[May 22, 2013]

Westell Technologies Reports Fourth Quarter and Annual Results

Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of telecommunications equipment for wireline and wireless networks, today announced results for its fiscal fourth quarter and year ended March 31, 2013. Consolidated revenue from continuing operations was $10.7 million for the quarter and $40.0 million for the year. The net loss was $38.2 million for the quarter, equal to $0.66 per diluted share, and $44.0 million for fiscal 2013, equal to $0.73 per share.

The major contributor to the loss for the quarter and year was $36.9 million of non-cash expense recorded in the fourth quarter to fully reserve deferred tax assets and to record impairment of goodwill. Without such non-operating items, the non-GAAP net loss was $1.3 million for the quarter, equal to $0.02 per share, and a non-GAAP net loss of $6.2 million for the year, equal to $0.10 per share.

New Products Improve Outlook

"Custom systems integration -- a cornerstone for our growth strategy -- produced its best quarter ever, with revenues up more than 300% from a year ago," said Chairman and CEO Rick Gilbert. "Some expected fourth-quarter revenue from distributed antenna system (DAS) panels was delayed. However, sales of Tower-Mounted Amplifiers accelerated as expected, and we experienced a sharp increase in new product sales during April, putting them on track to double the strong results they posted in our third quarter. This, coupled with a great start by Kentrox, should translate into a solid first quarter."

Consolidated Results Reflect the Wind-Down of Non-Core Business, and Non-Cash Items

Consolidated revenue from continuing operations for the fourth quarter of fiscal 2013 was $10.7 million, compared to $11.3 million in the prior-year period. The decrease reflected the planned wind-down of the Customer Networking Solutions (CNS) Division.

The consolidated net loss for the fourth quarter was $38.2 million, equal to $0.66 per share, compared to net loss of $2.4 million, equal to $0.04 per share, in the same quarter last year. The latest year's loss included a $34.0 million non-cash expense to increase valuation allowance to fully reserve deferred tax assets. It also included a $2.9 million non-cash charge for impairment of goodwill. These two charges are driven primarily by recent losses in the Westell Division. Adjusting for these charges and other items as shown in the attached financial tables, non-GAAP net loss for the fourth quarter was $1.3 million, equal to $0.02 per share, compared to a non-GAAP net loss of $0.7 million, equal to $0.01 per share, in the same quarter a year ago.

For the fiscal year, consolidated revenue from continuing operations was $40.0 million, compared to $69.7 million in the prior year. The decrease reflected the wind-down of CNS sales and lower revenues from legacy products in the Westell Division. The net loss for fiscal 2013 was $44.0 million, equal to $0.73 per share, compared to net income of $42.0 million, equal to $0.62 per share, in the prior year.

The most recent year's loss included the non-cash charges discussed above. Prior-year net income included after-tax gains of $18.8 million and $20.5 million from the CNS and ConferencePlus sale transactions, respectively. On a non-GAAP basis - excluding the effects of the items noted above, the impact of discontinued operations, and restructuring charges - the net loss for fiscal 2013 was $6.2 million, equal to $0.10 per share, compared to non-GAAP net income of $2.6 million, or $0.04 per share, in the prior year.

Westell Division Benefits from New and Traditional Product Sales

Fourth quarter revenue for the Westell Division, while unchanged from the prior-year's $10.7 million, rose 20.2% over the fiscal 2013 third quarter. Revenues from Custom Systems Integration and Tower Mounted Amplifiers were particularly strong. Gross margin was 37.6%, down slightly from last year's fourth quarter. Gross margin continues to reflect the reduced absorption of fixed costs on lower revenues, and the higher costs of producing new products during their introductory periods. Operating expenses were $7.7 million, up $3.9 million from the prior-year's quarter, reflecting the $2.9 million non-cash goodwill impairment charge, higher cost allocations, and increased costs for developing new products and supporting their sales. As a result, the division reported a fourth quarter operating loss of $3.7 million, compared to operating income of $0.3 million in the same period a year ago.

Since the CNS Division is winding down, CNS had no material revenue in the latest quarter versus $0.6 million in the same period during fiscal 2012. CNS operating expenses in the most recent period declined to $0.4 million, due to lower project expenditures following the limited product release for Homecloud^TM on September 26, 2012.

Kentrox to Bolster Results in New Fiscal Year

On April 1, 2013, the Company acquired Kentrox, Inc. for $30.0 million in cash, subject to an adjustment for working capital. Kentrox is a worldwide leader in intelligent site management solutions, providing comprehensive monitoring, management and control of a broad range of equipment. Kentrox offers a suite of Remote monitoring and control devices which, when combined with its Optima management system, provide a comprehensive, bi-directional solution. The machine-to-machine (M2M) communications Kentrox provides enable service providers, tower operators, and other network operators to reduce operating costs while improving network performance. The Company expects to operate Kentrox as a separate division during fiscal year 2014.

Conference Call Information

Management will discuss financial and business results during the fourth quarter conference call on Thursday, May 23, 2013, at 9:30 AM Eastern Time. Investors may quickly register online in advance of the call at www.conferenceplus.com/westell. After registering, participants receive a dial-in number, passcode and personal identification number (PIN) to automatically place them into the audio conference. Those not wishing to register may participate by dialing 888-206-4065 no later than 9:15 AM Eastern Time, and using confirmation number 34873226. International participants may dial 630-827-5974.

This news release, and related information that may be discussed on the earnings conference call, will be posted on the Investor News section of Westell's website, at www.westell.com. An archive of the entire conference will be available on the site by approximately noon Eastern Time following the conclusion of the call. A replay may be accessed by dialing 888-843-7419 or 630-652-3042 and entering 6468550#.

About Westell

Westell Technologies, Inc., headquartered in Aurora, Illinois, designs, distributes markets and services a broad range of carrier-class communications equipment. This includes digital transmission, intelligent site management, power distribution, demarcation and cell-site optimization products used by wireline and wireless telecommunications service providers, industrial customers, and systems integrators. For more information, please visit www.westell.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this release that are not historical facts, or that contain the words "believe," "expect," "intend," "anticipate," "estimate," "may," "will," "plan," "should," or derivatives of them - 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 these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, product demand and market acceptance risks; need for financing and capital; economic weakness in the United States 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, 2012, under Item 1A - Risk Factors. The Company undertakes no obligation to publicly update these forward-looking statements to reflect current events or circumstances occurring after the date hereof, or to reflect the occurrence of unanticipated events, or otherwise.

Financial Tables to Follow:

*Per share amounts may not sum to totals because of rounding.

The Company conforms to U.S. Generally Accepted Accounting Principles (GAAP) in the preparation of its financial statements. This schedule reconciles the company's GAAP net income to adjusted net income on a non-GAAP basis. Management believes that these non-GAAP results provide meaningful supplemental information to investors, indicate the Company's core performance, and facilitate comparison of results 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.

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