| Basis of Presentation |
Basis of Presentation:
Description of Business
Westell Technologies, Inc. (the Company) is a holding company. Its wholly owned subsidiary, Westell, Inc., designs and distributes telecommunications products which are sold primarily to major telephone companies. Noran Tel, Inc. is a wholly owned subsidiary of Westell, Inc. Noran Tel's operations focus on power distribution product development and sales of Westell products in Canada. On April 1, 2013, Westell, Inc. acquired 100% of the outstanding shares of Kentrox, Inc. (Kentrox). Kentrox designs and distributes intelligent site management solutions that provide comprehensive monitoring, management and control of any site. On March 1, 2014, Westell, Inc. acquired 100% of the outstanding shares of Cellular Specialties, Inc. (CSI). CSI designs and develops in-building wireless solutions including distributed antenna systems (DAS) products and small cell connectivity equipment. The assets and liabilities acquired and the results of operations relating to Kentrox and CSI are included in the Company's Consolidated Financial Statements from the dates of acquisitions. See Note 2, Acquisitions.
Discontinued Operations
Sale of Conference Plus, Inc.
On December 31, 2011, the Company sold its wholly owned subsidiary, Conference Plus, Inc. (CPI) including Conference Plus Global Services, Ltd (CGPS), a wholly owned subsidiary of ConferencePlus (collectively, ConferencePlus) to Arkadin for $40.3 million in cash (the ConferencePlus sale). Of the total sale price, $4.1 million was placed in escrow at closing for the purpose of post-closing claims. During the fiscal year 2013, the Company recorded a contingent liability of $1.5 million, pre-tax, relating to claims raised by Arkadin under the indemnity provisions of the purchase sales agreement. This, along with certain other adjustments, resulted in a $1.4 million loss for fiscal year 2013. In fiscal years 2013 and 2014, $1.6 million and $2.5 million of the escrow were released with $3.0 million returned to the Company and $1.1 million paid to Arkadin. In fiscal year 2015, the Company reversed a contingency reserve related to potential indemnity claims that resulted in $0.1 million of income from discontinued operations. The activity for contingencies related to the sale of ConferencePlus presented herein have been classified as discontinued operations.
CNS Asset Sale
On April 15, 2011, the Company sold certain assets and transferred certain liabilities of the Customer Networking Solutions (CNS) segment to NETGEAR, Inc. for $36.7 million in cash (the CNS asset sale). The Company retained a major CNS customer relationship and contract, and also retained the Homecloud product development program. The Company completed the remaining contractually required product shipments under the retained contract in December 2011.
As part of the sale, the Company agreed to indemnify NETGEAR following the closing against specified losses in connection with the CNS business and generally retained responsibility for various legal liabilities that may accrue. A balance of $3.4 million was placed in escrow at closing for the purpose of post-closing claims. NETGEAR made a $0.9 million claim against the escrow balance for a dispute and indemnity claim regarding an interpretation of the sale agreement. The Company had previously recorded a $0.4 million contingency reserve for this claim at the time of the sale and recorded an additional expense of $0.5 million during fiscal year 2013 when the Company resolved the dispute through arbitration. The escrow was released at that time with $2.6 million refunded to the Company and $0.9 million paid to NETGEAR. The Company discontinued the remaining operations of the CNS segment in the first quarter of fiscal year 2014.
The Consolidated Statements of Cash Flows include discontinued operations.
Revenue and income before income taxes reported in discontinued operations is as follows:
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Fiscal Year Ended March 31, |
(in thousands) |
2015 |
|
2014 |
|
2013 |
Discontinued CPI Revenue |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Discontinued CNS Revenue |
— |
|
|
— |
|
|
1,236 |
|
Total discontinued operations revenue |
$ |
— |
|
|
$ |
— |
|
|
$ |
1,236 |
|
|
|
|
|
|
|
CPI income (loss) before income taxes |
$ |
227 |
|
|
$ |
— |
|
|
$ |
(1,358 |
) |
CNS income (loss) before income taxes |
— |
|
|
(45 |
) |
|
(951 |
) |
Total discontinued operations income (loss) before income taxes |
$ |
227 |
|
|
$ |
(45 |
) |
|
$ |
(2,309 |
) |
Principles of Consolidation
The accompanying Consolidated Financial Statements include the accounts of the Company and its majority owned subsidiaries. The Consolidated Financial Statements have been prepared using accounting principles generally accepted in the United States (GAAP) and include the results of companies acquired by the Company from the date of each acquisition. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and that affect revenue and expenses during the periods reported. Estimates are used when accounting for the allowance for uncollectible accounts receivable, net realizable value of inventory, product warranty accrued, relative selling prices, stock-based compensation, goodwill and intangible assets fair value, depreciation, income taxes, and contingencies, among other things. The Company bases its estimate on historical experience and on other assumptions that its management believes are reasonable under the circumstances. Actual results could differ from those estimates.
Voluntary Change in Accounting Principle
Effective April 1, 2014, the Company made a voluntary change in accounting principle to classify shipping and handling costs associated with the distribution of finished product to our customers as cost of revenue (previously recorded in sales and marketing expense). The Company made the voluntary change in principle because it believes the classification of shipping and handling costs in cost of revenue better reflects the cost of producing and distributing products. It also enhances the comparability of the financial statements with many industry peers. As required by U.S. generally accepted accounting principles, the change has been reflected in the Consolidated Statements of Operations through retrospective application of the change in accounting principle.
Reconciliation to Previously Reported Financial Data
The following table provides the reconciliation from previously reported financial data, as restated and adjusted:
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Fiscal Year ended March 31, 2014 |
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Fiscal Year ended March 31, 2013 |
(in thousands) |
|
Previously reported |
|
Effect of
Accounting
Principle
Change (1)
|
|
Effect of CSI
Purchase
Accounting
Adjustment (2)
|
|
Adjustments (3)
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|
Adjusted |
|
Previously reported |
|
Effect of Accounting Principle Change (1)
|
|
Adjusted |
Revenue |
|
$ |
102,073 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
102,073 |
|
|
$ |
38,808 |
|
|
$ |
— |
|
|
$ |
38,808 |
|
Cost of revenue |
|
60,115 |
|
|
1,359 |
|
|
138 |
|
|
— |
|
|
61,612 |
|
|
25,483 |
|
|
709 |
|
|
26,192 |
|
Gross profit |
|
$ |
41,958 |
|
|
$ |
(1,359 |
) |
|
$ |
(138 |
) |
|
$ |
— |
|
|
$ |
40,461 |
|
|
$ |
13,325 |
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|
$ |
(709 |
) |
|
$ |
12,616 |
|
Gross margin |
|
41.1 |
% |
|
|
|
|
|
|
|
39.6 |
% |
|
34.3 |
% |
|
|
|
32.5 |
% |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
$ |
14,663 |
|
|
$ |
(1,359 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
13,304 |
|
|
$ |
7,492 |
|
|
$ |
(709 |
) |
|
$ |
6,783 |
|
Intangible Amortization |
|
$ |
4,908 |
|
|
$ |
— |
|
|
$ |
(19 |
) |
|
$ |
— |
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|
$ |
4,889 |
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|
$ |
887 |
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|
$ |
— |
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|
$ |
887 |
|
Income tax (expense) benefit |
|
$ |
8,782 |
|
|
$ |
— |
|
|
$ |
(322 |
) |
|
$ |
(550 |
) |
|
$ |
7,910 |
|
|
$ |
(29,392 |
) |
|
$ |
— |
|
|
$ |
(29,392 |
) |
Net income (loss) |
|
$ |
5,367 |
|
|
$ |
— |
|
|
$ |
(441 |
) |
|
$ |
(550 |
) |
|
$ |
4,376 |
|
|
$ |
(44,038 |
) |
|
$ |
— |
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|
$ |
(44,038 |
) |
(1) See Voluntary Change in Accounting Principle above
(2) Certain amounts have been adjusted to reflect measurement period adjustments related to the CSI acquisition (see Note 2).
(3) See Restatement of Consolidated Financial Statements below in Note 1.
The impact of this change in accounting principle was an increase to cost of revenue and a reduction to sales and marketing expense of $1.4 million and $0.7 million in the fiscal years ended March 31, 2014 and 2013, respectively. Gross profit and gross profit percentage were reduced accordingly. The amount included in cost of sales that would have been included in sales and marketing historically was $0.9 million for the fiscal year ended March 31, 2015. The change had no effect on income from continuing operations, net income, earnings per share, or retained earnings for any period.
Reclassifications
In addition to the reclassification of shipping and handling costs disclosed above, certain amounts in the Consolidated Financial Statements for fiscal year 2014 have been reclassified to reflect measurement period adjustments related to the CSI acquisition. See Note 2, Acquisitions.
Restatement of Consolidated Financial Statements
On October 27, 2015, the Company determined that it needed to restate financial results due to an unrecorded liability of $1.4 million related to a contractual obligation that existed prior to the Kentrox acquisition. The effect of recording the liability in purchase accounting on April 1, 2013 created an additional deferred tax asset of $0.6 million and a $0.9 million increase in goodwill at the acquisition date.
The Company fully reserves its deferred tax assets; therefore, the creation of the deferred tax asset recorded in purchase accounting required an offsetting valuation allowance, which decreased the income tax benefit recorded in quarter ended March 31, 2014 by $0.6 million. In addition, since the Company previously wrote off all of the goodwill related to the Kentrox acquisition, which was part of the CSG reporting unit, in the quarter ended September 30, 2014, the actual impairment charge recorded should have been $0.9 million higher in that quarter. The cumulative overstatement of income was therefore $1.4 million.
As a result, the Company concluded that the financial statements for the years ended March 31, 2015 and 2014, and the quarterly periods within these years, as well as the quarter ended June 30, 2015, were materially misstated.
The Consolidated Balance Sheets, Consolidated Statement of Operations, Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Stockholders' Equity, and Consolidated Statement of Cash Flows, as well as Notes 2, 4, 10, and 17, have been restated to reflect the correction of the aforementioned errors.
Below is a summary of the impacts of the restatement adjustments on the Company's previously reported consolidated net income (loss):
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Fiscal Year 2015 Quarter Ended, |
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Fiscal Year Ended, |
(in thousands) |
June 30, 2014 |
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Sept. 30, 2014 |
|
Dec. 31, 2014 |
|
Mar. 31, 2015 |
|
Mar. 31, 2015 |
Net income (loss) previously reported |
$ |
(2,818 |
) |
|
$ |
(14,649 |
) |
|
$ |
(27,540 |
) |
|
$ |
(13,000 |
) |
|
$ |
(58,007 |
) |
Goodwill impairment adjustment |
— |
|
|
895 |
|
|
— |
|
|
— |
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|
895 |
|
Net income (loss) as restated |
$ |
(2,818 |
) |
|
$ |
(15,544 |
) |
|
$ |
(27,540 |
) |
|
$ |
(13,000 |
) |
|
$ |
(58,902 |
) |
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Fiscal Year 2014 Quarter Ended |
|
Fiscal Year Ended, |
|
June 30, 2013 |
|
Sept. 30, 2013 |
|
Dec. 31, 2013 |
|
Mar. 31, 2014 |
|
Mar. 31, 2014 |
Net income (loss) previously reported |
$ |
(2,764 |
) |
|
$ |
1,328 |
|
|
$ |
1,925 |
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|
$ |
4,437 |
|
|
$ |
4,926 |
|
Income tax expense adjustment |
— |
|
|
— |
|
|
— |
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|
550 |
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|
550 |
|
Net income (loss) as restated |
$ |
(2,764 |
) |
|
$ |
1,328 |
|
|
$ |
1,925 |
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|
$ |
3,887 |
|
|
$ |
4,376 |
|
The following tables provide a reconciliation of the amounts previously reported to the restated amounts for the years ended March 31, 2014 and March 31, 2015.
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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(In thousands, except share amounts)
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March 31, 2014(as reported) |
|
Adjustments |
|
March 31, 2014(as restated) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
35,793 |
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$ |
— |
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$ |
35,793 |
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Short-term investments |
15,584 |
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|
— |
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|
15,584 |
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Accounts receivable |
15,831 |
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|
— |
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|
15,831 |
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Inventories |
24,056 |
|
|
— |
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|
24,056 |
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Prepaid expenses and other current assets |
1,952 |
|
|
— |
|
|
1,952 |
|
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Deferred income tax assets |
899 |
|
|
550 |
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|
1,449 |
|
|
Land held-for-sale |
264 |
|
|
— |
|
|
264 |
|
|
Total current assets |
94,379 |
|
|
550 |
|
|
94,929 |
|
|
Land, Property and equipment: |
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|
Land |
780 |
|
|
— |
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|
780 |
|
|
Machinery and equipment |
1,413 |
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|
— |
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|
1,413 |
|
|
Office, computer and research equipment |
9,039 |
|
|
— |
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|
9,039 |
|
|
Leasehold improvements |
7,450 |
|
|
— |
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|
7,450 |
|
|
Total property and equipment, gross |
18,682 |
|
|
— |
|
|
18,682 |
|
|
Less accumulated depreciation and amortization |
(16,001 |
) |
|
— |
|
|
(16,001 |
) |
|
Property and equipment, net |
2,681 |
|
|
— |
|
|
2,681 |
|
|
Goodwill |
31,102 |
|
|
895 |
|
|
31,997 |
|
|
Other intangible assets, net |
32,319 |
|
|
— |
|
|
32,319 |
|
|
Other non-current assets |
393 |
|
|
— |
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|
393 |
|
|
Total assets |
$ |
160,874 |
|
|
$ |
1,445 |
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|
$ |
162,319 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
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|
|
Current liabilities: |
|
|
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|
|
Accounts payable |
$ |
7,508 |
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|
$ |
— |
|
|
$ |
7,508 |
|
|
Accrued expenses |
2,920 |
|
|
1,445 |
|
|
4,365 |
|
|
Accrued restructuring |
57 |
|
|
— |
|
|
57 |
|
|
Accrued compensation |
4,395 |
|
|
— |
|
|
4,395 |
|
|
Contingent consideration |
2,067 |
|
|
— |
|
|
2,067 |
|
|
Deferred revenue |
1,774 |
|
|
— |
|
|
1,774 |
|
|
Total current liabilities |
18,721 |
|
|
1,445 |
|
|
20,166 |
|
|
Deferred revenue non-current |
787 |
|
|
|
|
787 |
|
|
Deferred income tax liability |
1,072 |
|
|
550 |
|
|
1,622 |
|
|
Accrued restructuring non-current |
— |
|
|
— |
|
|
— |
|
|
Contingent consideration non-current |
574 |
|
|
— |
|
|
574 |
|
|
Other non-current liabilities |
528 |
|
|
— |
|
|
528 |
|
|
Total liabilities |
21,682 |
|
|
1,995 |
|
|
23,677 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Class A common stock |
459 |
|
|
— |
|
|
459 |
|
|
Class B common stock |
139 |
|
|
— |
|
|
139 |
|
|
Additional paid-in capital |
410,176 |
|
|
— |
|
|
410,176 |
|
|
Treasury stock at cost |
(34,206 |
) |
|
— |
|
|
(34,206 |
) |
|
Cumulative translation adjustment |
608 |
|
|
— |
|
|
608 |
|
|
Accumulated deficit |
(237,984 |
) |
|
(550 |
) |
|
(238,534 |
) |
|
Total stockholders’ equity |
139,192 |
|
|
(550 |
) |
|
138,642 |
|
|
Total liabilities and stockholders’ equity |
$ |
160,874 |
|
|
$ |
1,445 |
|
|
$ |
162,319 |
|
|
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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|
(In thousands, except share amounts)
|
March 31, 2015(as reported) |
|
Adjustments |
|
March 31, 2015(as restated) |
Assets |
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|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
14,026 |
|
|
$ |
— |
|
|
$ |
14,026 |
|
Short-term investments |
23,906 |
|
|
— |
|
|
23,906 |
|
Accounts receivable |
11,845 |
|
|
— |
|
|
11,845 |
|
Inventories |
16,205 |
|
|
— |
|
|
16,205 |
|
Prepaid expenses and other current assets |
3,285 |
|
|
— |
|
|
3,285 |
|
Deferred income tax assets |
973 |
|
|
70 |
|
|
1,043 |
|
Land held-for-sale |
264 |
|
|
— |
|
|
264 |
|
Total current assets |
70,504 |
|
|
70 |
|
|
70,574 |
|
Land, Property and equipment: |
|
|
|
|
|
Land |
672 |
|
|
— |
|
|
672 |
|
Machinery and equipment |
1,701 |
|
|
— |
|
|
1,701 |
|
Office, computer and research equipment |
6,260 |
|
|
— |
|
|
6,260 |
|
Leasehold improvements |
7,451 |
|
|
— |
|
|
7,451 |
|
Total property and equipment, gross |
16,084 |
|
|
— |
|
|
16,084 |
|
Less accumulated depreciation and amortization |
(12,481 |
) |
|
— |
|
|
(12,481 |
) |
Property and equipment, net |
3,603 |
|
|
— |
|
|
3,603 |
|
Goodwill |
— |
|
|
— |
|
|
— |
|
Other intangible assets, net |
25,942 |
|
|
— |
|
|
25,942 |
|
Other non-current assets |
258 |
|
|
— |
|
|
258 |
|
Total assets |
$ |
100,307 |
|
|
$ |
70 |
|
|
$ |
100,377 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
4,011 |
|
|
$ |
— |
|
|
$ |
4,011 |
|
Accrued expenses |
3,157 |
|
|
1,445 |
|
|
4,602 |
|
Accrued restructuring |
1,161 |
|
|
— |
|
|
1,161 |
|
Accrued compensation |
974 |
|
|
— |
|
|
974 |
|
Contingent consideration |
1,184 |
|
|
— |
|
|
1,184 |
|
Deferred revenue |
2,415 |
|
|
— |
|
|
2,415 |
|
Total current liabilities |
12,902 |
|
|
1,445 |
|
|
14,347 |
|
Deferred revenue non-current |
751 |
|
|
— |
|
|
751 |
|
Deferred income tax liability |
1,019 |
|
|
70 |
|
|
1,089 |
|
Accrued restructuring non-current |
1,642 |
|
|
— |
|
|
1,642 |
|
Contingent consideration non-current |
400 |
|
|
— |
|
|
400 |
|
Other non-current liabilities |
409 |
|
|
— |
|
|
409 |
|
Total liabilities |
17,123 |
|
|
1,515 |
|
|
18,638 |
|
Stockholders’ equity: |
|
|
|
|
|
Class A common stock |
468 |
|
|
— |
|
|
468 |
|
Class B common stock |
139 |
|
|
— |
|
|
139 |
|
Additional paid-in capital |
413,026 |
|
|
— |
|
|
413,026 |
|
Treasury stock at cost |
(35,066 |
) |
|
— |
|
|
(35,066 |
) |
Cumulative translation adjustment |
608 |
|
|
— |
|
|
608 |
|
Accumulated deficit |
(295,991 |
) |
|
(1,445 |
) |
|
(297,436 |
) |
Total stockholders’ equity |
83,184 |
|
|
(1,445 |
) |
|
81,739 |
|
Total liabilities and stockholders’ equity |
$ |
100,307 |
|
|
$ |
70 |
|
|
$ |
100,377 |
|
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts)
|
Fiscal Year Ended March 31, |
|
2014
(as reported) |
|
Adjustments |
|
2014
(as restated) |
Revenue |
$ |
102,073 |
|
|
$ |
— |
|
|
$ |
102,073 |
|
Cost of revenue |
61,612 |
|
|
— |
|
|
61,612 |
|
Gross profit |
40,461 |
|
|
— |
|
|
40,461 |
|
Operating expenses: |
|
|
|
|
— |
|
Sales and marketing |
13,304 |
|
|
— |
|
|
13,304 |
|
Research and development |
11,339 |
|
|
— |
|
|
11,339 |
|
General and administrative |
14,027 |
|
|
— |
|
|
14,027 |
|
Intangible amortization |
4,889 |
|
|
— |
|
|
4,889 |
|
Restructuring |
335 |
|
|
— |
|
|
335 |
|
Goodwill impairment |
— |
|
|
— |
|
|
— |
|
Total operating expenses |
43,894 |
|
|
— |
|
|
43,894 |
|
Operating loss from continuing operations |
(3,433 |
) |
|
— |
|
|
(3,433 |
) |
Other income (expense), net |
(56 |
) |
|
— |
|
|
(56 |
) |
Loss before income taxes and discontinued operations |
(3,489 |
) |
|
— |
|
|
(3,489 |
) |
Income tax (expense) benefit |
8,460 |
|
|
(550 |
) |
|
7,910 |
|
Net income (loss) from continuing operations |
4,971 |
|
|
(550 |
) |
|
4,421 |
|
Discontinued operations (Note 1): |
|
|
|
|
|
Income (loss) from discontinued operations, net of tax benefit (expense) of $(88), $0 and $813 for fiscal years 2015, 2014 and 2013, respectively |
(45 |
) |
|
— |
|
|
(45 |
) |
Net income (loss) |
$ |
4,926 |
|
|
$ |
(550 |
) |
|
$ |
4,376 |
|
Basic net income (loss) per share: |
|
|
|
|
|
Basic net income (loss) from continuing operations |
$ |
0.08 |
|
|
$ |
(0.01 |
) |
|
$ |
0.08 |
|
Basic net income (loss) from discontinued operations |
— |
|
|
— |
|
|
— |
|
Basic net income (loss) per share |
$ |
0.08 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Diluted net income (loss) per share: |
|
|
|
|
|
Diluted net income (loss) from continuing operations |
$ |
0.08 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Diluted net income (loss) from discontinued operations |
— |
|
|
— |
|
|
— |
|
Diluted net income (loss) per share |
$ |
0.08 |
|
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
Weighted-average number of shares outstanding: |
|
|
|
|
|
Basic |
58,786 |
|
|
— |
|
|
58,786 |
|
Effect of dilutive securities: restricted stock, restricted stock units, performance stock units and stock options(3)
|
1,262 |
|
|
— |
|
|
1,262 |
|
Diluted |
60,048 |
|
|
— |
|
|
60,048 |
|
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts)
|
Fiscal Year Ended March 31, |
|
2015
(as reported) |
|
Adjustments |
|
2015
(as restated) |
Revenue |
$ |
84,127 |
|
|
$ |
— |
|
|
$ |
84,127 |
|
Cost of revenue |
57,317 |
|
|
— |
|
|
57,317 |
|
Gross profit |
26,810 |
|
|
— |
|
|
26,810 |
|
Operating expenses: |
|
|
|
|
— |
|
Sales and marketing |
12,407 |
|
|
— |
|
|
12,407 |
|
Research and development |
17,348 |
|
|
— |
|
|
17,348 |
|
General and administrative |
14,678 |
|
|
— |
|
|
14,678 |
|
Intangible amortization |
6,377 |
|
|
— |
|
|
6,377 |
|
Restructuring |
3,243 |
|
|
— |
|
|
3,243 |
|
Goodwill impairment |
31,102 |
|
|
895 |
|
|
31,997 |
|
Total operating expenses |
85,155 |
|
|
895 |
|
|
86,050 |
|
Operating loss from continuing operations |
(58,345 |
) |
|
(895 |
) |
|
(59,240 |
) |
Other income (expense), net |
(2 |
) |
|
— |
|
|
(2 |
) |
Loss before income taxes and discontinued operations |
(58,347 |
) |
|
(895 |
) |
|
(59,242 |
) |
Income tax (expense) benefit |
201 |
|
|
— |
|
|
201 |
|
Net income (loss) from continuing operations |
(58,146 |
) |
|
(895 |
) |
|
(59,041 |
) |
Discontinued operations (Note 1): |
|
|
|
|
|
Income (loss) from discontinued operations, net of tax benefit (expense) of $(88), $0 and $813 for fiscal years 2015, 2014 and 2013, respectively |
139 |
|
|
— |
|
|
139 |
|
Net income (loss) |
$ |
(58,007 |
) |
|
$ |
(895 |
) |
|
$ |
(58,902 |
) |
Basic net income (loss) per share: |
|
|
|
|
|
Basic net income (loss) from continuing operations |
$ |
(0.97 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.98 |
) |
Basic net income (loss) from discontinued operations |
— |
|
|
— |
|
|
— |
|
Basic net income (loss) per share |
$ |
(0.97 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.98 |
) |
Diluted net income (loss) per share: |
|
|
|
|
|
Diluted net income (loss) from continuing operations |
$ |
(0.97 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.98 |
) |
Diluted net income (loss) from discontinued operations |
— |
|
|
— |
|
|
— |
|
Diluted net income (loss) per share |
$ |
(0.97 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.98 |
) |
Weighted-average number of shares outstanding: |
|
|
|
|
|
Basic |
59,985 |
|
|
— |
|
|
59,985 |
|
Effect of dilutive securities: restricted stock, restricted stock units, performance stock units and stock options(3)
|
— |
|
|
— |
|
|
— |
|
Diluted |
59,985 |
|
|
— |
|
|
59,985 |
|
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
Fiscal Year Ended March 31, |
|
2014
(as reported)
|
|
Adjustments |
|
2014
(as restated)
|
Net income (loss) |
$ |
4,926 |
|
|
$ |
(550 |
) |
|
$ |
4,376 |
|
Other comprehensive income (loss): |
|
|
|
|
|
Foreign currency translation adjustment |
— |
|
|
— |
|
|
— |
|
Total other comprehensive income (loss) |
— |
|
|
— |
|
|
— |
|
Total comprehensive income (loss) |
$ |
4,926 |
|
|
$ |
(550 |
) |
|
$ |
4,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
Fiscal Year Ended March 31, |
|
2015
(as reported)
|
|
Adjustments |
|
2015
(as restated)
|
Net income (loss) |
$ |
(58,007 |
) |
|
$ |
(895 |
) |
|
$ |
(58,902 |
) |
Other comprehensive income (loss): |
|
|
|
|
|
Foreign currency translation adjustment |
— |
|
|
— |
|
|
— |
|
Total other comprehensive income (loss) |
— |
|
|
— |
|
|
— |
|
Total comprehensive income (loss) |
$ |
(58,007 |
) |
|
$ |
(895 |
) |
|
$ |
(58,902 |
) |
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
Fiscal Year Ended March 31, |
|
2014
(as reported)
|
|
Adjustments |
|
2014
(as restated)
|
Common Stock Class A |
$ |
459 |
|
|
$ |
— |
|
|
$ |
459 |
|
Common Stock Class B |
139 |
|
|
— |
|
|
139 |
|
Additional paid-in-capital |
410,176 |
|
|
— |
|
|
410,176 |
|
Accumulated translation adjustment |
608 |
|
|
— |
|
|
608 |
|
Accumulated deficit |
(237,984 |
) |
|
(550 |
) |
|
(238,534 |
) |
Treasury stock |
(34,206 |
) |
|
— |
|
|
(34,206 |
) |
Total stockholders' equity |
$ |
139,192 |
|
|
$ |
(550 |
) |
|
$ |
138,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
Fiscal Year Ended March 31, |
|
2015
(as reported)
|
|
Adjustments |
|
2015
(as restated)
|
Common Stock Class A |
$ |
468 |
|
|
$ |
— |
|
|
$ |
468 |
|
Common Stock Class B |
139 |
|
|
— |
|
|
139 |
|
Additional paid-in-capital |
413,026 |
|
|
— |
|
|
413,026 |
|
Accumulated translation adjustment |
608 |
|
|
— |
|
|
608 |
|
Accumulated deficit |
(295,991 |
) |
|
(1,445 |
) |
|
(297,436 |
) |
Treasury stock |
(35,066 |
) |
|
— |
|
|
(35,066 |
) |
Total stockholders' equity |
$ |
83,184 |
|
|
$ |
(1,445 |
) |
|
$ |
81,739 |
|
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Fiscal Year Ended March 31, |
|
2014
(as reported)
|
|
Adjustments |
|
2014
(as restated)
|
Cash flows from operating activities: |
|
|
|
|
|
Net income (loss) |
$ |
4,926 |
|
|
$ |
(550 |
) |
|
$ |
4,376 |
|
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
5,511 |
|
|
— |
|
|
5,511 |
|
Goodwill impairment |
— |
|
|
— |
|
|
— |
|
Stock-based compensation |
1,871 |
|
|
— |
|
|
1,871 |
|
Exchange rate loss |
33 |
|
|
— |
|
|
33 |
|
Impairment loss or loss (gain) on sale of fixed assets |
8 |
|
|
— |
|
|
8 |
|
Restructuring |
335 |
|
|
— |
|
|
335 |
|
Deferred taxes |
(8,990 |
) |
|
550 |
|
|
(8,440 |
) |
Changes in assets and liabilities: |
|
|
|
|
— |
|
Accounts receivable |
(2,139 |
) |
|
— |
|
|
(2,139 |
) |
Inventories |
595 |
|
|
— |
|
|
595 |
|
Prepaid expenses and other current assets |
742 |
|
|
— |
|
|
742 |
|
Other assets |
190 |
|
|
— |
|
|
190 |
|
Deferred revenue |
(404 |
) |
|
— |
|
|
(404 |
) |
Accounts payable and accrued expenses |
(3,223 |
) |
|
— |
|
|
(3,223 |
) |
Accrued compensation |
2,142 |
|
|
— |
|
|
2,142 |
|
Net cash provided by (used in) operating activities |
1,597 |
|
|
— |
|
|
1,597 |
|
Cash flows from investing activities: |
|
|
|
|
|
Maturities of held-to maturity short-term debt securities |
28,514 |
|
|
— |
|
|
28,514 |
|
Maturities of other short-term investments |
3,682 |
|
|
— |
|
|
3,682 |
|
Purchases of held-to maturity short-term debt securities |
(21,955 |
) |
|
— |
|
|
(21,955 |
) |
Purchases of other short-term investments |
(1,476 |
) |
|
— |
|
|
(1,476 |
) |
Purchases of property and equipment |
(443 |
) |
|
— |
|
|
(443 |
) |
Proceeds from sale of assets |
— |
|
|
— |
|
|
— |
|
Acquisitions, net of cash acquired |
(66,170 |
) |
|
— |
|
|
(66,170 |
) |
Changes in restricted cash |
2,500 |
|
|
— |
|
|
2,500 |
|
Net cash used in investing activities |
(55,348 |
) |
|
— |
|
|
(55,348 |
) |
Cash flows from financing activities: |
|
|
|
|
|
Purchase of treasury stock |
(359 |
) |
|
— |
|
|
(359 |
) |
Payment of contingent consideration |
— |
|
|
— |
|
|
— |
|
Proceeds from stock options exercised |
1,677 |
|
|
— |
|
|
1,677 |
|
Net cash provided by (used in) financing activities |
1,318 |
|
|
— |
|
|
1,318 |
|
(Gain) loss of exchange rate changes on cash |
(7 |
) |
|
— |
|
|
(7 |
) |
Net increase (decrease) in cash and cash equivalents |
(52,440 |
) |
|
— |
|
|
(52,440 |
) |
Cash and cash equivalents, beginning of period |
88,233 |
|
|
— |
|
|
88,233 |
|
Cash and cash equivalents, end of period |
$ |
35,793 |
|
|
$ |
— |
|
|
$ |
35,793 |
|
WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Fiscal Year Ended March 31, |
|
2015
(as restated)
|
|
Adjustments |
|
2015
(as restated)
|
Cash flows from operating activities: |
|
|
|
|
|
Net income (loss) |
$ |
(58,007 |
) |
|
$ |
(895 |
) |
|
$ |
(58,902 |
) |
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
7,416 |
|
|
— |
|
|
7,416 |
|
Goodwill impairment |
31,102 |
|
|
895 |
|
|
31,997 |
|
Stock-based compensation |
2,605 |
|
|
— |
|
|
2,605 |
|
Exchange rate loss |
23 |
|
|
— |
|
|
23 |
|
Impairment loss or loss (gain) on sale of fixed assets |
117 |
|
|
— |
|
|
117 |
|
Restructuring |
3,243 |
|
|
— |
|
|
3,243 |
|
Deferred taxes |
(127 |
) |
|
— |
|
|
(127 |
) |
Changes in assets and liabilities: |
|
|
|
|
— |
|
Accounts receivable |
3,986 |
|
|
— |
|
|
3,986 |
|
Inventories |
8,186 |
|
|
— |
|
|
8,186 |
|
Prepaid expenses and other current assets |
(1,661 |
) |
|
— |
|
|
(1,661 |
) |
Other assets |
137 |
|
|
— |
|
|
137 |
|
Deferred revenue |
605 |
|
|
— |
|
|
605 |
|
Accounts payable and accrued expenses |
(3,492 |
) |
|
— |
|
|
(3,492 |
) |
Accrued compensation |
(3,420 |
) |
|
— |
|
|
(3,420 |
) |
Net cash provided by (used in) operating activities |
(9,287 |
) |
|
— |
|
|
(9,287 |
) |
Cash flows from investing activities: |
|
|
|
|
|
Maturities of held-to maturity short-term debt securities |
22,776 |
|
|
— |
|
|
22,776 |
|
Maturities of other short-term investments |
1,985 |
|
|
— |
|
|
1,985 |
|
Purchases of held-to maturity short-term debt securities |
(24,662 |
) |
|
— |
|
|
(24,662 |
) |
Purchases of other short-term investments |
(8,421 |
) |
|
— |
|
|
(8,421 |
) |
Purchases of property and equipment |
(2,137 |
) |
|
— |
|
|
(2,137 |
) |
Proceeds from sale of assets |
— |
|
|
— |
|
|
— |
|
Acquisitions, net of cash acquired |
(304 |
) |
|
— |
|
|
(304 |
) |
Changes in restricted cash |
— |
|
|
— |
|
|
— |
|
Net cash used in investing activities |
(10,763 |
) |
|
— |
|
|
(10,763 |
) |
Cash flows from financing activities: |
|
|
|
|
|
Purchase of treasury stock |
(863 |
) |
|
— |
|
|
(863 |
) |
Payment of contingent consideration |
(1,104 |
) |
|
— |
|
|
(1,104 |
) |
Proceeds from stock options exercised |
257 |
|
|
— |
|
|
257 |
|
Net cash provided by (used in) financing activities |
(1,710 |
) |
|
— |
|
|
(1,710 |
) |
(Gain) loss of exchange rate changes on cash |
(7 |
) |
|
— |
|
|
(7 |
) |
Net increase (decrease) in cash and cash equivalents |
(21,767 |
) |
|
— |
|
|
(21,767 |
) |
Cash and cash equivalents, beginning of period |
35,793 |
|
|
— |
|
|
35,793 |
|
Cash and cash equivalents, end of period |
$ |
14,026 |
|
|
$ |
— |
|
|
$ |
14,026 |
|
|