Westell Technologies Posts Fiscal Third Quarter Results
Feb 07, 2013 (Close-Up Media via COMTEX) --
Westell Technologies, a provider of telecommunications equipment for wireline, wireless and home networks, announced results for its fiscal 2013 third quarter ended December 31.
In a release on February 4, the Company noted that 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 percent 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 percent 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 percent 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 percent 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.
Strong Cash Position Helped Fund Share Repurchases
Total cash and short-term investments on December 31, were $119.2 million, compared to $124.4 million at September 30. The company repurchased 1.4 million shares at a cost of $2.9 million during the latest quarter.
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