![]() | NEWS RELEASE |
1Q17 | 4Q16 | 1Q16 | 1Q17 | 1Q17 | |
3 months ended | 3 months ended | 3 months ended | vs. | vs. | |
06/30/16 | 03/31/16 | 06/30/15 | 4Q16 | 1Q16 | |
Consolidated Revenue | $14.8M | $20.9M | $21.6M | -29% | -31% |
Gross Margin | 30.8% | 37.8% | 39.1% | -7.0% | -8.3% |
Net Income (Loss) | ($7.8M) | ($5.1M) | ($3.9M) | ($2.7M) | ($3.9M) |
Earnings (Loss) Per Share | ($0.13) | ($0.08) | ($0.06) | ($0.05) | ($0.07) |
Non-GAAP Gross Margin (1) | 40.5% | 38.1% | 39.3% | 2.4% | +1.2% |
Non-GAAP Net Income (Loss) (1) | ($3.6M) | ($2.6M) | ($2.0M) | ($1.0M) | ($1.6M) |
Non-GAAP Earnings (Loss) Per Share (1) | ($0.06) | ($0.04) | ($0.03) | ($0.02) | ($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. |
1Q17 | 4Q16 | 1Q16 | 1Q17 | 1Q17 | |
3 months ended | 3 months ended | 3 months ended | vs. | vs. | |
06/30/16 | 03/31/16 | 06/30/15 | 4Q16 | 1Q16 | |
IBW Segment Revenue | $6.1M | $5.8M | $9.1M | 5% | -33% |
IBW Segment Gross Margin (1) | 16.2% | 35.6% | 44.1% | -19.4% | -27.9% |
IBW Segment R&D Expense | $2.4M | $2.4M | $3.2M | $— | ($0.8M) |
IBW Segment Profit (Loss) | ($1.4M) | ($0.3M) | $0.8M | ($1.1M) | ($2.2M) |
(1) 1Q17 IBW Segment Gross Margin was 39.0% when excluding a charge of $1.4 million related to the previously announced discontinuation of the ClearLink DAS and stock-based compensation. Please refer to the GAAP to non-GAAP reconciliation of IBW segment gross margin at the end of the Segment Statement of Operations section. |
1Q17 | 4Q16 | 1Q16 | 1Q17 | 1Q17 | |
3 months ended | 3 months ended | 3 months ended | vs. | vs. | |
06/30/16 | 03/31/16 | 06/30/15 | 4Q16 | 1Q16 | |
ISMS Segment Revenue | $4.1M | $5.2M | $4.5M | -21% | -9% |
ISMS Segment Gross Margin | 48.8% | 53.6% | 49.1% | -4.8% | -0.3% |
ISMS Segment R&D Expense | $1.3M | $1.5M | $1.3M | ($0.2M) | $— |
ISMS Segment Profit (Loss) | $0.7M | $1.3M | $0.9M | ($0.6M) | ($0.2M) |
1Q17 | 4Q16 | 1Q16 | 1Q17 | 1Q17 | |
3 months ended | 3 months ended | 3 months ended | vs. | vs. | |
06/30/16 | 03/31/16 | 06/30/15 | 4Q16 | 1Q16 | |
CNS Segment Revenue | $4.6M | $9.8M | $8.0M | -53% | -43% |
CNS Segment Gross Margin | 34.1% | 30.6% | 27.7% | +3.5% | +6.4% |
CNS Segment R&D Expense | $0.6M | $0.8M | $0.6M | ($0.2M) | $— |
CNS Segment Profit (Loss) | $0.9M | $2.2M | $1.6M | ($1.3M) | ($0.7M) |
Three months ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2016 | 2016 | 2015 | ||||||||||
Revenue | $ | 14,816 | $ | 20,904 | $ | 21,570 | ||||||
Gross profit | 4,565 | 7,893 | 8,429 | |||||||||
Gross margin | 30.8 | % | 37.8 | % | 39.1 | % | ||||||
Operating expenses: | ||||||||||||
R&D | 4,277 | 4,713 | 5,086 | |||||||||
Sales and marketing | 3,381 | 4,608 | 3,196 | |||||||||
General and administrative | 2,345 | 1,747 | 2,969 | |||||||||
Intangible amortization | 1,200 | 1,305 | 1,399 | |||||||||
Restructuring | (36 | ) | 731 | (1) | 17 | |||||||
Long-lived assets impairment | 1,181 | (2) | — | — | ||||||||
Total operating expenses | 12,348 | 13,104 | 12,667 | |||||||||
Operating profit (loss) | (7,783 | ) | (5,211 | ) | (4,238 | ) | ||||||
Other income (expense), net | 17 | 107 | 38 | |||||||||
Income (loss) before income taxes and discontinued operations | (7,766 | ) | (5,104 | ) | (4,200 | ) | ||||||
Income tax benefit (expense) | (2 | ) | 27 | 62 | ||||||||
Net income (loss) from continuing operations | (7,768 | ) | (5,077 | ) | (4,138 | ) | ||||||
Income from discontinued operations (3) | — | 1 | 272 | |||||||||
Net income (loss) | $ | (7,768 | ) | $ | (5,076 | ) | $ | (3,866 | ) | |||
Basic net income (loss) per share: | ||||||||||||
Basic net income (loss) from continuing operations | $ | (0.13 | ) | $ | (0.08 | ) | $ | (0.07 | ) | |||
Basic net income (loss) from discontinued operations | — | — | — | |||||||||
Basic net income (loss) (4) | $ | (0.13 | ) | $ | (0.08 | ) | $ | (0.06 | ) | |||
Diluted net income (loss) per share: | ||||||||||||
Diluted net income (loss) from continuing operations | $ | (0.13 | ) | $ | (0.08 | ) | $ | (0.07 | ) | |||
Diluted net income (loss) from discontinued operations | — | — | — | |||||||||
Diluted net income (loss) (4) | $ | (0.13 | ) | $ | (0.08 | ) | $ | (0.06 | ) | |||
Weighted-average number of common shares outstanding: | ||||||||||||
Basic | 61,016 | 60,847 | 60,703 | |||||||||
Diluted | 61,016 | 60,847 | 60,703 |
(1) | The Company recorded restructuring expense primarily relating to severance costs for terminated employees. |
(2) | Impairment related to long-lived assets associated with ClearLink DAS. |
(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. |
June 30, 2016 (Unaudited) | March 31, 2016 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 15,178 | $ | 19,169 | ||||
Short-term investments | 10,090 | 10,555 | ||||||
Accounts receivable, net | 10,885 | 16,361 | ||||||
Inventories | 13,732 | 13,498 | ||||||
Prepaid expenses and other current assets | 1,780 | 1,900 | ||||||
Total current assets | 51,665 | 61,483 | ||||||
Land, property and equipment, net | 2,809 | 3,977 | ||||||
Intangible assets, net | 19,188 | 20,388 | ||||||
Other non-current assets | 173 | 183 | ||||||
Total assets | $ | 73,835 | $ | 86,031 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Accounts payable | $ | 5,087 | $ | 7,856 | ||||
Accrued expenses | 5,425 | 5,932 | ||||||
Accrued restructuring | 1,090 | 1,537 | ||||||
Contingent consideration payable | 47 | 311 | ||||||
Deferred revenue | 989 | 1,601 | ||||||
Total current liabilities | 12,638 | 17,237 | ||||||
Deferred revenue non-current | 1,400 | 1,236 | ||||||
Deferred income tax liability | 12 | 10 | ||||||
Accrued restructuring non-current | 271 | 550 | ||||||
Other non-current liabilities | 276 | 314 | ||||||
Total liabilities | 14,597 | 19,347 | ||||||
Total stockholders’ equity | 59,238 | 66,684 | ||||||
Total liabilities and stockholders’ equity | $ | 73,835 | $ | 86,031 |
Three months ended June 30, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (7,768 | ) | $ | (3,866 | ) | ||
Reconciliation of net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 1,585 | 1,696 | ||||||
Long-lived assets impairment | 1,181 | — | ||||||
Stock-based compensation | 406 | 457 | ||||||
Restructuring | (36 | ) | 17 | |||||
Deferred taxes | 2 | 110 | ||||||
Exchange rate loss (gain) | 6 | (6 | ) | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 5,470 | (2,607 | ) | |||||
Inventory | (234 | ) | 1,420 | |||||
Accounts payable and accrued expenses | (4,144 | ) | 2,521 | |||||
Deferred revenue | (448 | ) | (275 | ) | ||||
Other | 128 | (76 | ) | |||||
Net cash provided by (used in) operating activities | (3,852 | ) | (609 | ) | ||||
Cash flows from investing activities: | ||||||||
Net maturity (purchase) of short-term investments and debt securities | 465 | 7,835 | ||||||
Proceeds from sale of land | — | 264 | ||||||
Purchases of property and equipment, net | (396 | ) | (455 | ) | ||||
Net cash provided by (used in) investing activities | 69 | 7,644 | ||||||
Cash flows from financing activities: | ||||||||
Purchase of treasury stock | (84 | ) | (49 | ) | ||||
Payment of contingent consideration | (127 | ) | (167 | ) | ||||
Net cash provided by (used in) financing activities | (211 | ) | (216 | ) | ||||
(Gain) loss of exchange rate changes on cash | 3 | 2 | ||||||
Net increase (decrease) in cash and cash equivalents | (3,991 | ) | 6,821 | |||||
Cash and cash equivalents, beginning of period | 19,169 | 14,026 | ||||||
Cash and cash equivalents, end of period | $ | 15,178 | $ | 20,847 |
Three months ended June 30, 2016 | Three Months ended March 31, 2016 | |||||||||||||||||||||||||||||||
IBW | ISMS | CNS | Total | IBW | ISMS | CNS | Total | |||||||||||||||||||||||||
Revenue | $ | 6,121 | $ | 4,139 | $ | 4,556 | $ | 14,816 | $ | 5,838 | $ | 5,245 | $ | 9,821 | $ | 20,904 | ||||||||||||||||
Gross profit | 994 | 2,019 | 1,552 | 4,565 | 2,077 | 2,809 | 3,007 | 7,893 | ||||||||||||||||||||||||
Gross margin (1) | 16.2 | % | 48.8 | % | 34.1 | % | 30.8 | % | 35.6 | % | 53.6 | % | 30.6 | % | 37.8 | % | ||||||||||||||||
R&D expenses | 2,364 | 1,294 | 619 | 4,277 | 2,421 | 1,471 | 821 | 4,713 | ||||||||||||||||||||||||
Segment profit (loss) | $ | (1,370 | ) | $ | 725 | $ | 933 | $ | 288 | $ | (344 | ) | $ | 1,338 | $ | 2,186 | $ | 3,180 | ||||||||||||||
(1) 1Q17 IBW Segment Gross Margin was 39.0% when excluding a charge of $1.4 million related to the previously announced discontinuation of the ClearLink DAS and stock-based compensation. Please refer to the GAAP to non-GAAP reconciliation of IBW segment gross margin at the end of the Segment Statement of Operations section. |
Three months ended June 30, 2016 | Three months ended June 30, 2015 | |||||||||||||||||||||||||||||||
IBW | ISMS | CNS | Total | IBW | ISMS | CNS | Total | |||||||||||||||||||||||||
Revenue | $ | 6,121 | $ | 4,139 | $ | 4,556 | $ | 14,816 | $ | 9,070 | $ | 4,505 | $ | 7,995 | $ | 21,570 | ||||||||||||||||
Gross profit | 994 | 2,019 | 1,552 | 4,565 | 4,001 | 2,211 | 2,217 | 8,429 | ||||||||||||||||||||||||
Gross margin (1) | 16.2 | % | 48.8 | % | 34.1 | % | 30.8 | % | 44.1 | % | 49.1 | % | 27.7 | % | 39.1 | % | ||||||||||||||||
R&D expenses | 2,364 | 1,294 | 619 | 4,277 | 3,162 | 1,281 | 643 | 5,086 | ||||||||||||||||||||||||
Segment profit (loss) | $ | (1,370 | ) | $ | 725 | $ | 933 | $ | 288 | $ | 839 | $ | 930 | $ | 1,574 | $ | 3,343 | |||||||||||||||
(1) 1Q17 IBW Segment Gross Margin was 39.0% when excluding a charge of $1.4 million related to the previously announced discontinuation of the ClearLink DAS and stock-based compensation. Please refer to the GAAP to non-GAAP reconciliation of IBW segment gross margin at the end of the Segment Statement of Operations section. |
Three months ended June 30, 2016 | |||||||||||
Revenue | Gross Profit | Gross Margin | |||||||||
GAAP - IBW segment | $ | 6,121 | $ | 994 | 16.2 | % | |||||
ClearLink DAS E&O (2) | — | 1,389 | |||||||||
Stock-based compensation (3) | — | 3 | |||||||||
Non-GAAP - IBW segment | $ | 6,121 | $ | 2,386 | 39.0 | % | |||||
(2) Excess and Obsolete inventory charges on ClearLink DAS inventory and firm purchase commitments. | |||||||||||
(3) Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards. |
Three months ended June 30, 2016 | Three Months ended March 31, 2016 | Three Months ended June 30, 2015 | |||||||||||||||||||||||||||||||
Revenue | Gross Profit | Gross Margin | Revenue | Gross Profit | Gross Margin | Revenue | Gross Profit | Gross Margin | |||||||||||||||||||||||||
GAAP - Consolidated | $ | 14,816 | $ | 4,565 | 30.8 | % | $ | 20,904 | 7,893 | 37.8 | % | $ | 21,570 | $ | 8,429 | 39.1 | % | ||||||||||||||||
Deferred revenue adjustment (1) | 63 | 63 | 63 | 63 | 73 | 73 | |||||||||||||||||||||||||||
ClearLink DAS E&O (2) | — | 1,389 | — | 59 | — | — | |||||||||||||||||||||||||||
Stock-based compensation (3) | — | 6 | — | (29 | ) | — | (3 | ) | |||||||||||||||||||||||||
Non-GAAP - Consolidated | $ | 14,879 | $ | 6,023 | 40.5 | % | $ | 20,967 | $ | 7,986 | 38.1 | % | $ | 21,643 | $ | 8,499 | 39.3 | % |
Three months ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2016 | 2016 | 2015 | ||||||||||
GAAP consolidated operating expenses | $ | 12,348 | $ | 13,104 | $ | 12,667 | ||||||
Adjustments: | ||||||||||||
Stock-based compensation (3) | (400 | ) | (320 | ) | (460 | ) | ||||||
Long-lived asset impairment (4) | (1,181 | ) | — | — | ||||||||
Amortization of intangibles (5) | (1,200 | ) | (1,305 | ) | (1,399 | ) | ||||||
Restructuring, separation, and transition (6) | 36 | (799 | ) | (164 | ) | |||||||
Total adjustments | (2,745 | ) | (2,424 | ) | (2,023 | ) | ||||||
Non-GAAP consolidated operating expenses | $ | 9,603 | $ | 10,680 | $ | 10,644 |
Three months ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2016 | 2016 | 2015 | ||||||||||
GAAP consolidated operating profit (loss) | $ | (7,783 | ) | $ | (5,211 | ) | $ | (4,238 | ) | |||
Adjustments: | ||||||||||||
Deferred revenue adjustment (1) | 63 | 63 | 73 | |||||||||
ClearLink DAS E&O (2) | 1,389 | 59 | — | |||||||||
Stock-based compensation (3) | 406 | 291 | 457 | |||||||||
Long-lived asset impairment (4) | 1,181 | — | — | |||||||||
Amortization of intangibles (5) | 1,200 | 1,305 | 1,399 | |||||||||
Restructuring, separation, and transition (6) | (36 | ) | 799 | 164 | ||||||||
Total adjustments | 4,203 | 2,517 | 2,093 | |||||||||
Non-GAAP consolidated operating profit (loss) from continuing operations | $ | (3,580 | ) | $ | (2,694 | ) | $ | (2,145 | ) | |||
Depreciation | 385 | 458 | 297 | |||||||||
Non-GAAP consolidated Adjusted EBITDA from continuing operations | $ | (3,195 | ) | $ | (2,236 | ) | $ | (1,848 | ) |
Three months ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2016 | 2016 | 2015 | ||||||||||
GAAP consolidated net income (loss) | $ | (7,768 | ) | $ | (5,076 | ) | $ | (3,866 | ) | |||
Adjustments: | ||||||||||||
Deferred revenue adjustment (1) | 63 | 63 | 73 | |||||||||
ClearLink DAS E&O (2) | 1,389 | 59 | — | |||||||||
Stock-based compensation (3) | 406 | 291 | 457 | |||||||||
Long-lived asset impairment (4) | 1,181 | — | — | |||||||||
Amortization of intangibles (5) | 1,200 | 1,305 | 1,399 | |||||||||
Restructuring, separation, and transition (6) | (36 | ) | 799 | 164 | ||||||||
(Income) loss from discontinued operations (7) | — | (1 | ) | (272 | ) | |||||||
Total adjustments | 4,203 | 2,516 | 1,821 | |||||||||
Non-GAAP consolidated net income (loss) | $ | (3,565 | ) | $ | (2,560 | ) | $ | (2,045 | ) | |||
GAAP consolidated net income (loss) per common share: | ||||||||||||
Basic and diluted | $ | (0.13 | ) | $ | (0.08 | ) | $ | (0.06 | ) | |||
Non-GAAP consolidated net income (loss) per common share: | ||||||||||||
Basic and diluted | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.03 | ) | |||
Average number of common shares outstanding: | ||||||||||||
Basic and diluted | 61,016 | 60,847 | 60,703 |
(1) | On April 1, 2013, the Company purchased Kentrox. The acquisition required the step-down on acquired deferred revenue, which resulted in lower revenue that will not recur once those liabilities have fully settled. The adjustment removes the step-down on acquired deferred revenue that was recognized. |
(2) | Excess and Obsolete inventory charges on ClearLink DAS inventory and firm purchase commitments. |
(3) | Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards. |
(4) | Impairment related to long-lived assets associated with ClearLink DAS. |
(5) | Amortization of intangibles is a non-cash expense arising from the acquisition of intangible assets. |
(6) | 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. |
(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 |