UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 3, 2016
WESTELL TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
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Delaware | | 0-27266 | | 36-3154957 |
(State of other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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750 North Commons Drive, Aurora, Illinois | | 60504 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code (630) 898-2500
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On February 3, 2016, Westell Technologies, Inc. issued a press release setting forth the financial results for its fiscal year 2016 third quarter ended December 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1.
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Item 9.01. | FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits
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99.1 |
| | Press release announcing financial results for the fiscal year 2016 third quarter ended December 31, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | | WESTELL TECHNOLOGIES, INC. |
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Date: | February 3, 2016 | | By: | /s/ Thomas P. Minichiello |
| | | | Thomas P. Minichiello |
| | | | Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
Exhibit 99.1
Westell Technologies Reports Fiscal Third Quarter 2016 Results
Year-over-year revenue grew 44% to $20.2 million
AURORA, IL, February 3, 2016 – 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 third quarter ended December 31, 2015 (3Q16). Management will host a conference call to discuss financial and business results tomorrow, Thursday, February 4, 2016 at 9:30 AM Eastern Time (details below).
Consolidated revenue was $20.2 million, consisting of $8.7 million from the In-Building Wireless (IBW) segment and $11.5 million from the Communication Solutions Group (CSG) segment. Both IBW and CSG segment revenues for 3Q16 were up year-over-year by 60% and 34%, respectively.
“Westell’s third quarter results showed continued progress in executing our growth and operational turnaround strategy. Revenue grew 44% compared to the same quarter last year, while down sequentially as expected. Additionally, Intelligent Site Management (ISM) revenue grew to its highest quarterly level in two years, contributing to a CSG segment gross margin above 40%,” said Tom Gruenwald, Chairman and CEO of Westell Technologies. “We have completed the rebuilding of our management team with performance-focused leaders in all key positions, have added new products such as our new tower mounted amplifier (TMA), and are progressing with trials and testing of our new ClearLink DAS solution - all of which bolsters our confidence going forward.”
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| 3Q16 | 2Q16 | 3Q15 | 3Q16 | 3Q16 |
3 months ended | 3 months ended | 3 months ended | vs. | vs. |
12/31/15 | 09/30/15 | 12/31/14 | 2Q16 | 3Q15 |
Consolidated Revenue | $20.2M | $25.5M | $14.0M | -21% | +44% |
Gross Margin | 39.4% | 40.1% | 31.3% | -0.7% | +8.1% |
Net Income (Loss) | ($4.8M) | ($2.5M) | ($27.5M) | ($2.3M) | $22.7M |
Earnings (Loss) Per Share | ($0.08) | ($0.04) | ($0.46) | ($0.04) | +$0.38 |
Non-GAAP Earnings (Loss) Per Share (1) | ($0.05) | ($0.01) | ($0.08) | ($0.04) | +$0.03 |
(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. |
Cash and short-term investments were $34.8 million at December 31, 2015, compared to $36.4 million at September 30, 2015. The $1.6 million use of cash was driven primarily by the net loss in the quarter, partly offset by favorable working capital.
In-Building Wireless (IBW) Segment
IBW’s revenue improvement year-over-year was due largely to increased demand for passive DAS conditioners; while the sequential decrease was due to the expected seasonal slowdown in sales of our active DAS conditioner, the Universal DAS Interface Tray (UDIT). Gross margins varied in line with changes in segment revenue.
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| 3Q16 | 2Q16 | 3Q15 | 3Q16 | 3Q16 |
3 months ended | 3 months ended | 3 months ended | vs. | vs. |
12/31/15 | 09/30/15 | 12/31/14 | 2Q16 | 3Q15 |
IBW Segment Revenue | $8.7M | $10.8M | $5.4M | -20% | +60% |
IBW Segment Gross Margin | 38.2% | 42.0% | 35.3% | -3.8% | +3.0% |
IBW Segment R&D Expense | $2.7M | $2.8M | $2.3M | ($0.1M) | $0.4M |
IBW Segment Profit (Loss) | $0.6M | $1.8M | ($0.4M) | ($1.2M) | $1.1M |
Communication Solutions Group (CSG) Segment
CSG’s revenue improvement year-over-year was due to higher revenues across all product categories - ISM, TMAs, and outside plant; whereas the sequential decrease was driven by the typical seasonal slowdown in sales of TMAs. Gross margin improved year-over-year due primarily to lower excess and obsolete inventory costs, and improved sequentially due primarily to a more favorable mix.
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| 3Q16 | 2Q16 | 3Q15 | 3Q16 | 3Q16 |
3 months ended | 3 months ended | 3 months ended | vs. | vs. |
12/31/15 | 09/30/15 | 12/31/14 | 2Q16 | 3Q15 |
CSG Segment Revenue | $11.5M | $14.7M | $8.6M | -22% | +34% |
CSG Segment Gross Margin | 40.3% | 38.7% | 28.8% | +1.6% | +11.5% |
CSG Segment R&D Expense | $2.2M | $1.9M | $2.0M | $0.3M | $0.2M |
CSG Segment Profit (Loss) | $2.5M | $3.8M | $0.5M | ($1.4M) | $2.0M |
Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Thursday, February 4, 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 February 4 by calling 888-206-4073 no later than 8:15 AM Central Time (9:15 AM Eastern Time) and providing the operator confirmation number 41579044.
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 following the conclusion of the conference.
About Westell Technologies
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)
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| | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended | |
| | December 31, | | September 30, | | December 31, | | December 31, | | December 31, | |
| | 2015 | | 2015 | | 2014 | | 2015 | | 2014 | |
Revenue | | $ | 20,215 |
| | $ | 25,514 |
| | $ | 14,043 |
| | $ | 67,299 |
| | $ | 65,514 |
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Gross profit | | 7,963 |
| | 10,231 |
| | 4,395 |
| | 26,623 |
| | 22,144 |
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Gross margin | | 39.4 | % | | 40.1 | % | | 31.3 | % | | 39.6 | % | | 33.8 | % | |
Operating expenses: | | | | | | | | | | | |
Research and development | | 4,893 |
| | 4,625 |
| | 4,353 |
| | 14,604 |
| | 13,128 |
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Sales and marketing | | 3,900 |
| | 4,113 |
| | 2,719 |
| | 11,209 |
| | 9,064 |
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General and administrative | | 2,627 |
| | 2,493 |
| | 2,797 |
| | 8,089 |
| | 9,131 |
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Intangible amortization | | 1,418 |
| | 1,432 |
| | 1,562 |
| | 4,249 |
| | 4,857 |
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Restructuring | | — |
| | — |
| | — |
| | 17 |
| | 55 |
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Goodwill impairment (1) | | — |
| | — |
| | 20,547 |
| | — |
| | 31,997 |
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Total operating expenses | | 12,838 |
| | 12,663 |
| | 31,978 |
| | 38,168 |
| | 68,232 |
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Operating income (loss) | | (4,875 | ) | | (2,432 | ) | | (27,583 | ) | | (11,545 | ) | | (46,088 | ) | |
Other income (expense), net | | 85 |
| | (61 | ) | | (29 | ) | | 62 |
| | 16 |
| |
Income (loss) before income taxes and discontinued operations | | (4,790 | ) | | (2,493 | ) | | (27,612 | ) | | (11,483 | ) | | (46,072 | ) | |
Income tax benefit (expense) | | (7 | ) | | 20 |
| | 72 |
| | 75 |
| | 170 |
| |
Net income (loss) from continuing operations | | (4,797 | ) | | (2,473 | ) | | (27,540 | ) | | (11,408 | ) | | (45,902 | ) | |
Income from discontinued operations (2) | | — |
| | — |
| | — |
| | 272 |
| | — |
| |
Net income (loss) | | $ | (4,797 | ) | | $ | (2,473 | ) | | $ | (27,540 | ) | | $ | (11,136 | ) | | $ | (45,902 | ) | |
Basic net income (loss) per share: | | | | | | | | | | | |
Basic net income (loss) from continuing operations | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.46 | ) | | $ | (0.19 | ) | | $ | (0.77 | ) | |
Basic net income (loss) from discontinued operations | | — |
| | — |
| | — |
| | — |
| | — |
| |
Basic net income (loss) (3) | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.46 | ) | | $ | (0.18 | ) | | $ | (0.77 | ) | |
Diluted net income (loss) per share: | | | | | | | | | | | |
Diluted net income (loss) from continuing operations | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.46 | ) | | $ | (0.19 | ) | | $ | (0.77 | ) | |
Diluted net income (loss) from discontinued operations | | — |
| | — |
| | — |
| | — |
| | — |
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Diluted net income (loss) (3) | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.46 | ) | | $ | (0.18 | ) | | $ | (0.77 | ) | |
Weighted-average number of common shares outstanding: | | | | | | | | | | | |
Basic | | 60,810 |
| | 60,783 |
| | 60,016 |
| | 60,765 |
| | 59,885 |
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Diluted | | 60,810 |
| | 60,783 |
| | 60,016 |
| | 60,765 |
| | 59,885 |
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(1) | The Company recorded a non-cash charge during the second and third quarters of fiscal year 2015 to record the impairment of the full carrying value of the Company's goodwill related to the Kentrox and CSI acquisitions, respectively. |
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(2) | 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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(3) | Totals may not sum due to rounding. |
Westell Technologies, Inc.
Condensed Consolidated Balance Sheet
(Amounts in thousands)
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| | December 31, 2015 (Unaudited) | | March 31, 2015 | |
Assets | | | | | |
Cash and cash equivalents | | $ | 33,559 |
| | $ | 14,026 |
| |
Short-term investments | | 1,242 |
| | 23,906 |
| |
Accounts receivable, net | | 12,626 |
| | 11,845 |
| |
Inventories | | 14,071 |
| | 16,205 |
| |
Prepaid expenses and other current assets | | 2,519 |
| | 3,285 |
| |
Land held-for-sale | | — |
| | 264 |
| |
Total current assets | | 64,017 |
| | 69,531 |
| |
Property and equipment, net | | 4,291 |
| | 3,603 |
| |
Intangible assets, net | | 21,693 |
| | 25,942 |
| |
Other non-current assets | | 108 |
| | 258 |
| |
Total assets | | $ | 90,109 |
| | $ | 99,334 |
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Liabilities and Stockholders’ Equity | | | | | |
Accounts payable | | $ | 7,288 |
| | $ | 4,011 |
| |
Accrued expenses | | 5,937 |
| | 5,576 |
| |
Accrued restructuring | | 1,092 |
| | 1,161 |
| |
Contingent consideration payable | | 714 |
| | 1,184 |
| |
Deferred revenue | | 1,199 |
| | 2,415 |
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Total current liabilities | | 16,230 |
| | 14,347 |
| |
Deferred revenue non-current | | 1,154 |
| | 751 |
| |
Deferred income tax liability | | 75 |
| | 46 |
| |
Accrued restructuring non-current | | 827 |
| | 1,642 |
| |
Contingent consideration payable non-current | | — |
| | 400 |
| |
Other non-current liabilities | | 333 |
| | 409 |
| |
Total liabilities | | 18,619 |
| | 17,595 |
| |
Total stockholders’ equity | | 71,490 |
| | 81,739 |
| |
Total liabilities and stockholders’ equity | | $ | 90,109 |
| | $ | 99,334 |
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Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
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| | | | | | | | | |
| | Nine months ended December 31, | |
| | 2015 | | 2014 | |
Cash flows from operating activities: | | | |
Net income (loss) | | $ | (11,136 | ) | | $ | (45,902 | ) | |
Reconciliation of net loss to net cash used in operating activities: | | | | | |
Depreciation and amortization | | 5,335 |
| | 5,599 |
| |
Goodwill impairment | | — |
| | 31,997 |
| |
Stock-based compensation | | 974 |
| | 1,628 |
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Restructuring | | 17 |
| | 55 |
| |
Deferred taxes | | 29 |
| | — |
| |
Exchange rate loss | | 17 |
| | 8 |
| |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | (791 | ) | | 8,699 |
| |
Inventory | | 2,134 |
| | 1,147 |
| |
Accounts payable and accrued expenses | | 2,562 |
| | (6,058 | ) | |
Deferred revenue | | (813 | ) | | (1,270 | ) | |
Other | | 916 |
| | (634 | ) | |
Net cash provided by (used in) operating activities | | (756 | ) | | (4,731 | ) | |
Cash flows from investing activities: | | | | | |
Net maturity (purchase) of short-term investments and debt securities | | 22,664 |
| | (9,638 | ) | |
Acquisitions, net of cash acquired | | — |
| | (304 | ) | |
Proceeds from sale of land | | 264 |
| | — |
| |
Purchases of property and equipment, net | | (1,776 | ) | | (1,773 | ) | |
Net cash provided by (used in) investing activities | | 21,152 |
| | (11,715 | ) | |
Cash flows from financing activities: | | | | | |
Purchase of treasury stock | | (87 | ) | | (692 | ) | |
Proceeds from stock options exercised | | — |
| | 155 |
| |
Payment of contingent consideration | | (770 | ) | | (1,104 | ) | |
Net cash provided by (used in) financing activities | | (857 | ) | | (1,641 | ) | |
(Gain) loss of exchange rate changes on cash | | (6 | ) | | (7 | ) | |
Net increase (decrease) in cash and cash equivalents | | 19,533 |
| | (18,094 | ) | |
Cash and cash equivalents, beginning of period | | 14,026 |
| | 35,793 |
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Cash and cash equivalents, end of period | | $ | 33,559 |
| | $ | 17,699 |
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Westell Technologies, Inc.
Segment Statement of Operations
(Amounts in thousands)
(Unaudited)
Sequential Quarter Comparison
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| | Three months ended December 31, 2015 | | Three Months Ended September 30, 2015 |
| | IBW | | CSG | | Total | | IBW | | CSG | | Total |
Revenue | | $ | 8,680 |
| | $ | 11,535 |
| | $ | 20,215 |
| | $ | 10,819 |
| | $ | 14,695 |
| | $ | 25,514 |
|
Cost of revenue | | 5,361 |
| | 6,891 |
| | 12,252 |
| | 6,272 |
| | 9,011 |
| | 15,283 |
|
Gross profit | | 3,319 |
| | 4,644 |
| | 7,963 |
| | 4,547 |
| | 5,684 |
| | 10,231 |
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Gross margin | | 38.2 | % | | 40.3 | % | | 39.4 | % | | 42.0 | % | | 38.7 | % | | 40.1 | % |
Research and development | | 2,701 |
| | 2,192 |
| | 4,893 |
| | 2,775 |
| | 1,850 |
| | 4,625 |
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Segment profit (loss) | | $ | 618 |
| | $ | 2,452 |
| | $ | 3,070 |
| | $ | 1,772 |
| | $ | 3,834 |
| | $ | 5,606 |
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Year-over-Year Quarter Comparison
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended December 31, 2015 | | Three months ended December 31, 2014 |
| | IBW | | CSG | | Total | | IBW | | CSG | | Total |
Revenue | | $ | 8,680 |
| | $ | 11,535 |
| | $ | 20,215 |
| | $ | 5,414 |
| | $ | 8,629 |
| | $ | 14,043 |
|
Cost of revenue | | 5,361 |
| | 6,891 |
| | 12,252 |
| | 3,504 |
| | 6,144 |
| | 9,648 |
|
Gross profit | | 3,319 |
| | 4,644 |
| | 7,963 |
| | 1,910 |
| | 2,485 |
| | 4,395 |
|
Gross margin | | 38.2 | % | | 40.3 | % | | 39.4 | % | | 35.3 | % | | 28.8 | % | | 31.3 | % |
Research and development | | 2,701 |
| | 2,192 |
| | 4,893 |
| | 2,342 |
| | 2,011 |
| | 4,353 |
|
Segment profit (loss) | | $ | 618 |
| | $ | 2,452 |
| | $ | 3,070 |
| | $ | (432 | ) | | $ | 474 |
| | $ | 42 |
|
Year-to-Date Comparison
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended December 31, 2015 | | Nine months ended December 31, 2014 |
| | IBW | | CSG | | Total | | IBW | | CSG | | Total |
Revenue | | $ | 28,569 |
| | $ | 38,730 |
| | $ | 67,299 |
| | $ | 30,632 |
| | $ | 34,882 |
| | $ | 65,514 |
|
Cost of revenue | | 16,702 |
| | 23,974 |
| | 40,676 |
| | 18,543 |
| | 24,827 |
| | 43,370 |
|
Gross profit | | 11,867 |
| | 14,756 |
| | 26,623 |
| | 12,089 |
| | 10,055 |
| | 22,144 |
|
Gross margin | | 41.5 | % | | 38.1 | % | | 39.6 | % | | 39.5 | % | | 28.8 | % | | 33.8 | % |
Research and development | | 8,638 |
| | 5,966 |
| | 14,604 |
| | 6,640 |
| | 6,488 |
| | 13,128 |
|
Segment profit (loss) | | $ | 3,229 |
| | $ | 8,790 |
| | $ | 12,019 |
| | $ | 5,449 |
| | $ | 3,567 |
| | $ | 9,016 |
|
Westell Technologies, Inc.
Reconciliation of GAAP to non-GAAP Financial Measures
(Amounts in thousands, except per share amounts)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
| | Dec. 31, | | Sept. 30, | | Dec. 31, | | Dec. 31, | | Dec. 31, |
| | 2015 | | 2015 | | 2014 | | 2015 | | 2014 |
GAAP net income (loss) | | $ | (4,797 | ) | | $ | (2,473 | ) | | $ | (27,540 | ) | | $ | (11,136 | ) | | $ | (45,902 | ) |
Adjustments: | | | | | | | | | | |
Inventory fair value step-up (1) | | — |
| | — |
| | 79 |
| | — |
| | 540 |
|
Deferred revenue adjustment (1) | | 73 |
| | 73 |
| | 64 |
| | 218 |
| | 322 |
|
Goodwill impairment (2) | | — |
| | — |
| | 20,547 |
| | — |
| | 31,997 |
|
Amortization of intangibles (3) | | 1,418 |
| | 1,432 |
| | 1,562 |
| | 4,249 |
| | 4,857 |
|
Restructuring, separation, and transition (4) | | — |
| | 59 |
| | — |
| | 223 |
| | 55 |
|
Stock-based compensation (5) | | 264 |
| | 253 |
| | 514 |
| | 974 |
| | 1,628 |
|
(Income) loss from discontinued operations (6) | | — |
| | — |
| | — |
| | (272 | ) | | — |
|
Total adjustments | | 1,755 |
| | 1,817 |
| | 22,766 |
| | 5,392 |
| | 39,399 |
|
Non-GAAP net income (loss) | | $ | (3,042 | ) | | $ | (656 | ) | | $ | (4,774 | ) | | $ | (5,744 | ) | | $ | (6,503 | ) |
GAAP net income (loss) per common share: | | | | | | | | | | |
Basic | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.46 | ) | | $ | (0.18 | ) | | $ | (0.77 | ) |
Diluted | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.46 | ) | | $ | (0.18 | ) | | $ | (0.77 | ) |
Non-GAAP net income (loss) per common share: | | | | | | | | | | |
Basic | | $ | (0.05 | ) | | $ | (0.01 | ) | | $ | (0.08 | ) | | $ | (0.09 | ) | | $ | (0.11 | ) |
Diluted | | $ | (0.05 | ) | | $ | (0.01 | ) | | $ | (0.08 | ) | | $ | (0.09 | ) | | $ | (0.11 | ) |
Average number of common shares outstanding: | | | | | | | | | | |
Basic | | 60,810 |
| | 60,783 |
| | 60,016 |
| | 60,765 |
| | 59,885 |
|
Diluted | | 60,810 |
| | 60,783 |
| | 60,016 |
| | 60,765 |
| | 59,885 |
|
|
| | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended December 31, 2015 | | Three Months Ended September 30, 2015 |
| | Revenue | | Gross Profit | | Gross Margin | | Revenue | | Gross Profit | | Gross Margin |
GAAP - Consolidated | | $ | 20,215 |
| | $ | 7,963 |
| | 39.4 | % | | $ | 25,514 |
| | $ | 10,231 |
| | 40.1 | % |
Deferred revenue adjustment (1) | | 73 |
| | 73 |
| | | | 73 |
| | 73 |
| | |
Stock-based compensation (5) | | — |
| | 13 |
| | | | — |
| | 14 |
| | |
Non-GAAP - Consolidated | | $ | 20,288 |
| | $ | 8,049 |
| | 39.7 | % | | $ | 25,587 |
| | $ | 10,318 |
| | 40.3 | % |
|
| | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended December 31, 2015 | | Nine Months Ended December 31, 2014 |
| | Revenue | | Gross Profit | | Gross Margin | | Revenue | | Gross Profit | | Gross Margin |
GAAP - Consolidated | | $ | 67,299 |
| | $ | 26,623 |
| | 39.6 | % | | $ | 65,514 |
| | $ | 22,144 |
| | 33.8 | % |
Inventory fair value step-up (1) | | — |
| | — |
| | | | — |
| | 540 |
| | |
Deferred revenue adjustment (1) | | 218 |
| | 218 |
| | | | 322 |
| | 322 |
| | |
Stock-based compensation (5) | | — |
| | 24 |
| | | | — |
| | 65 |
| | |
Non-GAAP - Consolidated | | $ | 67,517 |
| | $ | 26,865 |
| | 39.8 | % | | $ | 65,836 |
| | $ | 23,071 |
| | 35.0 | % |
|
| | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Nine Months Ended |
| | December 31, | | September 30, | | December 31, | | December 31, | | December 31, |
| | 2015 | | 2015 | | 2014 | | 2015 | | 2014 |
GAAP operating expenses | | $ | 12,838 |
| | $ | 12,663 |
| | $ | 31,978 |
| | $ | 38,168 |
| | $ | 68,232 |
|
Adjustments: | | | | | | | | | | |
Goodwill impairment (2) | | — |
| | — |
| | (20,547 | ) | | — |
| | (31,997 | ) |
Amortization of intangibles (3) | | (1,418 | ) | | (1,432 | ) | | (1,562 | ) | | (4,249 | ) | | (4,857 | ) |
Restructuring, separation, and transition (4) | | — |
| | (59 | ) | | — |
| | (223 | ) | | (55 | ) |
Stock-based compensation (5) | | (251 | ) | | (239 | ) | | (492 | ) | | (950 | ) | | (1,563 | ) |
Total adjustments | | (1,669 | ) | | (1,730 | ) | | (22,601 | ) | | (5,422 | ) | | (38,472 | ) |
Non-GAAP operating expenses | | $ | 11,169 |
| | $ | 10,933 |
| | $ | 9,377 |
| | $ | 32,746 |
| | $ | 29,760 |
|
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 March 1, 2014, the Company purchased Kentrox and Cellular Specialties, Inc. (CSI), respectively. 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. |
| |
(2) | The Company recorded a non-cash charge during the second and third quarters of fiscal year 2015 to record the impairment of the full carrying value of the Company's goodwill related to the Kentrox and CSI acquisitions, respectively. |
| |
(3) | Amortization of intangibles is a non-cash expense arising from the acquisition of intangible assets. |
| |
(4) | 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. |
| |
(5) | Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards. |
| |
(6) | The release of contingent liabilities related to the sale of ConferencePlus are presented as discontinued operations. |
For additional information, contact:
|
|
Tom Minichiello
Chief Financial Officer
Westell Technologies, Inc.
+1 (630) 375 4740 tminichiello@westell.com |
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