MILPITAS, Calif., May 13,
2019 /PRNewswire/ -- Aviat Networks, Inc. (NASDAQ: AVNW), ("Aviat
Networks" or the "Company"), the leading expert in wireless
transport solutions, today reported financial results for its
fiscal 2019 third quarter and nine months ended March 29,
2019.
"As indicated in our release last week, our fiscal 2019 third
quarter results were impacted by a component shortage in
North America, which has since
been corrected, and a slowdown in spending in Africa. However, our outlook for the fiscal
fourth quarter and fiscal year remains strong. North America continues to be an area of
growth and fuels our optimism over the coming years.
Internationally, we are adjusting our near-term outlook for
Africa and transitioning our
business model accordingly. Asia
continues to grow as evidenced by our third quarter and
year-to-date results, and we expect this momentum to continue."
"As we've seen for the past several years, our business can
fluctuate quarter to quarter. With that said, over a two-quarter
period, you can see more stability and for the third year in a row,
profitability has improved. We have also returned Aviat to growth
over the past two years and expect to be in position to improve our
operations in the coming year. We continue to drive innovation in
our product offering and expand our services, resulting in new
business and future opportunities, both in the private network and
service provider segments. We also anticipate further improvements
to our balance sheet and feel confident in our ability to enhance
shareholder value."
Fiscal 2019 Third Quarter and Nine-Month Results
Comparisons
Revenue Comparisons:
The Company reported total revenue of $54.0 million for its fiscal 2019 third quarter
as compared to $62.1 million in
the comparable fiscal 2018 period. The year-over-year change was
due to a $3.2 million decline in
North America revenue, with the
majority related to a component shortage which has since been
corrected, and a $4.9 million decline
in international revenue, primarily due to lower spending in
Africa, and offset by an increase
in revenue primarily in the Asia
region.
For the nine-month period in fiscal 2019, the Company reported
total revenue of $179.6 million,
roughly in line with the comparable fiscal 2018 period. The
year-over-year change for the nine-month period was primarily
related to a $6.1 million decline in
North America revenue due to the
component shortage referenced above, as well as the timing of
customer project milestones. This was partially offset by a
$5.7 million increase in
international revenue, with a significant increase in Asia.
Gross Profit Margin Comparisons:
GAAP gross margin for the fiscal 2019 third quarter was 30.1%,
as compared to 29.2% in the comparable fiscal 2018 period, an
improvement of 90 basis points. Non-GAAP gross margin for the
fiscal 2019 third quarter was 30.2%, as compared to 29.1% in the
comparable fiscal 2018 period, an improvement of 110 basis points.
The year-over-year improvement in gross margin was driven primarily
by improved profitability of product sales and lower supply chain
costs.
GAAP gross margin for the fiscal 2019 nine-month period was
31.5% as compared to 31.8% in the comparable year-ago period, a
decline of 30 basis points. Non-GAAP gross margin for the fiscal
2019 nine-month period was 31.6% as compared to 31.8% for the
nine-month period of fiscal 2018, a decline of 20 basis points. The
modest year-over-year decline in gross margin was primarily due to
lower service margin rates caused by lower services volume in
Africa and the Middle East, offset by higher product margins
and lower supply chain costs.
Operating Expense Comparisons:
GAAP total operating expenses for the fiscal 2019 third quarter
were $18.8 million as compared
to $19.5 million in the
comparable fiscal 2018 period, an improvement of $0.7 million or 3.8%. Non-GAAP total operating
expenses for the fiscal 2019 third quarter, excluding the impact of
share-based compensation and costs associated with
strategic-related activities, were $17.9
million as compared to $19.0
million reported in the fiscal 2018 third quarter, an
improvement of $1.1 million or 5.9%.
The year-over-year improvement was primarily related to a reduction
in related variable compensation expense, offset by higher research
and development expenses, both on a GAAP and non-GAAP basis as the
Company continues to invest in innovation and advance its
offerings. GAAP total operating expenses for the fiscal 2019
nine-month period were $57.8 million
as compared to $57.0 million in the
comparable fiscal 2018 period. Non-GAAP total operating expenses
for the fiscal 2019 nine-month period, excluding the impact of
share-based compensation, restructuring charges (recovery) and
costs associated with strategic-related activities, were
$55.3 million as compared to
$54.8 million reported for the
comparable fiscal 2018 period, with the increase primarily related
to a $0.9 million increase in
non-GAAP research and development expenses to fund growth
initiatives and future product roll-outs.
Operating Income (Loss) Comparisons:
GAAP operating loss was $2.5 million for the fiscal 2019 third
quarter, as compared to a GAAP operating loss of $1.4 million for the comparable fiscal 2018
period. Non-GAAP operating loss was $1.6 million for the fiscal 2019 third
quarter as compared to a non-GAAP operating loss of $0.9 million for the comparable fiscal 2018
period. For the fiscal 2019 nine-month period, the Company reported
a GAAP operating loss of $1.1 million as compared to GAAP operating
income of $0.3 million in the
comparable year-ago period. For the fiscal 2019 nine-month period,
the Company reported non-GAAP operating income of $1.5 million, as compared to non-GAAP
operating income of $2.3 million
for the fiscal 2018 nine-month period.
Income Tax Provision (Benefit) Comparisons:
For the third quarter ended March 29,
2019, the Company recorded a benefit from income taxes of
$6.8 million, as compared to a
provision for income taxes of $1.0
million in the comparable fiscal 2018 period.
The benefit for the third quarter ended March 29, 2019 was primarily due to a partial
release of valuation allowance related to the Company's U.S.
deferred tax asset, based on sufficient positive objective evidence
that the Company would generate sufficient taxable income in the
U.S. to realize the deferred tax assets. Realization of the
Company's deferred tax assets is primarily dependent upon future
taxable income. If the Company's assumptions and consequently its
estimates change in the future, the valuation allowances may be
increased or decreased, resulting in a respective increase or
decrease in income tax expense.
The net income tax benefit for the fiscal 2018 nine-month period
was primarily due to the foreign tax refunds received from the
Inland Revenue Authority of Singapore ("IRAS") of $1.3 million and the release of a valuation
allowance related to refundable AMT credit of $3.3 million as provided under the Tax Act,
offset by tax expense related to profitable subsidiaries.
Net Income (Loss) Attributable to Aviat Networks
Comparisons:
For the fiscal 2019 third quarter, the Company reported GAAP net
income of $4.3 million or net
income per diluted share of $0.78, as
compared to a GAAP net loss of $2.6
million or a net loss per diluted share of $0.49 in the fiscal 2018 third quarter. The
Company reported a non-GAAP net loss in the fiscal 2019 third
quarter of $1.8 million or a net loss
per diluted share of $0.33, as
compared to a non-GAAP net loss in the fiscal 2018 third quarter of
$1.4 million or a net loss per
diluted share of $0.26.
For the nine-month period in fiscal 2019, the Company reported
GAAP net income of $5.9 million
or net income per diluted share of $1.05, as compared to GAAP net income of
$1.8 million or net income per
diluted share of $0.32. The Company
reported non-GAAP net income of $0.6
million or net income per diluted share of $0.11, as compared to non-GAAP net income of
$0.9 million or net income per
diluted share of $0.17 in the
comparable fiscal 2018 period.
The Company reported an Adjusted Earnings Before Taxes,
Depreciation and Amortization ("EBITDA") loss of $0.5 million for the fiscal 2019 third quarter,
as compared to Adjusted EBITDA of $0.2
million in the fiscal 2018 third quarter. For the fiscal
2019 nine-month period, Adjusted EBITDA was $4.9 million, as compared to Adjusted EBITDA of
$5.7 million in the fiscal 2018
nine-month period.
Balance Sheet Updates
As of March 29, 2019, the Company
reported cash, cash equivalents and restricted cash of $36.1 million, as compared to cash, cash
equivalents and restricted cash of $37.4
million at June 29, 2018.
Note, during the fiscal 2019 nine-month period, the Company
repurchased approximately $1.9
million of its common stock under its Stock Repurchase
Program. On a sequential basis, when comparing against the fiscal
2019 second quarter, the Company's cash, cash equivalents and
restricted cash position increased by $4.5
million. The sequential improvement was anticipated and was
a result of stronger collections in North
America.
A reconciliation of GAAP to non-GAAP financial measures for the
third quarter and nine months of fiscal 2019, along with the
accompanying notes, is provided in Table 3 below.
Fiscal 2019 Fourth Quarter and Full-Year Outlook
- The Company expects revenue in the fiscal 2019 fourth quarter
to be in the range of $66.0 million - $71.0 million, which would result in total
revenue of approximately $246.0
million - $251.0 million in
fiscal 2019, or growth of approximately 1.0 - 3.0%. As previously
communicated, fiscal fourth quarter revenues were anticipated to be
stronger than the fiscal 2019 third quarter and the Company has
resolved the component shortage which adversely impacted fiscal
2019 third quarter results. The narrowed range from the Company's
prior guidance is related to the current and anticipated slowdown
in spending in Africa, offset by a
strong outlook in North
America.
- Non-GAAP gross margins in the fiscal 2019 fourth quarter are
anticipated to be 35.5 - 36.5%, resulting in non-GAAP gross margin
of approximately 33.0% in fiscal 2019, in line with the Company's
prior guidance.
- Non-GAAP operating expenses in the fiscal 2019 fourth quarter
are anticipated to be in the range of $18.0
million - $19.0 million,
with the higher end of the range dependent upon achieving
anticipated top- and bottom-line results. This would result in
total operating expenses of $73.5 million - $74.5 million for fiscal 2019.
- Non-GAAP operating income in the fiscal 2019 fourth quarter is
anticipated to be approximately $6.0
million, resulting in fiscal 2019 non-GAAP operating income
of approximately $7.5 million.
- Adjusted EBITDA in the fiscal 2019 fourth quarter is
anticipated to be approximately $7.0
million, resulting in fiscal 2019 Adjusted EBITDA of
$11.0 million - $12.0 million, with the minor variance from prior
guidance based on the current spending environment in Africa. However, the Company anticipates a
year-over-year bottom-line improvement, representing the third year
in a row.
Conference Call Details
Aviat Networks will host a conference call at 4:30 p.m. Eastern Time (ET) on Monday,
May 13, 2019 to discuss its results for the fiscal 2019 third
quarter and nine-month periods. To listen to the live conference
call, please dial toll free (US/CAN) (866) 562-9910, (INTL) (661)
378-9805, conference ID: 3588565. Investors are invited to listen
via webcast, which will be broadcasted live and via replay
approximately two hours after the call at
http://investors.aviatnetworks.com/events-and-presentations/events.
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 gross margin, research and development
expenses, selling and administrative expenses, operating income
(loss), income tax provision (benefit), income (loss) from
continuing operations attributable to Aviat Networks, basic and
diluted net income (loss) per share from continuing operations
attributable to Aviat Networks, adjusted income before interest,
tax, depreciation and amortization (Adjusted EBITDA) attributable
to Aviat Networks adjusted to exclude certain costs, charges, gains
and losses, 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, gains and losses as shown on the attached
Reconciliation of non-GAAP Financial Measures table (Table 3).
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
its 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 these non-GAAP financial measures in reporting its
financial results to provide investors with an additional tool to
evaluate its 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. works to provide dependable products,
services and support to our customers. With more than one million
systems sold into 170 countries worldwide, communications service
providers and private network operators including state/local
government, utility, federal government and defense organizations
trust Aviat Networks with their critical applications. Coupled with
a long history of microwave innovations, Aviat Networks provides a
comprehensive suite of localized professional and support services
enabling customers to drastically simplify both their networks and
their lives. For more than 50 years, the experts at Aviat Networks
have delivered high performance products, simplified operations and
the best overall customer experience. Aviat Networks is
headquartered in Milpitas,
California. For more information, visit
www.aviatnetworks.com or connect with Aviat Networks on
Twitter, Facebook, and LinkedIn.
Forward-Looking Statements
The information contained in this document includes
forward-looking statements within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, Section 21E of the Securities Exchange Act of 1934 and
Section 27A of the Securities Act of 1933 including Aviat
Networks' beliefs and expectations regarding business conditions,
new product solutions, customer positioning, revenue, future
orders, bookings, new contracts, cost structure, operating income,
profitability in fiscal 2019, process improvements, realignment
plans and review of strategic alternatives. All statements, trend
analyses and other information contained herein regarding the
foregoing beliefs and expectations, as well as about the markets
for the services and products of Aviat Networks and trends in
revenue, and other statements identified by the use of
forward-looking terminology, including "anticipate," "believe,"
"plan," "estimate," "expect," "goal," "will," "see," "continue,"
"delivering," "view," and "intend," or the negative of these terms
or other similar expressions, constitute forward-looking
statements. Forward-looking statements are neither historical facts
nor assurances of future performance. Instead, forward-looking
statements are based on estimates reflecting the current beliefs,
expectations and assumptions of the senior management of Aviat
Networks regarding the future of our business, future plans and
strategies, projections, anticipated events and trends, the economy
and other future conditions. Such 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. Therefore, you should
not rely on any of these forward-looking statements. Important
factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking
statements include the following:
- continued price and margin erosion as a result of increased
competition in the microwave transmission industry;
- the impact of the volume, timing and customer, product and
geographic mix of our product orders;
- our ability to meet financial covenant requirements which could
impact, among other things, our liquidity;
- the timing of our receipt of payment for products or services
from our customers;
- our ability to meet projected new product development dates or
anticipated cost reductions of new products;
- our suppliers' inability to perform and deliver on time as a
result of their financial condition, component shortages, or other
supply chain constraints;
- customer acceptance of new products;
- the ability of our subcontractors to timely perform;
- continued weakness in the global economy affecting customer
spending;
- retention of our key personnel;
- our ability to manage and maintain key customer
relationships;
- uncertain economic conditions in the telecommunications sector
combined with operator and supplier consolidation;
- our failure to protect our intellectual property rights or
defend against intellectual property infringement claims by
others;
- the results of restructuring efforts;
- the ability to preserve and use our net operating loss
carryforwards;
- the effects of currency and interest rate risks;
- the conduct of unethical business practices in developing
countries; and
- the impact of political turmoil in countries where we have
significant business.
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
August 28, 2018 as well as other reports filed by Aviat
Networks, Inc. with the SEC from time to time. Aviat Networks
undertakes no obligation to update publicly any forward-looking
statement, whether written or oral, for any reason, except as
required by law, even as new information becomes available or other
events occur in the future.
Investor Relations:
Glenn
Wiener, GW Communications for Aviat Networks, Inc.
Tel: 212-786-6011 / gwiener@GWCco.com
Financial Tables to Follow
Table
1
AVIAT NETWORKS,
INC.
Fiscal Year 2019
Third Quarter Summary
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(In thousands, except per share amounts)
|
March 29,
2019
|
|
March 30,
2018
|
|
March 29,
2019
|
|
March 30,
2018
|
Revenues:
|
|
|
|
|
|
|
|
Revenue from product
sales
|
$
|
34,615
|
|
|
$
|
40,686
|
|
|
$
|
115,696
|
|
|
$
|
113,472
|
|
Revenue from
services
|
19,422
|
|
|
21,407
|
|
|
63,933
|
|
|
66,526
|
|
Total
revenues
|
54,037
|
|
|
62,093
|
|
|
179,629
|
|
|
179,998
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Cost of product
sales
|
23,712
|
|
|
28,704
|
|
|
76,670
|
|
|
76,151
|
|
Cost of
services
|
14,070
|
|
|
15,257
|
|
|
46,289
|
|
|
46,529
|
|
Total cost of
revenues
|
37,782
|
|
|
43,961
|
|
|
122,959
|
|
|
122,680
|
|
Gross
margin
|
16,255
|
|
|
18,132
|
|
|
56,670
|
|
|
57,318
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development expenses
|
5,350
|
|
|
4,754
|
|
|
15,603
|
|
|
14,696
|
|
Selling and
administrative expenses
|
13,408
|
|
|
14,745
|
|
|
41,405
|
|
|
42,571
|
|
Restructuring
(recovery) charges
|
—
|
|
|
(2)
|
|
|
796
|
|
|
(252)
|
|
Total operating
expenses
|
18,758
|
|
|
19,497
|
|
|
57,804
|
|
|
57,015
|
|
Operating (loss)
income
|
(2,503)
|
|
|
(1,365)
|
|
|
(1,134)
|
|
|
303
|
|
Interest
income
|
73
|
|
|
49
|
|
|
167
|
|
|
149
|
|
Interest
expense
|
(7)
|
|
|
(5)
|
|
|
(88)
|
|
|
(24)
|
|
Other expense,
net
|
(1)
|
|
|
(54)
|
|
|
(1)
|
|
|
(220)
|
|
(Loss) income
before income taxes
|
(2,438)
|
|
|
(1,375)
|
|
|
(1,056)
|
|
|
208
|
|
(Benefit from)
provision for income taxes
|
(6,777)
|
|
|
1,015
|
|
|
(6,955)
|
|
|
(2,188)
|
|
Net income
(loss)
|
4,339
|
|
|
(2,390)
|
|
|
5,899
|
|
|
2,396
|
|
Less: Net income
attributable to noncontrolling interest, net of tax
|
—
|
|
|
233
|
|
|
—
|
|
|
605
|
|
Net income (loss)
attributable to Aviat Networks
|
$
|
4,339
|
|
|
$
|
(2,623)
|
|
|
$
|
5,899
|
|
|
$
|
1,791
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share of common stock outstanding:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.81
|
|
|
$
|
(0.49)
|
|
|
$
|
1.10
|
|
|
$
|
0.34
|
|
Diluted
|
$
|
0.78
|
|
|
$
|
(0.49)
|
|
|
$
|
1.05
|
|
|
$
|
0.32
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
5,381
|
|
|
5,344
|
|
|
5,382
|
|
|
5,331
|
|
Diluted
|
5,577
|
|
|
5,344
|
|
|
5,634
|
|
|
5,632
|
|
Table
2
AVIAT NETWORKS,
INC.
Fiscal Year 2019
Third Quarter Summary
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
|
|
(In thousands)
|
March 29,
2019
|
|
June 29,
2018
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
36,053
|
|
|
$
|
37,425
|
|
Restricted
cash
|
—
|
|
|
3
|
|
Accounts receivable,
net
|
45,622
|
|
|
43,068
|
|
Unbilled
receivables
|
28,474
|
|
|
14,167
|
|
Inventories
|
10,309
|
|
|
21,290
|
|
Customer service
inventories
|
949
|
|
|
1,507
|
|
Other current
assets
|
4,664
|
|
|
6,006
|
|
Total current
assets
|
126,071
|
|
|
123,466
|
|
Property, plant and
equipment, net
|
16,849
|
|
|
17,179
|
|
Deferred income
taxes
|
12,185
|
|
|
5,600
|
|
Other
assets
|
12,098
|
|
|
9,816
|
|
Total long-term
assets
|
41,132
|
|
|
32,595
|
|
TOTAL
ASSETS
|
$
|
167,203
|
|
|
$
|
156,061
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Short-term
debt
|
$
|
9,000
|
|
|
$
|
9,000
|
|
Accounts
payable
|
34,165
|
|
|
30,878
|
|
Accrued
expenses
|
22,234
|
|
|
25,864
|
|
Advance payments and
unearned revenue
|
18,507
|
|
|
19,300
|
|
Restructuring
liabilities
|
1,459
|
|
|
1,426
|
|
Total current
liabilities
|
85,365
|
|
|
86,468
|
|
Unearned
revenue
|
8,071
|
|
|
6,593
|
|
Other long-term
liabilities
|
953
|
|
|
1,250
|
|
Reserve for uncertain
tax positions
|
3,654
|
|
|
2,941
|
|
Deferred income
taxes
|
1,553
|
|
|
1,293
|
|
Total
liabilities
|
99,596
|
|
|
98,545
|
|
Equity:
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
54
|
|
|
54
|
|
Additional
paid-in-capital
|
815,421
|
|
|
816,426
|
|
Accumulated
deficit
|
(734,837)
|
|
|
(746,359)
|
|
Accumulated other
comprehensive loss
|
(13,031)
|
|
|
(12,605)
|
|
Total
equity
|
67,607
|
|
|
57,516
|
|
TOTAL LIABILITIES AND
EQUITY
|
$
|
167,203
|
|
|
$
|
156,061
|
|
AVIAT NETWORKS, INC.
Fiscal Year 2019 Third Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
AND REGULATION G DISCLOSURE
To supplement the consolidated financial statements presented in
accordance with accounting principles generally accepted in
the United States (GAAP), we
provide additional measures of gross margin, research and
development expenses, selling and administrative expenses,
operating (loss) income, provision for or benefit from income
taxes, net income attributable to Aviat Networks, diluted net
income per share attributable to Aviat Networks, and adjusted
income before interest, tax, depreciation and amortization
(Adjusted EBITDA) attributable to Aviat Networks, adjusted to
exclude certain costs, charges, gains and losses, as set forth
below. We believe 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. Reconciliations of these non-GAAP financial measures with the
most directly comparable financial measures calculated in
accordance with GAAP follow.
Table
3
AVIAT NETWORKS,
INC.
Fiscal Year 2019
Third Quarter Summary
RECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURES (1)
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
March 29,
2019
|
|
% of
Revenue
|
|
March 30,
2018
|
|
% of
Revenue
|
|
March 29,
2019
|
|
% of
Revenue
|
|
March 30,
2018
|
|
% of
Revenue
|
|
(In thousands,
except percentages and per share amounts)
|
GAAP gross
margin
|
$
|
16,255
|
|
|
30.1
|
%
|
|
$
|
18,132
|
|
|
29.2
|
%
|
|
$
|
56,670
|
|
|
31.5
|
%
|
|
$
|
57,318
|
|
|
31.8
|
%
|
WTM inventory
write-down recovery
|
—
|
|
|
|
|
(127)
|
|
|
|
|
(90)
|
|
|
|
|
(317)
|
|
|
|
Share-based
compensation
|
44
|
|
|
|
|
53
|
|
|
|
|
144
|
|
|
|
|
152
|
|
|
|
Non-GAAP gross
margin
|
16,299
|
|
|
30.2
|
%
|
|
18,058
|
|
|
29.1
|
%
|
|
56,724
|
|
|
31.6
|
%
|
|
57,153
|
|
|
31.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
|
5,350
|
|
|
9.9
|
%
|
|
$
|
4,754
|
|
|
7.7
|
%
|
|
$
|
15,603
|
|
|
8.7
|
%
|
|
$
|
14,696
|
|
|
8.2
|
%
|
Share-based
compensation
|
(42)
|
|
|
|
|
(36)
|
|
|
|
|
(123)
|
|
|
|
|
(114)
|
|
|
|
Non-GAAP research
and development expenses
|
5,308
|
|
|
9.8
|
%
|
|
4,718
|
|
|
7.6
|
%
|
|
15,480
|
|
|
8.6
|
%
|
|
14,582
|
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling and
administrative expenses
|
$
|
13,408
|
|
|
24.8
|
%
|
|
$
|
14,745
|
|
|
23.7
|
%
|
|
$
|
41,405
|
|
|
23.1
|
%
|
|
$
|
42,571
|
|
|
23.7
|
%
|
Share-based
compensation
|
(372)
|
|
|
|
|
(446)
|
|
|
|
|
(1,129)
|
|
|
|
|
(1,423)
|
|
|
|
Strategic alternative
costs
|
(491)
|
|
|
|
|
(43)
|
|
|
|
|
(491)
|
|
|
|
|
(920)
|
|
|
|
Non-GAAP selling
and administrative expenses
|
12,545
|
|
|
23.2
|
%
|
|
14,256
|
|
|
23.0
|
%
|
|
39,785
|
|
|
22.1
|
%
|
|
40,228
|
|
|
22.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
(loss) income
|
$
|
(2,503)
|
|
|
(4.6)
|
%
|
|
$
|
(1,365)
|
|
|
(2.2)
|
%
|
|
$
|
(1,134)
|
|
|
(0.6)
|
%
|
|
$
|
303
|
|
|
0.2
|
%
|
WTM inventory
write-down recovery
|
—
|
|
|
|
|
(127)
|
|
|
|
|
(90)
|
|
|
|
|
(317)
|
|
|
|
Share-based
compensation
|
458
|
|
|
|
|
535
|
|
|
|
|
1,396
|
|
|
|
|
1,689
|
|
|
|
Strategic alternative
costs
|
491
|
|
|
|
|
43
|
|
|
|
|
491
|
|
|
|
|
920
|
|
|
|
Restructuring
(recovery) charges, net
|
—
|
|
|
|
|
(2)
|
|
|
|
|
796
|
|
|
|
|
(252)
|
|
|
|
Non-GAAP operating
(loss) income
|
(1,554)
|
|
|
(2.9)
|
%
|
|
(916)
|
|
|
(1.5)
|
%
|
|
1,459
|
|
|
0.8
|
%
|
|
2,343
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income tax
(benefit) provision
|
$
|
(6,777)
|
|
|
(12.5)
|
%
|
|
$
|
1,015
|
|
|
1.6
|
%
|
|
$
|
(6,955)
|
|
|
(3.9)
|
%
|
|
$
|
(2,188)
|
|
|
(1.2)
|
%
|
Tax refund from
Inland Revenue Authority of Singapore
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,322
|
|
|
|
Tax receivable from
Department of Federal Revenue of Brazil
|
—
|
|
|
|
|
—
|
|
|
|
|
1,646
|
|
|
|
|
—
|
|
|
|
Release of valuation
allowance
|
7,054
|
|
|
|
|
—
|
|
|
|
|
7,054
|
|
|
|
|
—
|
|
|
|
AMT credit related to
valuation allowance release
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
3,303
|
|
|
|
Adjustment to reflect
pro forma tax rate
|
23
|
|
|
|
|
(715)
|
|
|
|
|
(845)
|
|
|
|
|
(1,537)
|
|
|
|
Non-GAAP income
tax provision
|
300
|
|
|
0.6
|
%
|
|
300
|
|
|
0.5
|
%
|
|
900
|
|
|
0.5
|
%
|
|
900
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) attributable to Aviat Networks
|
$
|
4,339
|
|
|
8.0
|
%
|
|
$
|
(2,623)
|
|
|
(4.2)
|
%
|
|
$
|
5,899
|
|
|
3.3
|
%
|
|
$
|
1,791
|
|
|
1.0
|
%
|
Share-based
compensation
|
458
|
|
|
|
|
535
|
|
|
|
|
1,396
|
|
|
|
|
1,689
|
|
|
|
Strategic alternative
costs
|
491
|
|
|
|
|
43
|
|
|
|
|
491
|
|
|
|
|
920
|
|
|
|
Restructuring
(recovery) charges, net
|
—
|
|
|
|
|
(2)
|
|
|
|
|
796
|
|
|
|
|
(252)
|
|
|
|
Nigeria FX loss on
dividend receivable
|
—
|
|
|
|
|
51
|
|
|
|
|
—
|
|
|
|
|
188
|
|
|
|
WTM inventory
write-down recovery
|
—
|
|
|
|
|
(127)
|
|
|
|
|
(90)
|
|
|
|
|
(317)
|
|
|
|
Tax refund from
Inland Revenue Authority of Singapore
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,322)
|
|
|
|
Release of valuation
allowance
|
(7,054)
|
|
|
|
|
—
|
|
|
|
|
(7,054)
|
|
|
|
|
—
|
|
|
|
AMT credit related to
valuation allowance release
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,303)
|
|
|
|
Tax receivable from
Department of Federal Revenue of Brazil
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,646)
|
|
|
|
|
—
|
|
|
|
Adjustment to reflect
pro forma tax rate
|
(23)
|
|
|
|
|
715
|
|
|
|
|
845
|
|
|
|
|
1,537
|
|
|
|
Non-GAAP net
(loss) income attributable to Aviat Networks
|
$
|
(1,789)
|
|
|
(3.3)
|
%
|
|
$
|
(1,408)
|
|
|
(2.3)
|
%
|
|
$
|
637
|
|
|
0.4
|
%
|
|
$
|
931
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share attributable to Aviat Networks'
stockholders:
|
GAAP
|
$
|
0.78
|
|
|
|
|
$
|
(0.49)
|
|
|
|
|
$
|
1.05
|
|
|
|
|
$
|
0.32
|
|
|
|
Non-GAAP
|
$
|
(0.33)
|
|
|
|
|
$
|
(0.26)
|
|
|
|
|
$
|
0.11
|
|
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net income (loss) per share
|
GAAP
|
5,577
|
|
|
|
|
5,344
|
|
|
|
|
5,634
|
|
|
|
|
5,632
|
|
|
|
Non-GAAP
|
5,379
|
|
|
|
|
5,344
|
|
|
|
|
5,634
|
|
|
|
|
5,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) attributable to Aviat Networks
|
$
|
4,339
|
|
|
8.0
|
%
|
|
$
|
(2,623)
|
|
|
(4.2)
|
%
|
|
$
|
5,899
|
|
|
3.3
|
%
|
|
$
|
1,791
|
|
|
1.0
|
%
|
Depreciation and
amortization of property, plant and equipment
|
1,024
|
|
|
|
|
1,391
|
|
|
|
|
3,408
|
|
|
|
|
3,981
|
|
|
|
Interest income
(expense), net
|
(66)
|
|
|
|
|
(44)
|
|
|
|
|
(79)
|
|
|
|
|
(125)
|
|
|
|
Share-based
compensation
|
458
|
|
|
|
|
535
|
|
|
|
|
1,396
|
|
|
|
|
1,689
|
|
|
|
Strategic alternative
costs
|
491
|
|
|
|
|
43
|
|
|
|
|
491
|
|
|
|
|
920
|
|
|
|
Restructuring
(recovery) charges, net
|
—
|
|
|
|
|
(2)
|
|
|
|
|
796
|
|
|
|
|
(252)
|
|
|
|
Nigeria FX loss on
dividend receivable
|
—
|
|
|
|
|
51
|
|
|
|
|
—
|
|
|
|
|
188
|
|
|
|
WTM inventory
write-down recovery
|
—
|
|
|
|
|
(127)
|
|
|
|
|
(90)
|
|
|
|
|
(317)
|
|
|
|
(Benefit from)
provision for income taxes
|
(6,777)
|
|
|
|
|
1,015
|
|
|
|
|
(6,955)
|
|
|
|
|
(2,188)
|
|
|
|
Adjusted EBITDA
attributable to Aviat Networks
|
$
|
(531)
|
|
|
(1.0)
|
%
|
|
$
|
239
|
|
|
0.4
|
%
|
|
$
|
4,866
|
|
|
2.7
|
%
|
|
$
|
5,687
|
|
|
3.2
|
%
|
_____________________________
(1)
|
The adjustments above
reconcile our GAAP financial results to the non-GAAP financial
measures used by us. Our non-GAAP net (loss) income attributable to
Aviat Networks excluded share-based compensation, and other
non-recurring charges (recovery). Adjusted EBITDA was determined by
excluding depreciation and amortization on property, plant and
equipment, interest, provision for or benefit from income taxes,
and non-GAAP pre-tax adjustments, as set forth above, from the GAAP
net income attributable to Aviat Networks. We believe that the
presentation of these non-GAAP items provides meaningful
supplemental information to investors, when viewed in conjunction
with, and not in lieu of, our GAAP results. However, the non-GAAP
financial measures have not been prepared under a comprehensive set
of accounting rules or principles. Non-GAAP information should not
be considered in isolation from, or as a substitute for,
information prepared in accordance with GAAP. Moreover, there are
material limitations associated with the use of non-GAAP financial
measures.
|
Table
4
AVIAT NETWORKS,
INC.
Fiscal Year 2019
Third Quarter Summary
SUPPLEMENTAL
SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
March 29,
2019
|
|
March 30,
2018
|
|
March 29,
2019
|
|
March 30,
2018
|
|
(In
thousands)
|
North
America
|
$
|
28,581
|
|
|
$
|
31,756
|
|
|
$
|
93,660
|
|
|
$
|
99,743
|
|
International:
|
|
|
|
|
|
|
|
Africa and the Middle
East
|
11,079
|
|
|
17,623
|
|
|
39,058
|
|
|
43,767
|
|
Europe and
Russia
|
3,326
|
|
|
3,638
|
|
|
10,271
|
|
|
11,898
|
|
Latin America and
Asia Pacific
|
11,051
|
|
|
9,076
|
|
|
36,640
|
|
|
24,590
|
|
|
25,456
|
|
|
30,337
|
|
|
85,969
|
|
|
80,255
|
|
Total
revenue
|
$
|
54,037
|
|
|
$
|
62,093
|
|
|
$
|
179,629
|
|
|
$
|
179,998
|
|
View original
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SOURCE Aviat Networks, Inc.