Westell Technologies Second Quarter Results for Fiscal 2001
10/18/0 16:23 (New York)
AURORA, Ill., Oct. 18 /PRNewswire/ -- Westell Technologies, Inc.
(Nasdaq: WSTL) today announced results for its second quarter fiscal year 2001
ending September 30, 2000.
(Photo: newscom.com )
Revenues for the second quarter of fiscal year 2001 were $105.5 million
compared with $25.0 million for the same period last year, an increase of
322%. Pro forma net income, which excludes the amortization of goodwill,
charges associated with a potential strategic acquisition that the Company
chose not to complete and other one-time expenses, was $483 thousand or
$0.01 per share compared with a net loss of $3.1 million or net loss of
$0.08 per share in the second quarter of fiscal 2000. Consolidated net loss
including the amortization of goodwill, charges associated with a potential
strategic acquisition that the Company chose not to complete and other
one-time expenses was $8.3 million or $0.14 per share.
Customer Premise Equipment (CPE) revenues were $49.5 million compared to
$2.0 million in same quarter last year and $61.9 million in the quarter ending
June 30, 2000. Transport Systems posted sales of $15.7 million for the three
months ended September 30, 2000 compared to $2.6 million in the same quarter
last year, an increase of approximately 500%. Combined DSL revenues in the
current quarter comprised 62% of total revenue.
Telco Access Products revenues were $29.9 million for the three months
ended September 30, 2000 representing a 136% increase compared to
$12.7 million of revenue in the same quarter last year. Service revenue from
the Company's subsidiary, Conference Plus, Inc. (CPI), were $10.4 million for
the September 30, 2000 quarter, an increase of 36% over the same period last
year.
Gross margins for equipment in the second fiscal quarter of 2001 were
17% compared to gross margins for equipment of 20% in the prior quarter ending
June 30, 2000. Gross margins for services in the September 30, 2000 quarter
were 38% compared to gross margins for services of 37% in the prior quarter
ending June 30, 2000. Equipment gross margins were impacted this quarter by
the integration of the St. Charles, IL manufacturing facilities expected to be
completed in the quarter ending December 31, 2000.
Pro forma operating expenses, which exclude the amortization of goodwill,
charges associated with a potential strategic acquisition that the Company
chose not to complete and other one-time expenses, for the three months
ending September 30, 2000, were $19.5 million or 19% of revenue compared to
$8.4 million or 34% of revenue in the same quarter last year. Including
goodwill, charges associated with a potential strategic acquisition that the
Company chose not to complete and other one-time expenses, operating expenses
for the three months ending September 30, 2000 were $28.2 million.
For the fiscal year ending March 31, 2001, Westell expects revenues in the
range of $400-$425 million and pro forma EPS between $0.13-$0.15. For year
2002, ending March 31, 2002, Westell expects revenues between
$600-$645 million and pro forma EPS between $0.60-$0.70. Pro forma EPS
excludes the amortization of goodwill, charges associated with a potential
strategic acquisition that the Company chose not to complete and other one-
time expenses.
"We faced a challenging quarter as we consolidated and integrated our
manufacturing facilities while at the same time experiencing lower shipments
in some of our business units," remarked Marc Zionts, Westell Technologies
Chief Executive Officer. "We remain positive on our longer term outlook for
both the deployment of broadband services and Westell's role as a leading
provider of DSL and broadband solutions."
Westell Technologies, Inc, headquartered in Aurora, Illinois, is a
holding company for Westell, Inc. and Conference Plus, Inc. Westell, Inc.
manufactures and licenses DSL systems and value added Customer Premise
Equipment, and manufactures telecommunications access products. Conference
Plus, Inc. is a collaborative Application Service Provider that manages
and hosts voice, video, IP applications and back-office services. Additional
information can be obtained by visiting Westell's Web site at
www.westell.com .
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995:
Certain statements contained herein such as Westell Technologies' expected
projected revenue and earnings per share are forward looking statements that
involve risks and uncertainties. These risks include, but are not limited to,
product demand and market acceptance risks (including the future commercial
acceptance of Westell's DSL systems by telephone companies and other
customers), the impact of competitive products and technologies (such as cable
modems and fiber optic cable), competitive pricing pressures, product
development, excess and obsolete inventory due to new product development,
commercialization and technological delays or difficulties (including delays
or difficulties in developing, producing, testing and selling new products and
technologies, such as DSL systems), the impact of Westell's merger with
Teltrend, the effect of Westell's accounting policies, the effect of economic
conditions and trade, legal, social, and economic risks (such as import,
licensing and trade restrictions) and other risks more fully described in
Westell's Annual Report on Form 10-K for the fiscal year ended March 31, 2000
under the section "Risk Factors". Westell undertakes no obligation to release
publicly the result of any revisions to these forward looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. The term pro forma in the
context of results for the quarter ending September 30, 2000 refer to the
exclusion of goodwill associated with the acquisition of Teltrend on March 17,
2000, charges associated with a potential strategic acquisition that the
Company chose not to complete and other one-time expenses.
Westell Technologies, Inc.
Consolidated Financial Results
(Dollars in thousands except per share amounts)
Three Months ended, Six Months ended,
September 30 % September 30 %
2000 1999 (A) Change 2000 1999 (A) Change
Revenues
TAP $29,875 $12,680 136% $60,096 $26,504 127%
Transport
systems 15,678 2,636 495% 21,695 4,825 350%
CPE 49,548 2,010 2365% 111,428 3,185 3399%
Services 10,428 7,678 36% 20,186 14,649 38%
Total revenues 105,529 25,004 322% 213,405 49,163 334%
Gross profit
Equipment 16,411 2,968 35,918(B) 8,268 --
Services 3,979 2,657 7,629 4,863 --
Total gross
profit 20,390 5,625 262% 43,547 13,131 232%
Gross margin
Equipment 17.3% 17.1% 18.6%(B) 24.0% --
Services 38.2% 34.6% 37.8% 33.2% --
Total gross
margin 19.3% 22.5% 20.4% 26.7% --
Operating expenses
Sales &
marketing 6,221 3,414 82% 13,600 7,112 91%
Expense to
revenue 5.9% 13.7% 6.4% 14.5% --
General &
administrative 6,539 3,377 94% 12,203 6,617 84%
Expense to
revenue 6.2% 13.5% 5.7% 13.5% --
Research &
development 7,511 1,619 364% 14,949 5,216 187%
Expense to
revenue 7.1% 6.5% 7.0% 10.6% --
Goodwill
amortization 7,958(C) -- 15,916(C) -- --
Total operating
expenses 28,229 8,410 236% 56,668 18,945 199%
Expense to
revenue 26.8% 33.6% 26.6% 38.5% --
Operating income
(loss) (7,840) (2,785) 182% (13,122) (5,814) 126%
Other income
(loss) (105) 74 -241% 64 (85) -176%
Interest expense 331 348 -5% 450 592 -24%
Income (loss) before
tax benefit (8,276) (3,059) 171% (13,508) (6,491) 108%
Benefit for
income taxes --(D) -- NM --(D) -- NM
Effective tax rate 0.0% 0.0% 0.0% 0.0%
Net income
(loss) $(8,276) $(3,059) NM $(13,508) $(6,491) NM
Loss per common share:
Basic and
diluted (E) (0.14) (0.08) NM (0.22) (0.18) NM
Average number of
common shares
outstanding:
Basic and
diluted(E) 61,188 36,570 60,697 36,519
Footnotes:
(A) Year over year comparisons effected by the acquisition of Teltrend,
Inc.
(B) Includes the impact of $970,000 for inventory revaluation due to
Teltrend acquisition.
(C) Goodwill amortization related to the Teltrend acquisition.
(D) Valuation allowance of $6.6 million and $5.5 million was recorded
during the three and six month periods ended September 30, 2000.
(E) Loss year impact of dilution is anti-dilutive, therefore dilutive
presentation is not applicable.
Westell Technologies, Inc.
Pro forma Financial Results
(Dollars in thousands except per share amounts)
Three Months ended Six Months ended
September 30, % September 30, %
2000 1999(a) Change 2000 1999(a) Change
Revenues
TAP $29,875 $12,680 136% $60,096 $26,504 127%
Transport
systems 15,678 2,636 495% 21,695 4,825 350%
CPE 49,548 2,010 2365% 111,428 3,185 3399%
Services 10,428 7,678 36% 20,186 14,649 38%
Total revenues 105,529 25,004 322% 213,405 49,163 334%
Gross profit
Equipment 16,411 2,968 36,888(b) 8,268
Services 3,979 2,657 7,629 4,863
Total gross
profit 20,390 5,625 262% 44,517 13,131 239%
Gross margin
Equipment 17.3% 17.1% 19.1%(b) 24.0%
Services 38.2% 34.6% 37.8% 33.2%
Total gross
margin 19.3% 22.5% 20.9% 26.7%
Operating expenses
Sales &
marketing 6,221 3,414 82% 13,600 7,112 91%
Expense to
revenue 5.9% 13.7% 6.4% 14.5%
General &
administrative 5,741(c) 3,377 70% 11,405 6,617 72%
Expense to
revenue 5.4% 13.5% 5.3% 13.5%
Research &
development 7,509 1,619 364% 14,947 5,216 187%
Expense to
revenue 7.1% 6.5% 7.0% 10.6%
Goodwill
amortization --(d) -- --(d) --
Total operating
expenses 19,471 8,410 132% 39,952 18,945 111%
Expense to
revenue 18.5% 33.6% 18.7% 38.5%
Operating income
(loss) 919 (2,785) -133% 4,565 (5,814) -179%
Other income (loss) (105) 74 -241% 64 51 26%
Interest expense 331 348 -5% 450 728 -38%
Income (loss) before
tax benefit 483 (3,059) -116% 4,179 (6,491) -164%
Benefit for income
taxes --(e) -- NM --(e) -- NM
Effective tax
rate 0.0% 0.0% 0.0% 0.0%
Net income (loss) $483 $(3,059) NM $4,179 $(6,491) NM
Loss per common share:
Basic 0.01 (0.08) NM 0.07 (0.18) NM
Diluted 0.01 --(f) NM 0.07 --(f) NM
Average number of
common shares
outstanding:
Basic 61,188 36,570 60,697 36,519
Diluted 64,311 --(f) 63,546 --(f)
Footnotes:
(a) Year over year comparisons effected by the acqusition of Teltrend,
Inc.
(b) Pro forma excludes impact of approximately $970,000 of inventory
revaluation related to the Teltrend acquisition.
(c) Pro forma excludes the impact of approximately $800,000 in charges
associated with an acquisition the Company chose not to complete and
other one-time charges related to issuance of non-employee stock
options.
(d) Pro forma excludes the impact of approximately $8.0 million and
$15.9 million of goodwill amortization in the three and six month
periods ended September 30, 2000 related to the Teltrend acquisition.
(e) Valuation allowance of $6.3 million and $4.8 million would have been
recorded during the three and six month periods ended September 30,
2000.
(f) Loss year impact of dilution is anti-dilutive, therefore dilutive
presentation is not applicable.
Westell Technologies, Inc.
Consolidated Financial Results (continued)
(Dollars in thousands except per share amounts)
September 30, March 31,
2000 2000
(000's)
(unaudited)
Cash and Short term Investments 8,391 29,209
Receivables 77,636 42,025
Inventory 90,540 30,741
Goodwill 159,287 175,482
Total current assets 192,628 117,025
Total current liabilities 128,477 52,690
Shareholders' Equity 277,837 279,663
Days Sales Outstanding 66 67(A)
Footnotes:
(A) Days sales outstanding calculation for March 31, 2000 was adjusted to
normalize the impact of the Teltrend acquisition. The adjustment
excludes Teltrend revenue in March subsequent to the merger and
Teltrend trade receivables as of March 31, 2000.
SOURCE Westell Technologies, Inc.
-0- 10/18/2000
/CONTACT: Nicholas Hindman-CFO, 630-375-4136, nhindman@westell.com, or
Bruce Albelda, 630-375-4125, balbelda@westell.com, both of Westell
Technologies/
/Photo: NewsCom: newscom.com
AP Archive: photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 201-369-3467/
/Web site: westell.com /
(WSTL)
CO: Westell Technologies, Inc.
ST: Illinois
IN: CPR MLM
SU: ERN
-0- Oct/18/2000 20:23 GMT |
