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Westell Technologies Reports Fiscal Third Quarter Results
AURORA, Ill. --(Business Wire)--
Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of
telecommunications equipment for wireline, wireless and home networks,
today announced results for its fiscal 2013 third quarter ended
December�31, 2012. Consolidated revenue from continuing operations was
$8.9 million. The net loss for the quarter was $2.0 million, equal to
$0.03 per share. The non-GAAP net loss for the third quarter was $1.4
million, equal to $0.02 per share.
New Products Lift Division Revenues, Reflect
Growth Strategy
"The most important takeaway for the quarter is the growing
acceptance of the new wireless network products that we have brought to
market over the last year," said Chairman and CEO Rick Gilbert. "In
the face of a seasonally slow quarter, sales of these new lines
increased significantly and were the primary reason for the 16%
year-over-year growth in Westell Division revenue."
"This validates our growth strategy to expand and diversify
Westell's revenue by using new products to build market share," Gilbert
explained. "We intend to add products for wireless
networks through internal development, which is driven by customer
feedback, and fold-in acquisitions. Realigning our sales
efforts has fueled our momentum, and our advances should be supported by
making steady progress in qualifying new products with additional
customers."
Westell's new products for wireless networks include distributed antenna
systems (DAS) products, Ethernet network interface units and switches,
and tower-mounted amplifiers. These new products contributed 11% of
total revenue during the fiscal 2013 third quarter.
Lower Consolidated Results Reflect Wind-Down of
Non-Core Business
Consolidated revenue from continuing operations for the latest quarter
was $8.9 million, compared to $14.4 million in the prior-year period.
The decrease reflected the planned wind-down of sales in the company's
Customer Networking Solutions (CNS) Division.
The net loss for the third quarter was $2.0 million, equal to $0.03 per
share, compared to net income of $19.8 million, equal to $0.29 per
share, in the same quarter last year. Prior-year net income included
$20.3 million of income from discontinued operations that related to the
Conference Plus Division, including a gain on the sale of the division.
The latest quarter included a $0.6 million loss from discontinued
operations, which reflected charges associated with a pending indemnity
claim, partially offset by an unrelated tax benefit. On a non-GAAP
basis, net loss for the fiscal 2013 third quarter was $1.4 million,
equal to $0.02 per share, compared to a non-GAAP net loss of $0.5
million, equal to $0.01 per share, in the year-ago quarter.
Westell Division Benefits from New and
Traditional Product Sales
Revenue for the Westell Division was $8.9 million in the fiscal third
quarter, up 16% from $7.7 million in the prior-year period. The increase
was driven primarily by sales of new products, although traditional
product categories also improved. Gross margin was 34.8% and was
comparable to the prior-year period. Operating expenses were $4.4
million, up $1.1 million from the prior-year period, reflecting higher
cost allocations and increases to support sales and development of new
products. On this basis, the division reported a fiscal third quarter
operating loss of $1.3 million, compared to an operating loss of $0.6
million in the same quarter of the prior year.
The CNS Division recorded revenue of $0.1 million in the fiscal third
quarter, compared to $6.7 million in the same quarter last year. The
decline reflects completion of the planned wind-down of sales to the
division's remaining customer following the CNS sale transaction. CNS
operating expenses in the most recent quarter declined to $0.4 million
as a result of reducing project expenditures following the limited
product release for HomecloudTM on September 26, 2012.
Strong Cash Position Helped Fund Share
Repurchases
Total cash and short-term investments on December�31, 2012, were $119.2
million, compared to $124.4 million at September 30, 2012. The company
repurchased 1.4 million shares at a cost of $2.9 million during the
latest quarter.
Conference Call Information
Management will address financial and business results during its third
quarter conference call on Tuesday, February�5, 2013, at 9:30 AM Eastern
Time. Participants may register for the call at http://www.conferenceplus.com/westell.
After doing so, they will receive a dial-in number, a passcode, and a
personal identification number (PIN) that automatically joins them to
the audio conference. Those who do not wish to register may participate
in the call by dialing 888-206-4065 no later than 9:15 AM Eastern
Time and using confirmation number 3406 9774#. International
participants may dial 630-827-5974.
This news release and related information that may be discussed on the
conference call will be posted on the Investor News section of Westell's
website: http://www.westell.com.
An archive of the entire call will be available on the site via Digital
Audio Replay by approximately noon Eastern Time after the call ends. The
replay of the conference also may be accessed by dialing 888-843-7419 or
630-652-3042 and entering 6887 757 #.
About Westell
Westell Technologies, Inc., headquartered in Aurora, Illinois, designs,
distributes, markets and services a broad range of carrier-class
communications equipment. This includes digital transmission, remote
monitoring, power distribution, demarcation and cell-site optimization
products used by wireline and wireless telecommunications service
providers, industrial customers, and home network users. For more
information, please visit http://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, 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, 2012, 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:
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Westell Technologies, Inc.
Condensed Consolidated Statement of Operations
(Amounts in thousands, except per share amounts)
(Unaudited)
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�
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Three Months Ended December 31,
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Nine Months Ended December 31,
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2012
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�
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�
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2011
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2012
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�
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�
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2011
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Revenue
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$
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8,928
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$
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14,392
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$
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29,380
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$
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58,321
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Gross profit
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3,143
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4,263
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10,387
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18,850
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Gross margin
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35.2
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%
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29.6
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%
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35.4
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%
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32.3
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%
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Operating expenses:
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Sales & marketing
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1,807
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1,414
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5,515
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5,108
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Research & development
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1,754
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1,797
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5,515
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5,865
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General & administrative
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2,124
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1,707
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7,368
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5,625
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Restructuring
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-
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(2
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149
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275
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Intangibles amortization
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236
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�
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136
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�
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656
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�
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413
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�
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Total operating expenses
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5,921
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�
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5,052
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�
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19,203
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�
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17,286
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�
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Operating income (loss)
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(2,778
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)
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(789
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)
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(8,816
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)
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1,564
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Gain on CNS asset sale
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-
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-
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-
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31,654
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Other income
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43
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106
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134
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201
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Interest (expense)
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-
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�
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(37
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)
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-
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�
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(42
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)
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Income (loss) before income taxes and discontinued operations
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(2,735
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)
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(720
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)
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(8,682
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)
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33,377
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�
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Income tax benefit (expense)
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1,399
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�
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268
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�
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3,431
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�
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(11,108
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)
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Net income (loss) from continuing operations
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(1,336
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)
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(452
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)
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(5,251
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)
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22,269
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�
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Income (loss) from discontinued operations, net of income tax
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(629
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)
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(1)
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20,254
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�
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(629
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)
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(2)
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22,161
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�
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Net income (loss)
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$
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(1,965
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)
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$
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19,802
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�
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$
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(5,880
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)
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$
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44,430
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�
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Basic earnings per share:
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Net income (loss) from continuing operations
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$
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(0.02
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)
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|
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$
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(0.01
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)
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|
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$
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(0.09
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)
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|
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$
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0.33
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Net income (loss) from discontinued operations
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(0.01
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)
|
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0.30
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�
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(0.01
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)
|
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|
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0.33
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�
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Net income (loss)
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$
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(0.03
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)
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|
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$
|
0.30
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�
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|
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$
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(0.10
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)
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|
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$
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0.66
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�
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Diluted earnings per share:
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Net income (loss) from continuing operations
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$
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(0.02
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)
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|
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$
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(0.01
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)
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$
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(0.09
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)
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|
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$
|
0.32
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Net income (loss) from discontinued operations
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(0.01
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)
|
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|
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0.30
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�
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(0.01
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)
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|
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0.32
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�
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Net income (loss)
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$
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(0.03
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)
|
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|
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$
|
0.29
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�
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$
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(0.10
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)
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$
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0.65
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�
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Average number of common shares outstanding:
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Basic
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58,693
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66,411
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60,541
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67,390
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Diluted
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58,693
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67,332
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|
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60,541
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|
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68,656
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�
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