Westell Technologies Reports Fiscal First Quarter 2017 Revenue of $14.8M

Sequential revenue growth of 5% for the IBW segment

AURORA, Ill.--(BUSINESS WIRE)-- Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of high-performance wireless infrastructure solutions, today announced results for its fiscal 2017 first quarter ended June 30, 2016 (1Q17). Management will host a conference call to discuss financial and business results tomorrow, Thursday, August 11, 2016, at 9:30 AM Eastern Time (details below).

Consistent with the Company’s preliminary announcement on July 27, consolidated revenue in 1Q17 was $14.8 million, and comprised $6.1 million from the In-Building Wireless (IBW) segment, $4.1 million from the Intelligent Site Management and Services (ISMS) segment, and $4.6 million from the Communication Network Solutions (CNS) segment.

“As indicated in our preliminary 1Q17 revenue announcement, a general slowdown in carrier spending and a strike-related work stoppage at a major customer adversely impacted first quarter results. That notwithstanding, the quarter included a 5% sequential revenue increase for our IBW segment,” said Tom Gruenwald, CEO and President of Westell Technologies. “We are now implementing the comprehensive expense reduction plan that we announced last month. We are also experiencing improved order momentum in July and early August, which should result in a sequential revenue increase in 2Q17.”

Cash and short-term investments were $25.3 million at June 30, 2016, compared to $29.7 million at March 31, 2016. The $4.4 million use of cash was driven primarily by the net loss in the quarter, partly offset by favorable working capital.

In-Building Wireless (IBW) Segment

IBW’s revenue decrease year-over-year was due primarily to lower sales of DAS Conditioners, while the sequential increase was due primarily to higher sales of Repeaters. IBW’s segment gross margin in 1Q17, excluding one-time charges, was 39.0%, a decrease compared to 1Q16 due primarily to the lower revenue, and an increase compared to 4Q16 due primarily to a more favorable mix.

Intelligent Site Management & Services (ISMS) Segment

ISMS’s revenue decrease year-over-year was due primarily to lower Services revenue, while the sequential decrease was driven largely by lower sales of ISM Remote units. While ISMS’s gross margin in 1Q17 was generally consistent with 1Q16, it was down compared to 4Q16 due primarily to lower revenue.

Communication Network Solutions Group (CNS) Segment

CNS’s revenue decrease year-over-year was due to lower revenues across all products in this segment, with lower sales of Tower Mounted Amplifiers (TMAs) representing the largest decline. On a sequential basis, the largest contributor to the lower revenue was the decrease in sales of Integrated Cabinets. CNS’s gross margin improvement when compared to both 1Q16 and 4Q16 was due primarily to a more favorable mix.

Conference Call Information

Management will discuss financial and business results during the quarterly conference call on Thursday, August 11, 2016 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 August 11, 2016 by calling 888-206-4065 no later than 8:15 AM Central Time (9:15 AM Eastern Time) and providing the operator confirmation number 43011348.

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://www.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 comprehensive set 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, 2016, 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.

Financial Tables to Follow:

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160810006147/en/

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

Source: Westell Technologies, Inc.

Released August 10, 2016