NEWS RELEASE |
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 | 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. |
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 |
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 |
Three months ended | Twelve months ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | March 31, 2016 | March 31, 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 |
Assets: | March 31, 2016 (Unaudited) | March 31, 2015 | ||||||||
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 |
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 |
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 |
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 |
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 |
Three months ended | Twelve months ended | |||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | March 31, 2016 | March 31, 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, 2016 | December 31, 2015 | March 31, 2015 | March 31, 2016 | March 31, 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 | % |
(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. |
(2) | Amortization of intangibles is a non-cash expense arising from the acquisition of intangible assets. |
(3) | 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. |
(4) | Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting. |
(5) | 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. |
(6) | Income from discontinued operations resulted from the expiration of indemnity periods and release of contingency reserves related to the sale of ConferencePlus. |
Tom Minichiello Chief Financial Officer Westell Technologies, Inc. +1 (630) 375-4740 tminichiello@westell.com |