Release Details
Aviat Networks Announces Fiscal First Quarter 2011 Financial Results
Revenue for the first quarter of fiscal 2011 was
Cash and cash equivalents were
Non-GAAP Financial Results
Non-GAAP net loss for the quarter was
Non-GAAP results exclude
- $5.6 million of restructuring charges
- $3.9 million for the loss on the sale of the NetBoss assets
- $1.1 million for share-based compensation expense and rebranding costs
- $0.9 million for the amortization of purchased intangibles
A reconciliation of GAAP to non-GAAP financial measures is provided on Table 4 along with the accompanying notes.
First Quarter Revenue by Segment
Revenue in the
Business Highlights
The Company is progressing through its restructuring and strategic plans previously announced in early
- Reduced headcount
- Announced release of new high capacity Ethernet switching and aggregation for the Eclipse radio platform
- Provided end-of-life notifications for legacy products
- Refocused product development to accelerate innovation in wireless transmission, especially IP backhaul solutions
- Integrated WiMAX technology to further complement and integrate with wireless transmission offerings
- Realigned and expanded the services business. During the quarter, the Company sold its NetBoss network management solution, while retaining certain rights, to focus its investments on its other network management products.
"While the accelerated pace of our restructuring and other changes caused temporary issues with collections and gross margins, we are encouraged. Because of strong orders during the first quarter of
FY11, we are cautiously optimistic about top-line growth next quarter. The speed at which we are implementing changes gives us confidence we can complete our previously announced restructuring by the end of the third quarter of FY11," said
Second Fiscal Quarter 2011 Outlook
Based on current backlog, business trends and operational changes, we believe revenue will be in the range of
Conference Call Details
Non-GAAP Measures and Comparative Financial Information
About
Forward-Looking Statements
The information contained in this document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act and Section 27A of the Securities Act. All statements, trend analyses and other information contained herein about the markets for the services and products of
- continued price erosion as a result of increased competition in the microwave transmission industry;
- the impact of the volume, timing and customer, product and geographic mix of our product orders may have an impact on our operating results;
- our ability to maintain projected product rollouts, product functionality, anticipated cost reductions or market acceptance of planned products;
- the ability of our subcontractors to perform or our key suppliers to manufacture or deliver material
- continued weakness in the global economy affecting customer spending;
- retention of our key personnel;
- our ability to manage and maintain key customer relationships;
- uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation; the timing of our receipt of payment for products or services from our customers;
- our failure to protect our intellectual property rights or defend against intellectual property infringement claims by others;
- the effects of currency and interest rate risks; and
- the impact of political, economic and geographic risks on international sales.
For more information regarding the risks and uncertainties for our business, see "Risk Factors" in our Form 10-K filed with the
Financial Tables to Follow:
Table 1 | |||
Quarter Ended | |||
October 1, 2010 | October 2, 2009 | ||
(In millions, except per share amounts) | |||
Revenue from product sales and services | $ 109.1 | $ 120.0 | |
Cost of product sales and services | (84.7) | (80.2) | |
Amortization of purchased technology | (0.2) | (2.1) | |
Gross margin | 24.2 | 37.7 | |
Research and development expenses | (11.1) | (10.7) | |
Selling and administrative expenses | (29.2) | (30.8) | |
Amortization of intangible assets | (0.7) | (1.5) | |
Restructuring charges | (5.6) | (1.1) | |
Operating loss | (22.4) | (6.4) | |
Loss on sale of NetBoss assets | (3.9) | — | |
Interest income | 0.1 | — | |
Interest expense | (0.6) | (0.5) | |
Loss before income taxes | (26.8) | (6.9) | |
Benefit from (provision for) income taxes | 5.5 | (0.9) | |
Net loss | $ (21.3) | $ (7.8) | |
Net loss per common share of Common Stock: | |||
Basic | $ (0.36) | $ (0.13) | |
Diluted | $ (0.36) | $ (0.13) | |
Basic weighted average shares outstanding | 59.3 | 58.9 | |
Diluted weighted average shares outstanding | 59.3 | 58.9 | |
Table 2 | |||
October 1, 2010 | July 2, 2010(1) | ||
(In millions) | |||
Assets | |||
Cash and cash equivalents | $ 107.8 | $ 141.7 | |
Receivables | 120.5 | 104.8 | |
Inventories and unbilled costs | 96.3 | 103.7 | |
Other current assets | 24.3 | 22.3 | |
Property, plant and equipment | 36.7 | 37.6 | |
Goodwill | 6.2 | 6.2 | |
Identifiable intangible assets | 6.6 | 7.5 | |
Non-current deferred taxes | 14.8 | 13.1 | |
Other assets | 2.3 | 10.1 | |
$ 415.5 | $ 447.0 | ||
Liabilities and Stockholders' Equity | |||
Short-term debt | $ 6.0 | $ 5.0 | |
Accounts payable | 53.4 | 58.6 | |
Accrued expenses and other current liabilities | 96.1 | 103.0 | |
Restructuring and other long-term liabilities | 9.4 | 8.9 | |
Redeemable preference shares | 8.3 | 8.3 | |
Stockholders' equity | 242.3 | 263.2 | |
$ 415.5 | $ 447.0 | ||
____________
(1) Derived from audited financial statements.
Table 3 | |||
Quarter Ended | |||
October 1, | October 2, | ||
(In millions) | |||
Operating Activities | |||
Net loss | $ (21.3) | $ (7.8) | |
Adjustments to reconcile loss income to net cash provided by operating activities: | |||
Amortization of identifiable intangible assets | 0.9 | 3.7 | |
Depreciation and amortization of property, plant and equipment and capitalized software | 3.6 | 6.0 | |
Non-cash share-based compensation expense | 0.8 | 1.0 | |
Deferred income tax (benefit) expense | (1.7) | 0.4 | |
Loss on sale of NetBoss assets | 3.9 | — | |
Changes in operating assets and liabilities: | |||
Receivables | (12.5) | 28.8 | |
Unbilled costs and inventories | 4.3 | (1.9) | |
Accounts payable and accrued expenses | (5.2) | (13.4) | |
Advance payments and unearned income | (5.7) | (7.2) | |
Restructuring liabilities and other | (3.9) | (5.2) | |
Net cash (used in) provided by operating activities | (36.8) | 4.4 | |
Investing Activities | |||
Cash received from sale of NetBoss assets | 3.8 | — | |
Cash paid related to acquisition of Telsima in prior fiscal year | — | (4.2) | |
Sales and maturities of short-term investments and available for sale securities | — | 0.3 | |
Additions of property, plant and equipment | (2.0) | (3.9) | |
Additions of capitalized software | (0.3) | (0.9) | |
Net cash provided by (used in) investing activities | 1.5 | (8.7) | |
Financing Activities | |||
Increase in short-term debt, net | 1.0 | — | |
Net cash provided by financing activities | 1.0 | — | |
Effect of exchange rate changes on cash and cash equivalents | 0.4 | 0.5 | |
Net decrease in cash and cash equivalents | (33.9) | (3.8) | |
Cash and cash equivalents, beginning of year | 141.7 | 136.8 | |
Cash and cash equivalents, end of quarter | $ 107.8 | $ 133.0 | |
Fiscal Year 2011 First Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE
To supplement our consolidated financial statements presented in accordance with accounting principles generally accepted in
Table 4 | |||||||||
Quarter Ended | |||||||||
October 1, 2010 | October 2, 2009 | ||||||||
As | Non-GAAP | Non-GAAP | % of | As | Non-GAAP | Non-GAAP | % of | ||
(In millions, except per share amounts) | |||||||||
Revenue from product sales and services | $ 109.1 | $ — | $ 109.1 | $ 120.0 | $ — | $ 120.0 | |||
Cost of product sales and services (A) | (84.7) | 0.1 | (84.6) | (80.2) | 0.2 | (80.0) | |||
Amortization of purchased technology (B) | (0.2) | 0.2 | — | (2.1) | 2.1 | — | |||
Gross margin | 24.2 | 0.3 | 24.5 | 22.5% | 37.7 | 2.3 | 40.0 | 33.3% | |
Research and development expenses (C) | (11.1) | 0.2 | (10.9) | 10.0% | (10.7) | 0.1 | (10.6) | 8.8% | |
Selling and administrative expenses (D) | (29.2) | 0.8 | (28.4) | 26.0% | (30.8) | 1.1 | (29.7) | 24.8% | |
Amortization of intangible assets (E) | (0.7) | 0.7 | — | (1.5) | 1.5 | — | |||
Restructuring charges (F) | (5.6) | 5.6 | — | (1.1) | 1.1 | — | |||
Operating loss | (22.4) | 7.6 | (14.8) | (13.6)% | (6.4) | 6.1 | (0.3) | (0.3)% | |
Loss on sale of NetBoss assets (G) | (3.9) | 3.9 | — | — | — | — | |||
Interest income | 0.1 | — | 0.1 | — | — | — | |||
Interest expense | (0.6) | — | (0.6) | (0.5) | — | (0.5) | |||
Loss before income taxes | (26.8) | 11.5 | (15.3) | Tax | (6.9) | 6.1 | (0.8) | Tax | |
Provision for income taxes (H) | 5.5 | (5.5) | — | 0% | (0.9) | 0.9 | — | 0% | |
Net loss | $ (21.3) | $ 6.0 | $ (15.3) | $ (7.8) | $ 7.0 | $ (0.8) | |||
Net loss per common share of Common Stock: | |||||||||
Basic | $ (0.36) | $ (0.26) | $ (0.13) | $ (0.01) | |||||
Diluted | $ (0.36) | $ (0.26) | $ (0.13) | $ (0.01) | |||||
Basic weighted average shares outstanding | 59.3 | 59.3 | 58.9 | 58.9 | |||||
Diluted weighted average shares outstanding | 59.3 | 59.3 | 58.9 | 58.9 | |||||
Notes to Table 4:
Note A — Cost of sales and services — Adjustment for the first quarter of fiscal 2011 is to remove non-cash share-based compensation expense of
For the first quarter of fiscal 2010, amount includes adjustment to remove purchase accounting adjustments for the amortization of the step-up in the value of fixed assets (
Note B — Amortization of purchased technology — Adjustment for the first quarters of fiscal 2011 and 2010 to remove amortization of purchased intangibles.
Note C — Research and development expenses — Adjustment for the first quarter of fiscal 2011 is to remove non-cash share-based compensation expense of
For the first quarter of fiscal 2010, adjustment is to remove non-cash share-based compensation expense of
Note D — Selling and administrative expenses — Includes adjustment for the first quarter of fiscal 2011 to remove non-cash share-based compensation expense (
For the first quarter of fiscal 2010, amount includes adjustment to remove purchase accounting adjustments related to the amortization of the step-up in the value of fixed assets (
Note E — Amortization of intangible assets — Adjustment for the first quarters of fiscal 2011 and 2010 to remove amortization of purchased intangibles.
Note F — Restructuring charges — Adjustment to remove charges for restructuring incurred during the first quarters of fiscal 2011 and 2010.
Note G — Loss on sale of NetBoss assets — Adjustment to remove the loss incurred on the sale of NetBoss assets to a third party during the first quarter of fiscal 2011.
Note H — Provision for income taxes — Adjustment to reflect a zero pro forma percent tax rate for the first quarters of fiscal 2011 and 2010.
Table 5 | |||
Quarter Ended | |||
October 1, 2010 | October 2, 2009 | ||
(In millions) | |||
North America | $ 35.6 | $ 48.0 | |
International | |||
Africa | 23.0 | 29.9 | |
Europe, Middle East, and Russia | 28.7 | 18.6 | |
Latin America and Asia Pacific | 21.8 | 23.5 | |
Total International | 73.5 | 72.0 | |
$ 109.1 | $ 120.0 | ||
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