Westell Reports Fiscal First Quarter 2018 Revenue of $16.6M

Sequential revenue growth of 8% and positive operating cash flow of $2.4M

AURORA, Ill., Aug. 09, 2017 (GLOBE NEWSWIRE) -- Westell Technologies, Inc. (NASDAQ:WSTL), a leading provider of high-performance wireless infrastructure solutions, announced results for its fiscal 2018 first quarter ended June 30, 2017 (1Q18).  Management will host a conference call to discuss financial and business results tomorrow, Thursday, August 10, 2017, at 9:30 AM Eastern Time (details below).

Consolidated revenue in 1Q18 was $16.6 million, and comprised $7.0 million from the In-Building Wireless (IBW) segment, $4.1 million from the Intelligent Site Management and Services (ISMS) segment, and $5.5 million from the Communication Network Solutions (CNS) segment.

Westell’s new President and Chief Executive Officer Matt Brady stated, “In 1Q18, business grew for the second consecutive quarter on the strength of our IBW and CNS segments.  IBW achieved its highest revenue level since the December 2015 quarter, as our Universal DAS Interface Tray (UDIT) maintained its robust sales pace and our Public Safety revenue increased.  CNS was up significantly as Integrated Cabinets and our Power Distribution products each recorded their best quarterly revenue since March 2016.”

“We continued to meet or beat key operating targets, including gross margin at 40% or greater and non-GAAP operating expenses at $6.0 million.  While the business has made great progress in recent quarters, our number one goal is profitable revenue growth, including executing on our initiatives in the Public Safety market for IBW and on the emerging Centralized Radio Access Network (CRAN) opportunities for ISMS and CNS,” added Brady. Cash was $23.7 million at June 30, 2017, compared to $21.8 million at March 31, 2017.  The $1.9 million net increase comprised $2.4 million of cash generated from operations, driven by the profitable non-GAAP results and improved working capital.  This was partly offset by $0.5 million of cash used for share repurchases and capital expenditures.

In-Building Wireless (IBW) Segment

IBW’s sequential revenue increase was primarily driven by higher sales of Public Safely solutions.  IBW’s segment gross margin increase was driven primarily by a more favorable mix and lower overhead costs.

Intelligent Site Management & Services (ISMS) Segment

ISMS’s sequential revenue decrease was primarily due to lower sales of Remote units.  ISMS’s segment gross margin decrease was primarily due to higher segment cost of goods sold.

Communication Network Solutions (CNS) Segment

CNS’s sequential revenue increase was primarily driven by higher sales of Integrated Cabinets and Power Distribution products.  CNS’s gross margin decrease was primarily due to increased excess inventory costs.

Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Thursday, August 10, 2017, 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 10, 2017, by calling 888-206-4065 no later than 8:15 AM Central Time (9:15 AM Eastern Time) and providing the operator confirmation number 45285112.

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://ir.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 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, 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, 2017, 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.

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⁾ On April 1, 2013, the Company purchased Kentrox.  The acquisition required the step-down on acquired deferred revenue, which resulted in lower revenue that will not recur once those liabilities have fully settled.  The adjustment removes the step-down on acquired deferred revenue that was recognized.
⁽²⁾ Non-recurring excess and obsolete inventory charges on inventory and firm purchase commitments associated with the previously announced strategic decision related to the discontinuation of ClearLink DAS.
⁽³⁾ Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.
⁽⁴⁾ Non-cash impairment related to tangible long-lived assets associated with the previously announced strategic decision related to the discontinuation of ClearLink DAS.
⁽⁵⁾ Amortization of intangibles is a non-cash expense arising from previously acquired intangible assets.
⁽⁶⁾ Restructuring expenses are not directly related to the ongoing performance of our fundamental business operations, including costs relating to abandonment of excess office space at our headquarters and in New Hampshire, and severance costs for terminated employees. This adjustment also includes severance benefits related to the departure of certain former executives.
⁽⁷⁾ EBITDA is a non-GAAP measure that represents Earnings Before Interest, Taxes, Depreciation, and Amortization.  The Company presents Adjusted EBITDA.

For additional information, contact:

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

Released August 9, 2017