Exhibit 99.1
                        
westelllogoonelinexa01a17.jpg
 
NEWS RELEASE

CORRECTING and REPLACING Westell Reports Fiscal 2021 First Quarter Results
Sequential quarterly revenue growth of 18% with improved gross margins and
lower expense structure improved loss per share 71%

CORRECTION . . . . by Westell Technologies, Inc.
August 14, 2020
The average number of common shares outstanding for the period ended June 30, 2020 in the non-GAAP table, which is reported in thousands, on the last page of the release should be 15,665.
The corrected release reads:
Westell Reports Fiscal 2021 First Quarter Results
Sequential quarterly revenue growth of 18% with improved gross margins and
lower expense structure improved loss per share 71%
AURORA, IL, August 14, 2020 – Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of high-performance network infrastructure solutions, today announced results for its fiscal 2021 first quarter ended June 30, 2020 (FY21 1Q). As previously announced, in light of the ongoing proposed reverse/forward split transaction, the Company has decided to forego the quarterly investors call. Information concerning the proposed transaction is set forth in the definitive proxy statement for the Company’s 2020 annual meeting of stockholders, which was filed with the SEC on Schedule 14A on August 11, 2020.  Stockholders are urged to read the definitive proxy statement carefully.
“We saw a strong start to the new fiscal year as revenues increased by $1.2 million over the previous quarter, FY20 Q4. Customer orders in the first quarter improved over what we believe was a COVID-19 related slowdown last quarter. Westell’s supply chain delivery also improved and enabled the Company to fill delayed customer orders. The Westell team did a tremendous job of working with our customers and delivering products during difficult circumstances.
Gross margins during this quarter improved to 38.7% compared to 32.8% in the previous quarter, higher IBW shipments contributed to the improvement. We also continue to spend our resources wisely, operating expenses were $3.8 million compared to $4.9 million in the previous quarter. These results led to a reduction in the consolidated net loss of $0.05 per share compared to a net loss of $0.18 per share in the previous quarter.
We also saw new product revenue. The first Crossfire Cellular DAS system, a key part of our new product growth strategy, shipped during the first quarter with revenue of nearly $0.2 million. Additional systems worth approximately $0.4 million in revenue are expected to ship during the second quarter. The first systems are already installed and are providing superior in-building cellular coverage,” said Westell’s President and CEO Tim Duitsman.




Consolidated Results
FY21 1Q
3 months ended 06/30/20
FY20 4Q
3 months ended 3/31/20
 + increase /
- decrease
Revenue
$7.4M
$6.2M
+$1.2M
Gross Margin
38.7%
32.8%
+5.9%
Operating Expenses
$3.8M
$4.9M
-$1.1M
Net Income (Loss)
($0.8M)
($2.8M)
+$2.0M
Earnings (Loss) Per Share
($0.05)
($0.18)
+$0.13
Non-GAAP Operating Expenses (1)
$3.2M
$3.5M
-$0.3M
Non-GAAP Net Income (Loss) (1)
($0.3M)
($1.3M)
+$1.0M
Non-GAAP Earnings (Loss) Per Share (1)
($0.02)
($0.09)
+$0.07
Ending Cash
$21.9M
$20.9M
+$1.0M
(1) Please refer to the schedule at the end of this press release for a complete GAAP to non-GAAP reconciliation and other information related to non-GAAP financial measures.
In-Building Wireless (IBW) Segment
IBW revenue from DAS conditioners and Ancillary products increased during FY21 1Q. Sales of cellular repeaters and public safety products were down slightly while the Company recorded its first revenue from the new Crossfire Cellular DAS product line. Segment gross margin and profit improved due to higher DAS conditioner sales. R&D expenses were down due to lower product certification and consulting costs.
($ in thousands)
FY21 1Q
3 months ended 06/30/20
FY20 4Q
3 months ended 3/31/20
 + increase /
- decrease
IBW Segment Revenue
$2,949
$2,014
+$935
IBW Segment Gross Margin
40.7%
20.8%
+19.9%
IBW Segment R&D Expense
$349
$485
-$136
IBW Segment Profit (Loss)
$851
$(66)
+$917
Intelligent Site Management (ISM) Segment
ISM revenue increased, reflecting increased sales of remote units. Segment gross margin decreased primarily due to product mix. These effects were partly offset by lower R&D expense due to a temporary salary reduction during the quarter in response to COVID-19, that resulted in a net increase in profitability for the quarter.
($ in thousands)
FY21 1Q
3 months ended 06/30/20
FY20 4Q
3 months ended 3/31/20
 + increase /
- decrease
ISM Segment Revenue
$2,047
$1,904
$143
ISM Segment Gross Margin
56.4%
60.4%
-4.0%
ISM Segment R&D Expense
$382
$412
-$30
ISM Segment Profit
$773
$738
$35
Communication Network Solutions (CNS) Segment
Growth in revenue from Cabinet products was offset in part by lower sales across other CNS product lines. The CNS segment profit improvement was driven primarily by lower R&D expense, due to a temporary salary reduction during the quarter in response to COVID-19.




($ in thousands)
FY21 1Q
3 months ended 06/30/20
FY20 4Q
3 months ended 3/31/20
 + increase /
- decrease
CNS Segment Revenue
$2,354
$2,308
$46
CNS Segment Gross Margin
20.7%
20.5%
+0.2%
CNS Segment R&D Expense
$214
$222
-$8
CNS Segment Profit
$273
$251
$22

This news release will be posted on the Investor Relations section of Westell's website: http://ir.westell.com.
About Westell Technologies
Westell is a leading provider of high-performance network 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, the ability to complete the proposed reverse/forward split transaction and/or the ability to realize its expected benefits, 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 effects of the Company's accounting policies, retention of key personnel, the effects and consequences of the COVID-19 pandemic or other pandemics, and other risks more fully described in the Company's SEC filings, including the Form 10-K for the fiscal year ended March 31, 2020, 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
 
 
June 30,
 
March 31
 
June 30,
 
 
2020
 
2020
 
2019
Revenue
 
$
7,350

 
$
6,226

 
$
9,002

Cost of revenue
 
4,508

 
4,184

 
5,756

Gross profit
 
2,842

 
2,042

 
3,246

Gross margin
 
38.7
%
 
32.8
%
 
36.1
%
Operating expenses:
 
 
 
 
 
 
Research & Development
 
945

 
1,119

 
1,556

Sales and marketing
 
1,376

 
1,445

 
2,332

General and administrative
 
1,210

 
1,051

 
1,364

Intangible amortization
 
226

 
309

 
308

Long-lived assets impairment
 
—

 
1,007

 
—

Total operating expenses
 
3,757

 
4,931

 
5,560

Operating profit (loss)
 
(915
)
 
(2,889
)
 
(2,314
)
Other income, net
 
30

 
58

 
164

Income (loss) before income taxes
 
(885
)
 
(2,831
)
 
(2,150
)
Income tax benefit (expense)
 
60

 
(9
)
 
(7
)
Net income (loss)
 
$
(825
)
 
$
(2,840
)
 
$
(2,157
)
 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
Basic net income (loss)
 
$
(0.05
)
 
$
(0.18
)
 
$
(0.14
)
Diluted net income (loss) per share:
 
 
 
 
 
 
Diluted net income (loss)
 
$
(0.05
)
 
$
(0.18
)
 
$
(0.14
)
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
Basic
 
15,665

 
15,579

 
15,455

Diluted
 
15,665

 
15,579

 
15,455








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


 
 
June 30, 2020 (Unaudited)
 
March 31, 2020
Assets
 
 
 
 
Cash and cash equivalents
 
$
21,917

 
$
20,869

Accounts receivable, net
 
4,899

 
4,047

Inventories
 
7,354

 
6,807

Prepaid expenses and other current assets
 
916

 
1,298

Total current assets
 
35,086

 
33,021

Land, property and equipment, net
 
1,028

 
1,076

Intangible assets, net
 
2,463

 
2,728

Right-of-use assets on operating leases, net
 
2,771

 
628

Other non-current assets
 
114

 
73

Total assets
 
$
41,462

 
$
37,526

Liabilities and Stockholders’ Equity
 
 
 
 
Accounts payable
 
$
2,247

 
$
1,065

Accrued expenses
 
3,028

 
3,136

Deferred revenue
 
955

 
1,099

Note Payable, SBA PPP loan - current
 
723

 
—

Total current liabilities
 
6,953

 
5,300

Note Payable, SBA PPP loan - non-current
 
917

 
—

Deferred revenue non-current
 
185

 
221

Lease liabilities non-current
 
2,226

 
250

Other non-current liabilities
 
225

 
94

Total liabilities
 
10,506

 
5,865

Total stockholders’ equity
 
30,956

 
31,661

Total liabilities and stockholders’ equity
 
$
41,462

 
$
37,526





Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
 
 
 
Three months
 ended
 June 30,
 
 
2020
 
2019
Cash flows from operating activities:
 
 
Net income (loss)
 
$
(825
)
 
$
(2,157
)
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
 
 
 
 
Depreciation and amortization
 
336

 
451

Stock-based compensation
 
162

 
244

Exchange rate loss (gain)
 
(9
)
 
(3
)
Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
(843
)
 
1,059

Inventory
 
(547
)
 
(142
)
Accounts payable and accrued expenses
 
3,184

 
740

Deferred revenue
 
(180
)
 
(318
)
Prepaid expenses and other current assets
 
382

 
33

Other assets
 
(2,184
)
 
(1,103
)
Net cash provided by (used in) operating activities
 
(524
)
 
(1,196
)
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment, net
 
(23
)
 
(14
)
Net cash provided by (used in) investing activities
 
(23
)
 
(14
)
Cash flows from financing activities:
 
 
 
 
Proceeds from note payable to bank, SBA PPP loan (1)
 
1,637

 
—

Purchase of treasury stock
 
(42
)
 
(173
)
Net cash provided by (used in) financing activities
 
1,595

 
(173
)
Gain (loss) of exchange rate changes on cash
 
—

 
3

Net increase (decrease) in cash and cash equivalents
 
1,048

 
(1,380
)
Cash and cash equivalents, beginning of period
 
20,869

 
25,457

Cash and cash equivalents, end of period
 
$
21,917

 
$
24,077


(1) On April 14, 2020, the Company received $1.6 million pursuant to a loan from JPMorgan Chase Bank, N.A. under the Paycheck Protection Program (the “PPP”) of the 2020 Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) as administered by the U.S. Small Business Association (the “SBA”). Funds from the loan may only be used for certain purposes, including payroll, benefits, rent and utilities. The Company will carefully monitor qualifying expenses and other requirements in an effort to properly maximize loan forgiveness, but the Company can provide no assurance that the PPP loan will be forgiven in whole or in part.





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

Sequential Quarter Comparison
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2020
 
Three months ended March 31, 2020
 
 
IBW
 
ISM
 
CNS
 
Total
 
IBW
 
ISM
 
CNS
 
Total
Total revenue
 
$
2,949

 
$
2,047

 
$
2,354

 
$
7,350

 
$
2,014

 
$
1,904

 
$
2,308

 
$
6,226

Gross profit
 
1,200

 
1,155

 
487

 
2,842

 
419

 
1,150

 
473

 
2,042

Gross margin
 
40.7
%
 
56.4
%
 
20.7
%
 
38.7
%
 
20.8
%
 
60.4
%
 
20.5
%
 
32.8
%
R&D expenses
 
349

 
382

 
214

 
945

 
485

 
412

 
222

 
1,119

Segment profit (loss)
 
$
851

 
$
773

 
$
273

 
$
1,897

 
$
(66
)
 
$
738

 
$
251

 
$
923


Year-over-Year Quarter Comparison
 
 
Three months ended June 30, 2020
 
Three months ended June 30, 2019
 
 
IBW
 
ISM
 
CNS
 
Total
 
IBW
 
ISM
 
CNS
 
Total
Total revenue
 
$
2,949

 
$
2,047

 
$
2,354

 
$
7,350

 
$
2,923

 
$
3,095

 
$
2,984

 
$
9,002

Gross profit
 
1,200

 
1,155

 
487

 
2,842

 
972

 
1,579

 
695

 
3,246

Gross margin
 
40.7
%
 
56.4
%
 
20.7
%
 
38.7
%
 
33.3
%
 
51.0
%
 
23.3
%
 
36.1
%
R&D expenses
 
349

 
382

 
214

 
945

 
399

 
701

 
456

 
1,556

Segment profit (loss)
 
$
851

 
$
773

 
$
273

 
$
1,897

 
$
573

 
$
878

 
$
239

 
$
1,690



 
 
 
 
 
 
 
 
 
 
 
 
 





Westell Technologies, Inc.
Reconciliation of GAAP to non-GAAP Financial Measures
(Amounts in thousands, except per share amounts)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
 
June 30,
 
March 31,
 
June 30,
 
 
2020
 
2020
 
2019
GAAP consolidated operating expenses
 
$
3,757

 
$
4,931

 
$
5,560

Adjustments:
 
 
 
 
 
 
Stock-based compensation (1)
 
(149
)
 
(158
)
 
(234
)
Intangible assets impairment (2)
 
—

 
(1,007
)
 
—

Amortization of acquisition-related intangibles (3)
 
(226
)
 
(309
)
 
(308
)
Transaction costs {4)
 
(200
)
 
—

 
—

    Total adjustments
 
(575
)
 
(1,474
)
 
(542
)
Non-GAAP consolidated operating expenses
 
$
3,182

 
$
3,457

 
$
5,018


 
 
Three months ended
 
 
June 30,
 
March 31,
 
June 30,
 
 
2020
 
2020
 
2019
GAAP consolidated net income (loss)
 
$
(825
)
 
$
(2,840
)
 
$
(2,157
)
Less:
 
 
 
 
 
 
       Income tax benefit (expense)
 
60

 
(9
)
 
(7
)
       Other income, net
 
30

 
58

 
164

GAAP consolidated operating profit (loss)
 
$
(915
)
 
$
(2,889
)
 
$
(2,314
)
Adjustments:
 
 
 
 
 
 
Stock-based compensation (1)
 
162

 
177

 
244

Intangible assets impairment (2)
 
—

 
1,007

 
—

Amortization of acquisition-related intangibles (3)
 
226

 
309

 
308

Transaction costs {4)
 
200

 
—

 
—

    Total adjustments
 
588

 
1,493

 
552

Non-GAAP consolidated operating profit (loss)
 
$
(327
)
 
$
(1,396
)
 
$
(1,762
)
Amortization of product licensing rights (5)
 
39

 
97

 
—

Depreciation
 
71

 
68

 
143

Non-GAAP consolidated Adjusted EBITDA (6)
 
$
(217
)
 
$
(1,231
)
 
$
(1,619
)





 
 
 
Three months ended
 
 
June 30,
 
March 31,
 
June 30,
 
 
2020
 
2020
 
2019
GAAP consolidated net income (loss)
 
$
(825
)
 
$
(2,840
)
 
$
(2,157
)
Adjustments:
 
 
 
 
 
 
Stock-based compensation (1)
 
162

 
177

 
244

Intangible assets impairment (2)
 
—

 
1,007

 
—

Amortization of acquisition-related intangibles (3)
 
226

 
309

 
308

Transaction costs {4)
 
200

 
—

 
—

Other tax benefit (7)
 
(53
)
 
—

 
—

    Total adjustments
 
535

 
1,493

 
552

Non-GAAP consolidated net income (loss)
 
$
(290
)
 
$
(1,347
)
 
$
(1,605
)
GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
Diluted
 
$
(0.05
)
 
$
(0.18
)
 
$
(0.14
)
Non-GAAP consolidated net income (loss) per common share:
 
 
 
 
 
 
Diluted
 
$
(0.02
)
 
$
(0.09
)
 
$
(0.10
)
Average number of common shares outstanding:
 
 
 
 
 
 
Diluted
 
15,665

 
15,579

 
15,455

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) Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.  
(2) Non-cash impairment related to an IBW intangible asset related to product licensing rights incurred in the quarter ended March 31, 2020.
(3) Amortization of acquisition-related intangibles is a non-cash expense arising from intangible assets previously acquired as a result of a business acquisition.
(4) Transaction related expenses associated with the proposed reverse/forward stock split announced on July 10, 2020.
(5) Amortization of the acquired product licensing rights are excluded from Adjusted EBITDA, but included in the Non-GAAP consolidated net income (loss), because the amortization is related to the ongoing operation of the business in the ordinary course.
(6) EBITDA is a non-GAAP measure that represents Earnings Before Interest, Taxes, Depreciation, and Amortization. The Company presents Adjusted EBITDA.
(7) Tax benefit associated with a reversal of an uncertain tax position.



For additional information, contact:
Tim Duitsman
Chief Executive Officer
Westell Technologies, Inc.
+1 (630) 898 2500
tduitsman@westell.com