WESTELL NEWS RELEASE News Release: FOR IMMEDIATE RELEASE For Additional Information, contact: CFO: Trade/Business Press: Nicholas Hindman Ken Trantowski Westell Technologies, Inc. KGT Communications Group 630.375.4136 630.469.8765 nhind@westell.com kennethg_trantowski@msn.com WESTELL TECHNOLOGIES REPORTS 1ST QUARTER FISCAL 2004 RESULTS AURORA, IL, JULY 22, 2003 - - Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of broadband access solutions, announced today the Company's fifth consecutive profitable quarter with the results for its fiscal 2004 first quarter ending June 30, 2003. Net income for the quarter was $4.6 million or $0.07 per share, compared with net income of $459,000 or $0.01 per share, for the same period last year. Revenues for the quarter were $55.3 million compared to $49.8 million for the comparable quarter of last year. "We continue to see strength and unit growth in our DSL and conferencing businesses," stated Van Cullens, Westell's President and CEO. "Our balance sheet continues to improve, providing us with increased flexibility going forward. During the quarter we generated nearly $6 million in cash from operations and obtained a three-year renewal of our $30 million revolving credit facility," Cullens said. "Overall revenue growth continues to be dependent upon winning additional market share and that is where our efforts are squarely pointed. The extensive marketing programs undertaken by many of the RBOCs seem to be driving additional demand for DSL service, and Westell is vigorously working to benefit from that demand," Cullens added. Westell maintained it previous guidance for the second fiscal quarter ending September 30, 2003 that revenue is expected to be in a range of $53 million to $56 million and EPS in a range of $0.06 to $0.07 per share. Westell's conference call information, earnings press release and any related earnings information to be discussed on the conference call will be posted on the Investor Relations section of the Company's web site at http://www.westell.com ABOUT WESTELL - ------------- Westell Technologies, Inc. (NASDAQ: WSTL) headquartered in Aurora, Illinois is a broadband access solutions company that provides leading broadband products, service solutions, and conferencing solutions for carriers, service providers and business enterprises around the world. Westell delivers innovative, open broadband solutions that meet our customers' needs for fast and seamless broadband connection. ConferencePlus, a Westell subsidiary, offers conferencing services including voice, video, and IP data conferencing, to carriers and multi-national corporations throughout the world. For more information visit www.westell.com. "Safe Harbor" statement under the Private Securities Litigation Reform Act 1995: Certain statements contained herein including, without limitation, statements containing the words "believe," "goal," " on track, " "anticipate," "committed" "expectation," "expect," "estimate", "await," "continue," "intend," "may," "will," "should," and similar expressions are forward looking statements that involve risks and uncertainties. These risks include, but are not limited to, product demand and market acceptance risks, need for financing, the economic downturn in the U.S. economy and telecom market, the impact of competitive products or technologies, competitive pricing pressures, product development, excess and obsolete inventory due to new product development, commercialization and technological delays or difficulties (including delays or difficulties in developing, producing, testing and selling new products and technologies), the effect of Westell's accounting policies, the need for additional capital, the effect of economic conditions and trade, legal social and economic risks (such as import, licensing and trade restrictions) and other risks more fully described in Westell's Annual Report on Form 10-K for the fiscal year ended March 31, 2003 under the section "Risk Factors". Westell undertakes no obligation to release publicly the result of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Financial Tables to Follow: Westell Technologies, Inc. Financial Results (Dollars in thousands except per share amounts) Three Months ended June 30, 2003 2002 ---------- ---------- Revenues NSA $13,546 $15,659 CNE 30,160 23,371 (1) Services 11,580 10,775 ---------- ---------- Total revenues 55,286 49,805 ---------- ---------- Gross profit Equipment 15,445 10,074 Services 4,825 3,937 ---------- ---------- Total gross profit 20,270 14,011 ---------- ---------- Gross margin Equipment 35.3% 25.8% Services 41.7% 36.5% ---------- ---------- Total gross margin 36.7% 28.1% ---------- ---------- Operating expenses Sales & marketing 5,426 4,333 Expense to revenue 9.8% 8.7% General & administrative 5,134 4,651 Expense to revenue 9.3% 9.3% Research & development 4,435 3,446 (2) Expense to revenue 8.0% 6.9% Intangibles amortization 364 (3) 389 (3) Expense to revenue 0.7% 0.8% ---------- ---------- Total operating expenses 15,359 12,819 ---------- ---------- Expense to revenue 27.8% 25.7% Operating income 4,911 1,192 Other income 44 50 Interest expense 359 783 ---------- ---------- Income before taxes 4,596 459 ---------- ---------- Income taxes - (4) - (4) Effective tax rate 0.0% 0.0% Net income $4,596 $459 ========== ========== Income per common share: Basic 0.07 0.01 ---------- ---------- Diluted 0.07 0.01 ---------- ---------- Average number of common shares outstanding: Basic 65,495 64,921 Diluted 69,014 64,922 Footnotes: (1) The Company earned $1.7 million in the three months ended June 30, 2002 from a customer for product royalties (2) The Company earned $250,000 in the three months ended June 30, 2002 from a customer to fund engineering projects which were offset against research and development expenses. (3) Teltrend product technology intangible amortization. (4) Valuation allowances were utilized for taxable income. Westell Technologies, Inc. Financial Results (continued) (Dollars in thousands) Jun. 30, Mar. 31, 2003 2003 ---------- ---------- Cash and Short term Investments 13,862 11,474 Receivables 23,836 22,633 Inventory 12,660 11,843 Goodwill and intangibles 15,035 15,399 Total current assets 53,657 49,781 Total current liabilities 38,209 44,120 Total assets 111,388 109,474 Revolving Promissory note payable 16,340 14,956 Term notes payable to a bank - 5,000 Vendor notes payable 9,722 12,389 Total liabilities 59,605 65,981 Shareholders' Equity 51,783 43,493 Days Sales Outstanding 39 37 - --------------------------- Contact: Westell Technologies, Inc. Nicholas Hindman, CFO, 630-375-4136 nhind@westell.com ----------------- or Trade/Business Press KGT Communications Group Ken Trantowski, 630-469-8765 kennethg_trantowski@msn.com --------------------------- - --------------------------------------- Source: Westell Technologies, Inc.