Exhibit 99.1
westelllogoonelinea01a05.jpg
 
NEWS RELEASE

Westell Reports Fiscal Fourth Quarter 2017 Revenue of $15.4 Million
Sequential revenue growth and gross margin increase drives EPS improvement

AURORA, IL, May 24, 2017 – Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of high-performance wireless infrastructure solutions, announced results for its fiscal 2017 fourth quarter ended March 31, 2017 (4Q17). Management will host a conference call to discuss financial and business results after market close today, Wednesday, May 24, 2017 at 4:30 PM Eastern Time (details below).
Consolidated revenue for 4Q17 was $15.4 million, and consisted of $6.9 million from the In-Building Wireless (IBW) segment, $4.5 million from the Intelligent Site Management and Services (ISMS) segment, and $3.9 million from the Communication Network Solutions (CNS) segment.
IBW recorded its highest quarterly revenue since December 2015, including record quarterly sales of the Universal DAS Interface Tray (UDIT) and first revenue for the recently announced two-watt public safety repeater. Also up sequentially were product sales within ISMS driven by software revenue and sales of integrated cabinets within CNS driven by new projects.
 
4Q17
3 months ended 03/31/17
3Q17
3 months ended 12/31/16
 + favorable /
- unfavorable
Consolidated Revenue
$15.4M
$15.0M
+3%
Net Income (Loss)
($0.6M)
($1.8M)
+69%
Gross Margin
44.0%
40.4%
+3.6%
Earnings (Loss) Per Share
($0.01)
($0.03)
+69%
Non-GAAP Net Income (1)
$1.0M
$0.2M
+375%
Non-GAAP Earnings Per Share (1)
$0.02
$—
+375%
Non-GAAP Adjusted EBITDA (1)
$1.2M
$0.5M
+142%
(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.

“We once again delivered sequential bottom-line improvements in 4Q17, as GAAP performance was better by $1.3 million and non-GAAP performance, positive for the second consecutive quarter, improved $0.8 million. Highlights included sequential revenue growth, gross margin increase, and continuous expense control,” said Kirk Brannock, President and CEO of Westell Technologies. “Our top priority is driving revenue growth. We continue to expand our IBW public safety product portfolio. We also expect the emerging centralized radio access network (CRAN) architecture to present us with growth opportunities for both our ISMS and CNS products and solutions.”





GAAP operating expenses were $7.4 million in 4Q17, a 6% reduction compared to $7.8 million in 3Q17. Non-GAAP operating expenses, which exclude stock-based compensation, amortization of acquired intangible assets, and restructuring charges, were $5.9 million in 4Q17, flat compared to 3Q17.
Cash was $21.8 million at March 31, 2017 compared to $23.8 million at December 31, 2016 and $20.9 million at September 30, 2016. Cash decreased $2.1 million in 4Q17 due primarily to a lower accounts payable and higher receivables at March 31, as well as employee severance payments. Cash increased $0.9 million during the second half of fiscal 2017, the period in which the majority of our cost and expense reset took effect.
In-Building Wireless (IBW) Segment
IBW’s sequential revenue increase was driven by higher sales for all product lines in the segment, led by record quarterly sales of UDIT. IBW’s gross margin increase was driven primarily by the higher revenue and lower product costs.
.
 
4Q17
3 months ended 03/31/17
3Q17
3 months ended 12/31/16
 + favorable /
- unfavorable
IBW Segment Revenue
$6.9M
$6.2M
+12%
IBW Segment Gross Margin
42.2%
40.3%
+1.9%
IBW Segment R&D Expense
$1.5M
$1.3M
-13%
IBW Segment Profit
$1.5M
$1.2M
+21%
Intelligent Site Management & Services (ISMS) Segment
ISMS’s sequential revenue decrease was due to lower services revenue, partially offset by higher sales of both our remote monitoring units and management systems. ISMS’s gross margin increase was driven primarily by a more favorable mix and lower costs.
 
4Q17
3 months ended 03/31/17
3Q17
3 months ended 12/31/16
 + favorable /
- unfavorable
ISMS Segment Revenue
$4.5M
$5.5M
-18%
ISMS Segment Gross Margin
56.2%
50.6%
+5.6%
ISMS Segment R&D Expense
$0.6M
$0.8M
+23%
ISMS Segment Profit
$1.9M
$2.0M
-3%
Communication Network Solutions Group (CNS) Segment
CNS’s sequential revenue increase was driven primarily by higher sales of integrated cabinets. CNS’s gross margin increase was driven by the higher revenue and lower costs.





 
4Q17
3 months ended 03/31/17
3Q17
3 months ended 12/31/16
 + favorable /
- unfavorable
CNS Segment Revenue
$3.9M
$3.2M
+20%
CNS Segment Gross Margin
32.7%
23.1%
+9.6%
CNS Segment R&D Expense
$0.3M
$0.3M
+15%
CNS Segment Profit
$1.0M
$0.4M
+128%

Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Wednesday, May 24, 2017, at 4:30 PM 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 May 24 by dialing (888) 206-4065 no later than 4:15 PM Eastern Time and providing the operator confirmation number 44880238.
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 7:00 PM Eastern Time after the call ends.

About Westell
Westell is a leading provider of high-performance wireless infrastructure solutions focused on innovation and differentiation at the edge of communication networks where end users connect. The Company's portfolio of products and solutions enable service providers and network operators to improve 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 for the fiscal year ended March 31, 2016, 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)
 
 
Three months ended
 
Twelve months ended
 
 
 
March 31, 2017
 
December 31, 2016
 
March 31, 2016
 
March 31, 2017
 
March 31, 2016
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Products
 
$
14,290

 
$
12,746

 
$
19,748

 
$
56,530

 
$
81,238

 
Services
 
1,096

 
2,237

 
1,156

 
6,435

 
6,965

 
Total revenue
 
$
15,386

 
$
14,983

 
$
20,904

 
$
62,965

 
$
88,203

 
Cost of revenue:
 
 
 
 
 
 
 
 
 
 
 
Products
 
8,331

 
7,807

 
12,566

 
36,119

 
50,332

 
Services
 
292

 
1,122

 
445

 
3,097

 
3,355

 
Total cost of revenue
 
8,623

 
8,929

 
13,011

 
39,216

 
53,687

 
Gross profit
 
6,763

 
6,054

 
7,893

 
23,749

 
34,516

 
Gross margin
 
44.0
%
 
40.4
%
 
37.8
%
 
37.7
%
 
39.1
%
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Research & development
 
2,349

 
2,414

 
4,713

 
12,367

 
19,317

 
Sales & marketing
 
2,124

 
1,943

 
4,608

 
10,344

 
15,817

 
General & administrative
 
1,651

 
1,777

 
1,747

 
7,991

 
9,836

 
Intangibles amortization
 
1,151

 
1,212

 
1,305

 
4,764

 
5,554

 
Restructuring
 
100

(1) 
490

(1) 
731

(2) 
3,155

(1) 
748

(2) 
Long-lived assets impairment
 
—

 
—

 
—

 
1,181

(3) 
—

 
Total operating expenses
 
7,375

 
7,836

 
13,104

 
39,802

 
51,272

 
Operating income (loss) from continuing operations
 
(612
)
 
(1,782
)
 
(5,211
)
 
(16,053
)
 
(16,756
)
 
Other income (expense), net
 
94

 
(15
)
 
107

 
170

 
169

 
Income (loss) before income taxes and discontinued operations
 
(518
)
 
(1,797
)
 
(5,104
)
 
(15,883
)
 
(16,587
)
 
Income tax benefit (expense)
 
(38
)
 
(10
)
 
27

 
(58
)
 
102

 
Net income (loss) from continuing operations
 
(556
)
 
(1,807
)
 
(5,077
)
 
(15,941
)
 
(16,485
)
 
Income (loss) from discontinued operations, net of income tax (4)
 
—

 
—

 
1

 
—

 
273

 
Net income (loss)
 
$
(556
)
 
$
(1,807
)
 
$
(5,076
)
 
$
(15,941
)
 
$
(16,212
)
 
Basic and diluted net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted net income (loss) from continuing operations
 
$
(0.01
)
 
$
(0.03
)
 
$
(0.08
)
 
$
(0.26
)
 
$
(0.27
)
 
Basic and diluted net income (loss) from discontinued operations
 
—

 
—

 
—

 
—

 
—

 
Basic and diluted net income (loss)
 
$
(0.01
)
 
$
(0.03
)
 
$
(0.08
)
 
$
(0.26
)
 
$
(0.27
)
 
Weighted-average number of shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
61,725

 
61,564

 
60,847

 
61,376

 
60,786

 
(1) The Company recorded restructuring expense relating to severance costs for terminated employees and abandonment of excess office space at its headquarters and in New Hampshire.
(2) The Company recorded restructuring expense primarily relating to severance costs for terminated employees.
(3) Non-cash impairment related to long-lived assets associated with the previously announced strategic decision related to the discontinuation of ClearLink DAS.
(4) Income from discontinued operations resulted from the expiration of indemnity periods and release of contingency reserves related to the sale of ConferencePlus.




Westell Technologies, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
 
Assets:
 
March 31, 2017
(Unaudited)
 
March 31, 2016
Cash and cash equivalents
 
$
21,778

 
 
$
19,169

 
Short-term investments
 
—
 
 
 
10,555
 
 
Accounts receivable, net
 
12,075
 
 
 
16,361
 
 
Inventories
 
12,511
 
 
 
13,498
 
 
Prepaid expenses and other current assets
 
1,409
 
 
 
1,900
 
 
Total current assets
 
47,773
 

 
61,483
 

Property and equipment, net
 
1,984
 
 
 
3,977
 
 
Intangible assets, net
 
15,624
 
 
 
20,388
 
 
Other non-current assets
 
160
 
 
 
183
 
 
Total assets
 
$
65,541

 
 
$
86,031

 
Liabilities and Stockholders’ Equity:
 
 
 
 
Accounts payable
 
$
4,163

 
 
$
7,856

 
Accrued expenses
 
4,273
 
 
 
5,932
 
 
Accrued restructuring
 
1,171
 
 
 
1,537
 
 
Contingent consideration
 
—
 
 
 
311
 
 
Deferred revenue
 
2,359
 
 
 
1,601
 
 
Total current liabilities
 
11,966
 

 
17,237
 

Deferred revenue non-current
 
1,102
 
 
 
1,236
 
 
Net deferred income tax liability
 
—
 
 
 
10
 
 
Accrued restructuring non-current
 
63
 
 
 
550
 
 
Other non-current liabilities
 
236
 
 
 
314
 
 
Total liabilities
 
13,367
 
 
 
19,347
 

Total stockholders’ equity
 
52,174
 
 
 
66,684
 
 
Total liabilities and stockholders’ equity
 
$
65,541

 
 
$
86,031

 







Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
 
 
 
Three months ended March 31,
 
Six months ended March 31,
 
Twelve months ended March 31,
Cash flows from operating activities:
 
2017
 (Unaudited)
 
2017
 (Unaudited)
 
2017 (Unaudited)
 
2016
Net income (loss)
 
$
(556
)
 
$
(2,363
)
 
$
(15,941
)
 
$
(16,212
)
Reconciliation of net income to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
1,430

 
2,914

 
6,144

 
7,098

Long-lived assets impairment
 
—

 
—

 
1,181

 
—

Stock-based compensation
 
248

 
501

 
1,594

 
1,265

Restructuring
 
100

 
590

 
3,155

 
748

Deferred taxes
 
(30
)
 
(24
)
 
(10
)
 
(36
)
Loss (gain) on sale of fixed assets
 
(28
)
 
16

 
27

 
14

Exchange rate loss (gain)
 
2

 
2

 
2

 
(38
)
Changes in assets and liabilities:
 
 
 
 
 
 
 
 
Accounts receivable
 
(817
)
 
1,559

 
4,281

 
(4,476
)
Inventories
 
478

 
167

 
987

 
2,707

Accounts payable and accrued expenses
 
(2,768
)
 
(3,661
)
 
(9,570
)
 
2,192

Other
 
(34
)
 
1,278

 
1,139

 
1,131

Net cash provided by (used in) operating activities
 
(1,975
)
 
979

 
(7,011
)
 
(5,607
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
Net purchases of short-term investments and debt securities
 
—

 
—

 
10,555

 
13,351

Proceeds from sale of assets
 
—

 
—

 
—

 
264

Purchases of property and equipment
 
(69
)
 
(98
)
 
(596
)
 
(1,932
)
Net cash provided by (used in) investing activities
 
(69
)
 
(98
)
 
9,959

 
11,683

Cash flows from financing activities:
 
 
 
 
 
 
 
 
Payment of contingent consideration
 
—

 
—

 
(175
)
 
(808
)
Purchases of treasury stock
 
(17
)
 
(22
)
 
(163
)
 
(108
)
Net cash provided by (used in) financing activities
 
(17
)
 
(22
)
 
(338
)
 
(916
)
Gain (loss) of exchange rate changes on cash
 
(3
)
 
2

 
(1
)
 
(17
)
Net increase (decrease) in cash and cash equivalents
 
(2,064
)
 
861

 
2,609

 
5,143

Cash and cash equivalents, beginning of period
 
23,842

 
20,917

 
19,169

 
14,026

Cash and cash equivalents, end of period
 
$
21,778

 
$
21,778

 
$
21,778

 
$
19,169









Westell Technologies, Inc.
Segment Statement of Operations
(Amounts in thousands)
(Unaudited)
 Sequential Quarter Comparison
 
 
Three months ended March 31, 2017
 
Three months Ended December 31, 2016
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Revenue
 
$
6,944

 
$
4,548

 
$
3,894

 
$
15,386

 
$
6,224

 
$
5,525

 
$
3,234

 
$
14,983

Cost of revenue
 
4,011

 
1,991

 
2,621

 
8,623

 
3,713

 
2,730

 
2,486

 
8,929

Gross profit
 
2,933

 
2,557

 
1,273

 
6,763

 
2,511

 
2,795

 
748

 
6,054

Gross margin
 
42.2
%
 
56.2
%
 
32.7
%
 
44.0
%
 
40.3
%
 
50.6
%
 
23.1
%
 
40.4
%
Research & development
 
1,473

 
619

 
257

 
2,349

 
1,307

 
805

 
302

 
2,414

Segment profit
 
$
1,460

 
$
1,938

 
$
1,016

 
$
4,414

 
$
1,204

 
$
1,990

 
$
446

 
$
3,640


Year-over-Year Quarter Comparison
 
 
Three months ended March 31, 2017
 
Three months ended March 31, 2016
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Revenue
 
$
6,944

 
$
4,548

 
$
3,894

 
$
15,386

 
$
5,838

 
$
5,245

 
$
9,821

 
$
20,904

Cost of revenue
 
4,011

 
1,991

 
2,621

 
8,623

 
3,761

 
2,436

 
6,814

 
13,011

Gross profit
 
2,933

 
2,557

 
1,273

 
6,763

 
2,077

 
2,809

 
3,007

 
7,893

Gross margin
 
42.2
%
 
56.2
%
 
32.7
%
 
44.0
%
 
35.6
%
 
53.6
%
 
30.6
%
 
37.8
%
Research & development
 
1,473

 
619

 
257

 
2,349

 
2,421

 
1,471

 
821

 
4,713

Segment profit (loss)
 
$
1,460

 
$
1,938

 
$
1,016

 
$
4,414

 
$
(344
)
 
$
1,338

 
$
2,186

 
$
3,180


Full-Year Comparison
 
 
Twelve months ended March 31, 2017
 
Twelve months ended March 31, 2016
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Revenue
 
$
25,933

 
$
19,321

 
$
17,711

 
$
62,965

 
$
34,407

 
$
21,783

 
$
32,013

 
$
88,203

Cost of revenue
 
17,262

 
9,543

 
12,411

 
39,216

 
20,463

 
10,661

 
22,563

 
53,687

Gross profit
 
8,671

 
9,778

 
5,300

 
23,749

 
13,944

 
11,122

 
9,450

 
34,516

Gross margin
 
33.4
%
 
50.6
%
 
29.9
%
 
37.7
%
 
40.5
%
 
51.1
%
 
29.5
%
 
39.1
%
Research & development
 
6,738

 
3,955

 
1,674

 
12,367

 
11,059

 
5,417

 
2,841

 
19,317

Segment profit
 
$
1,933

 
$
5,823

 
$
3,626

 
$
11,382

 
$
2,885

 
$
5,705

 
$
6,609

 
$
15,199


 




Reconciliation of GAAP to non-GAAP IBW Segment Gross Margin


 
 
Twelve months ended March 31, 2017
 
Twelve months ended March 31, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - IBW segment
 
$
25,933

 
$
8,671

 
33.4
%
 
$
34,407

 
$
13,944

 
40.5
%
ClearLink DAS E&O (1)
 
—

 
1,581

 
 
 
—

 
—

 
 
Stock-based compensation (2)
 
—

 
9

 
 
 
—

 
(3
)
 
 
Non-GAAP - IBW segment
 
$
25,933

 
$
10,261

 
39.6
%
 
$
34,407

 
$
13,941

 
40.5
%
(1)  Excess and Obsolete inventory charges on ClearLink DAS inventory and firm purchase commitments.
(2)  Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.










Westell Technologies, Inc.
Reconciliation of GAAP to non-GAAP Financial Measures
(Amounts in thousands, except per share amounts)
(Unaudited)
 
 
 
Three months ended
March 31, 2017
 
Three months ended
 December 31, 2016
 
Three months ended
 March 31, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - Consolidated
 
$
15,386

 
$
6,763

 
44.0
%
 
$
14,983

 
$
6,054

 
40.4
%
 
$
20,904

 
$
7,893

 
37.8
%
Deferred revenue adjustment (1)
 
64

 
64

 
 
 
64

 
64

 
 
 
63

 
63

 
 
Stock-based compensation (3)
 
—

 
10

 
 
 
—

 
10

 
 
 
—

 
(29
)
 
 
Non-GAAP - Consolidated
 
$
15,450

 
$
6,837

 
44.3
%
 
$
15,047

 
$
6,128

 
40.7
%
 
$
20,967

 
$
7,927

 
37.8
%
 
 
Twelve months ended
March 31, 2017
 
Twelve months ended
 March 31, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - Consolidated
 
$
62,965

 
$
23,749

 
37.7
%
 
$
88,203

 
$
34,516

 
39.1
%
Deferred revenue adjustment (1)
 
254

 
254

 
 
 
281

 
281

 
 
ClearLink DAS E&O (2)
 
—

 
1,581

 
 
 
—

 
—

 
 
Stock-based compensation (3)
 
—

 
34

 
 
 
—

 
(5
)
 
 
Non-GAAP - Consolidated
 
$
63,219

 
$
25,618

 
40.5
%
 
$
88,484

 
$
34,792

 
39.3
%

 
 
Three months ended
 
Twelve months ended
 
 
March 31,
 
December 31,
 
March 31,
 
March 31,
 
March 31,
 
 
2017
 
2016
 
2016
 
2017
 
2016
GAAP consolidated operating expenses
 
$
7,375

 
$
7,836

 
$
13,104

 
$
39,802

 
$
51,272

Adjustments:
 
 
 
 
 
 
 
 
 
 
Stock-based compensation (3)
 
(238
)
 
(243
)
 
(320
)
 
(1,560
)
 
(1,270
)
Long-lived asset impairment (4)
 
—

 
—

 
—

 
(1,181
)
 
—

Amortization of intangibles (5)
 
(1,151
)
 
(1,212
)
 
(1,305
)
 
(4,764
)
 
(5,554
)
Restructuring, separation, and transition (6)
 
(100
)
 
(490
)
 
(799
)
 
(3,155
)
 
(1,022
)
    Total adjustments
 
(1,489
)
 
(1,945
)
 
(2,424
)
 
(10,660
)
 
(7,846
)
Non-GAAP consolidated operating expenses
 
$
5,886

 
$
5,891

 
$
10,680

 
$
29,142

 
$
43,426





 
 
Three months ended
 
Twelve months ended
 
 
March 31,
 
December 31,
 
March 31,
 
March 31,
 
March 31,
 
 
2017
 
2016
 
2016
 
2017
 
2016
GAAP consolidated net income (loss)
 
$
(556
)
 
$
(1,807
)
 
$
(5,076
)
 
$
(15,941
)
 
$
(16,212
)
Income tax benefit (expense)
 
(38
)
 
(10
)
 
27

 
(58
)
 
102

Other income (expense), net
 
94

 
(15
)
 
107

 
170

 
169

GAAP consolidated operating profit (loss)
 
$
(612
)
 
$
(1,782
)
 
$
(5,210
)
 
$
(16,053
)
 
$
(16,483
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Deferred revenue adjustment (1)
 
64

 
64

 
63

 
254

 
281

ClearLink DAS E&O (2)
 
—

 
—

 
—

 
1,581

 
—

Stock-based compensation (3)
 
248

 
253

 
291

 
1,594

 
1,265

Long-lived asset impairment (4)
 
—

 
—

 
—

 
1,181

 
—

Amortization of intangibles (5)
 
1,151

 
1,212

 
1,305

 
4,764

 
5,554

Restructuring, separation, and transition (6)
 
100

 
490

 
799

 
3,155

 
1,022

    Total adjustments
 
1,563

 
2,019

 
2,458

 
12,529

 
8,122

Non-GAAP consolidated operating profit (loss) from continuing operations
 
$
951

 
$
237

 
$
(2,752
)
 
$
(3,524
)
 
$
(8,361
)
Depreciation
 
279

 
272

 
458

 
1,380

 
1,544

Non-GAAP consolidated Adjusted EBITDA (7) from continuing operations
 
$
1,230

 
$
509

 
$
(2,294
)
 
$
(2,144
)
 
$
(6,817
)

 
 
Three months ended
 
Twelve months ended
 
 
March 31,
 
December 31,
 
March 31,
 
March 31,
 
March 31,
 
 
2017
 
2016
 
2016
 
2017
 
2016
GAAP consolidated net income (loss)
 
$
(556
)
 
$
(1,807
)
 
$
(5,076
)
 
$
(15,941
)
 
$
(16,212
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Deferred revenue adjustment (1)
 
64

 
64

 
63

 
254

 
281

ClearLink DAS E&O (2)
 
—

 
—

 
—

 
1,581

 
—

Stock-based compensation (3)
 
248

 
253

 
291

 
1,594

 
1,265

Long-lived asset impairment (4)
 
—

 
—

 
—

 
1,181

 
—

Amortization of intangibles (5)
 
1,151

 
1,212

 
1,305

 
4,764

 
5,554

Restructuring, separation, and transition (6)
 
100

 
490

 
799

 
3,155

 
1,022

(Income) loss from discontinued operations (8)
 
—

 
—

 
(1
)
 
—

 
(273
)
    Total adjustments
 
1,563

 
2,019

 
2,457

 
12,529

 
7,849

Non-GAAP consolidated net income (loss)
 
$
1,007

 
$
212

 
$
(2,619
)
 
$
(3,412
)
 
$
(8,363
)
GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Diluted
 
$
(0.01
)
 
$
(0.03
)
 
$
(0.08
)
 
$
(0.26
)
 
$
(0.27
)
Non-GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Diluted
 
$
0.02

 
$
—

 
$
(0.04
)
 
$
(0.06
)
 
$
(0.14
)
Average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Diluted
 
62,115

 
61,700

 
60,847

 
61,376

 
60,786

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.
Footnotes:

(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) 
Non-recurring excess and obsolete inventory charges on inventory and firm purchase commitments associated with the previously announced strategic decision related to the discontinuation of ClearLink DAS.
(3) 
Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.
(4) 
Non-cash impairment related to tangible long-lived assets associated with the previously announced strategic decision related to the discontinuation of ClearLink DAS.  
(5) 
Amortization of intangibles is a non-cash expense arising from previously acquired intangible assets.
(6) 
Restructuring expenses are not directly related to the ongoing performance of our fundamental business operations, including costs relating to abandonment of excess office space at our headquarters and in New Hampshire, and severance costs for terminated employees. This adjustment also includes severance benefits related to the departure of certain former executives.
(7) 
EBITDA is a non-GAAP measure that represents Earnings Before Interest, Taxes, Depreciation, and Amortization. The Company presents Adjusted EBITDA.
(8) 
This adjustment is a non-recurring charge related to the release of contingent liabilities related to the sale of ConferencePlus, which is presented as discontinued operations.



For additional information, contact:
Tom Minichiello
Chief Financial Officer
Westell Technologies, Inc.
+1 (630) 375-4740
 tminichiello@westell.com