AURORA, ll., Feb. 05, 2020 (GLOBE NEWSWIRE) -- Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of high-performance network infrastructure solutions, today announced results for its fiscal 2020 third quarter ended December 31, 2019 (FY20 3Q). Management will host a conference call to discuss financial and business results tomorrow, Thursday, February 6, 2020, at 9:30 AM Eastern Time.
Cash increased to $22.0 million at December 31, 2019, compared to $21.7 million at September 30, 2019, driven by improved working capital. Revenue was $7.2 million, compared with $7.6 million in the prior quarter. Net loss in FY20 3Q was $1.5 million, an improvement from a net loss of $3.6 million in the prior quarter. Prior quarter loss included charges for excess and obsolete inventory of $1.3 million. Excess and obsolete expense was insignificant in FY20 3Q.
“Our third quarter results exceeded our expectations and showed some early traction with our turn-around plans,” said Tim Duitsman, Westell’s President and CEO. “While revenue remained soft, we made progress with some of our new products. We reset our cost base to help preserve our cash and facilitate our expected return to profitability in fiscal 2021. In addition, we continue to drive our product development strategy, with a sharp focus on public safety, fiber connectivity solutions and remote monitoring, to support a return to profitable revenue growth.”
| Consolidated Results | FY20 3Q 3 months ended 12/31/19 | FY20 2Q 3 months ended 9/30/19 | + increase / - decrease | ||||||
| Revenue | $7.2M | $7.6M | -$0.4M | ||||||
| Gross Margin | 38.8% | 20.9% | +17.9% | ||||||
| Operating Expenses | $4.4M | $5.3M | -$0.9M | ||||||
| Net Income (Loss) | ($1.5M) | ($3.6M) | +$2.1M | ||||||
| Earnings (Loss) Per Share | ($0.10) | ($0.23) | +$0.13 | ||||||
| Non-GAAP Operating Expenses (1) | $3.7M | $4.8M | -$1.1M | ||||||
| Non-GAAP Net Income (Loss) (1) | ($0.9M) | ($3.1M) | +$2.2M | ||||||
| Non-GAAP Earnings (Loss) Per Share (1) | ($0.05) | ($0.20) | +$0.15 | ||||||
| Ending Cash | $22.0M | $21.7M | +$0.3M | ||||||
| (1) Please refer to the schedule at the end of this press release for a complete GAAP to non-GAAP reconciliation and other information related to non-GAAP financial measures. | |||||||||
In-Building Wireless (IBW) Segment
IBW revenue from public safety products, which are a strategic focus, continued to grow during FY20 3Q. Sales of commercial repeaters also increased, while lower sales of DAS conditioners offset the increases. Segment gross margin and profit improved primarily as a result of much lower charges for excess and obsolete inventory compared to the prior quarter.
| ($ in thousands) | FY20 3Q 3 months ended 12/31/19 | FY20 2Q 3 months ended 9/30/19 | + increase / - decrease | ||||||
| IBW Segment Revenue | $2,466 | $2,618 | -$152 | ||||||
| IBW Segment Gross Margin | 32.8% | 15.8% | +17.0% | ||||||
| IBW Segment R&D Expense | $470 | $403 | $67 | ||||||
| IBW Segment Profit | $339 | $10 | +$329 | ||||||
Intelligent Site Management (ISM) Segment
ISM revenue decreased, reflecting lower sales of remote units. Segment gross margin improved based on much lower charges for excess and obsolete inventory and other cost reductions. These effects, combined with lower R&D expense, improved profitability for the quarter.
| ($ in thousands) | FY20 3Q 3 months ended 12/31/19 | FY20 2Q 3 months ended 9/30/19 | + increase / - decrease | ||||||
| ISM Segment Revenue | $2,456 | $2,646 | -$190 | ||||||
| ISM Segment Gross Margin | 59.6% | 39.4% | +20.2% | ||||||
| ISM Segment R&D Expense | $505 | $619 | -$114 | ||||||
| ISM Segment Profit | $960 | $423 | $537 | ||||||
Communication Network Solutions (CNS) Segment
Growth in revenue from fiber connectivity products, a strategic focus, was more than offset by lower sales across most other CNS product lines. The turnaround in CNS segment profit was driven primarily by lower charges for excess and obsolete inventory and lower R&D expense.
| ($ in thousands) | FY20 3Q 3 months ended 12/31/19 | FY20 2Q 3 months ended 9/30/19 | + increase / - decrease | ||||||
| CNS Segment Revenue | $2,237 | $2,305 | -$68 | ||||||
| CNS Segment Gross Margin | 22.6% | 5.4% | +17.2% | ||||||
| CNS Segment R&D Expense | $247 | $427 | -$180 | ||||||
| CNS Segment Profit (Loss) | $259 | $(303) | $562 | ||||||
Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Thursday, February 6, 2020, at 9:30 AM Eastern Time. Investors may quickly register online in advance of the call at 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 February 6, 2020, by calling (888) 206-4073 and providing the operator confirmation number 49338781.
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: ir.westell.com. A digital recording of the entire conference will be available for replay on Westell's website by approximately 12:00 PM Eastern Time following the conclusion of the conference.
About Westell Technologies
Westell is a leading provider of high-performance network 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, 2019, 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.
Westell Technologies, Inc.
Condensed Consolidated Statement of Operations
(Amounts in thousands, except per share amounts)
(Unaudited)
| Three months ended | Nine months ended | ||||||||||||||||||||
| December 31, | September 30 | December 31, | December 31, | December 31, | |||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
| Revenue | $ | 7,159 | $ | 7,569 | $ | 10,722 | $ | 23,730 | $ | 33,865 | |||||||||||
| Cost of revenue | 4,379 | 5,990 | 6,132 | 16,125 | 19,147 | ||||||||||||||||
| Gross profit | 2,780 | 1,579 | 4,590 | 7,605 | 14,718 | ||||||||||||||||
| Gross margin | 38.8 | % | 20.9 | % | 42.8 | % | 32.0 | % | 43.5 | % | |||||||||||
| Operating expenses: | |||||||||||||||||||||
| Research & Development | 1,222 | 1,449 | 1,736 | 4,227 | 5,011 | ||||||||||||||||
| Sales and marketing | 1,556 | 2,259 | 1,999 | 6,147 | 6,012 | ||||||||||||||||
| General and administrative | 1,093 | 1,249 | 1,738 | 3,706 | 4,672 | ||||||||||||||||
| Intangible amortization | 308 | 308 | 830 | 924 | 2,652 | ||||||||||||||||
| Restructuring (1) | 234 | — | — | 234 | — | ||||||||||||||||
| Total operating expenses | 4,413 | 5,265 | 6,303 | 15,238 | 18,347 | ||||||||||||||||
| Operating profit (loss) | (1,633 | ) | (3,686 | ) | (1,713 | ) | (7,633 | ) | (3,629 | ) | |||||||||||
| Other income, net | 109 | 125 | 158 | 398 | 442 | ||||||||||||||||
| Income (loss) before income taxes | (1,524 | ) | (3,561 | ) | (1,555 | ) | (7,235 | ) | (3,187 | ) | |||||||||||
| Income tax benefit (expense) | (20 | ) | — | (1 | ) | (27 | ) | (11 | ) | ||||||||||||
| Net income (loss) from continuing operations | (1,544 | ) | (3,561 | ) | (1,556 | ) | (7,262 | ) | (3,198 | ) | |||||||||||
| Income (loss) from discontinued operations (2) | — | — | — | — | (138 | ) | |||||||||||||||
| Net income (loss) | $ | (1,544 | ) | $ | (3,561 | ) | $ | (1,556 | ) | $ | (7,262 | ) | $ | (3,336 | ) | ||||||
| Net income (loss) per share: | |||||||||||||||||||||
| Basic net income (loss) from continuing operations | $ | (0.10 | ) | $ | (0.23 | ) | $ | (0.10 | ) | $ | (0.47 | ) | $ | (0.21 | ) | ||||||
| Basic net income (loss) from discontinued operations | — | — | — | — | (0.01 | ) | |||||||||||||||
| Basic net income (loss) | $ | (0.10 | ) | $ | (0.23 | ) | $ | (0.10 | ) | $ | (0.47 | ) | $ | (0.21 | ) | (3) | |||||
| Diluted net income (loss) per share: | |||||||||||||||||||||
| Diluted net income (loss) from continuing operations | $ | (0.10 | ) | $ | (0.23 | ) | $ | (0.10 | ) | $ | (0.47 | ) | $ | (0.21 | ) | ||||||
| Diluted net income (loss) from discontinued operations | — | — | — | — | (0.01 | ) | |||||||||||||||
| Diluted net income (loss) | $ | (0.10 | ) | $ | (0.23 | ) | $ | (0.10 | ) | $ | (0.47 | ) | $ | (0.21 | ) | (3) | |||||
| Weighted-average number of common shares outstanding: | |||||||||||||||||||||
| Basic | 15,575 | 15,512 | 15,524 | 15,514 | 15,576 | ||||||||||||||||
| Diluted | 15,575 | 15,512 | 15,524 | 15,514 | 15,576 | ||||||||||||||||
(1) Restructuring expense for the quarter ended December 31, 2019, related to severance costs for terminated employees.
(2) During the quarter ended September 30, 2018, the Company recorded indemnification expense related to probable loss contingencies associated with a major customer contract related to a business which was previously sold and therefore is presented as discontinued operations. On July 24, 2019, the Company signed a settlement agreement related to this matter. The $345K settlement, which was fully covered by the accrual on March 31, 2019, was paid in the quarter ended December 31, 2019.
(3) Per share amounts may not sum to totals due to rounding.
Westell Technologies, Inc.
Condensed Consolidated Balance Sheet
(Amounts in thousands)
| December 31, 2019 (Unaudited) | March 31, 2019 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 21,990 | $ | 25,457 | ||||
| Accounts receivable, net | 4,933 | 6,865 | ||||||
| Inventories | 7,622 | 9,801 | ||||||
| Prepaid expenses and other current assets | 1,703 | 1,706 | ||||||
| Total current assets | 36,248 | 43,829 | ||||||
| Land, property and equipment, net | 1,073 | 1,298 | ||||||
| Intangible assets, net | 4,141 | 3,278 | ||||||
| Right-of-use assets on operating leases, net | 810 | — | ||||||
| Other non-current assets | 257 | 492 | ||||||
| Total assets | $ | 42,529 | $ | 48,897 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Accounts payable | $ | 2,821 | $ | 2,313 | ||||
| Accrued expenses | 3,422 | 3,567 | ||||||
| Deferred revenue | 1,314 | 1,217 | ||||||
| Total current liabilities | 7,557 | 7,097 | ||||||
| Deferred revenue non-current | 268 | 444 | ||||||
| Other non-current liabilities | 379 | 176 | ||||||
| Total liabilities | 8,204 | 7,717 | ||||||
| Total stockholders’ equity | 34,325 | 41,180 | ||||||
| Total liabilities and stockholders’ equity | $ | 42,529 | $ | 48,897 | ||||
Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
| Three months ended December 31, | Nine months ended December 30, | |||||||||||||
| 2019 | 2019 | 2018 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income (loss) | $ | (1,544 | ) | $ | (7,262 | ) | $ | (3,336 | ) | |||||
| Reconciliation of net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||
| Depreciation and amortization | 484 | 1,426 | 3,092 | |||||||||||
| Stock-based compensation | 152 | 597 | 889 | |||||||||||
| Loss (gain) on sale of fixed assets | — | (11 | ) | 1 | ||||||||||
| Restructuring | 234 | 234 | — | |||||||||||
| Exchange rate loss (gain) | (5 | ) | (2 | ) | 3 | |||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Accounts receivable | 105 | 1,934 | 1,892 | |||||||||||
| Inventory | 696 | 2,179 | (941 | ) | ||||||||||
| Accounts payable and accrued expenses | (618 | ) | 332 | 494 | ||||||||||
| Deferred revenue | 628 | (79 | ) | (1,114 | ) | |||||||||
| Prepaid expenses and other current assets | 125 | 3 | (353 | ) | ||||||||||
| Other assets | 63 | (575 | ) | 11 | ||||||||||
| Net cash provided by (used in) operating activities | 320 | (1,224 | ) | 638 | ||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Net maturity (purchase) of short-term investments | — | — | 2,779 | |||||||||||
| Purchase of product licensing rights (1) | — | (1,950 | ) | — | ||||||||||
| Purchases of property and equipment, net | (54 | ) | (113 | ) | (273 | ) | ||||||||
| Proceeds from sale of fixed assets | 11 | 11 | ||||||||||||
| Net cash provided by (used in) investing activities | (43 | ) | (2,052 | ) | 2,506 | |||||||||
| Cash flows from financing activities: | ||||||||||||||
| Purchase of treasury stock | (2 | ) | (191 | ) | (1,038 | ) | ||||||||
| Net cash provided by (used in) financing activities | (2 | ) | (191 | ) | (1,038 | ) | ||||||||
| Gain (loss) of exchange rate changes on cash | (1 | ) | — | (4 | ) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 274 | (3,467 | ) | 2,102 | ||||||||||
| Cash and cash equivalents, beginning of period | 21,716 | 25,457 | 24,963 | (2) | ||||||||||
| Cash and cash equivalents, end of period | $ | 21,990 | $ | 21,990 | $ | 27,065 | ||||||||
(1) During the quarter ended September 30, 2019, the Company made a partial payment for the purchase of product licensing rights. The remaining $1.0 million due is recorded in Accounts Payable as of December 31, 2019. The corresponding asset is recorded in intangible assets.
(2) As of March 31, 2018, the Company had $2.8 million of short-term investments in addition to cash and cash equivalents.
Westell Technologies, Inc.
Segment Statement of Operations
(Amounts in thousands)
(Unaudited)
Sequential Quarter Comparison
| Three months ended December 31, 2019 | Three months ended September 30, 2019 | |||||||||||||||||||||||||||||||
| IBW | ISM | CNS | Total | IBW | ISM | CNS | Total | |||||||||||||||||||||||||
| Total revenue | $ | 2,466 | $ | 2,456 | $ | 2,237 | $ | 7,159 | $ | 2,618 | $ | 2,646 | $ | 2,305 | $ | 7,569 | ||||||||||||||||
| Gross profit | 809 | 1,465 | 506 | 2,780 | 413 | 1,042 | 124 | 1,579 | ||||||||||||||||||||||||
| Gross margin | 32.8 | % | 59.6 | % | 22.6 | % | 38.8 | % | 15.8 | % | 39.4 | % | 5.4 | % | 20.9 | % | ||||||||||||||||
| R&D expenses | 470 | 505 | 247 | 1,222 | 403 | 619 | 427 | 1,449 | ||||||||||||||||||||||||
| Segment profit (loss) | $ | 339 | $ | 960 | $ | 259 | $ | 1,558 | $ | 10 | $ | 423 | $ | (303 | ) | $ | 130 | |||||||||||||||
Year-over-Year Quarter Comparison
| Three months ended December 31, 2019 | Three months ended December 31, 2018 | |||||||||||||||||||||||||||||||
| IBW | ISM | CNS | Total | IBW | ISM | CNS | Total | |||||||||||||||||||||||||
| Total revenue | $ | 2,466 | $ | 2,456 | $ | 2,237 | $ | 7,159 | $ | 2,794 | $ | 5,116 | $ | 2,812 | $ | 10,722 | ||||||||||||||||
| Gross profit | 809 | 1,465 | 506 | 2,780 | 1,069 | 2,899 | 622 | 4,590 | ||||||||||||||||||||||||
| Gross margin | 32.8 | % | 59.6 | % | 22.6 | % | 38.8 | % | 38.3 | % | 56.7 | % | 22.1 | % | 42.8 | % | ||||||||||||||||
| R&D expenses | 470 | 505 | 247 | 1,222 | 682 | 570 | 484 | 1,736 | ||||||||||||||||||||||||
| Segment profit (loss) | $ | 339 | $ | 960 | $ | 259 | $ | 1,558 | $ | 387 | $ | 2,329 | $ | 138 | $ | 2,854 | ||||||||||||||||
Westell Technologies, Inc.
Reconciliation of GAAP to non-GAAP Financial Measures
(Amounts in thousands, except per share amounts)
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| GAAP consolidated operating expenses | $ | 4,413 | $ | 5,265 | $ | 6,303 | $ | 15,238 | $ | 18,347 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Stock-based compensation (1) | (132 | ) | (181 | ) | (291 | ) | (547 | ) | (854 | ) | ||||||||||
| Amortization of acquisition-related intangibles (2) | (308 | ) | (308 | ) | (830 | ) | (924 | ) | (2,652 | ) | ||||||||||
| Restructuring, separation, and transition (3) | (234 | ) | — | — | (234 | ) | — | |||||||||||||
| Total adjustments | (674 | ) | (489 | ) | (1,121 | ) | (1,705 | ) | (3,506 | ) | ||||||||||
| Non-GAAP consolidated operating expenses | $ | 3,739 | $ | 4,776 | $ | 5,182 | $ | 13,533 | $ | 14,841 | ||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| GAAP consolidated net income (loss) | $ | (1,544 | ) | $ | (3,561 | ) | $ | (1,556 | ) | $ | (7,262 | ) | $ | (3,336 | ) | |||||
| Less: | ||||||||||||||||||||
| Income tax benefit (expense) | (20 | ) | — | (1 | ) | (27 | ) | (11 | ) | |||||||||||
| Other income, net | 109 | 125 | 158 | 398 | 442 | |||||||||||||||
| Discontinued operations (4) | — | — | — | — | (138 | ) | ||||||||||||||
| GAAP consolidated operating profit (loss) | $ | (1,633 | ) | $ | (3,686 | ) | $ | (1,713 | ) | $ | (7,633 | ) | $ | (3,629 | ) | |||||
| Adjustments: | ||||||||||||||||||||
| Stock-based compensation (1) | 152 | 201 | 303 | 597 | 889 | |||||||||||||||
| Amortization of acquisition-related intangibles (2) | 308 | 308 | 830 | 924 | 2,652 | |||||||||||||||
| Restructuring, separation, and transition (3) | 234 | — | — | 234 | — | |||||||||||||||
| Total adjustments | 694 | 509 | 1,133 | 1,755 | 3,541 | |||||||||||||||
| Non-GAAP consolidated operating profit (loss) | $ | (939 | ) | $ | (3,177 | ) | $ | (580 | ) | $ | (5,878 | ) | $ | (88 | ) | |||||
| Amortization of product licensing rights (5) | 98 | 65 | — | 163 | — | |||||||||||||||
| Depreciation | 78 | 118 | 149 | 339 | 440 | |||||||||||||||
| Non-GAAP consolidated Adjusted EBITDA (6) | $ | (763 | ) | $ | (2,994 | ) | $ | (431 | ) | $ | (5,376 | ) | $ | 352 | ||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| GAAP consolidated net income (loss) | $ | (1,544 | ) | $ | (3,561 | ) | $ | (1,556 | ) | $ | (7,262 | ) | $ | (3,336 | ) | |||||
| Adjustments: | ||||||||||||||||||||
| Stock-based compensation (1) | 152 | 201 | 303 | 597 | 889 | |||||||||||||||
| Amortization of acquisition-related intangibles (2) | 308 | 308 | 830 | 924 | 2,652 | |||||||||||||||
| Restructuring, separation, and transition (3) | 234 | — | — | 234 | — | |||||||||||||||
| Discontinued operations (4) | — | — | — | — | 138 | |||||||||||||||
| Total adjustments | 694 | 509 | 1,133 | 1,755 | 3,679 | |||||||||||||||
| Non-GAAP consolidated net income (loss) | $ | (850 | ) | $ | (3,052 | ) | $ | (423 | ) | $ | (5,507 | ) | $ | 343 | ||||||
| GAAP consolidated net income (loss) per common share: | ||||||||||||||||||||
| Diluted | $ | (0.10 | ) | $ | (0.23 | ) | $ | (0.10 | ) | $ | (0.47 | ) | $ | (0.21 | ) | |||||
| Non-GAAP consolidated net income (loss) per common share: | ||||||||||||||||||||
| Diluted | $ | (0.05 | ) | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.35 | ) | $ | 0.02 | ||||||
| Average number of common shares outstanding: | ||||||||||||||||||||
| Diluted | 15,575 | 15,512 | 15,524 | 15,514 | 15,663 | |||||||||||||||
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) Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting standards.
(2) Amortization of acquisition-related intangibles is a non-cash expense arising from intangible assets previously acquired as a result of a business acquisition.
(3) Restructuring expense for the quarter ended December 31, 2019, related to severance costs for terminated employees.
(4) The Company recorded indemnification expense related to probable loss contingencies associated with a major customer contract related to a business which was previously sold and therefore is presented as discontinued operations. On July 24, 2019, the Company signed a settlement agreement related to this matter. The amount to be paid under the settlement agreement is fully covered by the accrual.
(5) Amortization of the recently acquired product licensing rights are excluded from Adjusted EBITDA, but included in the Non-GAAP consolidated net income (loss), because the amortization is related to the ongoing operation of the business in the ordinary course.
(6) EBITDA is a non-GAAP measure that represents Earnings Before Interest, Taxes, Depreciation, and Amortization. The Company presents Adjusted EBITDA.
For additional information, contact:
Tim Duitsman
Chief Executive Officer
Westell Technologies, Inc.
+1 (630) 898 2500
tduitsman@westell.com