Westell Technologies, Inc. (NASDAQ:WSTL), a leading provider of
high-performance wireless infrastructure solutions, announced
results for its fiscal 2018 third quarter ended December 31,
2017 (3Q18). Management will host a conference call to
discuss financial and business results tomorrow, Thursday,
February 8, 2018, at 9:30 AM Eastern Time (details below).
Revenue was $13.7 million and comprised $5.2
million from the In-Building Wireless (IBW) segment, a strong $5.8
million performance from the Intelligent Site Management and
Services (ISMS) segment, and a seasonally low $2.7 million from the
Communication Network Solutions (CNS) segment. Cash and
short-term investments grew to $26.0 million at December 31,
2017, up from $24.2 million at September 30, 2017.
“Westell continued to generate positive operating profit margin
and net income, and increase cash, even with the revenue
seasonality that typifies our December quarters. These
positive results demonstrate the tremendous operating leverage we
have in the business,” said Kirk Brannock, Westell’s President and
Chief Executive Officer.
|
|
|
|
|
3Q183 months ended 12/31/17 |
2Q183 months ended 9/30/17 |
+ favorable /- unfavorable |
Revenue |
$13.7M |
$17.2M |
-$3.5M |
Gross Margin |
44.4% |
42.2% |
+2.2% |
Operating Expenses |
$6.0M |
$7.2M |
+$1.2M |
Operating Margin |
0.3% |
0.3% |
—% |
Net Income |
$0.8M |
$0.7M |
+$0.1M |
Earnings Per Share |
$0.05 |
$0.05 |
$— |
Non-GAAP Operating Expenses (1) |
$4.7M |
$5.7M |
+$1.0M |
Non-GAAP Operating Margin (1) |
10.2% |
9.3% |
+0.9% |
Non-GAAP Net Income (1) |
$1.5M |
$1.7M |
-$0.2M |
Non-GAAP Earnings Per Share (1) |
$0.09 |
$0.11 |
-$0.02 |
Non-GAAP Adjusted EBITDA (1) |
$1.6M |
$1.8M |
-$0.2M |
(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. |
|
“The momentum of the efficiencies created over the past year
resulted in our fifth consecutive quarter of positive non-GAAP
operating profit margin. Along with our healthy cost
structure, we are encouraged by the revenue growth opportunities we
have in the IBW public safety market, which grew sequentially this
quarter, and in emerging wireless network densification
applications like centralized radio access networks (CRAN).
At the same time, we continue to evaluate new growth opportunities
to increase shareholder value,” Brannock added.
In-Building Wireless (IBW)
Segment
IBW’s sequential revenue decrease was driven by lower sales of
our Universal DAS Interface Tray (UDIT) and passive system
components, both of which achieved record quarterly revenue levels
last quarter. IBW’s segment gross margin increase was driven
primarily by lower costs.
|
|
|
|
|
3Q18 3 months ended 12/31/17 |
2Q18 3 months ended 9/30/17 |
+ favorable / - unfavorable |
IBW Segment Revenue |
$5.2M |
$7.9M |
-$2.7M |
IBW Segment Gross Margin |
47.3% |
46.1% |
+1.2% |
IBW Segment R&D Expense |
$0.8M |
$1.4M |
+$0.6M |
IBW Segment Profit |
$1.7M |
$2.2M |
-$0.5M |
|
|
|
|
Intelligent Site Management &
Services (ISMS) Segment
ISMS’s sequential revenue increase was driven primarily by
higher support services revenue and increased sales of Remote
units, resulting in ISMS attaining its highest revenue level since
the December 2015 quarter. ISMS’s segment gross margin
increase was primarily due to a more favorable mix.
|
|
|
|
|
3Q18 3 months ended 12/31/17 |
2Q18 3 months ended 9/30/17 |
+ favorable / - unfavorable |
ISMS Segment Revenue |
$5.8M |
$4.7M |
+$1.1M |
ISMS Segment Gross Margin |
54.5% |
46.9% |
+7.6% |
ISMS Segment R&D Expense |
$0.5M |
$0.5M |
$— |
ISMS Segment Profit |
$2.6M |
$1.7M |
+$0.9M |
|
|
|
|
Communication Network Solutions (CNS)
Segment
CNS product lines are used primarily in the outdoor
communication network; as a result, the December quarter tends to
be its lowest performing quarter. In 3Q18, CNS’s sequential
revenue decrease was most affected by lower sales of Integrated
Cabinets and Tower Mounted Amplifiers. CNS’s gross margin
decrease was primarily due to the lower revenue.
|
|
|
|
|
3Q18 3 months ended 12/31/17 |
2Q18 3 months ended 9/30/17 |
+ favorable / - unfavorable |
CNS Segment Revenue |
$2.7M |
$4.6M |
-$1.9M |
CNS Segment Gross Margin |
16.9% |
30.7% |
-13.8% |
CNS Segment R&D Expense |
$0.2M |
$0.2M |
$— |
CNS Segment Profit |
$0.2M |
$1.2M |
-$1.0M |
|
|
|
|
Conference Call
InformationManagement will discuss financial and business
results during the quarterly conference call on Thursday,
February 8, 2018, 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 February 8,
2018, by calling 888-206-4073 no later than 8:15
AM Central Time (9:15 AM Eastern Time) and providing the operator
confirmation number 46315825.
This news release and related information that
may be discussed on the conference call will be posted on the
Investor Relations section of Westell's website:
http://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 |
|
Nine months ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
11,754 |
|
|
$ |
16,097 |
|
|
$ |
12,746 |
|
|
$ |
43,396 |
|
|
$ |
42,240 |
|
|
Services |
|
1,921 |
|
|
1,135 |
|
|
2,237 |
|
|
4,085 |
|
|
5,339 |
|
|
Total revenue |
|
13,675 |
|
|
17,232 |
|
|
14,983 |
|
|
47,481 |
|
|
47,579 |
|
|
Cost of
revenue: |
|
|
|
|
|
|
|
|
|
|
|
Products |
|
7,114 |
|
|
9,522 |
|
|
7,807 |
|
|
26,060 |
|
|
27,788 |
|
|
Services |
|
485 |
|
|
435 |
|
|
1,122 |
|
|
1,303 |
|
|
2,805 |
|
|
Total cost of
revenue |
|
7,599 |
|
|
9,957 |
|
|
8,929 |
|
|
27,363 |
|
|
30,593 |
|
|
Gross profit |
|
6,076 |
|
|
7,275 |
|
|
6,054 |
|
|
20,118 |
|
|
16,986 |
|
|
Gross margin |
|
44.4 |
% |
|
42.2 |
% |
|
40.4 |
% |
|
42.4 |
% |
|
35.7 |
% |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
R&D |
|
1,542 |
|
|
2,205 |
|
|
2,414 |
|
|
6,023 |
|
|
10,018 |
|
|
Sales and
marketing |
|
1,950 |
|
|
1,992 |
|
|
1,943 |
|
|
6,278 |
|
|
8,220 |
|
|
General
and administrative |
|
1,502 |
|
|
1,809 |
|
|
1,777 |
|
|
5,022 |
|
|
6,340 |
|
|
Intangible amortization |
|
1,047 |
|
|
1,048 |
|
|
1,212 |
|
|
3,142 |
|
|
3,613 |
|
|
Restructuring |
|
— |
|
|
165 |
|
(1 |
) |
490 |
|
(2 |
) |
165 |
|
(1 |
) |
3,055 |
|
(2 |
) |
Long-lived assets impairment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
(3 |
) |
Total
operating expenses |
|
6,041 |
|
|
7,219 |
|
|
7,836 |
|
|
20,630 |
|
|
32,427 |
|
|
Operating profit
(loss) |
|
35 |
|
|
56 |
|
|
(1,782 |
) |
|
(512 |
) |
|
(15,441 |
) |
|
Other income, net |
|
79 |
|
|
677 |
|
(4 |
) |
(15 |
) |
|
799 |
|
(4 |
) |
76 |
|
|
Income (loss) before
income taxes |
|
114 |
|
|
733 |
|
|
(1,797 |
) |
|
287 |
|
|
(15,365 |
) |
|
Income tax benefit
(expense) |
|
685 |
|
(5 |
) |
(13 |
) |
|
(10 |
) |
|
660 |
|
(5 |
) |
(20 |
) |
|
Net income (loss) |
|
$ |
799 |
|
|
$ |
720 |
|
|
$ |
(1,807 |
) |
|
$ |
947 |
|
|
$ |
(15,385 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic net
income (loss) |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
(0.12 |
) |
(6 |
) |
$ |
0.06 |
|
|
$ |
(1.00 |
) |
(6 |
) |
Diluted
net income (loss) |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
(0.12 |
) |
(6 |
) |
$ |
0.06 |
|
|
$ |
(1.00 |
) |
(6 |
) |
Weighted-average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
15,504 |
|
|
15,461 |
|
|
15,391 |
|
(6 |
) |
15,482 |
|
|
15,315 |
|
(6 |
) |
Diluted |
|
15,755 |
|
|
15,672 |
|
|
15,391 |
|
(6 |
) |
15,679 |
|
|
15,315 |
|
(6 |
) |
(1) 2Q18 restructuring expense related
to severance costs for terminated employees.(2) 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.(3) 1Q17 non-cash impairment related to
long-lived assets associated with the discontinuation of ClearLink
DAS.(4) 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.(5) During the
quarter ended December 31, 2017, the Company had an income tax
benefit of $697K from the release of the tax valuation allowance
associated with previously generated alternative minimum tax (AMT)
credits due to the enactment of the Tax Cuts and Jobs Act of
2017.(6) 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) |
|
|
|
|
|
|
|
December 31, 2017 (Unaudited) |
|
March 31, 2017 |
Assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
21,492 |
|
|
$ |
21,778 |
|
Short-term
investments |
|
4,537 |
|
|
— |
|
Accounts receivable,
net |
|
11,070 |
|
|
12,075 |
|
Inventories |
|
9,464 |
|
|
12,511 |
|
Prepaid expenses and
other current assets |
|
864 |
|
|
1,409 |
|
Total
current assets |
|
47,427 |
|
|
47,773 |
|
Land, property and
equipment, net |
|
1,630 |
|
|
1,984 |
|
Intangible assets,
net |
|
12,482 |
|
|
15,624 |
|
Tax receivable,
non-current |
|
697 |
|
|
— |
|
Other non-current
assets |
|
80 |
|
|
160 |
|
Total
assets |
|
$ |
62,316 |
|
|
$ |
65,541 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Accounts payable |
|
$ |
2,494 |
|
|
$ |
4,163 |
|
Accrued expenses |
|
3,528 |
|
|
4,273 |
|
Accrued
restructuring |
|
166 |
|
|
1,171 |
|
Deferred revenue |
|
1,931 |
|
|
2,359 |
|
Total
current liabilities |
|
8,119 |
|
|
11,966 |
|
Deferred revenue
non-current |
|
912 |
|
|
1,102 |
|
Accrued restructuring
non-current |
|
— |
|
|
63 |
|
Other non-current
liabilities |
|
341 |
|
|
236 |
|
Total
liabilities |
|
9,372 |
|
|
13,367 |
|
Total
stockholders’ equity |
|
52,944 |
|
|
52,174 |
|
Total
liabilities and stockholders’ equity |
|
$ |
62,316 |
|
|
$ |
65,541 |
|
|
|
|
|
|
|
Westell Technologies,
Inc.Condensed Consolidated Statement of Cash
Flows(Amounts in thousands)(Unaudited) |
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Nine
months ended December
31, |
|
|
|
2017 |
|
2017 |
|
2016 |
|
Cash flows from operating activities: |
|
|
|
Net income (loss) |
|
$ |
799 |
|
|
$ |
947 |
|
|
$ |
(15,385 |
) |
|
Reconciliation of net income (loss) to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
1,221 |
|
|
3,747 |
|
|
4,714 |
|
|
Long-lived assets impairment |
|
— |
|
|
— |
|
|
1,181 |
|
(1 |
) |
Stock-based compensation |
|
316 |
|
|
988 |
|
|
1,346 |
|
|
Loss on
sale of fixed assets |
|
2 |
|
|
10 |
|
|
11 |
|
|
Restructuring |
|
— |
|
|
165 |
|
|
3,055 |
|
|
Deferred
taxes |
|
(697 |
) |
|
(697 |
) |
|
20 |
|
|
Gain on
disposal of foreign operations |
|
— |
|
|
(608 |
) |
(2 |
) |
— |
|
|
Exchange
rate loss (gain) |
|
(14 |
) |
|
(20 |
) |
|
44 |
|
|
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
— |
|
|
1,025 |
|
|
5,098 |
|
|
Inventory |
|
519 |
|
|
3,047 |
|
|
509 |
|
|
Accounts
payable and accrued expenses |
|
(1,236 |
) |
|
(3,542 |
) |
|
(6,802 |
) |
|
Deferred
revenue |
|
859 |
|
|
(618 |
) |
|
686 |
|
|
Prepaid
expenses and other current assets |
|
170 |
|
|
545 |
|
|
494 |
|
|
Other
assets |
|
7 |
|
|
80 |
|
|
(7 |
) |
|
Net cash
provided by (used in) operating activities |
|
1,946 |
|
|
5,069 |
|
|
(5,036 |
) |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Net
maturity (purchase) of short-term investments |
|
474 |
|
|
(4,537 |
) |
|
10,555 |
|
|
Purchases
of property and equipment, net |
|
(7 |
) |
|
(261 |
) |
|
(527 |
) |
|
Net cash
provided by (used in) investing activities |
|
467 |
|
|
(4,798 |
) |
|
10,028 |
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Purchase
of treasury stock |
|
(102 |
) |
|
(558 |
) |
|
(146 |
) |
|
Payment
of contingent consideration |
|
— |
|
|
— |
|
|
(175 |
) |
|
Net cash
provided by (used in) financing activities |
|
(102 |
) |
|
(558 |
) |
|
(321 |
) |
|
Gain (loss) of
exchange rate changes on cash |
|
(19 |
) |
|
1 |
|
|
2 |
|
|
Net increase
(decrease) in cash and cash equivalents |
|
2,292 |
|
|
(286 |
) |
|
4,673 |
|
|
Cash and cash
equivalents, beginning of period |
|
19,200 |
|
|
21,778 |
|
|
19,169 |
|
|
Cash and cash
equivalents, end of period |
|
$ |
21,492 |
|
(3 |
) |
$ |
21,492 |
|
(3 |
) |
$ |
23,842 |
|
|
(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 December
31, 2017, the Company has $4.5 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 December 31,
2017 |
|
Three months ended September 30, 2017 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Total revenue |
|
$ |
5,223 |
|
|
$ |
5,802 |
|
|
$ |
2,650 |
|
|
$ |
13,675 |
|
|
$ |
7,919 |
|
|
$ |
4,730 |
|
|
$ |
4,583 |
|
|
$ |
17,232 |
|
Gross profit |
|
2,469 |
|
|
3,160 |
|
|
447 |
|
|
6,076 |
|
|
3,650 |
|
|
2,219 |
|
|
1,406 |
|
|
7,275 |
|
Gross margin |
|
47.3 |
% |
|
54.5 |
% |
|
16.9 |
% |
|
44.4 |
% |
|
46.1 |
% |
|
46.9 |
% |
|
30.7 |
% |
|
42.2 |
% |
R&D
expenses |
|
750 |
|
|
547 |
|
|
245 |
|
|
1,542 |
|
|
1,443 |
|
|
523 |
|
|
239 |
|
|
2,205 |
|
Segment profit |
|
$ |
1,719 |
|
|
$ |
2,613 |
|
|
$ |
202 |
|
|
$ |
4,534 |
|
|
$ |
2,207 |
|
|
$ |
1,696 |
|
|
$ |
1,167 |
|
|
$ |
5,070 |
|
|
|
|
|
|
Year-over-Year Quarter Comparison |
|
|
|
|
|
|
|
Three months ended December 31,
2017 |
|
Three months ended December 31, 2016 |
|
|
IBW |
|
ISMS |
|
CNS |
|
Total |
|
IBW |
|
ISMS |
|
CNS |
|
Total |
Total revenue |
|
$ |
5,223 |
|
|
$ |
5,802 |
|
|
$ |
2,650 |
|
|
$ |
13,675 |
|
|
$ |
6,224 |
|
|
$ |
5,525 |
|
|
$ |
3,234 |
|
|
$ |
14,983 |
|
Gross profit |
|
2,469 |
|
|
3,160 |
|
|
447 |
|
|
6,076 |
|
|
2,511 |
|
|
2,795 |
|
|
748 |
|
|
6,054 |
|
Gross margin (1) |
|
47.3 |
% |
|
54.5 |
% |
|
16.9 |
% |
|
44.4 |
% |
|
40.3 |
% |
|
50.6 |
% |
|
23.1 |
% |
|
40.4 |
% |
R&D
expenses |
|
750 |
|
|
547 |
|
|
245 |
|
|
1,542 |
|
|
1,307 |
|
|
805 |
|
|
302 |
|
|
2,414 |
|
Segment profit |
|
$ |
1,719 |
|
|
$ |
2,613 |
|
|
$ |
202 |
|
|
$ |
4,534 |
|
|
$ |
1,204 |
|
|
$ |
1,990 |
|
|
$ |
446 |
|
|
$ |
3,640 |
|
|
|
|
|
|
|
|
Reconciliation of GAAP to non-GAAP IBW Segment Gross
Margin |
|
|
|
|
|
|
|
|
|
Three months
ended December 31, 2017 |
|
Three months endedSeptember 30, 2017 |
|
Three months endedDecember 31, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP - IBW segment |
|
$ |
5,223 |
|
|
$ |
2,469 |
|
|
47.3 |
% |
|
$ |
7,919 |
|
|
$ |
3,650 |
|
|
46.1 |
% |
|
$ |
6,224 |
|
|
$ |
2,511 |
|
|
40.3 |
% |
Stock-based
compensation (1) |
|
— |
|
|
2 |
|
|
|
|
— |
|
|
(2 |
) |
|
|
|
— |
|
|
2 |
|
|
|
Non-GAAP - IBW
segment |
|
$ |
5,223 |
|
|
$ |
2,471 |
|
|
47.3 |
% |
|
$ |
7,919 |
|
|
$ |
3,648 |
|
|
46.1 |
% |
|
$ |
6,224 |
|
|
$ |
2,513 |
|
|
40.4 |
% |
(1) Stock-based compensation is a non-cash expense
incurred in accordance with share-based compensation accounting
standards. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31,
2017 |
|
Nine months ended December 31, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP - IBW segment |
|
$ |
20,098 |
|
|
$ |
9,133 |
|
|
45.4 |
% |
|
$ |
18,989 |
|
|
$ |
5,738 |
|
|
30.2 |
% |
ClearLink DAS E&O
(1) |
|
— |
|
|
— |
|
|
|
|
— |
|
|
1,581 |
|
|
|
Stock-based
compensation (2) |
|
— |
|
|
8 |
|
|
|
|
— |
|
|
7 |
|
|
|
Non-GAAP - IBW
segment |
|
$ |
20,098 |
|
|
$ |
9,141 |
|
|
45.5 |
% |
|
$ |
18,989 |
|
|
$ |
7,326 |
|
|
38.6 |
% |
(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 December 31, 2017 |
|
Three months ended September 30, 2017 |
|
Three months ended December 31, 2016 |
|
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
|
Revenue |
|
Gross Profit |
|
Gross Margin |
GAAP -
Consolidated |
|
$ |
13,675 |
|
|
$ |
6,076 |
|
|
44.4 |
% |
|
$ |
17,232 |
|
|
$ |
7,275 |
|
|
42.2 |
% |
|
$ |
14,983 |
|
|
$ |
6,054 |
|
|
40.4 |
% |
Deferred
revenue adjustment (1) |
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
64 |
|
|
64 |
|
|
|
Stock-based compensation (2) |
|
— |
|
|
11 |
|
|
|
|
— |
|
|
(3 |
) |
|
|
|
— |
|
|
10 |
|
|
|
Non-GAAP -
Consolidated |
|
$ |
13,675 |
|
|
$ |
6,087 |
|
|
44.5 |
% |
|
$ |
17,232 |
|
|
$ |
7,272 |
|
|
42.2 |
% |
|
$ |
15,047 |
|
|
$ |
6,128 |
|
|
40.7 |
% |
|
|
Three months ended |
|
Nine months ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated
operating expenses |
|
$ |
6,041 |
|
|
$ |
7,219 |
|
|
$ |
7,836 |
|
|
$ |
20,630 |
|
|
$ |
32,427 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (2) |
|
(305 |
) |
|
(345 |
) |
|
(243 |
) |
|
(955 |
) |
|
(1,322 |
) |
Long-lived asset impairment (3) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,181 |
) |
Amortization of intangibles (4) |
|
(1,047 |
) |
|
(1,048 |
) |
|
(1,212 |
) |
|
(3,142 |
) |
|
(3,613 |
) |
Restructuring, separation, and transition (5) |
|
— |
|
|
(165 |
) |
|
(490 |
) |
|
(165 |
) |
|
(3,055 |
) |
Total
adjustments |
|
(1,352 |
) |
|
(1,558 |
) |
|
(1,945 |
) |
|
(4,262 |
) |
|
(9,171 |
) |
Non-GAAP consolidated
operating expenses |
|
$ |
4,689 |
|
|
$ |
5,661 |
|
|
$ |
5,891 |
|
|
$ |
16,368 |
|
|
$ |
23,256 |
|
|
|
Three months ended |
|
Nine months ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated net
income (loss) |
|
$ |
799 |
|
|
$ |
720 |
|
|
$ |
(1,807 |
) |
|
$ |
947 |
|
|
$ |
(15,385 |
) |
Less: |
|
|
|
|
|
|
|
|
|
|
Income
tax benefit (expense) |
|
685 |
|
|
(13 |
) |
|
(10 |
) |
|
660 |
|
|
(20 |
) |
Other
income, net |
|
79 |
|
|
677 |
|
|
(15 |
) |
|
799 |
|
|
76 |
|
GAAP consolidated
operating profit (loss) |
|
$ |
35 |
|
|
$ |
56 |
|
|
$ |
(1,782 |
) |
|
$ |
(512 |
) |
|
$ |
(15,441 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue adjustment (1) |
|
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
190 |
|
ClearLink
DAS E&O (6) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,581 |
|
Stock-based compensation (2) |
|
316 |
|
|
342 |
|
|
253 |
|
|
988 |
|
|
1,346 |
|
Long-lived asset impairment (3) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
Amortization of intangibles (4) |
|
1,047 |
|
|
1,048 |
|
|
1,212 |
|
|
3,142 |
|
|
3,613 |
|
Restructuring, separation, and transition (5) |
|
— |
|
|
165 |
|
|
490 |
|
|
165 |
|
|
3,055 |
|
Total
adjustments |
|
1,363 |
|
|
1,555 |
|
|
2,019 |
|
|
4,295 |
|
|
10,966 |
|
Non-GAAP consolidated
operating profit (loss) |
|
$ |
1,398 |
|
|
$ |
1,611 |
|
|
$ |
237 |
|
|
$ |
3,783 |
|
|
$ |
(4,475 |
) |
Depreciation |
|
174 |
|
|
201 |
|
|
272 |
|
|
605 |
|
|
1,101 |
|
Non-GAAP consolidated
Adjusted EBITDA (7) |
|
$ |
1,572 |
|
|
$ |
1,812 |
|
|
$ |
509 |
|
|
$ |
4,388 |
|
|
$ |
(3,374 |
) |
|
|
Three months ended |
|
Nine months ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP consolidated net
income (loss) |
|
$ |
799 |
|
|
$ |
720 |
|
|
$ |
(1,807 |
) |
|
$ |
947 |
|
|
$ |
(15,385 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue adjustment (1) |
|
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
190 |
|
ClearLink
DAS E&O (6) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,581 |
|
Stock-based compensation (2) |
|
316 |
|
|
342 |
|
|
253 |
|
|
988 |
|
|
1,346 |
|
Long-lived asset impairment (3) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,181 |
|
Amortization of intangibles (4) |
|
1,047 |
|
|
1,048 |
|
|
1,212 |
|
|
3,142 |
|
|
3,613 |
|
Restructuring, separation, and transition (5) |
|
— |
|
|
165 |
|
|
490 |
|
|
165 |
|
|
3,055 |
|
Foreign
currency translation adjustment (8) |
|
— |
|
|
(608 |
) |
|
— |
|
|
(608 |
) |
|
— |
|
Income
taxes (9) |
|
(697 |
) |
|
— |
|
|
— |
|
|
(697 |
) |
|
— |
|
Total
adjustments |
|
666 |
|
|
947 |
|
|
2,019 |
|
|
2,990 |
|
|
10,966 |
|
Non-GAAP consolidated
net income (loss) |
|
$ |
1,465 |
|
|
$ |
1,667 |
|
|
$ |
212 |
|
|
$ |
3,937 |
|
|
$ |
(4,419 |
) |
GAAP consolidated net
income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
(0.12 |
) |
|
$ |
0.06 |
|
|
$ |
(1.00 |
) |
Non-GAAP consolidated
net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.09 |
|
|
$ |
0.11 |
|
|
$ |
0.01 |
|
|
$ |
0.25 |
|
|
$ |
(0.29 |
) |
Average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
15,755 |
|
|
15,672 |
|
|
15,425 |
|
|
15,679 |
|
|
15,315 |
|
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) Stock-based
compensation is a non-cash expense incurred in accordance with
share-based compensation accounting standards.(3)
Non-cash impairment related to tangible long-lived assets
associated with the previously announced strategic decision related
to the discontinuation of ClearLink DAS.(4)
Amortization of intangibles is a non-cash expense arising from
previously acquired intangible assets.(5) 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.(6)
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.(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.(9) Adjustment removes
one-time tax effect of changes in valuation allowance reserves
associated with previously generated alternative minimum tax (AMT)
credits due to the enactment of the Tax Cuts and Jobs Act of
2017.
For additional information, contact:
Tom Minichiello Chief Financial Officer Westell Technologies,
Inc. +1 (630) 375 4740tminichiello@westell.com
Westell Technologies (NASDAQ:WSTL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Westell Technologies (NASDAQ:WSTL)
Historical Stock Chart
From Apr 2023 to Apr 2024