![]() | NEWS RELEASE |
Three months ended | Six months ended | ||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||
2015 | 2015 | 2014 (1) | 2015 | 2014 (1) | |||||||||||||||||
Revenue | $ | 25,514 | $ | 21,570 | $ | 23,646 | $ | 47,084 | $ | 51,471 | |||||||||||
Gross profit | 10,231 | 8,429 | 8,065 | 18,660 | 17,749 | ||||||||||||||||
Gross margin | 40.1 | % | 39.1 | % | 34.1 | % | 39.6 | % | 34.5 | % | |||||||||||
Operating expenses: | |||||||||||||||||||||
Research and development | 4,625 | 5,086 | 4,300 | 9,711 | 8,775 | ||||||||||||||||
Sales and marketing | 4,026 | 3,196 | 2,924 | 7,222 | 6,345 | ||||||||||||||||
General and administrative | 2,580 | 2,969 | 3,280 | 5,549 | 6,334 | ||||||||||||||||
Intangible amortization | 1,432 | 1,399 | 1,710 | 2,831 | 3,295 | ||||||||||||||||
Restructuring | — | 17 | (2 | ) | 17 | 55 | |||||||||||||||
Goodwill impairment (2) | — | — | 11,450 | — | 11,450 | ||||||||||||||||
Total operating expenses | 12,663 | 12,667 | 23,662 | 25,330 | 36,254 | ||||||||||||||||
Operating income (loss) | (2,432 | ) | (4,238 | ) | (15,597 | ) | (6,670 | ) | (18,505 | ) | |||||||||||
Other income (expense), net | (61 | ) | 38 | (16 | ) | (23 | ) | 45 | |||||||||||||
Income (loss) before income taxes and discontinued operations | (2,493 | ) | (4,200 | ) | (15,613 | ) | (6,693 | ) | (18,460 | ) | |||||||||||
Income tax benefit (expense) | 20 | 62 | 69 | 82 | 98 | ||||||||||||||||
Net income (loss) from continuing operations | (2,473 | ) | (4,138 | ) | (15,544 | ) | (6,611 | ) | (18,362 | ) | |||||||||||
Income from discontinued operations (3) | — | 272 | — | 272 | — | ||||||||||||||||
Net income (loss) | $ | (2,473 | ) | $ | (3,866 | ) | $ | (15,544 | ) | $ | (6,339 | ) | $ | (18,362 | ) | ||||||
Basic net income (loss) per share: | |||||||||||||||||||||
Basic net income (loss) from continuing operations | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.26 | ) | $ | (0.11 | ) | $ | (0.31 | ) | ||||||
Basic net income (loss) from discontinued operations | — | — | — | — | — | ||||||||||||||||
Basic net income (loss) (4) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | (0.10 | ) | $ | (0.31 | ) | ||||||
Diluted net income (loss) per share: | |||||||||||||||||||||
Diluted net income (loss) from continuing operations | $ | (0.04 | ) | $ | (0.07 | ) | $ | (0.26 | ) | $ | (0.11 | ) | $ | (0.31 | ) | ||||||
Diluted net income (loss) from discontinued operations | — | — | — | — | — | ||||||||||||||||
Diluted net income (loss) (4) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | (0.10 | ) | $ | (0.31 | ) | ||||||
Weighted-average number of common shares outstanding: | |||||||||||||||||||||
Basic | 60,783 | 60,703 | 59,924 | 60,743 | 59,819 | ||||||||||||||||
Diluted | 60,783 | 60,703 | 59,924 | 60,743 | 59,819 |
(1) | Reflects unaudited adjustment to correct previously unidentified error. |
(2) | The Company recorded a non-cash charge during the second quarter of fiscal year 2015 to record the impairment of the full carrying value of the Company's goodwill related to the Kentrox acquisition. |
(3) | Income from discontinued operations resulted from the expiration of indemnity periods and release of contingency reserves related to the sale of ConferencePlus. |
(4) | Totals may not sum due to rounding. |
September 30, 2015 | March 31, 2015 (1) | ||||||||
Assets | |||||||||
Cash and cash equivalents | $ | 32,878 | $ | 14,026 | |||||
Short-term investments | 3,476 | 23,906 | |||||||
Accounts receivable, net | 17,130 | 11,845 | |||||||
Inventories | 12,196 | 16,205 | |||||||
Prepaid expenses and other current assets | 2,470 | 3,285 | |||||||
Deferred income taxes | 1,030 | 1,043 | |||||||
Land held-for-sale | — | 264 | |||||||
Total current assets | 69,180 | 70,574 | |||||||
Property and equipment, net | 4,468 | 3,603 | |||||||
Intangible assets, net | 23,110 | 25,942 | |||||||
Other non-current assets | 140 | 258 | |||||||
Total assets | $ | 96,898 | $ | 100,377 | |||||
Liabilities and Stockholders’ Equity | |||||||||
Accounts payable | $ | 7,643 | $ | 4,011 | |||||
Accrued expenses | 6,203 | 5,576 | |||||||
Accrued restructuring | 1,092 | 1,161 | |||||||
Contingent consideration payable | 1,030 | 1,184 | |||||||
Deferred revenue | 1,217 | 2,415 | |||||||
Total current liabilities | 17,185 | 14,347 | |||||||
Deferred revenue non-current | 1,104 | 751 | |||||||
Deferred income tax liability | 1,133 | 1,089 | |||||||
Accrued restructuring non-current | 1,099 | 1,642 | |||||||
Contingent consideration payable non-current | — | 400 | |||||||
Other non-current liabilities | 352 | 409 | |||||||
Total liabilities | 20,873 | 18,638 | |||||||
Total stockholders’ equity | 76,025 | 81,739 | |||||||
Total liabilities and stockholders’ equity | $ | 96,898 | $ | 100,377 |
Six months ended September 30, | |||||||||
2015 | 2014 (1) | ||||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | (6,339 | ) | $ | (18,362 | ) | |||
Reconciliation of net loss to net cash used in operating activities: | |||||||||
Depreciation and amortization | 3,495 | 3,755 | |||||||
Goodwill impairment | — | 11,450 | |||||||
Stock-based compensation | 710 | 1,114 | |||||||
Restructuring | 17 | 55 | |||||||
Deferred taxes | 57 | (28 | ) | ||||||
Exchange rate loss | 60 | 4 | |||||||
Changes in assets and liabilities: | |||||||||
Accounts receivable | (5,342 | ) | 3,890 | ||||||
Inventory | 4,009 | 1,793 | |||||||
Accounts payable and accrued expenses | 3,476 | (3,229 | ) | ||||||
Deferred revenue | (845 | ) | (642 | ) | |||||
Other | 933 | (14 | ) | ||||||
Net cash provided by (used in) operating activities | 231 | (214 | ) | ||||||
Cash flows from investing activities: | |||||||||
Net maturity (purchase) of short-term investments and debt securities | 20,430 | (4,786 | ) | ||||||
Acquisitions, net of cash acquired | — | (304 | ) | ||||||
Proceeds from sale of land | 264 | — | |||||||
Purchases of property and equipment, net | (1,530 | ) | (1,155 | ) | |||||
Net cash provided by (used in) investing activities | 19,164 | (6,245 | ) | ||||||
Cash flows from financing activities: | |||||||||
Purchase of treasury stock | (85 | ) | (688 | ) | |||||
Proceeds from stock options exercised | — | 155 | |||||||
Payment of contingent consideration | (455 | ) | (879 | ) | |||||
Net cash provided by (used in) financing activities | (540 | ) | (1,412 | ) | |||||
(Gain) loss of exchange rate changes on cash | (3 | ) | (2 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 18,852 | (7,873 | ) | ||||||
Cash and cash equivalents, beginning of period | 14,026 | 35,793 | |||||||
Cash and cash equivalents, end of period | $ | 32,878 | $ | 27,920 |
Three months ended September 30, 2015 | Three Months Ended June 30, 2015 | |||||||||||||||||||||||
IBW | CSG | Total | IBW | CSG | Total | |||||||||||||||||||
Revenue | $ | 10,819 | $ | 14,695 | $ | 25,514 | $ | 9,070 | $ | 12,500 | $ | 21,570 | ||||||||||||
Cost of revenue | 6,272 | 9,011 | 15,283 | 5,069 | 8,072 | 13,141 | ||||||||||||||||||
Gross profit | 4,547 | 5,684 | 10,231 | 4,001 | 4,428 | 8,429 | ||||||||||||||||||
Gross margin | 42.0 | % | 38.7 | % | 40.1 | % | 44.1 | % | 35.4 | % | 39.1 | % | ||||||||||||
Research and development | 2,775 | 1,850 | 4,625 | 3,162 | 1,924 | 5,086 | ||||||||||||||||||
Segment profit (loss) | $ | 1,772 | $ | 3,834 | $ | 5,606 | $ | 839 | $ | 2,504 | $ | 3,343 |
Three months ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||||
IBW | CSG | Total | IBW | CSG | Total | |||||||||||||||||||
Revenue | $ | 10,819 | $ | 14,695 | $ | 25,514 | $ | 11,121 | $ | 12,525 | $ | 23,646 | ||||||||||||
Cost of revenue | 6,272 | 9,011 | 15,283 | 6,753 | 8,828 | 15,581 | ||||||||||||||||||
Gross profit | 4,547 | 5,684 | 10,231 | 4,368 | 3,697 | 8,065 | ||||||||||||||||||
Gross margin | 42.0 | % | 38.7 | % | 40.1 | % | 39.3 | % | 29.5 | % | 34.1 | % | ||||||||||||
Research and development | 2,775 | 1,850 | 4,625 | 2,103 | 2,197 | 4,300 | ||||||||||||||||||
Segment profit (loss) | $ | 1,772 | $ | 3,834 | $ | 5,606 | $ | 2,265 | $ | 1,500 | $ | 3,765 |
Six months ended September 30, 2015 | Six months ended September 30, 2014 | |||||||||||||||||||||||
IBW | CSG | Total | IBW | CSG | Total | |||||||||||||||||||
Revenue | $ | 19,889 | $ | 27,195 | $ | 47,084 | $ | 25,218 | $ | 26,253 | $ | 51,471 | ||||||||||||
Cost of revenue | 11,341 | 17,083 | 28,424 | 15,039 | 18,683 | 33,722 | ||||||||||||||||||
Gross profit | 8,548 | 10,112 | 18,660 | 10,179 | 7,570 | 17,749 | ||||||||||||||||||
Gross margin | 43.0 | % | 37.2 | % | 39.6 | % | 40.4 | % | 28.8 | % | 34.5 | % | ||||||||||||
Research and development | 5,937 | 3,774 | 9,711 | 4,298 | 4,477 | 8,775 | ||||||||||||||||||
Segment profit (loss) | $ | 2,611 | $ | 6,338 | $ | 8,949 | $ | 5,881 | $ | 3,093 | $ | 8,974 |
Three months ended | Six months ended | |||||||||||||||||||
Sept. 30, | June 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||
2015 | 2015 | 2014 (1) | 2015 | 2014 (1) | ||||||||||||||||
GAAP net income (loss) | $ | (2,473 | ) | $ | (3,866 | ) | $ | (15,544 | ) | $ | (6,339 | ) | $ | (18,362 | ) | |||||
Adjustments: | ||||||||||||||||||||
Inventory fair value step-up (2) | — | — | 206 | — | 462 | |||||||||||||||
Deferred revenue adjustment (2) | 73 | 73 | 112 | 146 | 258 | |||||||||||||||
Goodwill impairment (3) | — | — | 11,450 | — | 11,450 | |||||||||||||||
Amortization of intangibles (4) | 1,432 | 1,399 | 1,710 | 2,831 | 3,295 | |||||||||||||||
Restructuring, separation, and transition (5) | 59 | 164 | (2 | ) | 223 | 55 | ||||||||||||||
Stock-based compensation (6) | 253 | 457 | 560 | 710 | 1,114 | |||||||||||||||
(Income) loss from discontinued operations (7) | — | (272 | ) | — | (272 | ) | — | |||||||||||||
Total adjustments | 1,817 | 1,821 | 14,036 | 3,638 | 16,634 | |||||||||||||||
Non-GAAP net income (loss) | $ | (656 | ) | $ | (2,045 | ) | $ | (1,508 | ) | $ | (2,701 | ) | $ | (1,728 | ) | |||||
GAAP net income (loss) per common share: | ||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | (0.10 | ) | $ | (0.31 | ) | |||||
Diluted | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | (0.10 | ) | $ | (0.31 | ) | |||||
Non-GAAP net income (loss) per common share: | ||||||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.03 | ) | |||||
Diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.03 | ) | |||||
Average number of common shares outstanding: | ||||||||||||||||||||
Basic | 60,783 | 60,703 | 59,924 | 60,743 | 59,819 | |||||||||||||||
Diluted | 60,783 | 60,703 | 59,924 | 60,743 | 59,819 |
Three Months Ended September 30, 2015 | Three Months Ended June 30, 2015 | |||||||||||||||||||||
Revenue | Gross Profit | Gross Margin | Revenue | Gross Profit | Gross Margin | |||||||||||||||||
GAAP - Consolidated | $ | 25,514 | $ | 10,231 | 40.1 | % | $ | 21,570 | $ | 8,429 | 39.1 | % | ||||||||||
Deferred revenue adjustment (2) | 73 | 73 | 73 | 73 | ||||||||||||||||||
Stock-based compensation (6) | — | 14 | — | (3 | ) | |||||||||||||||||
Non-GAAP - Consolidated | $ | 25,587 | $ | 10,318 | 40.3 | % | $ | 21,643 | $ | 8,499 | 39.3 | % |
Three months ended | Six months ended | |||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
2015 | 2015 | 2014 (1) | 2015 | 2014 (1) | ||||||||||||||||
GAAP operating expenses | $ | 12,663 | $ | 12,667 | $ | 23,662 | $ | 25,330 | $ | 36,254 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill impairment (3) | — | — | (11,450 | ) | — | (11,450 | ) | |||||||||||||
Amortization of intangibles (4) | (1,432 | ) | (1,399 | ) | (1,710 | ) | (2,831 | ) | (3,295 | ) | ||||||||||
Restructuring, separation, and transition (5) | (59 | ) | (164 | ) | 2 | (223 | ) | (55 | ) | |||||||||||
Stock-based compensation (6) | (239 | ) | (460 | ) | (535 | ) | (699 | ) | (1,071 | ) | ||||||||||
Total adjustments | (1,730 | ) | (2,023 | ) | (13,693 | ) | (3,753 | ) | (15,871 | ) | ||||||||||
Non-GAAP operating expenses | $ | 10,933 | $ | 10,644 | $ | 9,969 | $ | 21,577 | $ | 20,383 |
(1) | Reflects unaudited adjustment to correct previously unidentified error. |
(2) | 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. |
(3) | The Company recorded a non-cash charge during the second quarter of fiscal 2015 to record the impairment of the full carrying value of the Company's goodwill related to the Kentrox acquisition. |
(4) | Amortization of intangibles is a non-cash expense arising from the acquisition of intangible assets. |
(5) | 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. |
(6) | Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards. |
(7) | The release of contingent liabilities related to the sale of ConferencePlus are presented as discontinued operations. |
Tom Minichiello Chief Financial Officer Westell Technologies, Inc. +1 (630) 375 4740 tminichiello@westell.com |