7/19...WSTL... Technologies Posts Record Revenue in Excess of $107 Million With First Quarter Results for Fiscal 2001
Company Reports First Pro Forma Profit as Public Company; CPE DSL Sales Up Over 275% From Prior Quarter
AURORA, Ill., July 19 /PRNewswire/ -- Westell Technologies, Inc. (Nasdaq: WSTL - news) today announced results for its first quarter fiscal year 2001 ending June 30, 2000.
Revenues for the first quarter of fiscal year 2001 were $107.9 million compared with $24.2 million for the same period last year, an increase of 347%. Pro forma net income which excludes the inventory step-up and amortization of goodwill associated with the acquisition of Teltrend on March 17, 2000 was $3.7 million or $0.06 per share compared with a net loss of $3.4 million or net loss of $0.09 per share in the first quarter of fiscal 2000. This marks the seventh consecutive quarter of improvement in EPS performance. Consolidated net loss including the inventory step-up and amortization of goodwill associated with the acquisition of Teltrend on March 17, 2000 was $5.2 million or $0.08 per share.
Customer Premise Equipment (CPE) revenues climbed 283%, to $61.9 million for the three months ended June 30, 2000 from $16.2 million in the prior quarter ending March 31, 2000. Transport Systems posted sales of $6.0 million for the three months ended June 30, 2000, compared to $2.3 million in the same quarter last year, a 175% increase. Combined DSL revenues in the current quarter comprised 63% of total revenue compared to 46% in prior quarter and 14% in the same quarter last year.
Telco Access Products revenues were $30.2 million for the three months ended March 31, 2000 representing a 119% increase compared to $13.8 million of revenue in the same quarter last year. Service revenue from the Company's subsidiary, Conference Plus, Inc. (CPI), increased 40% over the same period last year to $9.8 million in the June 30, 2000 quarter from $7.0 million in the same quarter last year.
Pro forma gross margins for equipment, which exclude the inventory step-up associated with the acquisition of Teltrend on March 17, 2000, for the first fiscal quarter or 2001 were 21% compared to pro forma gross margins for equipment of 17% in the prior quarter ending March 31, 2000. Gross margins for equipment, including the inventory step-up were 20%.
Gross margins for services for the June 30, 2000 quarter were 37% compared to gross margins for services of 40% in the prior quarter ending March 31, 2000. Gross margins for CPI are expected to remain in the 36-40% range and were impacted this quarter by the implementation of several IP based initiatives with key customers.
Pro forma operating expenses, which exclude the amortization of goodwill for the three months ending June 30, 2000 were $20.5 million or 19% of revenue compared to $10.5 million or 44% of revenue in the same quarter last year. Including goodwill, operating expenses for the three months were $28.4 million.
``We are delighted with our record quarter,'' remarked Nicholas Hindman, Westell Technologies Chief Financial Officer. ``We demonstrated significant top-line growth in our equipment business and DSL revenues climbed to 63% of revenues from 46% in the prior quarter.''
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 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 June 30,2000 refer to the exclusion of goodwill and the inventory set-up associated with the acquisition of Teltrend on March 17, 2000.
Westell Technologies, Inc.
Pro forma Financial Results
Excluding Amortization of Goodwill and Inventory Step-up
(Dollars in thousands except per share amounts)
Three Months ended June 30,
2000 1999(A) % Change
(unaudited)
Revenues
TAP $30,221 $13,824 119%
Transport systems 6,017 2,189 175%
CPE 61,880 1,175 5166%
Services 9,758 6,971 40%
Total revenues 107,876 24,159 347%
Gross profit
Equipment 20,477(B) 5,277
Services 3,650 2,228
Total gross profit 24,127 7,505 221%
Gross margin
Equipment 20.9% (2) 30.7%
Services 37.4% 32.0%
Total gross margin 22.4% 31.1%
Operating expenses
Sales & marketing 7,379 3,697 100%
Expense to revenue 6.8% 15.3%
General & administrative 5,664 3,240 75%
Expense to revenue 5.3% 13.4%
Research & development 7,438 3,597 107%
Expense to revenue 6.9% 14.9%
Goodwill amortization - (C) -
Total operating expenses 20,481 10,534 94%
Expense to revenue 19.0% 43.6%
Operating income (loss) 3,646 (3,029) -220%
Other income 169 (159) -206%
Interest expense 119 244 -51%
Income (loss) before tax benefit 3,696 (3,432) -208%
Benefit for income taxes -(D) - NM
Effective tax rate 0.0% 0.0%
Net income (loss) $3,696 $(3,432) NM
Loss per common share:
Basic 0.06 (0.09) NM
Diluted 0.06 - (E) NM
Average number of common
shares outstanding:
Basic 62,652 36,468
Diluted 66,114 - (E)
Footnotes:
(A) Year over year comparisons effected by the acquisition of Teltrend,
Inc.
(B) Pro forma impact of excluding approximately $970,000 of inventory
revaluation related to the Teltrend acquisition.
(C) Pro forma impact of excluding approximately $8 million of goodwill
amortization related to Teltrend acquisition.
(D) A valuation reduction in the reserve of $1.5 million would have been
recorded during the current quarter.
(E) Loss year impact of dilution is anti-dilutive, therefore dilutive
presentation is not applicable.
Westell Technologies, Inc.
Consolidated Financial Results
(Dollars in thousands except per share amounts)
Three Months ended June 30,
2000 1999(A) % Change
(unaudited)
Revenues
TAP $30,221 $13,824 119%
Transport systems 6,017 2,189 175%
CPE 61,880 1,175 5166%
Services 9,758 6,971 40%
Total revenues 107,876 24,159 347%
Gross profit
Equipment 19,507(B) 5,277
Services 3,650 2,228
Total gross profit 23,157 7,505 209%
Gross margin
Equipment 19.9%(B) 30.7%
Services 37.4% 32.0%
Total gross margin 21.5% 31.1%
Operating expenses
Sales & marketing 7,379 3,697 100%
Expense to revenue 6.8% 15.3%
General & administrative 5,664 3,240 75%
Expense to revenue 5.3% 13.4%
Research & development 7,438 3,597 107%
Expense to revenue 6.9% 14.9%
Goodwill amortization 7,958© -
Total operating expenses 28,439 10,534 170%
Expense to revenue 26.4% 43.6%
Operating loss (5,282) (3,029) 74%
Other income 169 (159) -206%
Interest expense 119 244 -51%
Loss before tax benefit (5,232) (3,432) 52%
Benefit for income taxes -(D) - NM
Effective tax rate 0.0% 0.0%
Net loss $(5,232) $(3,432) NM
Loss per common share:
Basic and diluted (E) (0.08) (0.09) NM
Average number of common
shares outstanding:
Basic and diluted (E) 62,652 36,468
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) A reduction in the valuation reserve of $1.1 million was recorded
during the current quarter.
(E) 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)
June 30, March 31,
2000 2000
(000's)
(unaudited)
Cash and Short term Investments 12,959 29,209
Receivables 79,879 42,025
Inventory 43,398 30,741
Goodwill 167,245 175,482
Total current assets 151,682 117,025
Total current liabilities 82,428 52,690
Shareholders' Equity 282,060 279,663
Days Sales Outstanding 67 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.
The calculation also excludes non-trade receivables related to customer funding of on-going engineering projects.
SOURCE: Westell Technologies, Inc. |
