Exhibit 99.1
                        
westelllogoonelinexa01a09.jpg
 
NEWS RELEASE

Westell Delivers Continued Profitability and $1.8M of Cash for Fiscal 3Q18
AURORA, IL, February 7, 2018 – Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of high-performance wireless infrastructure solutions, announced results for its fiscal 2018 third quarter ended December 31, 2017 (3Q18). Management will host a conference call to discuss financial and business results tomorrow, Thursday, February 8, 2018, at 9:30 AM Eastern Time (details below).
Revenue was $13.7 million and comprised $5.2 million from the In-Building Wireless (IBW) segment, a strong $5.8 million performance from the Intelligent Site Management and Services (ISMS) segment, and a seasonally low $2.7 million from the Communication Network Solutions (CNS) segment. Cash and short-term investments grew to $26.0 million at December 31, 2017, up from $24.2 million at September 30, 2017.

“Westell continued to generate positive operating profit margin and net income, and increase cash, even with the revenue seasonality that typifies our December quarters. These positive results demonstrate the tremendous operating leverage we have in the business,” said Kirk Brannock, Westell’s President and Chief Executive Officer.”
 
3Q18
3 months ended 12/31/17
2Q18
3 months ended 9/30/17
 + favorable /
- unfavorable
Revenue
$13.7M
$17.2M
-$3.5M
Gross Margin
44.4%
42.2%
+2.2%
Operating Expenses
$6.0M
$7.2M
+$1.2M
Operating Margin
0.3%
0.3%
—%
Net Income
$0.8M
$0.7M
+$0.1M
Earnings Per Share
$0.05
$0.05
$—
Non-GAAP Operating Expenses (1)
$4.7M
$5.7M
+$1.0M
Non-GAAP Operating Margin (1)
10.2%
9.3%
+0.9%
Non-GAAP Net Income (1)
$1.5M
$1.7M
-$0.2M
Non-GAAP Earnings Per Share (1)
$0.09
$0.11
-$0.02
Non-GAAP Adjusted EBITDA (1)
$1.6M
$1.8M
-$0.2M
(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.
“The momentum of the efficiencies created over the past year resulted in our fifth consecutive quarter of positive non-GAAP operating profit margin. Along with our healthy cost structure, we are encouraged by the revenue growth opportunities we have in the IBW public safety market, which grew sequentially this quarter, and in emerging wireless network densification applications like centralized radio access networks (CRAN). At the same time, we continue to evaluate new growth opportunities to increase shareholder value,” Brannock added.





In-Building Wireless (IBW) Segment
IBW’s sequential revenue decrease was driven by lower sales of our Universal DAS Interface Tray (UDIT) and passive system components, both of which achieved record quarterly revenue levels last quarter. IBW’s segment gross margin increase was driven primarily by lower costs.
 
3Q18
3 months ended 12/31/17
2Q18
3 months ended 9/30/17
 + favorable /
- unfavorable
IBW Segment Revenue
$5.2M
$7.9M
-$2.7M
IBW Segment Gross Margin
47.3%
46.1%
+1.2%
IBW Segment R&D Expense
$0.8M
$1.4M
+$0.6M
IBW Segment Profit
$1.7M
$2.2M
-$0.5M
Intelligent Site Management & Services (ISMS) Segment
ISMS’s sequential revenue increase was driven primarily by higher support services revenue and increased sales of Remote units, resulting in ISMS attaining its highest revenue level since the December 2015 quarter. ISMS’s segment gross margin increase was primarily due to a more favorable mix.
 
3Q18
3 months ended 12/31/17
2Q18
3 months ended 9/30/17
 + favorable /
- unfavorable
ISMS Segment Revenue
$5.8M
$4.7M
+$1.1M
ISMS Segment Gross Margin
54.5%
46.9%
+7.6%
ISMS Segment R&D Expense
$0.5M
$0.5M
$—
ISMS Segment Profit
$2.6M
$1.7M
+$0.9M
Communication Network Solutions (CNS) Segment
CNS product lines are used primarily in the outdoor communication network; as a result, the December quarter tends to be its lowest performing quarter. In 3Q18, CNS’s sequential revenue decrease was most affected by lower sales of Integrated Cabinets and Tower Mounted Amplifiers. CNS’s gross margin decrease was primarily due to the lower revenue.
 
3Q18
3 months ended 12/31/17
2Q18
3 months ended 9/30/17
 + favorable /
- unfavorable
CNS Segment Revenue
$2.7M
$4.6M
-$1.9M
CNS Segment Gross Margin
16.9%
30.7%
-13.8%
CNS Segment R&D Expense
$0.2M
$0.2M
$—
CNS Segment Profit
$0.2M
$1.2M
-$1.0M





Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Thursday, February 8, 2018, 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 February 8, 2018, by calling 888-206-4073 no later than 8:15 AM Central Time (9:15 AM Eastern Time) and providing the operator confirmation number 46315825.

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
 
Nine months ended
 
 
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
 
 
2017
 
2017
 
2016
 
2017
 
2016
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
  Products
 
$
11,754

 
$
16,097

 
$
12,746

 
$
43,396

 
$
42,240

 
  Services
 
1,921

 
1,135

 
2,237

 
4,085

 
5,339

 
Total revenue
 
13,675

 
17,232

 
14,983

 
47,481

 
47,579

 
Cost of revenue:
 
 
 
 
 
 
 
 
 
 
 
  Products
 
7,114

 
9,522

 
7,807

 
26,060

 
27,788

 
  Services
 
485

 
435

 
1,122

 
1,303

 
2,805

 
Total cost of revenue
 
7,599

 
9,957

 
8,929

 
27,363

 
30,593

 
Gross profit
 
6,076

 
7,275

 
6,054

 
20,118

 
16,986

 
Gross margin
 
44.4
%
 
42.2
%
 
40.4
%
 
42.4
%
 
35.7
%
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
R&D
 
1,542

 
2,205

 
2,414

 
6,023

 
10,018

 
Sales and marketing
 
1,950

 
1,992

 
1,943

 
6,278

 
8,220

 
General and administrative
 
1,502

 
1,809

 
1,777

 
5,022

 
6,340

 
Intangible amortization
 
1,047

 
1,048

 
1,212

 
3,142

 
3,613

 
Restructuring
 
—

 
165

(1) 
490

(2) 
165

(1) 
3,055

(2) 
Long-lived assets impairment
 
—

 
—

 
—

 
—

 
1,181

(3) 
Total operating expenses
 
6,041

 
7,219

 
7,836

 
20,630

 
32,427

 
Operating profit (loss)
 
35

 
56

 
(1,782
)
 
(512
)
 
(15,441
)
 
Other income, net
 
79

 
677

(4) 
(15
)
 
799

(4) 
76

 
Income (loss) before income taxes
 
114

 
733

 
(1,797
)
 
287

 
(15,365
)
 
Income tax benefit (expense)
 
685

(5) 
(13
)
 
(10
)
 
660

(5) 
(20
)
 
Net income (loss)
 
$
799

 
$
720

 
$
(1,807
)
 
$
947

 
$
(15,385
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
Basic net income (loss)
 
$
0.05

 
$
0.05

 
$
(0.12
)
(6) 
$
0.06

 
$
(1.00
)
(6) 
Diluted net income (loss)
 
$
0.05

 
$
0.05

 
$
(0.12
)
(6) 
$
0.06

 
$
(1.00
)
(6) 
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic
 
15,504

 
15,461

 
15,391

(6) 
15,482

 
15,315

(6) 
Diluted
 
15,755

 
15,672

 
15,391

(6) 
15,679

 
15,315

(6) 


(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)
During the quarter ended December 31, 2017, the Company had an income tax benefit of $697K from the release of the tax valuation allowance associated with previously generated alternative minimum tax (AMT) credits due to the enactment of the Tax Cuts and Jobs Act of 2017.
(6)
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)


 
 
December 31, 2017 (Unaudited)
 
March 31, 2017
Assets
 
 
 
 
Cash and cash equivalents
 
$
21,492

 
$
21,778

Short-term investments
 
4,537

 
—

Accounts receivable, net
 
11,070

 
12,075

Inventories
 
9,464

 
12,511

Prepaid expenses and other current assets
 
864

 
1,409

Total current assets
 
47,427

 
47,773

Land, property and equipment, net
 
1,630

 
1,984

Intangible assets, net
 
12,482

 
15,624

Tax receivable, non-current
 
697

 
—

Other non-current assets
 
80

 
160

Total assets
 
$
62,316

 
$
65,541

Liabilities and Stockholders’ Equity
 
 
 
 
Accounts payable
 
$
2,494

 
$
4,163

Accrued expenses
 
3,528

 
4,273

Accrued restructuring
 
166

 
1,171

Deferred revenue
 
1,931

 
2,359

Total current liabilities
 
8,119

 
11,966

Deferred revenue non-current
 
912

 
1,102

Accrued restructuring non-current
 
—

 
63

Other non-current liabilities
 
341

 
236

Total liabilities
 
9,372

 
13,367

Total stockholders’ equity
 
52,944

 
52,174

Total liabilities and stockholders’ equity
 
$
62,316

 
$
65,541





Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
 
 
 
Three months ended December 31,
 
Nine months
 ended
 December 31,
 
 
 
2017
 
2017
 
2016
 
Cash flows from operating activities:
 
 
 
Net income (loss)
 
$
799

 
$
947

 
$
(15,385
)
 
Reconciliation of net income (loss) to net cash used in operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
 
1,221

 
3,747

 
4,714

 
Long-lived assets impairment
 
—

 
—

 
1,181

(1) 
Stock-based compensation
 
316

 
988

 
1,346

 
Loss on sale of fixed assets
 
2

 
10

 
11

 
Restructuring
 
—

 
165

 
3,055

 
Deferred taxes
 
(697
)
 
(697
)
 
20

 
Gain on disposal of foreign operations
 
—

 
(608
)
(2) 
—

 
Exchange rate loss (gain)
 
(14
)
 
(20
)
 
44

 
Changes in assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
 
—

 
1,025

 
5,098

 
Inventory
 
519

 
3,047

 
509

 
Accounts payable and accrued expenses
 
(1,236
)
 
(3,542
)
 
(6,802
)
 
Deferred revenue
 
859

 
(618
)
 
686

 
Prepaid expenses and other current assets
 
170

 
545

 
494

 
Other assets
 
7

 
80

 
(7
)
 
Net cash provided by (used in) operating activities
 
1,946

 
5,069

 
(5,036
)
 
Cash flows from investing activities:
 
 
 
 
 
 
 
Net maturity (purchase) of short-term investments
 
474

 
(4,537
)
 
10,555

 
Purchases of property and equipment, net
 
(7
)
 
(261
)
 
(527
)
 
Net cash provided by (used in) investing activities
 
467

 
(4,798
)
 
10,028

 
Cash flows from financing activities:
 
 
 
 
 
 
 
Purchase of treasury stock
 
(102
)
 
(558
)
 
(146
)
 
Payment of contingent consideration
 
—

 
—

 
(175
)
 
Net cash provided by (used in) financing activities
 
(102
)
 
(558
)
 
(321
)
 
Gain (loss) of exchange rate changes on cash
 
(19
)
 
1

 
2

 
Net increase (decrease) in cash and cash equivalents
 
2,292

 
(286
)
 
4,673

 
Cash and cash equivalents, beginning of period
 
19,200

 
21,778

 
19,169

 
Cash and cash equivalents, end of period
 
$
21,492

(3) 
$
21,492

(3) 
$
23,842

 

(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 December 31, 2017, the Company has $4.5 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 December 31, 2017
 
Three months ended September 30, 2017
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Total revenue
 
$
5,223

 
$
5,802

 
$
2,650

 
$
13,675

 
$
7,919

 
$
4,730

 
$
4,583

 
$
17,232

Gross profit
 
2,469

 
3,160

 
447

 
6,076

 
3,650

 
2,219

 
1,406

 
7,275

Gross margin
 
47.3
%
 
54.5
%
 
16.9
%
 
44.4
%
 
46.1
%
 
46.9
%
 
30.7
%
 
42.2
%
R&D expenses
 
750

 
547

 
245

 
1,542

 
1,443

 
523

 
239

 
2,205

Segment profit
 
$
1,719

 
$
2,613

 
$
202

 
$
4,534

 
$
2,207

 
$
1,696

 
$
1,167

 
$
5,070


Year-over-Year Quarter Comparison
 
 
Three months ended December 31, 2017
 
Three months ended December 31, 2016
 
 
IBW
 
ISMS
 
CNS
 
Total
 
IBW
 
ISMS
 
CNS
 
Total
Total revenue
 
$
5,223

 
$
5,802

 
$
2,650

 
$
13,675

 
$
6,224

 
$
5,525

 
$
3,234

 
$
14,983

Gross profit
 
2,469

 
3,160

 
447

 
6,076

 
2,511

 
2,795

 
748

 
6,054

Gross margin (1)
 
47.3
%
 
54.5
%
 
16.9
%
 
44.4
%
 
40.3
%
 
50.6
%
 
23.1
%
 
40.4
%
R&D expenses
 
750

 
547

 
245

 
1,542

 
1,307

 
805

 
302

 
2,414

Segment profit
 
$
1,719

 
$
2,613

 
$
202

 
$
4,534

 
$
1,204

 
$
1,990

 
$
446

 
$
3,640

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP to non-GAAP IBW Segment Gross Margin
 
 
Three months ended
 December 31, 2017
 
Three months ended
September 30, 2017
 
Three months ended
December 31, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - IBW segment
 
$
5,223

 
$
2,469

 
47.3
%
 
$
7,919

 
$
3,650

 
46.1
%
 
$
6,224

 
$
2,511

 
40.3
%
Stock-based compensation (1)
 
—

 
2

 
 
 
—

 
(2
)
 
 
 
—

 
2

 
 
Non-GAAP - IBW segment
 
$
5,223

 
$
2,471

 
47.3
%
 
$
7,919

 
$
3,648

 
46.1
%
 
$
6,224

 
$
2,513

 
40.4
%
(1) Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended December 31, 2017
 
Nine months ended December 31, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - IBW segment
 
$
20,098

 
$
9,133

 
45.4
%
 
$
18,989

 
$
5,738

 
30.2
%
ClearLink DAS E&O (1)
 
—

 
—

 
 
 
—

 
1,581

 
 
Stock-based compensation (2)
 
—

 
8

 
 
 
—

 
7

 
 
Non-GAAP - IBW segment
 
$
20,098

 
$
9,141

 
45.5
%
 
$
18,989

 
$
7,326

 
38.6
%
(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
 December 31, 2017
 
Three months ended
 September 30, 2017
 
Three months ended
 December 31, 2016
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - Consolidated
 
$
13,675

 
$
6,076

 
44.4
%
 
$
17,232

 
$
7,275

 
42.2
%
 
$
14,983

 
$
6,054

 
40.4
%
Deferred revenue adjustment (1)
 
—

 
—

 
 
 
—

 
—

 
 
 
64

 
64

 
 
Stock-based compensation (2)
 
—

 
11

 
 
 
—

 
(3
)
 
 
 
—

 
10

 
 
Non-GAAP - Consolidated
 
$
13,675

 
$
6,087

 
44.5
%
 
$
17,232

 
$
7,272

 
42.2
%
 
$
15,047

 
$
6,128

 
40.7
%
 
 
Three months ended
 
Nine months ended
 
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
 
2017
 
2017
 
2016
 
2017
 
2016
GAAP consolidated operating expenses
 
$
6,041

 
$
7,219

 
$
7,836

 
$
20,630

 
$
32,427

Adjustments:
 
 
 
 
 
 
 
 
 
 
Stock-based compensation (2)
 
(305
)
 
(345
)
 
(243
)
 
(955
)
 
(1,322
)
Long-lived asset impairment (3)
 
—

 
—

 
—

 
—

 
(1,181
)
Amortization of intangibles (4)
 
(1,047
)
 
(1,048
)
 
(1,212
)
 
(3,142
)
 
(3,613
)
Restructuring, separation, and transition (5)
 
—

 
(165
)
 
(490
)
 
(165
)
 
(3,055
)
    Total adjustments
 
(1,352
)
 
(1,558
)
 
(1,945
)
 
(4,262
)
 
(9,171
)
Non-GAAP consolidated operating expenses
 
$
4,689

 
$
5,661

 
$
5,891

 
$
16,368

 
$
23,256


 
 
Three months ended
 
Nine months ended
 
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
 
2017
 
2017
 
2016
 
2017
 
2016
GAAP consolidated net income (loss)
 
$
799

 
$
720

 
$
(1,807
)
 
$
947

 
$
(15,385
)
Less:
 
 
 
 
 
 
 
 
 
 
       Income tax benefit (expense)
 
685

 
(13
)
 
(10
)
 
660

 
(20
)
      Other income, net
 
79

 
677

 
(15
)
 
799

 
76

GAAP consolidated operating profit (loss)
 
$
35

 
$
56

 
$
(1,782
)
 
$
(512
)
 
$
(15,441
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Deferred revenue adjustment (1)
 
—

 
—

 
64

 
—

 
190

ClearLink DAS E&O (6)
 
—

 
—

 
—

 
—

 
1,581

Stock-based compensation (2)
 
316

 
342

 
253

 
988

 
1,346

Long-lived asset impairment (3)
 
—

 
—

 
—

 
—

 
1,181

Amortization of intangibles (4)
 
1,047

 
1,048

 
1,212

 
3,142

 
3,613

Restructuring, separation, and transition (5)
 
—

 
165

 
490

 
165

 
3,055

    Total adjustments
 
1,363

 
1,555

 
2,019

 
4,295


10,966

Non-GAAP consolidated operating profit (loss)
 
$
1,398

 
$
1,611

 
$
237

 
$
3,783

 
$
(4,475
)
Depreciation
 
174

 
201

 
272

 
605

 
1,101

Non-GAAP consolidated Adjusted EBITDA (7)
 
$
1,572

 
$
1,812

 
$
509

 
$
4,388

 
$
(3,374
)





 
 
 
Three months ended
 
Nine months ended
 
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
 
2017
 
2017
 
2016
 
2017
 
2016
GAAP consolidated net income (loss)
 
$
799

 
$
720

 
$
(1,807
)
 
$
947

 
$
(15,385
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Deferred revenue adjustment (1)
 
—

 
—

 
64

 
—

 
190

ClearLink DAS E&O (6)
 
—

 
—

 
—

 
—

 
1,581

Stock-based compensation (2)
 
316

 
342

 
253

 
988

 
1,346

Long-lived asset impairment (3)
 
—

 
—

 
—

 
—

 
1,181

Amortization of intangibles (4)
 
1,047

 
1,048

 
1,212

 
3,142

 
3,613

Restructuring, separation, and transition (5)
 
—

 
165

 
490

 
165

 
3,055

Foreign currency translation adjustment (8)
 
—

 
(608
)
 
—

 
(608
)
 
—

Income taxes (9)
 
(697
)
 
—

 
—

 
(697
)
 
—

    Total adjustments
 
666

 
947

 
2,019

 
2,990

 
10,966

Non-GAAP consolidated net income (loss)
 
$
1,465

 
$
1,667

 
$
212

 
$
3,937

 
$
(4,419
)
GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Diluted
 
$
0.05

 
$
0.05

 
$
(0.12
)
 
$
0.06

 
$
(1.00
)
Non-GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Diluted
 
$
0.09

 
$
0.11

 
$
0.01

 
$
0.25

 
$
(0.29
)
Average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Diluted
 
15,755

 
15,672

 
15,425

 
15,679

 
15,315

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) Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.
(3) Non-cash impairment related to tangible long-lived assets associated with the previously announced strategic decision related to the discontinuation of ClearLink DAS.  
(4) Amortization of intangibles is a non-cash expense arising from previously acquired intangible assets.
(5) 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.
(6) 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.
(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.
(9) Adjustment removes one-time tax effect of changes in valuation allowance reserves associated with previously generated alternative minimum tax (AMT) credits due to the enactment of the Tax Cuts and Jobs Act of 2017.





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