Reports Q2 revenue of $123 million RESEARCH TRIANGLE PARK, N.C.,
Feb. 3 /PRNewswire-FirstCall/ -- Aviat Networks, Inc.
(NASDAQ:AVNW), previously known as Harris Stratex Networks, Inc.,
is the wireless expert in advanced IP network migration, today
reported financial results for the second quarter of fiscal year
2010, which ended January 1, 2010. Revenue for the second quarter
of fiscal 2010 was $122.6 million, compared with $190.9 million in
the year ago period. GAAP net loss was $7.9 million or $0.13 per
share, compared with GAAP net loss of $318.7 million or $5.43 per
share in the year ago quarter. In Q2 of fiscal 2009 GAAP results
included $327.1 million of charges comprised primarily of a $301.0
million expense for impairment of goodwill and other
indefinite-lived intangible assets. Non-GAAP Financial Results
Non-GAAP net income for the quarter was $0.8 million, or $0.01 per
share, compared with non-GAAP net income of $8.4 million, or $0.14
per share in the year ago quarter. Non-GAAP results exclude $7.3
million of pre-tax charges comprised of $3.8 million for
amortization of purchased intangibles, $2.0 million of
restructuring and stock compensation expense, and $1.5 million of
expense associated with rebranding and expense incurred in
transitioning from a Harris Corporation subsidiary to an
independent company. A reconciliation of GAAP to non-GAAP financial
measures is provided on Table 4 along with the accompanying notes.
As of the quarter ended January 1, 2010 cash and cash equivalents
were $126.4 million, compared with $133.0 million as of the quarter
ended October 2, 2009. Second Quarter Revenue by Business Segment
Revenue in the North America segment was $49.4 million in the
second quarter of fiscal 2010, compared with $66.6 million in the
year ago period. International revenue was $73.2 million, compared
with $124.3 million in the year ago period. Beginning in Q1 of
fiscal 2010, Network Operations revenue is now reported within the
North America and International segments. "As our first earnings
report under our new company name, we are pleased to report a
sequential improvement in revenue, from $120 million in our first
quarter to approximately $123 million this quarter, despite the
ongoing challenges in the global economy. The demand for our
innovative wireless products and services in various Asia Pacific
regions continues to be a source of financial strength, as well as
pride and accomplishment with the customers we serve," said Harald
Braun, president and chief executive officer of Aviat Networks.
"Signs of stabilization in North America continue, and evidence of
a recovery is also emerging in other select regions of the world."
Outlook and Guidance Due to the current macro-economic situation,
it is difficult to provide financial guidance, and it is likely
that Aviat Networks' actual results could differ materially from
current expectations. The Company's current revenue expectations
for the third quarter of fiscal year 2010 are in the range of $120
million to $130 million. 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 480-629-9724 (Conference ID: 4195176) at approximately 4:20
p.m. A replay of the call will be available starting approximately
one hour after the call's completion until February 10. To access
the replay, dial 303-590-3030 (Conference ID: 4195176). A live and
archived webcast of the conference call will also be available via
the company's Web site at
http://investors.aviatnetworks.com/eventdetail.cfm?eventid=76918.
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 and
expenses 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 Aviat Networks, Inc.
(NASDAQ:AVNW), previously known as Harris Stratex Networks, Inc.,
is the wireless expert in advanced IP network migration, building
the foundation for the 4G/LTE broadband future. We offer
best-of-breed transformational wireless solutions, including
LTE-ready microwave backhaul, WiMAX access 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 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 http://www.aviatnetworks.com/ or join the dialogue at
http://www.twitter.com/aviat_networks. 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 achieve
business plans for Aviat Networks; -- the ability to manage and
maintain key customer relationships; -- the ability to maintain
projected product rollouts, product functionality, anticipated cost
reductions or market acceptance of planned products; -- 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; -- uncertain
economic conditions in the telecommunications sector combined with
operator and supplier consolidation which makes it difficult to
estimate growth. 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
BELOW Table 1 AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX
NETWORKS, INC.) Fiscal Year 2010 Second Quarter Summary CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Quarter Ended Two
Quarters Ended ------------- ------------------ January January
January January 1, 2010 2, 2009 1, 2010 2, 2009 -------- --------
-------- -------- (In millions, except per share amounts) Revenue
from product sales and services $122.6 $190.9 $242.6 $386.7 Cost of
product sales and services (78.2) (138.0) (158.4) (272.9)
Amortization of purchased technology (2.1) (1.8) (4.2) (3.6) Gross
margin 42.3 51.1 80.0 110.2 Research and development expenses
(10.1) (9.5) (20.8) (19.7) Selling and administrative expenses
(35.4) (32.9) (66.2) (69.4) Amortization of intangible assets (1.5)
(1.4) (3.0) (2.8) Goodwill impairment charges - (279.0) - (279.0)
Trade name impairment charges - (22.0) - (22.0) Restructuring
charges (1.5) (1.1) (2.6) (4.4) Operating loss (6.2) (294.8) (12.6)
(287.1) Interest income 0.1 0.3 0.1 0.7 Interest expense (0.4)
(0.7) (0.9) (1.4) Loss before income taxes (6.5) (295.2) (13.4)
(287.8) Income tax expense benefit (1.4) (23.5) (2.3) (24.4) Net
loss $(7.9) $(318.7) $(15.7) $(312.2) Net loss per common share of
Class A and Class B common stock (Note 1): Basic and diluted
$(0.13) $(5.43) $(0.27) $(5.33) Basic and diluted weighted average
shares outstanding 59.3 58.7 59.1 58.6 (1) The net loss per common
share amounts were the same for Class A and Class B in the quarter
and two quarters ended January 2, 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 the quarter and two
quarters ended January 1, 2010. Effective November 19, 2009, under
a change to our Articles of Incorporation approved by shareholders,
all shares of our Class A common stock were reclassified on a
one-to-one basis to shares 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.
(FORMERLY HARRIS STRATEX NETWORKS, INC.) Fiscal Year 2010 Second
Quarter Summary CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
January 1, 2010 July 3, 2009(1) --------------- -------------- (In
millions) Assets Cash and cash equivalents $126.4 $136.8 Short-term
investments - 0.3 Receivables 133.3 142.9 Inventories and unbilled
costs 118.4 126.4 Other current assets 28.1 29.7 Property, plant
and equipment 56.9 57.4 Goodwill 3.5 3.2 Identifiable intangible
assets 77.3 84.1 Non-current deferred taxes 7.5 8.0 Other assets
11.2 11.4 ---- ---- $562.6 $600.2 ====== ====== Liabilities and
Shareholders' Equity Short-term debt $10.0 $10.0 Accounts payable
54.5 69.6 Accrued expenses and other current liabilities 106.6
114.8 Restructuring and other long-term liabilities 1.4 4.3
Redeemable preference shares 8.3 8.3 Non-current deferred taxes and
reserve for uncertain tax positions 6.0 5.3 Shareholders' equity
375.8 387.9 ----- ----- $562.6 $600.2 ====== ====== (1) Derived
from audited financial statements. Table 3 AVIAT NETWORKS, INC.
(FORMERLY HARRIS STRATEX NETWORKS, INC.) Fiscal Year 2010 Second
Quarter Summary CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Two Quarters Ended ------------------------- January 1,
January 2, 2010 2009 ---- ---- Operating Activities Net loss
$(15.7) $(312.2) Adjustments to reconcile net loss to net cash
provided by operating activities: Amortization of identifiable
intangible assets 7.2 6.4 Depreciation and amortization of
property, plant and equipment and capitalized software 10.8 11.7
Non-cash stock-based compensation expense 1.5 1.4 Goodwill
impairment charges - 279.0 Trade name impairment charges - 22.0
Decrease in fair value of warrants - (0.3) Deferred income tax
expense 1.3 22.6 Changes in operating assets and liabilities:
Receivables 9.9 20.6 Unbilled costs and inventories 7.9 (26.2)
Accounts payable and accrued expenses (16.2) - Advance payments and
unearned income (2.5) 2.8 Restructuring liabilities and other (0.3)
(11.4) Net cash provided by operating activities 3.9 16.4 Investing
Activities Cash paid related to acquisition of Telsima in prior
fiscal year (4.2) - Purchases of short-term investments and
available for sale securities - (1.2) Sales of short-term
investments and available for sale securities 0.3 2.7 Additions of
property, plant and equipment (9.4) (7.2) Additions of capitalized
software (1.5) (2.2) Net cash used in investing activities (14.8)
(7.9) Financing Activities Increase in short-term debt - 10.0
Payments on long-term debt - (8.8) Payments on capital lease
obligations (0.2) (0.5) Net cash (used in) provided by financing
activities (0.2) 0.7 Effect of exchange rate changes on cash and
cash equivalents 0.7 (6.5) Net (decrease) increase in cash and cash
equivalents (10.4) 2.7 Cash and cash equivalents, beginning of year
136.8 95.0 Cash and cash equivalents, end of quarter $126.4 $97.7
Table 3 (Continued) AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX
NETWORKS, INC.) Fiscal Year 2010 Second Quarter Summary CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Quarter Ended
------------------------ January 1, January 2, 2010 2009 ---- ----
Operating Activities Net loss $(7.9) $(318.7) Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities: Amortization of identifiable intangible assets 3.5 3.0
Depreciation and amortization of property, plant and equipment and
capitalized software 4.8 6.1 Non-cash stock-based compensation
expense 0.5 0.4 Goodwill impairment charges - 279.0 Trade name
impairment charges - 22.0 Deferred income tax expense 0.9 23.3
Changes in operating assets and liabilities, net of effects from
acquisition: Receivables (18.9) 15.1 Unbilled costs and inventories
9.8 (12.6) Accounts payable and accrued expenses (2.8) (4.3)
Advance payments and unearned income 4.7 1.8 Restructuring
liabilities and other 4.9 (2.6) Net cash (used in) provided by
operating activities (0.5) 12.5 Investing Activities Sales of
short-term investments and available for sale securities - 0.9
Additions of property, plant and equipment (5.5) (2.8) Additions of
capitalized software (0.6) (1.2) Net cash used in investing
activities (6.1) (3.1) Financing Activities Payments on long-term
capital lease obligations (0.2) (0.5) Net cash used in financing
activities (0.2) (0.5) Effect of exchange rate changes on cash and
cash equivalents 0.2 (5.6) Net (decrease) increase in cash and cash
equivalents (6.6) 3.3 Cash and cash equivalents, beginning of
quarter 133.0 94.4 Cash and cash equivalents, end of quarter $126.4
$97.7 AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Quarter and Two Quarters Ended January 1, 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, expenses 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.
(FORMERLY HARRIS STRATEX NETWORKS, INC.) Fiscal Year 2010 Second
Quarter Summary RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations (Unaudited) Quarter
Ended January 1, 2010 --------------- As Non-GAAP % of Reported
Adjustments Non-GAAP Sales -------- ----------- -------- ----- (In
millions, except per share amounts) Revenue from product sales and
services $122.6 $ - $122.6 Cost of product sales and services (A)
(78.2) 0.1 (78.1) Amortization of purchased technology (B) (2.1)
2.1 - Gross margin 42.3 2.2 44.5 36.3% Research and development
expenses (C) (10.1) 0.2 (9.9) 8.1% Selling and administrative
expenses (D) (35.4) 1.9 (33.5) 27.3% Amortization of intangible
assets (E) (1.5) 1.5 - Goodwill impairment charges (F) - - - Trade
name impairment charges (F) - - - Restructuring charges (G) (1.5)
1.5 - Operating (loss) income (6.2) 7.3 1.1 0.9% Interest income
0.1 - 0.1 Interest expense (0.4) - (0.4) ---- --- ---- (Loss)
income before income taxes (6.5) 7.3 0.8 Tax rate Income tax
(expense) benefit (H) (1.4) 1.4 - 0% Net (loss) income $(7.9) $8.7
$0.8 Net (loss) income per common share: Basic and diluted $(0.13)
$0.01 Basic and diluted weighted average shares outstanding 59.3
59.3 Quarter Ended ------------- January 2, 2009 --------------- As
Non-GAAP % of Reported Adjustments Non-GAAP Sales --------
----------- -------- ----- (In millions, except per share amounts)
Revenue from product sales and services $190.9 $- $190.9 Cost of
product sales and services (A) (138.0) 0.3 (137.7) Amortization of
purchased technology (B) (1.8) 1.8 - Gross margin 51.1 2.1 53.2
27.9% Research and development expenses (C) (9.5) 0.1 (9.4) 4.9%
Selling and administrative expenses (D) (32.9) 0.6 (32.3) 16.9%
Amortization of intangible assets (E) (1.4) 1.4 - Goodwill
impairment charges (F) (279.0) 279.0 - Trade name impairment
charges (F) (22.0) 22.0 - Restructuring charges (G) (1.1) 1.1 -
Operating (loss) income (294.8) 306.3 11.5 6.0% Interest income 0.3
- 0.3 Interest expense (0.7) - (0.7) ---- --- ---- (Loss) income
before income taxes (295.2) 306.3 11.1 Tax rate Income tax
(expense) benefit (H) (23.5) 20.8 (2.7) 24% Net (loss) income
$(318.7) $327.1 $8.4 Net (loss) income per common share: Basic and
diluted $(5.43) $0.14 Basic and diluted weighted average shares
outstanding 58.7 58.7 Notes to Table 4: Note A - Cost of sales and
services - Includes adjustment to cost of product sales and
services for the second quarter of fiscal 2010 to remove purchase
accounting adjustments for the amortization of the step-up in the
value of fixed assets ($0.1 million). For the second 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 ($0.2
million) and adjustment to remove non-cash share-based compensation
expense ($0.1 million). Note B - Amortization of purchased
technology - Adjustment for the second quarter of fiscal 2010 and
2009 to remove amortization of purchased intangibles. Note C -
Research and development expenses - Adjustment for the second
quarter of fiscal 2010 to remove non-cash share-based compensation
expense of $0.2 million. For the second quarter of fiscal 2009,
adjustment is to remove non-cash share-based compensation expense
of $0.1 million. Note D - Selling and administrative expenses -
Includes adjustment for the second quarter of fiscal 2010 to remove
purchase accounting adjustments related to the amortization of the
step-up in the value of fixed assets ($0.1 million), to remove
non-cash share-based compensation expense ($0.3 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 ($0.5 million)
and expenses related to implementing new internal information
systems required to provide services currently being phased out
under the Transitional Services Agreement with Harris ($1.0
million). For the second 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 ($0.4
million) and non-cash share-based compensation expense ($0.2
million). Note E - Amortization of intangible assets - Adjustment
for the second quarter of fiscal 2010 and 2009 to remove
amortization of purchased intangibles. Note F -- Goodwill and Trade
name impairment charges -- Adjustment to remove charges for
impairment incurred during the second quarter of fiscal 2009. Note
G - Restructuring charges - Adjustment to remove charges for
restructuring incurred during the second quarter of fiscal 2010 and
2009. Note H - Provision for income taxes - Adjustment to reflect a
zero percent pro forma tax rate for the second quarter of fiscal
2010 and a pro forma 24 percent tax rate for the second quarter of
fiscal 2009. We estimate zero tax expense for the second quarter of
fiscal 2010 due to breakeven pre-tax pro forma income for the first
two quarters of fiscal 2010 and zero pro forma tax expense recorded
in the first quarter of fiscal 2010. The adjustment in the second
quarter of fiscal 2009 primarily consisted of removing the effect
of a $20.8 million increase in the valuation allowance on certain
deferred tax assets. Table 5 AVIAT NETWORKS, INC. (FORMERLY HARRIS
STRATEX NETWORKS, INC.) Fiscal Year-to-Date 2010 Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Condensed
Consolidated Statements of Operations (Unaudited) Two Quarters
Ended January 1, 2010
------------------------------------------------ As Non-GAAP % of
Reported Adjustments Non-GAAP Sales --------- ----------- --------
----- (In millions, except per share amounts) Revenue from product
sales and services $242.6 $-- $242.6 Cost of product sales and
services (A) (158.4) 0.3 (158.1) Amortization of purchased
technology (B) (4.2) 4.2 -- Gross margin 80.0 4.5 84.5 34.8%
Research and development expenses (C) (20.8) 0.3 (20.5) 8.5%
Selling and administrative expenses (D) (66.2) 3.0 (63.2) 26.1%
Amortization of intangible assets (E) (3.0) 3.0 -- Goodwill
impairment charges (F) -- -- -- Trade name impairment charges (F)
-- -- -- Restructuring charges (G) (2.6) 2.6 -- Operating (loss)
income (12.6) 13.4 0.8 0.3% Interest income 0.1 - 0.1 Interest
expense (0.9) - (0.9) (Loss) income before income Taxes (13.4) 13.4
-- Tax rate Income tax (expense) benefit (H) (2.3) 2.3 -- 16% Net
(loss) income $(15.7) $15.7 $-- Net (loss) income per common share:
Basic and diluted $(0.27) $-- Basic and diluted weighted average
shares outstanding 59.1 59.1 Two Quarters Ended January 2, 2009
-------------------------------------------- As Non-GAAP % of
Reported Adjustments Non-GAAP Sales -------- ----------- --------
----- (In millions, except per share amounts) Revenue from product
sales and services $386.7 $-- $386.7 Cost of product sales and
services (A) (272.9) 0.7 (272.2) Amortization of purchased
technology (B) (3.6) 3.6 -- Gross margin 110.2 4.3 114.5 29.6%
Research and development expenses (C) (19.7) 0.3 (19.4) 5.0%
Selling and administrative expenses (D) (69.4) 1.7 (67.7) 17.5%
Amortization of intangible assets (E) (2.8) 2.8 -- Goodwill
impairment charges (F) (279.0) 279.0 -- Trade name impairment
charges (F) (22.0) 22.0 -- Restructuring charges (G) (4.4) 4.4 --
Operating (loss) income (287.1) 314.5 27.4 7.1% Interest income 0.7
- 0.7 Interest expense (1.4) - (1.4) (Loss) income before income
Taxes (287.8) 314.5 26.7 Tax rate Income tax (expense) benefit (H)
(24.4) 18.0 (6.4) 24% Net (loss) income $(312.2) $332.5 $20.3 Net
(loss) income Per common share: Basic and diluted $(5.33) $0.35
Basic and diluted weighted average shares outstanding 58.6 58.6
Notes to Table 5: Note A - Cost of sales and services - Includes
adjustment to cost of product sales and services for the two
quarters ended January 1, 2010 to remove purchase accounting
adjustments for the amortization of the step-up in the value of
fixed assets ($0.2 million) and adjustment to remove non-cash
share-based compensation expense ($0.1 million). For the two
quarters ended January 2, 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 ($0.4 million) and adjustment to remove non-cash
share-based compensation expense ($0.3 million). Note B -
Amortization of purchased technology - Adjustment for the two
quarters ended January 1, 2010 and January 2, 2009 to remove
amortization of purchased intangibles. Note C - Research and
development expenses - Adjustment for the two quarters ended
January 1, 2010 to remove non-cash share-based compensation expense
of $0.3 million. For the two quarters ended January 2, 2009,
adjustment is to remove non-cash share-based compensation expense
of $0.3 million. Note D - Selling and administrative expenses -
Includes adjustment for the two quarters ended January 1, 2010 to
remove purchase accounting adjustments related to the amortization
of the step-up in the value of fixed assets ($0.2 million), to
remove non-cash share-based compensation expense ($1.2 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 ($0.6
million) and expenses related to implementing new internal
information systems required to provide services currently being
phased out under the Transitional Services Agreement with Harris
($1.0 million). For the two quarters ended January 2, 2009,
includes adjustment to remove purchase accounting adjustments
related to the amortization of the step-up in the value of fixed
assets ($0.8 million) and non-cash share-based compensation expense
($0.9 million). Note E - Amortization of intangible assets -
Adjustment for the two quarters ended January 1, 2010 and January
2, 2009 to remove amortization of purchased intangibles. Note F --
Goodwill and Trade name impairment charges -- Adjustment to remove
charges for impairment incurred during the two quarters ended
January 2, 2009. Note G - Restructuring charges - Adjustment to
remove charges for restructuring incurred during the two quarters
ended January 1, 2010 and January 2, 2009. Note H - Provision for
income taxes - Adjustment to reflect a 16 percent pro forma tax
rate for the two quarters ended January 1, 2010 and a pro forma 24
percent tax rate for the two quarters ended January 2, 2009. The
adjustment in the two quarters ended January 2, 2009 primarily
consisted of removing the effect of a $20.8 million increase in the
valuation allowance on certain deferred tax assets. Table 6 AVIAT
NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.) Fiscal Year
2010 Second Quarter Summary SUPPLEMENTAL SCHEDULE OF REVENUE BY
GEOGRAPHICAL AREA (Unaudited) Quarter Ended
-------------------------------------------------------------
January 1, 2010 January 2, 2009 ------------------------------
---------------------------- (In millions) As Non-GAAP As Non-GAAP
Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
------------------------------- ----------------------------- North
America (1) $49.4 $ - $49.4 $66.6 $ - $66.6 International (1):
Africa 18.6 - 18.6 51.7 - 51.7 Europe, Middle East, and Russia 29.9
- 29.9 49.1 - 49.1 Latin America and AsiaPac 24.7 - 24.7 23.5 -
23.5 ---- --- ---- ---- --- ---- Total International 73.2 - 73.2
124.3 - 124.3 ---- --- ---- ----- --- ----- $122.6 $ - $122.6
$190.9 $ - $190.9 ===== ======= ====== ====== ======= ====== (1) We
previously reported three operating segments in our public filings:
North America Microwave, International Microwave and Network
Operations. During the first quarter of fiscal 2010, we realigned
the management structure of our Network Operations segment to
geographically integrate with our North America Microwave and
International Microwave segments to gain cost efficiencies. As a
result, we eliminated the Network Operations segment as a separate
reporting unit and consolidated this segment into our remaining two
segments that are based on the geographical location where revenue
is recognized. Additionally, we have dropped the word "Microwave"
from the name of our North America and International segments.
Segment information in the table above has been adjusted to reflect
this change. Table 7 AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX
NETWORKS, INC.) Fiscal Year-to-Date 2010 Summary SUPPLEMENTAL
SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA (Unaudited) Two Quarters
Ended ------------------------------------------------------------
January 1, 2010 January 2, 2009 -----------------------------
---------------------------- (In millions) As Non-GAAP As Non-GAAP
Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
------------------------------ ----------------------------- North
America (1) $97.4 $ - $97.4 $129.6 $ - $129.6 International (1):
Africa 48.5 - 48.5 117.5 - 117.5 Europe, Middle East, and Russia
48.5 - 48.5 86.9 - 86.9 Latin America and AsiaPac 48.2 - 48.2 52.7
- 52.7 ---- --- ---- ---- --- ---- Total International 145.2 -
145.2 257.1 - 257.1 ----- --- ----- ----- --- ----- $242.6 $ -
$242.6 $386.7 $ - $386.7 ====== ======= ====== ====== =======
====== (1) We previously reported three operating segments in our
public filings: North America Microwave, International Microwave
and Network Operations. During the first quarter of fiscal 2010, we
realigned the management structure of our Network Operations
segment to geographically integrate with our North America
Microwave and International Microwave segments to gain cost
efficiencies. As a result, we eliminated the Network Operations
segment as a separate reporting unit and consolidated this segment
into our remaining two segments that are based on the geographical
location where revenue is recognized. Additionally, we have dropped
the word "Microwave" from the name of our North America and
International segments. Segment information in the table above has
been adjusted to reflect this change. DATASOURCE: Aviat Networks,
Inc. CONTACT: Investors: Mary McGowan, Summit IR Group Inc.,
+1-408-404-5401, ; or Media: Scott Smith, Aviat Networks,
+1-408-944-3529, Web Site: http://www.aviatnetworks.com/
Copyright