation and amortization of
property, plant and equipment and capitalized software
|
6.1
|
6.7
|
|
Non-cash share-based
compensation expense
|
1.4
|
1.0
|
|
Intangible assets impairment
charges
|
63.2
|
10.6
|
|
Property, plant and equipment
impairment charges
|
7.9
|
-
|
|
Decrease in fair value of
warrants
|
-
|
(0.1)
|
|
Deferred income tax
benefit
|
3.3
|
(3.9)
|
|
Non-cash other income
|
(1.2)
|
-
|
|
Changes in operating assets and
liabilities:
|
|
|
|
Receivables
|
10.4
|
0.4
|
|
Unbilled costs and
inventories
|
(3.7)
|
5.7
|
|
Accounts payable and accrued
expenses
|
(3.0)
|
11.3
|
|
Advance payments and unearned
income
|
(1.1)
|
2.4
|
|
Other assets and liabilities,
net
|
8.8
|
(8.5)
|
|
Net cash provided by operating
activities
|
6.5
|
26.0
|
|
Investing
Activities
|
|
|
|
Cash paid related to acquisition
of Telsima
|
-
|
(0.3)
|
|
Proceeds from sale of property,
plant and equipment
|
5.4
|
-
|
|
Sales of short-term investments
and available for sale securities
|
-
|
0.3
|
|
Additions of property, plant and
equipment
|
(4.2)
|
(4.6)
|
|
Additions to capitalized
software
|
(0.8)
|
(2.7)
|
|
Net cash provided by (used in)
investing activities
|
0.4
|
(7.3)
|
|
Financing
Activities
|
|
|
|
Decrease in short-term
debt
|
(5.0)
|
-
|
|
Payments on capital lease
obligations
|
-
|
(0.5)
|
|
Net cash used in financing
activities
|
(5.0)
|
(0.5)
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
(0.7)
|
3.0
|
|
Net increase in cash and cash
equivalents
|
1.2
|
21.2
|
|
Cash and cash equivalents,
beginning of quarter
|
140.5
|
115.6
|
|
Cash and cash equivalents, end
of quarter
|
$
141.7
|
$
136.8
|
|
|
|
|
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS,
INC.)
Quarter and Fiscal Year Ended July 2,
2010 Summaries
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION
G DISCLOSURE
To supplement our consolidated financial statements presented in
accordance with accounting principles generally accepted in
the United States (GAAP), we
provide additional measures of revenue, cost of product sales and
services, gross margin, research and development expenses, selling
and administrative expenses, operating income (loss), income (loss)
before income taxes, income taxes, net income (loss), and net
income (loss) per basic and diluted share adjusted to exclude
certain costs, charges, gains and losses, including such amounts
related to our merger with Stratex Networks. Aviat Networks, Inc.
(“we” or “our”) believes that these non-GAAP financial measures,
when considered together with the GAAP financial measures provide
information that is useful to investors in understanding
period-over-period operating results separate and apart from items
that may, or could, have a disproportionate positive or negative
impact on results in any particular period. We also believe these
non-GAAP measures enhance the ability of investors to analyze
trends in our business and to understand our performance. In
addition, we may utilize non-GAAP financial measures as a guide in
our forecasting, budgeting and long-term planning process and to
measure operating performance for some management compensation
purposes. Any analysis of non-GAAP financial measures should be
used only in conjunction with results presented in accordance with
GAAP. A reconciliation of these non-GAAP financial measures with
the most directly comparable financial measures calculated in
accordance with GAAP follows.
Table 4
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010 Fourth Quarter
Summary
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
Condensed Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
Quarter Ended
|
|
|
July 2, 2010
|
|
July 3, 2009
|
|
|
As
Reported
|
Non-GAAP
Adjustments
|
Non-GAAP
|
% of
Sales
|
|
As
Reported
|
Non-GAAP
Adjustments
|
Non-GAAP
|
% of
Sales
|
|
|
(In millions, except per share
amounts)
|
|
Revenue from
product sales and services
|
$ 116.3
|
$ -
|
$ 116.3
|
|
|
$ 135.2
|
$ -
|
$ 135.2
|
|
|
Cost of
product sales and services (A)
|
(79.2)
|
(0.9)
|
(80.1)
|
|
|
(85.4)
|
0.3
|
(85.1)
|
|
|
Amortization
of purchased technology (B)
|
(1.9)
|
1.9
|
-
|
|
|
(2.1)
|
2.1
|
-
|
|
|
Gross
margin
|
35.2
|
1.0
|
36.2
|
31.1%
|
|
47.7
|
2.4
|
50.1
|
37.1%
|
|
Research and
development expenses (C)
|
(10.1)
|
0.2
|
(9.9)
|
8.5%
|
|
(10.8)
|
0.2
|
(10.6)
|
7.8%
|
|
Selling and
administrative expenses (D)
|
(39.8)
|
6.5
|
(33.3)
|
28.6%
|
|
(34.3)
|
0.7
|
(33.6)
|
24.9%
|
|
Amortization
of intangible assets (E)
|
(1.3)
|
1.3
|
-
|
|
|
(1.4)
|
1.4
|
-
|
|
|
Intangible
assets, goodwill and other impairment charges (F)
|
(71.9)
|
71.9
|
-
|
|
|
(10.9)
|
10.9
|
-
|
|
|
Restructuring charges
(G)
|
(3.8)
|
3.8
|
-
|
|
|
(3.3)
|
3.3
|
-
|
|
|
Operating
(loss) income
|
(91.7)
|
84.7
|
(7.0)
|
(6.0)%
|
|
(13.0)
|
18.9
|
5.9
|
4.4%
|
|
Other income
(H)
|
1.2
|
(1.2)
|
-
|
|
|
-
|
-
|
-
|
|
|
Interest
income
|
0.2
|
-
|
0.2
|
|
|
-
|
-
|
-
|
|
|
Interest
expense
|
(0.7)
|
-
|
(0.7)
|
|
|
(0.6)
|
-
|
(0.6)
|
|
|
(Loss)
income before income taxes
|
(91.0)
|
83.5
|
(7.5)
|
Tax rate
|
|
(13.6)
|
18.9
|
5.3
|
Tax rate
|
|
Income tax
benefit (expense) (I)
|
2.2
|
(2.2)
|
-
|
0%
|
|
10.2
|
(10.4)
|
(0.2)
|
4%
|
|
Net (loss)
income
|
$
(88.8)
|
$
81.3
|
$
(7.5)
|
|
|
$
(3.4)
|
$
8.5
|
$
5.1
|
|
|
Net (loss)
income per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(1.49)
|
|
$
(0.13)
|
|
|
$
(0.06)
|
|
$
0.09
|
|
|
Basic and
diluted weighted average shares outstanding
|
59.7
|
|
59.7
|
|
|
59.0
|
|
59.0
|
|
|
Notes to Table 4:
Note A - Cost of
sales and services - Includes adjustment to cost of product sales
and services for the fourth quarter of fiscal 2010 to remove a $1.0
million gain on sale of land and building in San Antonio and to
remove share-based compensation expense ($0.1 million).
For the fourth quarter of fiscal
2009, includes adjustment to cost of product sales and services to
remove purchase accounting adjustments for the amortization of the
step-up in the value of fixed assets ($0.1 million) and adjustment
to remove share-based compensation expense ($0.2
million).
Note B -
Amortization of purchased technology - Adjustment for the fourth
quarters of fiscal 2010 and 2009 to remove amortization of
purchased intangibles.
Note C - Research
and development expenses - Adjustment for the fourth quarter of
fiscal 2010 to remove non-cash share-based compensation expense of
$0.2 million.
For the fourth quarter of fiscal
2009, adjustment is to remove non-cash share-based compensation
expense of $0.2 million.
Note D - Selling
and administrative expenses - Includes adjustment for the fourth
quarter of fiscal 2010 to remove non-cash share-based compensation
expense ($1.0 million) and various charges for lease and other
asset impairments ($3.4 million). Also includes adjustments to
remove expenses related to rebranding in connection with the change
in Company name required by the license agreement termination
notice from Harris Corporation ($0.3 million). Also includes $1.8
million to remove severance costs accrued for the former
CEO.
For the fourth quarter of fiscal
2009, includes adjustment to remove purchase accounting adjustments
related to the amortization of the step-up in the value of fixed
assets ($0.1 million) and non-cash share-based compensation expense
($0.6 million).
Note E -
Amortization of intangible assets - Adjustment for the fourth
quarter of fiscal 2010 and 2009 to remove amortization of purchased
intangibles.
Note F – Intangible
assets, goodwill and other impairment charges - Adjustments for the
fourth quarter of fiscal 2009 to remove impairment
charges.
Note G -
Restructuring charges - Adjustment to remove charges for
restructuring incurred during the fourth quarters of fiscal 2010
and 2009.
Note H - Other
income - Adjustment to remove a $1.2 million gain on the settlement
of purchase price for the Telsima acquisition.
Note I - Provision
for income taxes - Adjustment to reflect a zero percent pro forma
tax rate for the fourth quarter of fiscal 2010 and a pro forma 4
percent tax rate for the fourth quarter of fiscal 2009. We estimate
zero tax expense for the fourth quarter of fiscal 2010 due to
recording net losses in fourth quarter of fiscal 2010.
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|
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|
|
|
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Table 5
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010
Summary
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
Condensed Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
Fiscal Year Ended
|
|
|
July 2, 2010
|
|
July 3, 2009
|
|
|
As Reported
|
Non-GAAP
Adjustments
|
Non-GAAP
|
% of
Sales
|
|
As Reported
|
Non-GAAP
Adjustments
|
Non-GAAP
|
%
of Sales
|
|
|
(In millions, except per share
amounts)
|
|
Revenue from
product sales and services
|
$ 478.9
|
$ -
|
$ 478.9
|
|
|
$ 679.9
|
$ -
|
$ 679.9
|
|
|
Cost of
product sales and services (A)
|
(320.4)
|
(0.5)
|
(320.9)
|
|
|
(468.2)
|
1.0
|
(467.2)
|
|
|
Charges for
product transition (B)
|
(16.9)
|
16.9
|
-
|
|
|
(29.8)
|
29.8
|
-
|
|
|
Amortization
of purchased technology (C)
|
(8.2)
|
8.2
|
-
|
|
|
(7.5)
|
7.5
|
-
|
|
|
Gross
margin
|
133.4
|
24.6
|
158.0
|
33.0%
|
|
174.4
|
38.3
|
212.7
|
31.3%
|
|
Research and
development expenses (D)
|
(41.1)
|
0.6
|
(40.5)
|
8.5%
|
|
(40.4)
|
0.7
|
(39.7)
|
5.8%
|
|
Selling and
administrative expenses (E)
|
(141.0)
|
11.2
|
(129.8)
|
27.1%
|
|
(138.3)
|
3.0
|
(135.3)
|
19.9%
|
|
Amortization
of intangible assets (F)
|
(5.6)
|
5.6
|
-
|
|
|
(5.6)
|
5.6
|
-
|
|
|
Acquired
in-process research and development (G)
|
-
|
-
|
-
|
|
|
(2.4)
|
2.4
|
-
|
|
|
Intangible
assets, goodwill and other impairment charges (H)
|
(71.9)
|
71.9
|
-
|
|
|
(314.8)
|
314.8
|
-
|
|
|
Restructuring charges
(I)
|
(7.1)
|
7.1
|
-
|
|
|
(8.2)
|
8.2
|
-
|
|
|
Operating
(loss) income
|
(133.3)
|
121.0
|
(12.3)
|
(2.6)%
|
|
(335.3)
|
373.0
|
37.7
|
5.5%
|
|
Other income
(J)
|
1.2
|
(1.2)
|
-
|
|
|
-
|
-
|
-
|
|
|
Interest
income
|
0.3
|
-
|
0.3
|
|
|
0.9
|
-
|
0.9
|
|
|
Interest
expense
|
(2.2)
|
-
|
(2.2)
|
|
|
(2.8)
|
-
|
(2.8)
|
|
|
(Loss)
income before income Taxes
|
(134.0)
|
119.8
|
(14.2)
|
Tax rate
|
|
(337.2)
|
373.0
|
35.8
|
Tax rate
|
|
Income tax
benefit (expense) (K)
|
3.8
|
(3.8)
|
-
|
0%
|
|
(17.8)
|
10.3
|
(7.5)
|
21%
|
|
Net (loss)
income
|
$
(130.2)
|
$
116.0
|
$
(14.2)
|
|
|
$
(355.0)
|
$
383.3
|
$
28.3
|
|
|
Net (loss) income per common
share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(2.19)
|
|
$
(0.24)
|
|
|
$
(6.05)
|
|
$
0.48
|
|
|
Basic and
diluted weighted average shares outstanding
|
59.4
|
|
59.4
|
|
|
58.7
|
|
58.7
|
|
|
|
|
Notes to Table 5:
Note A - Cost of
sales and services - Includes adjustment to cost of product sales
and services for fiscal 2010 to remove a $1.0 million gain on sale
of land and building in San Antonio, to remove purchase accounting
adjustments for the amortization of the step-up in the value of
fixed assets ($0.3 million) and to remove non-cash share-based
compensation expense ($0.2 million).
For fiscal 2009, includes
adjustment to cost of product sales and services to remove purchase
accounting adjustments for the amortization of the step-up in the
value of fixed assets ($0.6 million) and adjustment to remove
non-cash share-based compensation expense ($0.4
million).
Note B - Charges
for product transition - Adjustments for fiscal 2010 to converge
our products onto a single platform. These charges included
$7.9 million related to provisions for legacy product excess
and obsolete inventory, and $5.5 million for impairment of a
building and idle equipment. Additionally, $3.5 million in
charges were recorded for inventory purchase
commitments.
Adjustments for fiscal 2009 to
remove charges for an accelerated transition
towards a common IP-based platform. These charges included
$26.4 million related to provisions for legacy product excess
and obsolete inventory, and write-downs of property, plant,
manufacturing and test equipment. Additionally, $3.4 million
in charges were recorded for inventory purchase
commitments.
Note C -
Amortization of purchased technology - Adjustment for fiscal 2010
and 2009 to remove amortization of purchased
intangibles.
Note D - Research
and development expenses - Adjustment for fiscal 2010 to remove
non-cash share-based compensation expense of $0.6
million.
For fiscal 2009, adjustment is
to remove non-cash share-based compensation expense of $0.7
million.
Note E - Selling
and administrative expenses - Includes adjustment for fiscal 2010
to remove non-cash share-based compensation expense ($2.4 million),
to remove purchase accounting adjustments related to the
amortization of the step-up in the value of fixed assets ($0.3
million) and to remove various charges for lease and other asset
impairments ($3.4 million). Also includes adjustments to remove
expenses related to rebranding in connection with the change in
Company name required by the license agreement termination notice
from Harris Corporation ($1.6 million) and expenses related to
implementing new internal information systems required to provide
services previously provided under the Transitional Services
Agreement with Harris ($1.1 million). Also includes $2.4 million to
remove severance costs accrued for the former CEO and to move
certain executive positions to the new California corporate
headquarters office.
For fiscal 2009, includes
adjustment to remove purchase accounting adjustments related to the
amortization of the step-up in the value of fixed assets ($1.1
million) and non-cash share-based compensation expense ($1.9
million).
Note F -
Amortization of intangible assets - Adjustment for fiscal 2010 and
2009 to remove amortization of purchased intangibles.
Note G - Acquired
in-process research and development - Adjustment to remove charges
incurred during fiscal 2009 from the Telsima acquisition, which
occurred on February 27, 2009.
Note H – Intangible
assets, goodwill and other impairment charges - Adjustments for
fiscal 2009 to remove impairment charges.
Note I -
Restructuring charges - Adjustment to remove charges for
restructuring incurred during fiscal 2010 and 2009.
Note J - Other
income - Adjustment to remove a $1.2 million gain on the settlement
of purchase price for the Telsima acquisition.
Note K - Provision
for income taxes - Adjustment to reflect a zero percent pro forma
tax rate for fiscal 2010 and a pro forma 21 percent tax rate for
fiscal 2009. The adjustment in fiscal 2009 primarily consisted of
removing the effect of a $25.1 million increase in the valuation
allowance on certain deferred tax assets.
|
|
|
|
|
|
|
|
|
|
|
|
Table 6
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010 Fourth Quarter
Summary
|
|
SUPPLEMENTAL SCHEDULE OF REVENUE
BY GEOGRAPHICAL AREA
|
|
(Unaudited)
|
|
|
|
|
Quarter Ended
|
|
|
July 2, 2010
|
July 3, 2009
|
|
|
(In millions)
|
|
North
America
|
$ 38.1
|
$ 59.4
|
|
International:
|
|
|
|
Africa
|
38.0
|
32.7
|
|
Europe, Middle East, and
Russia
|
17.0
|
20.1
|
|
Latin America and
AsiaPac
|
23.2
|
23.0
|
|
Total
International
|
78.2
|
75.8
|
|
|
$
116.3
|
$
135.2
|
|
|
|
|
Table 7
|
|
|
|
AVIAT NETWORKS,
INC.
|
|
|
|
Fiscal Year 2010
Summary
|
|
SUPPLEMENTAL SCHEDULE OF REVENUE
BY GEOGRAPHICAL AREA
|
|
(Unaudited)
|
|
|
|
|
Fiscal Year Ended
|
|
|
July 2, 2010
|
July 3, 2009
|
|
|
(In millions)
|
|
North
America
|
$ 175.1
|
$ 232.0
|
|
International:
|
|
|
|
Africa
|
124.2
|
213.8
|
|
Europe, Middle East, and
Russia
|
88.4
|
139.7
|
|
Latin America and
AsiaPac
|
91.2
|
94.4
|
|
Total
International
|
303.8
|
447.9
|
|
|
$
478.9
|
$
679.9
|
|
|
|
|
SOURCE Aviat Networks, Inc.
Copyright . 25 PR Newswire