Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of
high-performance network infrastructure solutions, today announced
results for its fiscal 2019 fourth quarter ended March 31,
2019 (4Q19) and its fiscal year ended March 31, 2019 (FY19).
Management will host a conference call to discuss financial and
business results tomorrow, Thursday, May 30, 2019 at 9:30 AM
Eastern Time (details below).
“4Q19 revenue was largely affected by the
performance of our IBW segment. While sales of commercial
repeaters and DAS conditioners decreased as expected, delays in
expanding our product portfolio for a larger addressable public
safety market further contributed to the IBW decline.
Seasonally lower sales of remote units affected ISM revenue after a
strong performance in 3Q19. CNS revenue increased
sequentially, led by power distribution and network connectivity
products, and growing traction for our new suite of fiber access
solutions,” said Stephen John, Westell’s President and CEO.
“Moving forward, our IBW business remains committed
to the public safety market and the development of our OnGo small
cell for private LTE networks. For our CNS and ISM
businesses, we are focused on densification initiatives for 5G and
IoT where our fiber access and remote monitoring solutions address
the critical requirements of more capacity, deployment
simplification, and intelligence at the edge of communication
networks,” added John.
|
4Q19 3 months ended 03/31/19 |
3Q19 3 months ended 12/31/18 |
+ increase / - decrease |
Revenue |
$9.7M |
$10.7M |
-$1.0M |
Gross Margin |
37.6% |
42.8% |
-5.2% |
Net Income (Loss) (1) |
($8.0M) |
($1.6M) |
-$6.4M |
Earnings (Loss) Per Share (1) |
($0.52) |
($0.10) |
-$0.42 |
Non-GAAP Net Income (Loss) (2) |
($2.1M) |
($0.4M) |
-$1.7M |
Non-GAAP Earnings (Loss) Per Share (2) |
($0.13) |
($0.03) |
-$0.10 |
Ending Cash |
$25.5M |
$27.1M |
-$1.6M |
(1) Includes a $4.7M non-recurring accounting
charge in 4Q19 for the impairment of IBW intangible
assets.(2) Please refer to the schedule at the end of this
press release for a complete GAAP to non-GAAP reconciliation and
other information related to non-GAAP financial measures.
In-Building Wireless (IBW)
Segment
IBW’s revenue decrease was primarily due to new
public safety product introduction delays and lower sales of
commercial repeaters and DAS conditioners, partly offset by
increased sales of existing public safety repeaters and passive RF
system components. IBW’s gross margin decrease was primarily
due to higher excess and obsolete inventory costs.
($ in thousands) |
4Q19 3 months ended 03/31/19 |
3Q19 3 months ended 12/31/18 |
+ increase / - decrease |
IBW Segment Revenue |
$2,477 |
$2,794 |
($317) |
IBW Segment Gross Margin |
31.4% |
38.3% |
-6.8% |
IBW Segment R&D Expense |
$684 |
$682 |
$2 |
IBW Segment Profit |
$95 |
$387 |
($292) |
Intelligent Site Management (ISM)
Segment
ISM’s revenue decrease was due to lower sales of
remote units and Optima software licenses, partly offset by
increased support services revenue. ISM’s gross margin
decrease was due to a less favorable mix and higher excess and
obsolete inventory costs.
($ in thousands) |
4Q19 3 months ended 03/31/19 |
3Q19 3 months ended 12/31/18 |
+ increase / - decrease |
ISM Segment Revenue |
$3,757 |
$5,116 |
($1,359) |
ISM Segment Gross Margin |
47.1% |
56.7% |
-9.6% |
ISM Segment R&D Expense |
$693 |
$570 |
$123 |
ISM Segment Profit |
$1,078 |
$2,329 |
($1,251) |
Communication Network Solutions (CNS)
Segment
CNS’s revenue increase was driven by higher sales
of power distribution and network connectivity products, as well as
growing traction for our new of fiber access solutions; partly
offset by lower sales on integrated cabinets. CNS’s gross
margin increase was driven by higher revenue and a more favorable
mix.
($ in thousands) |
4Q19 3 months ended 03/31/19 |
3Q19 3 months ended 12/31/18 |
+ increase / - decrease |
CNS Segment Revenue |
$3,471 |
$2,812 |
$659 |
CNS Segment Gross Margin |
31.6% |
22.1% |
+9.5% |
CNS Segment R&D Expense |
$402 |
$484 |
($82) |
CNS Segment Profit |
$694 |
$138 |
$556 |
|
|
|
|
Conference Call Information
Management will discuss financial and business
results during the quarterly conference call on Thursday,
May 30, 2019, 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 May 30 by dialing
888-206-4065 no later than 9:15 AM Eastern Time
and providing the operator confirmation number
48609103.
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: ir.westell.com. A
digital recording of the entire conference will be available for
replay on Westell's website by approximately 12:00 PM Eastern Time
following the conclusion of the conference.
About Westell
Westell is a leading provider of high-performance
network 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, 2018, 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.
Financial Tables to Follow:
|
|
Westell Technologies, Inc. |
Condensed Consolidated Statement of
Operations |
(Amounts in thousands, except per share amounts) |
|
|
|
Three months ended |
|
Twelve months ended |
|
|
|
March 31, 2019 (Unaudited) |
|
December 31, 2018 (Unaudited) |
|
March 31, 2018 (Unaudited) |
|
March 31, 2019 (Unaudited) |
|
March 31, 2018 (Audited) |
|
Revenue |
|
$ |
9,705 |
|
|
$ |
10,722 |
|
|
$ |
11,096 |
|
|
$ |
43,570 |
|
|
$ |
58,577 |
|
|
Cost of revenue |
|
6,059 |
|
|
6,132 |
|
|
6,047 |
|
|
25,206 |
|
|
33,410 |
|
|
Gross profit |
|
3,646 |
|
|
4,590 |
|
|
5,049 |
|
|
18,364 |
|
|
25,167 |
|
|
Gross margin |
|
37.6 |
% |
|
42.8 |
% |
|
45.5 |
% |
|
42.1 |
% |
|
43.0 |
% |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research & development |
|
1,779 |
|
|
1,736 |
|
|
1,352 |
|
|
6,790 |
|
|
7,375 |
|
|
Sales & marketing |
|
2,330 |
|
|
1,999 |
|
|
2,012 |
|
|
8,342 |
|
|
8,290 |
|
|
General & administrative |
|
2,027 |
|
|
1,738 |
|
|
1,580 |
|
|
6,699 |
|
|
6,602 |
|
|
Intangibles amortization |
|
783 |
|
|
830 |
|
|
1,047 |
|
|
3,435 |
|
|
4,189 |
|
|
Restructuring |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
165 |
|
(1) |
Long-lived assets impairment |
|
4,722 |
|
(2) |
— |
|
|
— |
|
|
4,722 |
|
(2) |
— |
|
|
Total operating expenses |
|
11,641 |
|
|
6,303 |
|
|
5,991 |
|
|
29,988 |
|
|
26,621 |
|
|
Operating income (loss) |
|
(7,995 |
) |
|
(1,713 |
) |
|
(942 |
) |
|
(11,624 |
) |
|
(1,454 |
) |
|
Other income (expense), net |
|
184 |
|
|
158 |
|
|
89 |
|
|
626 |
|
|
888 |
|
(3) |
Income (loss) before income
taxes |
|
(7,811 |
) |
|
(1,555 |
) |
|
(853 |
) |
|
(10,998 |
) |
|
(566 |
) |
|
Income tax benefit (expense) |
|
(28 |
) |
|
(1 |
) |
|
(63 |
) |
|
(39 |
) |
|
597 |
|
(4) |
Net income (loss) from continuing
operating |
|
(7,839 |
) |
|
(1,556 |
) |
|
(916 |
) |
|
(11,037 |
) |
|
31 |
|
|
Income from discontinued
operations |
|
(207 |
) |
|
— |
|
|
— |
|
|
(345 |
) |
|
— |
|
|
Net income (loss) |
|
$ |
(8,046 |
) |
|
$ |
(1,556 |
) |
|
$ |
(916 |
) |
|
$ |
(11,382 |
) |
|
$ |
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) |
|
$ |
(0.52 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.73 |
) |
|
$ |
— |
|
|
Diluted net income (loss) |
|
$ |
(0.52 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.73 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
15,342 |
|
|
15,524 |
|
|
15,541 |
|
|
15,517 |
|
|
15,497 |
|
|
Diluted |
|
15,342 |
|
|
15,524 |
|
|
15,541 |
|
|
15,517 |
|
|
15,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 2Q18 restructuring expense related to severance
costs for terminated employees.
(2) 4Q19 Non-recurring impairment related to
intangible assets associated with the IBW reporting unit.
(3) 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.
(4) 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.
|
|
Westell Technologies, Inc. |
Condensed Consolidated Balance Sheets |
(Amounts in thousands) |
|
Assets: |
|
March 31, 2019(Unaudited) |
|
March 31, 2018(Audited) |
Cash and cash equivalents |
|
$ |
25,457 |
|
$ |
24,963 |
Short-term investments |
|
— |
|
2,779 |
Accounts receivable, net |
|
6,865 |
|
8,872 |
Inventories |
|
9,801 |
|
9,222 |
Prepaid expenses and other
current assets |
|
1,706 |
|
816 |
Total current assets |
|
43,829 |
|
46,652 |
Property and equipment,
net |
|
1,298 |
|
1,601 |
Intangible assets, net |
|
3,278 |
|
11,435 |
Other non-current assets |
|
492 |
|
771 |
Total assets |
|
$ |
48,897 |
|
$ |
60,459 |
Liabilities and Stockholders’ Equity: |
|
|
|
|
Accounts payable |
|
$ |
2,313 |
|
$ |
1,903 |
Accrued expenses |
|
3,567 |
|
3,280 |
Accrued restructuring |
|
— |
|
63 |
Deferred revenue |
|
1,217 |
|
1,790 |
Total current liabilities |
|
7,097 |
|
7,036 |
Deferred revenue
non-current |
|
444 |
|
846 |
Other non-current
liabilities |
|
176 |
|
282 |
Total liabilities |
|
7,717 |
|
8,164 |
Total stockholders’ equity |
|
41,180 |
|
52,295 |
Total liabilities and stockholders’ equity |
|
$ |
48,897 |
|
$ |
60,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westell Technologies, Inc. |
Condensed Consolidated Statement of Cash
Flows |
(Amounts in thousands) |
|
|
|
Three months ended March 31, |
|
Twelve months ended March 31, |
Cash flows from
operating activities: |
|
2019 (Unaudited) |
|
2019 (Unaudited) |
|
2018 (Audited) |
Net income (loss) |
|
$ |
(8,046 |
) |
|
$ |
(11,382 |
) |
|
$ |
31 |
|
Reconciliation of net income to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
934 |
|
|
4,026 |
|
|
4,957 |
|
Intangible assets impairment |
|
4,722 |
|
|
4,722 |
|
|
— |
|
Stock-based compensation |
|
282 |
|
|
1,171 |
|
|
1,271 |
|
Restructuring |
|
— |
|
|
— |
|
|
165 |
|
Gain on disposal of foreign operations |
|
— |
|
|
— |
|
|
(608 |
) |
Deferred taxes |
|
— |
|
|
— |
|
|
(697 |
) |
Loss (gain) on sale of fixed assets |
|
1 |
|
|
2 |
|
|
22 |
|
Exchange rate loss (gain) |
|
(1 |
) |
|
2 |
|
|
2 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
115 |
|
|
2,007 |
|
|
3,200 |
|
Inventories |
|
362 |
|
|
(579 |
) |
|
3,289 |
|
Accounts payable and accrued expenses |
|
34 |
|
|
528 |
|
|
(4,541 |
) |
Deferred revenue |
|
468 |
|
|
(646 |
) |
|
(825 |
) |
Prepaid expenses and other current assets |
|
(537 |
) |
|
(890 |
) |
|
593 |
|
Other asset |
|
268 |
|
|
279 |
|
|
86 |
|
Net cash provided by (used in) operating activities |
|
(1,398 |
) |
|
(760 |
) |
|
6,945 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Net purchases of short-term investments and debt securities |
|
— |
|
|
2,779 |
|
|
(2,779 |
) |
Proceeds from sale of assets |
|
— |
|
|
— |
|
|
2 |
|
Purchases of property and equipment |
|
(17 |
) |
|
(290 |
) |
|
(408 |
) |
Net cash provided by (used in) investing activities |
|
(17 |
) |
|
2,489 |
|
|
(3,185 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Purchases of treasury stock |
|
(195 |
) |
|
(1,233 |
) |
|
(574 |
) |
Net cash provided by (used in) financing activities |
|
(195 |
) |
|
(1,233 |
) |
|
(574 |
) |
Gain (loss) of
exchange rate changes on cash |
|
2 |
|
|
(2 |
) |
|
(1 |
) |
Net increase (decrease) in cash and cash
equivalents |
|
(1,608 |
) |
|
494 |
|
|
3,185 |
|
Cash and cash
equivalents, beginning of period |
|
27,065 |
|
|
24,963 |
|
|
21,778 |
|
Cash and cash
equivalents, end of period |
|
$ |
25,457 |
|
|
$ |
25,457 |
|
|
$ |
24,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westell Technologies, Inc. |
Segment Statement of Operations |
(Amounts in thousands) |
(Unaudited) |
|
Sequential Quarter Comparison |
|
|
|
Three months ended March 31, 2019 |
|
Three months Ended December 31, 2018 |
|
|
IBW |
|
ISM |
|
CNS |
|
Total |
|
IBW |
|
ISM |
|
CNS |
|
Total |
Revenue |
|
$ |
2,477 |
|
|
$ |
3,757 |
|
|
$ |
3,471 |
|
|
$ |
9,705 |
|
|
$ |
2,794 |
|
|
$ |
5,116 |
|
|
$ |
2,812 |
|
|
$ |
10,722 |
|
Gross profit |
|
779 |
|
|
1,771 |
|
|
1,096 |
|
|
3,646 |
|
|
1,069 |
|
|
2,899 |
|
|
622 |
|
|
4,590 |
|
Gross margin |
|
31.4 |
% |
|
47.1 |
% |
|
31.6 |
% |
|
37.6 |
% |
|
38.3 |
% |
|
56.7 |
% |
|
22.1 |
% |
|
42.8 |
% |
R&D expense |
|
684 |
|
|
693 |
|
|
402 |
|
|
1,779 |
|
|
682 |
|
|
570 |
|
|
484 |
|
|
1,736 |
|
Segment profit |
|
$ |
95 |
|
|
$ |
1,078 |
|
|
$ |
694 |
|
|
$ |
1,867 |
|
|
$ |
387 |
|
|
$ |
2,329 |
|
|
$ |
138 |
|
|
$ |
2,854 |
|
Year-over-Year Quarter Comparison |
|
|
|
Three months ended March 31, 2019 |
|
Three months ended March 31, 2018 |
|
|
IBW |
|
ISM |
|
CNS |
|
Total |
|
IBW |
|
ISM |
|
CNS |
|
Total |
Revenue |
|
$ |
2,477 |
|
|
$ |
3,757 |
|
|
$ |
3,471 |
|
|
$ |
9,705 |
|
|
$ |
3,167 |
|
|
$ |
4,688 |
|
|
$ |
3,241 |
|
|
$ |
11,096 |
|
Gross profit |
|
779 |
|
|
1,771 |
|
|
1,096 |
|
|
3,646 |
|
|
1,520 |
|
|
2,454 |
|
|
1,075 |
|
|
5,049 |
|
Gross margin |
|
31.4 |
% |
|
47.1 |
% |
|
31.6 |
% |
|
37.6 |
% |
|
48.0 |
% |
|
52.3 |
% |
|
33.2 |
% |
|
45.5 |
% |
R&D expense |
|
684 |
|
|
693 |
|
|
402 |
|
|
1,779 |
|
|
485 |
|
|
629 |
|
|
238 |
|
|
1,352 |
|
Segment profit |
|
$ |
95 |
|
|
$ |
1,078 |
|
|
$ |
694 |
|
|
$ |
1,867 |
|
|
$ |
1,035 |
|
|
$ |
1,825 |
|
|
$ |
837 |
|
|
$ |
3,697 |
|
Full-Year
Comparison |
|
|
Twelve months ended March 31, 2019 |
|
Twelve months ended March 31, 2018 |
|
|
IBW |
|
ISM |
|
CNS |
|
Total |
|
IBW |
|
ISM |
|
CNS |
|
Total |
Revenue |
|
$ |
12,474 |
|
|
$ |
17,263 |
|
|
$ |
13,833 |
|
|
$ |
43,570 |
|
|
$ |
23,265 |
|
|
$ |
19,350 |
|
|
$ |
15,962 |
|
|
$ |
58,577 |
|
Gross profit |
|
5,202 |
|
|
9,040 |
|
|
4,122 |
|
|
18,364 |
|
|
10,653 |
|
|
9,959 |
|
|
4,555 |
|
|
25,167 |
|
Gross margin |
|
41.7 |
% |
|
52.4 |
% |
|
29.8 |
% |
|
42.1 |
% |
|
45.8 |
% |
|
51.5 |
% |
|
28.5 |
% |
|
43.0 |
% |
R&D expense |
|
2,755 |
|
|
2,390 |
|
|
1,645 |
|
|
6,790 |
|
|
4,141 |
|
|
2,264 |
|
|
970 |
|
|
7,375 |
|
Segment profit |
|
$ |
2,447 |
|
|
$ |
6,650 |
|
|
$ |
2,477 |
|
|
$ |
11,574 |
|
|
$ |
6,512 |
|
|
$ |
7,695 |
|
|
$ |
3,585 |
|
|
$ |
17,792 |
|
|
|
Westell Technologies, Inc. |
Reconciliation of GAAP to non-GAAP Financial
Measures |
(Amounts in thousands, except per share amounts) |
(Unaudited) |
|
|
|
Three months ended |
|
Twelve months ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2019 |
|
2018 |
GAAP consolidated operating expenses |
|
$ |
11,641 |
|
|
$ |
6,303 |
|
|
$ |
5,991 |
|
|
$ |
29,988 |
|
|
$ |
26,621 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (1) |
|
(270 |
) |
|
(291 |
) |
|
(286 |
) |
|
(1,124 |
) |
|
(1,241 |
) |
Amortization of intangibles (2) |
|
(783 |
) |
|
(830 |
) |
|
(1,047 |
) |
|
(3,435 |
) |
|
(4,189 |
) |
Intangible assets impairment(3) |
|
(4,722 |
) |
|
— |
|
|
— |
|
|
(4,722 |
) |
|
— |
|
Restructuring, separation, and transition (4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(165 |
) |
Total adjustments |
|
(5,775 |
) |
|
(1,121 |
) |
|
(1,333 |
) |
|
(9,281 |
) |
|
(5,595 |
) |
Non-GAAP consolidated
operating expenses |
|
$ |
5,866 |
|
|
$ |
5,182 |
|
|
$ |
4,658 |
|
|
$ |
20,707 |
|
|
$ |
21,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2019 |
|
2018 |
GAAP consolidated net income (loss) |
|
$ |
(8,046 |
) |
|
$ |
(1,556 |
) |
|
$ |
(916 |
) |
|
$ |
(11,382 |
) |
|
$ |
31 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense) |
|
(28 |
) |
|
(1 |
) |
|
(63 |
) |
|
(39 |
) |
|
597 |
|
Other income (expense), net |
|
184 |
|
|
158 |
|
|
89 |
|
|
626 |
|
|
888 |
|
Discontinued operations (5) |
|
(207 |
) |
|
— |
|
|
— |
|
|
(345 |
) |
|
— |
|
GAAP consolidated operating
profit (loss) |
|
$ |
(7,995 |
) |
|
$ |
(1,713 |
) |
|
$ |
(942 |
) |
|
$ |
(11,624 |
) |
|
$ |
(1,454 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (1) |
|
282 |
|
|
303 |
|
|
283 |
|
|
1,171 |
|
|
1,271 |
|
Amortization of intangibles (2) |
|
783 |
|
|
830 |
|
|
1,047 |
|
|
3,435 |
|
|
4,189 |
|
Intangible assets impairment(3) |
|
4,722 |
|
|
— |
|
|
— |
|
|
4,722 |
|
|
— |
|
Restructuring, separation, and transition (4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
165 |
|
Total adjustments |
|
5,787 |
|
|
1,133 |
|
|
1,330 |
|
|
9,328 |
|
|
5,625 |
|
Non-GAAP consolidated
operating profit (loss) |
|
$ |
(2,208 |
) |
|
$ |
(580 |
) |
|
$ |
388 |
|
|
$ |
(2,296 |
) |
|
$ |
4,171 |
|
Depreciation |
|
151 |
|
|
149 |
|
|
163 |
|
|
591 |
|
|
768 |
|
Non-GAAP consolidated Adjusted
EBITDA (6) |
|
$ |
(2,057 |
) |
|
$ |
(431 |
) |
|
$ |
551 |
|
|
$ |
(1,705 |
) |
|
$ |
4,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
2019 |
|
2018 |
|
2018 |
|
2019 |
|
2018 |
GAAP consolidated net income (loss) |
|
$ |
(8,046 |
) |
|
$ |
(1,556 |
) |
|
$ |
(916 |
) |
|
$ |
(11,382 |
) |
|
$ |
31 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (1) |
|
282 |
|
|
303 |
|
|
283 |
|
|
1,171 |
|
|
1,271 |
|
Amortization of intangibles (2) |
|
783 |
|
|
830 |
|
|
1,047 |
|
|
3,435 |
|
|
4,189 |
|
Intangible assets impairment(3) |
|
4,722 |
|
|
— |
|
|
— |
|
|
4,722 |
|
|
— |
|
Restructuring, separation, and transition (4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
165 |
|
Discontinued operations (5) |
|
207 |
|
|
— |
|
|
— |
|
|
345 |
|
|
— |
|
Foreign currency translation adjustment (7) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(608 |
) |
Income taxes (8) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(697 |
) |
Total adjustments |
|
5,994 |
|
|
1,133 |
|
|
1,330 |
|
|
9,673 |
|
|
4,320 |
|
Non-GAAP consolidated net
income (loss) |
|
$ |
(2,052 |
) |
|
$ |
(423 |
) |
|
$ |
414 |
|
|
$ |
(1,709 |
) |
|
$ |
4,351 |
|
GAAP consolidated net income
(loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
(0.52 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.73 |
) |
|
$ |
— |
|
Non-GAAP consolidated net
income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.11 |
) |
|
$ |
0.28 |
|
Average number of common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
15,342 |
|
|
15,524 |
|
|
15,794 |
|
|
15,517 |
|
|
15,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) Stock-based compensation is a non-cash expense
incurred in accordance with share-based compensation accounting
standards.(2) Amortization of intangibles is a non-cash expense
arising from previously acquired intangible assets.(3) 4Q19
Non-recurring impairment related to intangible assets associated
with the IBW reporting unit.(4) 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.(5) During FY2019, the Company recorded
indemnification expense related to probable loss contingencies
associated with a major customer contract related to a business
which was previously sold and therefore is presented as
discontinued operations(6) EBITDA is a non-GAAP measure that
represents Earnings Before Interest, Taxes, Depreciation, and
Amortization. The Company presents Adjusted EBITDA.(7)
Non-recurring foreign currency translation gain related to the
wind-up of the NoranTel legal entity during the quarter ended
September 30, 2017.(8) 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 MinichielloChief Financial Officer Westell Technologies,
Inc. +1 (630) 375-4740tminichiello@westell.com
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