[May 18, 2016] |
|
Westell Technologies Reports Fiscal Fourth Quarter 2016 Results
Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of
in-building wireless, intelligent site management, cell site
optimization, and outside plant solutions, today announced results for
its fiscal 2016 fourth quarter ended March 31, 2016 (4Q16). Management
will host a conference call to discuss financial and business results
tomorrow, Thursday, May 19, 2016 at 9:30 AM Eastern Time (details below).
Consolidated revenue for 4Q16 was $20.9 million, up 12% year-over-year
and 3% on a sequential quarter basis, and consisted of $5.8 million from
the In-Building Wireless (IBW) segment and $15.1 million from the
Communication Solutions Group (CSG) segment. Consolidated revenue for
fiscal year 2016 (FY16) grew 5% to $88.2 million. More significantly,
gross margin increased year-over-year from 31.9% in FY15 to 39.1% in
FY16.
"CSG delivered strong 4Q16 results, with segment revenue up 31% on both
a year-over-year and sequential quarter basis, led by solid performances
from our Intelligent Site Management (ISM) and Outside Plant (OSP)
product areas. While IBW was affected by the integration of our
Distributed Antennas System (DAS) Conditioner products into larger
network elements, we anticipate future IBW growth from our new ClearLink
DAS and from enhancements to our Repeater product line," said Tom
Gruenwald, Chairman, CEO, and President of Westell Technologies.
"FY16 was a year of powerful change for Westell, during which we
successfully launched our multi-phase 'fix-build-expand' turnaround
plan. Under new leadership, we gained positive momentum in transforming
several key areas of the business, most notably a significant upgrade of
our sales organization, a more effective supply chain, and the
establishment of a CTO (Chief Technology Office) function. While we face
headwinds with the decline of some of our late-lifecycle products, we
are firmly focused on returning the Company to profitability through
continued scrutiny of expenses and structure, and the introduction of
new products," Gruenwald said.
Total cash and short-term investments were $29.7 million at March 31,
2016, compared to $34.8 million at December 31, 2015. The use of cash
increased when compared to each of the three previous quarters primarily
due to a revenue pattern weighted more towards the latter part of the
quarter, resulting in a higher customer receivable balance at March 31,
2016.
4Q16 Performance
|
4Q16
|
3Q16
|
4Q15
|
4Q16
|
4Q16
|
3 months ended
|
3 months ended
|
3 months ended
|
vs.
|
vs.
|
03/31/16
|
12/31/15
|
03/31/15
|
3Q16
|
4Q15
|
Consolidated Revenue
|
$20.9M
|
$20.2M
|
$18.6M
|
+3%
|
+12%
|
Gross Margin
|
37.8%
|
39.4%
|
25.1%
|
-1.6%
|
+12.7%
|
Net Income (Loss)
|
($5.1M)
|
($4.8M)
|
($13.0M)
|
($0.3M)
|
$7.9M
|
Earnings (Loss) Per Share
|
($0.08)
|
($0.08)
|
($0.22)
|
$-
|
$0.14
|
Non-GAAP Earnings (Loss) Per Share (1)
|
($0.04)
|
($0.05)
|
($0.09)
|
$0.01
|
$0.05
|
(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.
|
FY16 Performance
|
FY16
|
FY15
|
FY16
|
12 months ended
|
12 months ended
|
vs.
|
03/31/16
|
03/31/15
|
FY15
|
Consolidated Revenue
|
$88.2M
|
$84.1M
|
+5%
|
Gross Margin
|
39.1%
|
31.9%
|
+7.2%
|
Net Income (Loss)
|
($16.2M)
|
($58.9M)
|
$42.7M
|
Earnings (Loss) Per Share
|
($0.27)
|
($0.98)
|
$0.71
|
Non-GAAP Earnings (Loss) Per Share (1)
|
($0.14)
|
($0.20)
|
$0.06
|
(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.
|
In-Building Wireless (IBW) Segment
IBW's 4Q16 revenue performance year-over-year and on a sequential
quarter basis was largely indicative of a market shifting away from
stand-alone DAS conditioners, as the function served by these devices
are increasingly integrated into larger network elements. IBW's 4Q16
gross margin improvement compared to 4Q15 was primarily due to lower
excess and obsolete inventory costs, and decrease compared to 3Q16 was
principally a result of the change in segment revenue.
|
|
|
4Q16
|
|
|
|
|
|
3Q16
|
|
|
|
|
|
4Q15
|
|
|
|
|
|
4Q16
|
|
|
|
|
|
4Q16
|
|
|
|
3 months ended
|
|
|
|
|
|
3 months ended
|
|
|
|
|
|
3 months ended
|
|
|
|
|
|
vs.
|
|
|
|
|
|
vs.
|
|
|
|
03/31/16
|
|
|
|
|
|
12/31/15
|
|
|
|
|
|
03/31/15
|
|
|
|
|
|
3Q16
|
|
|
|
|
|
4Q15
|
|
IBW Segment Revenue
|
|
|
$5.8M
|
|
|
|
|
|
$8.7M
|
|
|
|
|
|
$7.1M
|
|
|
|
|
|
-33%
|
|
|
|
|
|
-18%
|
|
IBW Segment Gross Margin
|
|
|
35.6%
|
|
|
|
|
|
38.2%
|
|
|
|
|
|
23.0%
|
|
|
|
|
|
-2.6%
|
|
|
|
|
|
+12.6%
|
|
IBW Segment R&D Expense
|
|
|
$2.4M
|
|
|
|
|
|
$2.7M
|
|
|
|
|
|
$2.3M
|
|
|
|
|
|
($0.3M)
|
|
|
|
|
|
$0.1M
|
|
IBW Segment Profit (Loss)
|
|
|
($0.3M)
|
|
|
|
|
|
$0.6M
|
|
|
|
|
|
($0.7M)
|
|
|
|
|
|
($0.9M)
|
|
|
|
|
|
$0.4M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communication Solutions Group (CSG) Segment
CSG's 4Q16 year-over-year revenue growth was due to increased ISM
revenue and significantly higher OSP revenue, while the same growth
level on a sequential quarter basis was due to the significantly higher
OSP revenue and increased sales of Tower Mounted Amplifiers. OSP
achieved its highest quarterly revenue level since the June 2013
quarter, driven predominately by sales of Integrated Cabinets. CSG's
4Q16 gross margin improvement compared to 4Q15 was primarily due to
lower excess and obsolete inventory costs, and decrease compared to 3Q16
was mainly due to a less favorable mix.
|
|
|
4Q16
|
|
|
|
|
|
3Q16
|
|
|
|
|
|
4Q15
|
|
|
|
|
|
4Q16
|
|
|
|
|
|
4Q16
|
|
|
|
3 months ended
|
|
|
|
|
|
3 months ended
|
|
|
|
|
|
3 months ended
|
|
|
|
|
|
vs.
|
|
|
|
|
|
vs.
|
|
|
|
03/31/16
|
|
|
|
|
|
12/31/15
|
|
|
|
|
|
03/31/15
|
|
|
|
|
|
3Q16
|
|
|
|
|
|
4Q15
|
|
CSG Segment Revenue
|
|
|
$15.1M
|
|
|
|
|
|
$11.5M
|
|
|
|
|
|
$11.5M
|
|
|
|
|
|
+31%
|
|
|
|
|
|
+31%
|
|
CSG Segment Gross Margin
|
|
|
38.6%
|
|
|
|
|
|
40.3%
|
|
|
|
|
|
26.4%
|
|
|
|
|
|
-1.7%
|
|
|
|
|
|
+12.2%
|
|
CSG Segment R&D Expense
|
|
|
$2.3M
|
|
|
|
|
|
$2.2M
|
|
|
|
|
|
$1.9M
|
|
|
|
|
|
$0.1M
|
|
|
|
|
|
$0.4M
|
|
CSG Segment Profit (Loss)
|
|
|
$3.5M
|
|
|
|
|
|
$2.5M
|
|
|
|
|
|
$1.1M
|
|
|
|
|
|
$1.0M
|
|
|
|
|
|
$2.4M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call Information
Management will discuss financial and business results during the
quarterly conference call on Thursday, May 19, 2016, 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 19 by dialing 888-206-4073 no later
than 9:15 AM Eastern Time and providing the operator confirmation number
41589143.
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://www.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 after
the call ends.
About Westell
Westell Technologies, Inc. is a leading provider of in-building
wireless, intelligent site management, cell site optimization, and
outside plant solutions focused on innovation and differentiation at the
edge of telecommunication networks, where end users connect. The
Company's comprehensive set of products and solutions enable service
providers and network operators to improve network 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/A for the fiscal year ended March
31, 2015, 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)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
|
|
2016
|
|
2015
|
|
2015
|
|
2016
|
|
2015
|
|
Revenue
|
|
$
|
20,904
|
|
|
$
|
20,215
|
|
|
$
|
18,613
|
|
|
$
|
88,203
|
|
|
$
|
84,127
|
|
|
Gross profit
|
|
7,893
|
|
|
7,963
|
|
|
4,666
|
|
|
34,516
|
|
|
26,810
|
|
|
Gross margin
|
|
37.8
|
%
|
|
39.4
|
%
|
|
25.1
|
%
|
|
39.1
|
%
|
|
31.9
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research & development
|
|
4,713
|
|
|
4,893
|
|
|
4,220
|
|
|
19,317
|
|
|
17,348
|
|
|
Sales & marketing
|
|
4,608
|
|
|
3,900
|
|
|
3,343
|
|
|
15,817
|
|
|
12,407
|
|
|
General & administrative
|
|
1,747
|
|
|
2,627
|
|
|
5,547
|
|
|
9,836
|
|
|
14,678
|
|
|
Intangibles amortization
|
|
1,305
|
|
|
1,418
|
|
|
1,520
|
|
|
5,554
|
|
|
6,377
|
|
|
Restructuring
|
|
731
|
|
(1)
|
-
|
|
|
3,188
|
|
(2)
|
748
|
|
(1)
|
3,243
|
|
(2)
|
Goodwill impairment (3)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,997
|
|
|
Total operating expenses
|
|
13,104
|
|
|
12,838
|
|
|
17,818
|
|
|
51,272
|
|
|
86,050
|
|
|
Operating income (loss) from continuing operations
|
|
(5,211
|
)
|
|
(4,875
|
)
|
|
(13,152
|
)
|
|
(16,756
|
)
|
|
(59,240
|
)
|
|
Other income (expense), net
|
|
107
|
|
|
85
|
|
|
(18
|
)
|
|
169
|
|
|
(2
|
)
|
|
Income (loss) before income taxes and discontinued operations
|
|
(5,104
|
)
|
|
(4,790
|
)
|
|
(13,170
|
)
|
|
(16,587
|
)
|
|
(59,242
|
)
|
|
Income tax benefit (expense)
|
|
27
|
|
|
(7
|
)
|
|
31
|
|
|
102
|
|
|
201
|
|
|
Net income (loss) from continuing operations
|
|
(5,077
|
)
|
|
(4,797
|
)
|
|
(13,139
|
)
|
|
(16,485
|
)
|
|
(59,041
|
)
|
|
Income (loss) from discontinued operations, net of income tax (4)
|
|
1
|
|
|
-
|
|
|
139
|
|
|
273
|
|
|
139
|
|
|
Net income (loss)
|
|
$
|
(5,076
|
)
|
|
$
|
(4,797
|
)
|
|
$
|
(13,000
|
)
|
|
$
|
(16,212
|
)
|
|
$
|
(58,902
|
)
|
|
Basic and diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) from continuing operations
|
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.98
|
)
|
|
Basic and diluted net income (loss) from discontinued operations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Basic and diluted net income (loss)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.98
|
)
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
60,847
|
|
|
60,810
|
|
|
60,286
|
|
|
60,786
|
|
|
59,985
|
|
|
(1)
|
|
The Company recorded restructuring expense primarily relating to
severance costs for terminated employees.
|
(2)
|
|
The Company recorded restructuring expense relating to severance
costs for terminated employees and abandonment of excess office
space at its headquarters.
|
(3)
|
|
The Company recorded a non-cash charge of $32.0 million to record an
impairment of the full carrying amount of goodwill.
|
(4)
|
|
Income from discontinued operations resulted from the expiration of
indemnity periods and release of contingency reserves related to the
sale of ConferencePlus.
|
|
|
|
Westell Technologies, Inc.
|
Condensed Consolidated Balance Sheets
|
(Amounts in thousands)
|
|
Assets:
|
|
March 31, 2016
|
|
March 31, 2015
|
|
|
(Unaudited)
|
|
|
Cash and cash equivalents
|
|
$
|
19,169
|
|
|
$
|
14,026
|
Short-term investments
|
|
10,555
|
|
|
23,906
|
Accounts receivable, net
|
|
16,361
|
|
|
11,845
|
Inventories
|
|
13,498
|
|
|
16,205
|
Prepaid expenses and other current assets
|
|
1,900
|
|
|
3,285
|
Land held-for-sale
|
|
-
|
|
|
264
|
Total current assets
|
|
61,483
|
|
|
69,531
|
Property and equipment, net
|
|
3,977
|
|
|
3,603
|
Intangible assets, net
|
|
20,388
|
|
|
25,942
|
Other non-current assets
|
|
183
|
|
|
258
|
Total assets
|
|
$
|
86,031
|
|
|
$
|
99,334
|
Liabilities and Stockholders' Equity:
|
|
|
|
|
Accounts payable
|
|
$
|
7,856
|
|
|
$
|
4,011
|
Accrued expenses
|
|
5,932
|
|
|
5,576
|
Accrued restructuring
|
|
1,537
|
|
|
1,161
|
Contingent consideration
|
|
311
|
|
|
1,184
|
Deferred revenue
|
|
1,601
|
|
|
2,415
|
Total current liabilities
|
|
17,237
|
|
|
14,347
|
Deferred revenue non-current
|
|
1,236
|
|
|
751
|
Net deferred income tax liability
|
|
10
|
|
|
46
|
Accrued restructuring non-current
|
|
550
|
|
|
1,642
|
Contingent consideration non-current
|
|
-
|
|
|
400
|
Other non-current liabilities
|
|
314
|
|
|
409
|
Total liabilities
|
|
19,347
|
|
|
17,595
|
Total stockholders' equity
|
|
66,684
|
|
|
81,739
|
Total liabilities and stockholders' equity
|
|
$
|
86,031
|
|
|
$
|
99,334
|
|
|
|
|
|
|
|
|
Westell Technologies, Inc.
|
Condensed Consolidated Statement of Cash Flows
|
(Amounts in thousands)
|
|
|
|
|
|
Twelve Months Ended March 31,
|
Cash flows from operating activities:
|
|
2016 (Unaudited)
|
|
2015
|
Net income (loss)
|
|
$
|
(16,212
|
)
|
|
$
|
(58,902
|
)
|
Reconciliation of net income to net cash provided by (used in)
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
7,098
|
|
|
7,416
|
|
Goodwill impairment
|
|
-
|
|
|
31,997
|
|
Stock-based compensation
|
|
1,265
|
|
|
2,605
|
|
Restructuring
|
|
748
|
|
|
3,243
|
|
Deferred taxes
|
|
(36
|
)
|
|
(127
|
)
|
Impairment loss or loss (gain) on sale of fixed assets
|
|
14
|
|
|
117
|
|
Exchange rate loss (gain)
|
|
(38
|
)
|
|
23
|
|
Changes in assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(4,476
|
)
|
|
3,986
|
|
Inventories
|
|
2,707
|
|
|
8,186
|
|
Accounts payable and accrued expenses
|
|
2,192
|
|
|
(6,912
|
)
|
Other
|
|
1,131
|
|
|
(919
|
)
|
Net cash provided by (used in) operating activities
|
|
(5,607
|
)
|
|
(9,287
|
)
|
Cash flows from investing activities:
|
|
|
|
|
Net purchases of short-term investments and debt securities
|
|
13,351
|
|
|
(8,322
|
)
|
Acquisitions, net of cash acquired
|
|
-
|
|
|
(304
|
)
|
Proceeds from sale of land
|
|
264
|
|
|
-
|
|
Purchases of property and equipment
|
|
(1,932
|
)
|
|
(2,137
|
)
|
Net cash provided by (used in) investing activities
|
|
11,683
|
|
|
(10,763
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Payment of contingent consideration
|
|
(808
|
)
|
|
(1,104
|
)
|
Purchases of treasury stock
|
|
(108
|
)
|
|
(863
|
)
|
Proceeds from stock options exercised
|
|
-
|
|
|
257
|
|
Net cash provided by (used in) financing activities
|
|
(916
|
)
|
|
(1,710
|
)
|
Gain (loss) of exchange rate changes on cash
|
|
(17
|
)
|
|
(7
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
5,143
|
|
|
(21,767
|
)
|
Cash and cash equivalents, beginning of period
|
|
14,026
|
|
|
35,793
|
|
Cash and cash equivalents, end of period
|
|
$
|
19,169
|
|
|
$
|
14,026
|
|
|
|
|
|
|
|
|
|
|
Westell Technologies, Inc.
|
Segment Statement of Operations
|
(Amounts in thousands)
|
(Unaudited)
|
Sequential Quarter Comparison
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|
Three Months Ended December 31, 2015
|
|
|
IBW
|
|
CSG
|
|
Total
|
|
IBW
|
|
CSG
|
|
Total
|
Revenue
|
|
$
|
5,838
|
|
|
$
|
15,066
|
|
|
$
|
20,904
|
|
|
$
|
8,680
|
|
|
$
|
11,535
|
|
|
$
|
20,215
|
|
Cost of revenue
|
|
3,761
|
|
|
9,250
|
|
|
13,011
|
|
|
5,361
|
|
|
6,891
|
|
|
12,252
|
|
Gross profit
|
|
2,077
|
|
|
5,816
|
|
|
7,893
|
|
|
3,319
|
|
|
4,644
|
|
|
7,963
|
|
Gross margin
|
|
35.6
|
%
|
|
38.6
|
%
|
|
37.8
|
%
|
|
38.2
|
%
|
|
40.3
|
%
|
|
39.4
|
%
|
Research & development
|
|
2,421
|
|
|
2,292
|
|
|
4,713
|
|
|
2,701
|
|
|
2,192
|
|
|
4,893
|
|
Segment profit (loss)
|
|
$
|
(344
|
)
|
|
$
|
3,524
|
|
|
$
|
3,180
|
|
|
$
|
618
|
|
|
$
|
2,452
|
|
|
$
|
3,070
|
|
Year-over-Year Quarter Comparison
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|
Three months ended March 31, 2015
|
|
|
IBW
|
|
CSG
|
|
Total
|
|
IBW
|
|
CSG
|
|
Total
|
Revenue
|
|
$
|
5,838
|
|
|
$
|
15,066
|
|
|
$
|
20,904
|
|
|
$
|
7,082
|
|
|
$
|
11,531
|
|
|
$
|
18,613
|
|
Cost of revenue
|
|
3,761
|
|
|
9,250
|
|
|
13,011
|
|
|
5,456
|
|
|
8,491
|
|
|
13,947
|
|
Gross profit
|
|
2,077
|
|
|
5,816
|
|
|
7,893
|
|
|
1,626
|
|
|
3,040
|
|
|
4,666
|
|
Gross margin
|
|
35.6
|
%
|
|
38.6
|
%
|
|
37.8
|
%
|
|
23.0
|
%
|
|
26.4
|
%
|
|
25.1
|
%
|
Research & development
|
|
2,421
|
|
|
2,292
|
|
|
4,713
|
|
|
2,315
|
|
|
1,905
|
|
|
4,220
|
|
Segment profit (loss)
|
|
$
|
(344
|
)
|
|
$
|
3,524
|
|
|
$
|
3,180
|
|
|
$
|
(689
|
)
|
|
$
|
1,135
|
|
|
$
|
446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year Comparison
|
|
|
|
|
|
|
|
Twelve months ended March 31, 2016
|
|
Twelve months ended March 31, 2015
|
|
|
IBW
|
|
CSG
|
|
Total
|
|
IBW
|
|
CSG
|
|
Total
|
Revenue
|
|
$
|
34,407
|
|
|
$
|
53,796
|
|
|
$
|
88,203
|
|
|
$
|
37,714
|
|
|
$
|
46,413
|
|
|
$
|
84,127
|
|
Cost of revenue
|
|
20,463
|
|
|
33,224
|
|
|
53,687
|
|
|
23,999
|
|
|
33,318
|
|
|
57,317
|
|
Gross profit
|
|
13,944
|
|
|
20,572
|
|
|
34,516
|
|
|
13,715
|
|
|
13,095
|
|
|
26,810
|
|
Gross margin
|
|
40.5
|
%
|
|
38.2
|
%
|
|
39.1
|
%
|
|
36.4
|
%
|
|
28.2
|
%
|
|
31.9
|
%
|
Research & development
|
|
11,059
|
|
|
8,258
|
|
|
19,317
|
|
|
8,955
|
|
|
8,393
|
|
|
17,348
|
|
Segment profit (loss)
|
|
$
|
2,885
|
|
|
$
|
12,314
|
|
|
$
|
15,199
|
|
|
$
|
4,760
|
|
|
$
|
4,702
|
|
|
$
|
9,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2016
|
|
2015
|
|
2015
|
|
2016
|
|
2015
|
GAAP net income (loss)
|
|
$
|
(5,076
|
)
|
|
$
|
(4,797
|
)
|
|
$
|
(13,000
|
)
|
|
$
|
(16,212
|
)
|
|
$
|
(58,902
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Inventory fair value step-up (1)
|
|
|
-
|
|
|
|
-
|
|
|
|
36
|
|
|
|
-
|
|
|
|
576
|
|
Deferred revenue adjustment (1)
|
|
|
63
|
|
|
|
73
|
|
|
|
64
|
|
|
|
281
|
|
|
|
386
|
|
Amortization of intangibles (2)
|
|
|
1,305
|
|
|
|
1,418
|
|
|
|
1,520
|
|
|
|
5,554
|
|
|
|
6,377
|
|
Restructuring, separation and transition (3)
|
|
|
799
|
|
|
|
-
|
|
|
|
4,989
|
|
|
|
1,022
|
|
|
|
5,044
|
|
Stock-based compensation (4)
|
|
|
291
|
|
|
|
264
|
|
|
|
977
|
|
|
|
1,265
|
|
|
|
2,605
|
|
Land impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
108
|
|
|
|
-
|
|
|
|
108
|
|
Goodwill impairment (5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,997
|
|
(Income) loss from discontinued operations (6)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(139
|
)
|
|
|
(273
|
)
|
|
|
(139
|
)
|
Total adjustments
|
|
|
2,457
|
|
|
|
1,755
|
|
|
|
7,555
|
|
|
|
7,849
|
|
|
|
46,954
|
|
Non-GAAP net income (loss)
|
|
$
|
(2,619
|
)
|
|
$
|
(3,042
|
)
|
|
$
|
(5,445
|
)
|
|
$
|
(8,363
|
)
|
|
$
|
(11,948
|
)
|
GAAP net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.98
|
)
|
Non-GAAP net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.20
|
)
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
60,847
|
|
|
|
60,810
|
|
|
|
60,286
|
|
|
|
60,786
|
|
|
|
59,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
2015
|
|
2016
|
|
2015
|
GAAP operating expenses
|
|
$
|
13,104
|
|
|
$
|
12,838
|
|
|
$
|
17,818
|
|
|
$
|
51,272
|
|
|
$
|
86,050
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles (2)
|
|
|
(1,305
|
)
|
|
|
(1,418
|
)
|
|
|
(1,520
|
)
|
|
|
(5,554
|
)
|
|
|
(6,377
|
)
|
Restructuring, separation and transition (3)
|
|
|
(799
|
)
|
|
|
-
|
|
|
|
(4,989
|
)
|
|
|
(1,022
|
)
|
|
|
(5,044
|
)
|
Stock-based compensation (4)
|
|
|
(320
|
)
|
|
|
(251
|
)
|
|
|
(953
|
)
|
|
|
(1,270
|
)
|
|
|
(2,516
|
)
|
Land impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
(108
|
)
|
|
|
-
|
|
|
|
(108
|
)
|
Goodwill impairment (5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,997
|
)
|
Total adjustments
|
|
|
(2,424
|
)
|
|
|
(1,669
|
)
|
|
|
(7,570
|
)
|
|
|
(7,846
|
)
|
|
|
(46,042
|
)
|
Non-GAAP operating expense
|
|
$
|
10,680
|
|
|
$
|
11,169
|
|
|
$
|
10,248
|
|
|
$
|
43,426
|
|
|
$
|
40,008
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|
Three months ended March 31, 2015
|
|
|
Revenue
|
|
Gross Profit
|
|
Gross Margin
|
|
Revenue
|
|
Gross Profit
|
|
Gross Margin
|
GAAP - consolidated
|
|
$
|
20,904
|
|
|
$
|
7,893
|
|
|
37.8
|
%
|
|
$
|
18,613
|
|
|
$
|
4,666
|
|
|
25.1
|
%
|
Deferred revenue adjustment (1)
|
|
|
63
|
|
|
|
63
|
|
|
|
|
|
64
|
|
|
|
64
|
|
|
|
Inventory fair value step-up (1)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
36
|
|
|
|
Stock-based compensation (4)
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
|
|
-
|
|
|
|
24
|
|
|
|
Non-GAAP - consolidated
|
|
$
|
20,967
|
|
|
$
|
7,927
|
|
|
37.8
|
%
|
|
$
|
18,677
|
|
|
$
|
4,790
|
|
|
25.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended March 31, 2016
|
|
Twelve months ended March 31, 2015
|
|
|
Revenue
|
|
Gross Profit
|
|
Gross Margin
|
|
Revenue
|
|
Gross Profit
|
|
Gross Margin
|
GAAP - consolidated
|
|
$
|
88,203
|
|
|
$
|
34,516
|
|
|
39.1
|
%
|
|
$
|
84,127
|
|
|
$
|
26,810
|
|
|
31.9
|
%
|
Deferred revenue adjustment (1)
|
|
|
281
|
|
|
|
281
|
|
|
|
|
|
386
|
|
|
|
386
|
|
|
|
Inventory fair value step-up (1)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
576
|
|
|
|
Stock-based compensation (4)
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
|
|
-
|
|
|
|
89
|
|
|
|
Non-GAAP - consolidated
|
|
$
|
88,484
|
|
|
$
|
34,792
|
|
|
39.3
|
%
|
|
$
|
84,513
|
|
|
$
|
27,861
|
|
|
33.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
(1)
|
|
On April 1, 2013 and on March 1, 2014, the Company purchased Kentrox
and CSI. These acquisitions required the step-up of certain assets
to fair value, which resulted in cost that will not recur once those
assets have fully settled. The adjustments remove the increased
costs associated with the third-party sales of inventory that was
stepped-up and the step-down on acquired deferred revenue that was
recognized in the periods presented.
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(2)
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Amortization of intangibles is a non-cash expense arising from the
acquisition of intangible assets.
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(3)
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Restructuring expenses are not directly related to the ongoing
performance of our fundamental business operations. This adjustment
also includes severance benefits related to the departure of certain
former executives.
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(4)
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Stock-based compensation is a non-cash expense incurred in
accordance with share-based compensation accounting.
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(5)
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The Company recorded a non-cash charge of $32.0 million during
fiscal 2015 to record the impairment of the full carrying value of
the Company's goodwill.
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(6)
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Income from discontinued operations resulted from the expiration of
indemnity periods and release of contingency reserves related to the
sale of ConferencePlus.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160518006415/en/
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