Exhibit 99.1
                        
westelllogoonelinexa01a08.jpg
 
NEWS RELEASE

Westell Delivers Profitability and Revenue Growth for Fiscal 2Q18
Sequential revenue growth and strong gross margin drive
positive operating profit and net income
AURORA, IL, November 1, 2017 – Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of high-performance wireless infrastructure solutions, announced results for its fiscal 2018 second quarter ended September 30, 2017 (2Q18). Management will host a conference call to discuss financial and business results tomorrow, Thursday, November 2, 2017, at 9:30 AM Eastern Time (details below).
Revenue was $17.2 million, the third consecutive quarter of sequential growth, and comprised $7.9 million from the In-Building Wireless (IBW) segment, $4.7 million from the Intelligent Site Management and Services (ISMS) segment, and $4.6 million from the Communication Network Solutions (CNS) segment.

Westell’s President and Chief Executive Officer Matthew B. Brady stated, “Positive GAAP earnings and a greater than twofold sequential improvement of non-GAAP earnings were driven by revenue growth, a healthy gross margin, and continued expense management. Revenue highlights included the best IBW results since the December 2015 quarter, sequential ISMS growth, and solid CNS performance.”
 
2Q18
3 months ended 9/30/17
1Q18
3 months ended 6/30/17
 + favorable /
- unfavorable
Revenue
$17.2M
$16.6M
+$0.6M
Gross Margin
42.2%
40.8%
+1.4%
Operating Expenses
$7.2M
$7.4M
+$0.2M
Net Income (Loss)
$0.7M
($0.6M)
+$1.3M
Earnings (Loss) Per Share
$0.05
($0.04)
+$0.09
Non-GAAP Operating Expenses (1)
$5.7M
$6.0M
+$0.3M
Non-GAAP Net Income (1)
$1.7M
$0.8M
+$0.9M
Non-GAAP Earnings Per Share (1)
$0.11
$0.05
+$0.06
Non-GAAP Adjusted EBITDA (1)
$1.8M
$1.0M
+$0.8M
(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.

“In fiscal 2Q18, IBW achieved record revenue levels for the Universal DAS Interface Tray (UDIT) product line, as well as for our passive system components, which we sell for both commercial and public safety deployments,” Brady added. “Moving forward, we are focused on gaining further traction in the IBW public safety market, the evolving Centralized Radio Access Network (CRAN) architecture for our ISMS and CNS solutions, and new opportunities that can deliver consistent and profitable revenue growth.”




Cash and short-term investments were $24.2 million at September 30, 2017, compared to $23.7 million at June 30, 2017. Efficiencies in inventory management contributed to the $0.7 million of positive operating cash flow. This was partly offset by $0.2 million of cash used for share repurchases and capital expenditures.
In-Building Wireless (IBW) Segment
IBW’s sequential revenue increase was driven by record quarterly sales of UDIT and passive system components. IBW’s segment gross margin increase was driven primarily by the increased revenue and an improved cost structure.
 
2Q18
3 months ended 9/30/17
1Q18
3 months ended 6/30/17
 + favorable /
- unfavorable
IBW Segment Revenue
$7.9M
$7.0M
+$0.9M
IBW Segment Gross Margin
46.1%
43.3%
+2.8%
IBW Segment R&D Expense
$1.4M
$1.5M
+$0.1M
IBW Segment Profit
$2.2M
$1.6M
+$0.6M
Intelligent Site Management & Services (ISMS) Segment
ISMS’s sequential revenue increase was driven primarily by increased sales of Remote units. ISMS’s segment gross margin decrease was primarily due to a less favorable mix.
 
2Q18
3 months ended 9/30/17
1Q18
3 months ended 6/30/17
 + favorable /
- unfavorable
ISMS Segment Revenue
$4.7M
$4.1M
+$0.6M
ISMS Segment Gross Margin
46.9%
51.5%
-4.6%
ISMS Segment R&D Expense
$0.5M
$0.6M
+$0.1M
ISMS Segment Profit
$1.7M
$1.6M
+$0.1M
Communication Network Solutions (CNS) Segment
CNS’s sequential revenue decrease was primarily driven by lower sales of Integrated Cabinets. CNS’s gross margin increase was primarily due to a more favorable mix.
 
2Q18
3 months ended 9/30/17
1Q18
3 months ended 6/30/17
 + favorable /
- unfavorable
CNS Segment Revenue
$4.6M
$5.5M
-$0.9M
CNS Segment Gross Margin
30.7%
29.6%
+1.1%
CNS Segment R&D Expense
$0.2M
$0.2M
$—
CNS Segment Profit
$1.2M
$1.4M
-$0.2M





Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Thursday, November 2, 2017, at 9:30 AM 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 November 2, 2017, by calling 888-206-4073 no later than 8:15 AM Central Time (9:15 AM Eastern Time) and providing the operator confirmation number 45830387.

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://ir.westell.com. A digital recording of the entire conference will be available for replay on Westell's website by approximately 1:00 PM Eastern Time following the conclusion of the conference.
About Westell Technologies
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, 2017, 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.





Westell Technologies, Inc.
Condensed Consolidated Statement of Operations
(Amounts in thousands, except per share amounts)
(Unaudited)

 
 
Three months ended
 
Six months ended
 
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
 
 
2017
 
2017
 
2016
 
2017
 
2016
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
  Products
 
$
16,097

 
$
15,545

 
$
15,881

 
$
31,642

 
$
29,494

 
  Services
 
1,135

 
1,029

 
1,899

 
2,164

 
3,102

 
Total revenue
 
17,232

 
16,574

 
17,780

 
$
33,806

 
$
32,596

 
Cost of revenue:
 
 
 
 
 
 
 
 
 
 
 
  Products
 
9,522

 
9,424

 
10,380

 
18,946

 
19,981

 
  Services
 
435

 
383

 
1,033

 
818

 
1,683

 
Total cost of revenue
 
9,957

 
9,807

 
11,413

 
19,764

 
21,664

 
Gross profit
 
7,275

 
6,767

 
6,367

 
14,042

 
10,932

 
Gross margin
 
42.2
%
 
40.8
%
 
35.8
%
 
41.5
%
 
33.5
%
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
R&D
 
2,205

 
2,276

 
3,327

 
4,481

 
7,604

 
Sales and marketing
 
1,992

 
2,336

 
2,896

 
4,328

 
6,277

 
General and administrative
 
1,809

 
1,711

 
2,218

 
3,520

 
4,563

 
Intangible amortization
 
1,048

 
1,047

 
1,201

 
2,095

 
2,401

 
Restructuring
 
165

(1) 
—

 
2,601

(2) 
165

(1) 
2,565

(2) 
Long-lived assets impairment
 
—

 
—

 
—

 
—

 
1,181

(3) 
Total operating expenses
 
7,219

 
7,370

 
12,243

 
14,589

 
24,591

 
Operating profit (loss)
 
56

 
(603
)
 
(5,876
)
 
(547
)
 
(13,659
)
 
Other income, net
 
677

(4) 
43

 
74

 
720

(4) 
91

 
Income (loss) before income taxes
 
733

 
(560
)
 
(5,802
)
 
173

 
(13,568
)
 
Income tax expense
 
(13
)
 
(12
)
 
(8
)
 
(25
)
 
(10
)
 
Net income (loss)
 
$
720

 
$
(572
)
 
$
(5,810
)
 
$
148

 
$
(13,578
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
Basic net income (loss)
 
$
0.05

 
$
(0.04
)
 
$
(0.38
)
(5) 
$
0.01

 
$
(0.89
)
(5) 
Diluted net income (loss)
 
$
0.05

 
$
(0.04
)
 
$
(0.38
)
(5) 
$
0.01

 
$
(0.89
)
(5) 
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic
 
15,461

 
15,481

 
15,299

(5) 
15,471

 
15,277

(5) 
Diluted
 
15,672

 
15,481

 
15,299

(5) 
15,638

 
15,277

(5) 


(1)
2Q18 restructuring expense related to severance costs for terminated employees.
(2)
The Company recorded restructuring expense primarily relating to abandonment of excess office space at its headquarters and in New Hampshire, and severance costs for terminated employees.
(3)
1Q17 non-cash impairment related to long-lived assets associated with the discontinuation of ClearLink DAS.
(4)
During the quarter ended September 30, 2017, the Company dissolved the NoranTel legal entity which triggered a one-time $0.6 million foreign currency gain with the reversal of a cumulative translation adjustment.
(5)
All common stock, equity, share and per share amounts have been retroactively adjusted to reflect a one-for-four reverse stock split which was effective June 7, 2017.




Westell Technologies, Inc.
Condensed Consolidated Balance Sheet
(Amounts in thousands)


 
 
September 30, 2017 (Unaudited)
 
March 31, 2017
Assets
 
 
 
 
Cash and cash equivalents
 
$
19,200

 
$
21,778

Short-term investments
 
5,011

 
—

Accounts receivable, net
 
11,038

 
12,075

Inventories
 
9,983

 
12,511

Prepaid expenses and other current assets
 
1,034

 
1,409

Total current assets
 
46,266

 
47,773

Land, property and equipment, net
 
1,798

 
1,984

Intangible assets, net
 
13,529

 
15,624

Other non-current assets
 
87

 
160

Total assets
 
$
61,680

 
$
65,541

Liabilities and Stockholders’ Equity
 
 
 
 
Accounts payable
 
$
3,210

 
$
4,163

Accrued expenses
 
3,823

 
4,273

Accrued restructuring
 
415

 
1,171

Deferred revenue
 
1,055

 
2,359

Total current liabilities
 
8,503

 
11,966

Deferred revenue non-current
 
929

 
1,102

Accrued restructuring non-current
 
—

 
63

Other non-current liabilities
 
317

 
236

Total liabilities
 
9,749

 
13,367

Total stockholders’ equity
 
51,931

 
52,174

Total liabilities and stockholders’ equity
 
$
61,680

 
$
65,541





Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
 
 
 
Three months ended September 30,
 
Six months
 ended
 September 30,
 
 
 
2017
 
2017
 
2016
 
Cash flows from operating activities:
 
 
 
Net income (loss)
 
$
720

 
$
148

 
$
(13,578
)
 
Reconciliation of net loss to net cash used in operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
 
1,249

 
2,526

 
3,230

 
Long-lived assets impairment
 
—

 
—

 
1,181

(1) 
Stock-based compensation
 
342

 
672

 
1,093

 
Loss on sale of fixed assets
 
8

 
8

 
11

 
Restructuring
 
165

 
165

 
2,565

 
Deferred taxes
 
(7
)
 
—

 
14

 
Gain on disposal of foreign operations
 
(608
)
(2) 
(608
)
(2) 
—

 
Exchange rate loss (gain)
 
(2
)
 
(6
)
 
—

 
Changes in assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
 
(723
)
 
1,025

 
2,722

 
Inventory
 
2,207

 
2,528

 
820

 
Accounts payable and accrued expenses
 
(2,269
)
 
(2,082
)
 
(4,800
)
 
Accrued compensation
 
183

 
(224
)
 
(1,109
)
 
Deferred revenue
 
(800
)
 
(1,477
)
 
(131
)
 
Prepaid expenses and other current assets
 
147

 
375

 
(23
)
 
Other assets
 
66

 
73

 
15

 
Net cash provided by (used in) operating activities
 
678

 
3,123

 
(7,990
)
 
Cash flows from investing activities:
 
 
 
 
 
 
 
Net maturity (purchase) of short-term investments
 
(5,011
)
 
(5,011
)
 
10,555

 
Purchases of property and equipment, net
 
(99
)
 
(254
)
 
(498
)
 
Net cash provided by (used in) investing activities
 
(5,110
)
 
(5,265
)
 
10,057

 
Cash flows from financing activities:
 
 
 
 
 
 
 
Purchase of treasury stock
 
(82
)
 
(456
)
 
(141
)
 
Payment of contingent consideration
 
—

 
—

 
(175
)
 
Net cash provided by (used in) financing activities
 
(82
)
 
(456
)
 
(316
)
 
Gain (loss) of exchange rate changes on cash
 
26

 
20

 
(3
)
 
Net increase (decrease) in cash and cash equivalents
 
(4,488
)
 
(2,578
)
 
1,748

 
Cash and cash equivalents, beginning of period
 
23,688

 
21,778

 
19,169

 
Cash and cash equivalents, end of period
 
$
19,200

(3) 
$
19,200

(3) 
$
20,917

 

(1) 1Q17 non-cash impairment related to long-lived assets associated with the discontinuation of ClearLink DAS.
(2) During the quarter ended September 30, 2017, the Company dissolved the NoranTel legal entity which triggered a one-time $0.6 million foreign currency gain with the reversal of a cumulative translation adjustment.
(3) As of September 30, 2017, the Company has $5.0 million of short-term investments in addition to cash and cash equivalents.




Westell Technologies, Inc.
Segment Statement of Operations
(Amounts in thousands)
(Unaudited)

Sequential Quarter Comparison
 
 
Three months ended September 30, 2017
 
Three months ended June 30, 2017
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Total revenue
 
$
7,919

 
$
4,730

 
$
4,583

 
$
17,232

 
$
6,956

 
$
4,130

 
$
5,488

 
$
16,574

Gross profit
 
3,650

 
2,219

 
1,406

 
7,275

 
3,014

 
2,126

 
1,627

 
6,767

Gross margin
 
46.1
%
 
46.9
%
 
30.7
%
 
42.2
%
 
43.3
%
 
51.5
%
 
29.6
%
 
40.8
%
R&D expenses
 
1,443

 
523

 
239

 
2,205

 
1,463

 
565

 
248

 
2,276

Segment profit
 
$
2,207

 
$
1,696

 
$
1,167

 
$
5,070

 
$
1,551

 
$
1,561

 
$
1,379

 
$
4,491


Year-over-Year Quarter Comparison
 
 
Three months ended September 30, 2017
 
Three months ended September 30, 2016
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Total revenue
 
$
7,919

 
$
4,730

 
$
4,583

 
$
17,232

 
$
6,644

 
$
5,109

 
$
6,027

 
$
17,780

Gross profit
 
3,650

 
2,219

 
1,406

 
7,275

 
2,233

 
2,407

 
1,727

 
6,367

Gross margin (1)
 
46.1
%
 
46.9
%
 
30.7
%
 
42.2
%
 
33.6
%
 
47.1
%
 
28.7
%
 
35.8
%
R&D expenses
 
1,443

 
523

 
239

 
2,205

 
1,594

 
1,237

 
496

 
3,327

Segment profit
 
$
2,207

 
$
1,696

 
$
1,167

 
$
5,070

 
$
639

 
$
1,170

 
$
1,231

 
$
3,040

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP to non-GAAP IBW Segment Gross Margin
 
 
Three months ended
 September 30, 2017
 
Three months ended
June 30, 2017
 
Three months ended
September 30, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - IBW segment
 
$
7,919

 
$
3,650

 
46.1
%
 
$
6,956

 
$
3,014

 
43.3
%
 
$
6,644

 
$
2,233

 
33.6
%
ClearLink DAS E&O (1)
 
—

 
—

 
 
 
—

 
—

 
 
 
—

 
192

 
 
Stock-based compensation (2)
 
—

 
(2
)
 
 
 
—

 
8

 
 
 
—

 
2

 
 
Non-GAAP - IBW segment
 
$
7,919

 
$
3,648

 
46.1
%
 
$
6,956

 
$
3,022

 
43.4
%
 
$
6,644

 
$
2,427

 
36.5
%
(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.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended September 30, 2017
 
Six months ended September 30, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - IBW segment
 
$
14,875

 
$
6,664

 
44.8
%
 
$
12,765

 
$
3,227

 
25.3
%
ClearLink DAS E&O (1)
 
—

 
—

 
 
 
—

 
1,581

 
 
Stock-based compensation (2)
 
—

 
6

 
 
 
—

 
5

 
 
Non-GAAP - IBW segment
 
$
14,875

 
$
6,670

 
44.8
%
 
$
12,765

 
$
4,813

 
37.7
%
(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
 September 30, 2017
 
Three months ended
 June 30, 2017
 
Three months ended
 September 30, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - Consolidated
 
$
17,232

 
$
7,275

 
42.2
%
 
$
16,574

 
6,767

 
40.8
%
 
$
17,780

 
$
6,367

 
35.8
%
Deferred revenue adjustment (1)
 
—

 
—

 
 
 
—

 
—

 
 
 
63

 
63

 
 
ClearLink DAS E&O (2)
 
—

 
—

 
 
 
—

 
—

 
 
 
—

 
192

 
 
Stock-based compensation (3)
 
—

 
(3
)
 
 
 
—

 
25

 
 
 
—

 
8

 
 
Non-GAAP - Consolidated
 
$
17,232

 
$
7,272

 
42.2
%
 
$
16,574

 
$
6,792

 
41.0
%
 
$
17,843

 
$
6,630

 
37.2
%
 
 
Three months ended
 
Six months ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
 
2017
 
2017
 
2016
 
2017
 
2016
GAAP consolidated operating expenses
 
$
7,219

 
$
7,370

 
$
12,243

 
$
14,589

 
$
24,591

Adjustments:
 
 
 
 
 
 
 
 
 
 
Stock-based compensation (3)
 
(345
)
 
(305
)
 
(679
)
 
(650
)
 
(1,079
)
Long-lived asset impairment (4)
 
—

 
—

 
—

 
—

 
(1,181
)
Amortization of intangibles (5)
 
(1,048
)
 
(1,047
)
 
(1,201
)
 
(2,095
)
 
(2,401
)
Restructuring, separation, and transition (6)
 
(165
)
 
—

 
(2,601
)
 
(165
)
 
(2,565
)
    Total adjustments
 
(1,558
)
 
(1,352
)
 
(4,481
)
 
(2,910
)
 
(7,226
)
Non-GAAP consolidated operating expenses
 
$
5,661

 
$
6,018

 
$
7,762

 
$
11,679

 
$
17,365


 
 
Three months ended
 
Six months ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
 
2017
 
2017
 
2016
 
2017
 
2016
GAAP consolidated net income (loss)
 
$
720

 
$
(572
)
 
$
(5,810
)
 
$
148

 
$
(13,578
)
Less:
 
 
 
 
 
 
 
 
 
 
       Income tax benefit (expense)
 
(13
)
 
(12
)
 
(8
)
 
(25
)
 
(10
)
      Other income, net
 
677

 
43

 
74

 
720

 
91

GAAP consolidated operating profit (loss)
 
$
56

 
$
(603
)
 
$
(5,876
)
 
$
(547
)
 
$
(13,659
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Deferred revenue adjustment (1)
 
—

 
—

 
63

 
—

 
126

ClearLink DAS E&O (2)
 
—

 
—

 
192

 
—

 
1,581

Stock-based compensation (3)
 
342

 
330

 
687

 
672

 
1,093

Long-lived asset impairment (4)
 
—

 
—

 
—

 
—

 
1,181

Amortization of intangibles (5)
 
1,048

 
1,047

 
1,201

 
2,095

 
2,401

Restructuring, separation, and transition (6)
 
165

 
—

 
2,601

 
165

 
2,565

    Total adjustments
 
1,555

 
1,377

 
4,744

 
2,932


8,947

Non-GAAP consolidated operating profit (loss)
 
$
1,611

 
$
774

 
$
(1,132
)
 
$
2,385

 
$
(4,712
)
Depreciation
 
201

 
230

 
444

 
431

 
829

Non-GAAP consolidated Adjusted EBITDA (7)
 
$
1,812

 
$
1,004

 
$
(688
)
 
$
2,816

 
$
(3,883
)





 
 
 
Three months ended
 
Six months ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
 
2017
 
2017
 
2016
 
2017
 
2016
GAAP consolidated net income (loss)
 
$
720

 
$
(572
)
 
$
(5,810
)
 
$
148

 
$
(13,578
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Deferred revenue adjustment (1)
 
—

 
—

 
63

 
—

 
126

ClearLink DAS E&O (2)
 
—

 
—

 
192

 
—

 
1,581

Stock-based compensation (3)
 
342

 
330

 
687

 
672

 
1,093

Long-lived asset impairment (4)
 
—

 
—

 
—

 
—

 
1,181

Amortization of intangibles (5)
 
1,048

 
1,047

 
1,201

 
2,095

 
2,401

Restructuring, separation, and transition (6)
 
165

 
—

 
2,601

 
165

 
2,565

Foreign currency translation adjustment (8)
 
(608
)
 
—

 
—

 
(608
)
 
—

    Total adjustments
 
947

 
1,377

 
4,744

 
2,324

 
8,947

Non-GAAP consolidated net income (loss)
 
$
1,667

 
$
805

 
$
(1,066
)
 
$
2,472

 
$
(4,631
)
GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Diluted
 
$
0.05

 
$
(0.04
)
 
$
(0.38
)
 
$
0.01

 
$
(0.89
)
Non-GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Diluted
 
$
0.11

 
$
0.05

 
$
(0.07
)
 
$
0.16

 
$
(0.30
)
Average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Diluted
 
15,672

 
15,617

 
15,299

 
15,638

 
15,277

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) 
Non-recurring foreign currency translation gain related to the wind-up of the NoranTel legal entity during the quarter ended September 30, 2017.





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