Total Revenue of $88.4
million; Up 1.7% Year-Over-Year
Adjusted EBITDA of $(7.7) million
Non-GAAP Diluted Earnings per Share of
$(0.87)
AUSTIN,
Texas, Nov. 5, 2024 /PRNewswire/ -- Aviat
Networks, Inc. ("Aviat Networks," "Aviat," or the "Company"),
(Nasdaq: AVNW), the leading expert in wireless transport and access
solutions, today reported financial results for its fiscal 2025
first quarter ended September 27, 2024.
First Quarter Highlights
- Continued to gain share of demand in North America based on FCC filing data
- Closed acquisition of 4RF and secured first order for new
Aprisa 5G cellular router to a North American utility company
- Began shipping product to recently won state-wide private
network customer on the East Coast
First Quarter Financial Highlights
- Total Revenues: $88.4
million, up 1.7% from the same quarter last year
- GAAP Results: Gross Margin 22.4%; Operating Expenses
$35.4 million; Operating Loss
$(15.6) million; Net Loss
$(11.9) million; Net Loss per diluted
share ("Net Loss per share") $(0.94)
- Non-GAAP Results: Adjusted EBITDA $(7.7) million; Gross Margin 23.2%; Operating
Expenses $30.0 million; Operating
Loss $(9.5) million; Net Loss
$(11.1) million; Net Loss per share
$(0.87)
- Net cash and cash equivalents: $51.0 million; cash net of debt: $(32.3) million
Fiscal 2025 First Quarter and Three Months Ended
September 27, 2024
Revenues
The Company reported total revenues of $88.4 million for its fiscal 2025 first quarter,
compared to $86.9 million in the
fiscal 2024 first quarter, an increase of $1.5 million or 1.7%. North America revenue of $42.2 million decreased by $(12.6) million or (23.0)%, compared to
$54.9 million in the prior year due
lower tier 1 demand and timing of certain private network projects.
International revenue of $46.2
million increased by $14.1
million or 44.1%, compared to $32.1
million in the prior year. This growth was due to the
addition from the Pasolink acquisition.
Gross Margins
In the fiscal 2025 first quarter, the Company reported GAAP
gross margin of 22.4% and non-GAAP gross margin of 23.2%. This
compares to GAAP gross margin of 35.9% and non-GAAP gross margin of
36.2% in the fiscal 2024 first quarter, a decrease of (1,350) and
(1,300) basis points, respectively. The decrease was driven by mix
shift away from higher margin projects and regions in the
quarter.
Operating Expenses
The Company reported GAAP total operating expenses of
$35.4 million for the fiscal 2025
first quarter, compared to $26.3
million in the fiscal 2024 first quarter, an increase of
$9.1 million or 34.4%. Non-GAAP total
operating expenses, excluding the impact of restructuring charges,
share-based compensation, and merger and acquisition expenses for
the fiscal 2025 first quarter were $30.0
million, compared to $23.9
million in the prior year, an increase of $6.2 million or 25.8%.
Operating Income
The Company reported GAAP operating loss of $(15.6) million for the fiscal 2025 first
quarter, compared to a GAAP operating income of $4.9 million in the fiscal 2024 first quarter, a
decrease of $(20.5) million.
Operating income decreased primarily due to lower gross margin and
higher operating expenses as a result of the Pasolink and 4RF
transactions. On a non-GAAP basis, the Company reported operating
loss of $(9.5) million for the fiscal
2025 first quarter, compared to a non-GAAP operating income of
$7.6 million in the prior year, a
decrease of $(17.1) million.
Income Taxes
The Company reported GAAP income tax benefit of $(5.5) million in the fiscal 2025 first quarter,
compared to a GAAP income tax expense of $0.4 million in the fiscal 2024 first
quarter.
Net Income / Net Income Per Share
The Company reported GAAP net loss of $(11.9) million in the fiscal 2025 first quarter
or GAAP net loss per share of $(0.94). This compared to GAAP net income of
$3.6 million or GAAP net income per
share of $0.30 in the fiscal 2024
first quarter. On a non-GAAP basis, the Company reported net loss
of $(11.1) million or non-GAAP net
income per share of $(0.87), compared
to non-GAAP net income of $7.2
million or $0.60 per share in
the prior year.
Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and
amortization ("Adjusted EBITDA") for the fiscal 2025 first quarter
was $(7.7) million, compared to
$8.9 million in the fiscal 2024 first
quarter, a decrease of $(16.6)
million.
Balance Sheet Highlights
The Company reported $51.0 million
in cash and cash equivalents as of September 27, 2024,
compared to $64.6 million as of
June 28, 2024. As of September 27, 2024, total debt was
$83.4 million, an increase of
$35.0 million from June 28,
2024.
Fiscal 2025 Full Year Outlook
The Company is updating its fiscal 2025 full year guidance as
follows:
- Full year Revenue between $430
and $470 million
- Full year Adjusted EBITDA between $30.0 and $40.0
million
Conference Call Details
Aviat Networks will host a conference call at 4:30 p.m. Eastern Time (ET) today,
November 5, 2024, to discuss its financial and operational
results for the fiscal 2025 first quarter ended September 27,
2024. Participating on the call will be Peter Smith, President and Chief Executive
Officer; Michael Connaway, Sr. Vice
President and Chief Financial Officer; and Andrew Fredrickson, Director of Corporate
Development and Investor Relations. Following management's remarks,
there will be a question and answer period.
Interested parties may access the conference call live via the
webcast through Aviat Network's Investor Relations website at
investors.aviatnetworks.com/events-and-presentations/events, or may
participate via telephone by registering using this online form.
Once registered, telephone participants will receive the dial-in
number along with a unique PIN number that must be used to access
the call. A replay of the conference call webcast will be available
after the call on the Company's investor relations website.
About Aviat Networks
Aviat Networks, Inc. is the leading expert in wireless
transport and access solutions and works to provide dependable
products, services and support to its customers. With more than one
million systems sold into 170 countries worldwide, communications
service providers and private network operators including
state/local government, utility, federal government and defense
organizations trust Aviat with their critical applications. Coupled
with a long history of microwave innovations, Aviat provides a
comprehensive suite of localized professional and support services
enabling customers to drastically simplify both their networks and
their lives. For more than 70 years, the experts at Aviat have
delivered high performance products, simplified operations, and the
best overall customer experience. Aviat is headquartered in
Austin, Texas. For more
information, visit www.aviatnetworks.com or connect
with Aviat Networks on Facebook and LinkedIn.
Forward-Looking Statements
The information contained in this Current Report on Form 8-K
includes forward-looking statements within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995, including Aviat's beliefs and expectations regarding
outlook, business conditions, new product solutions, customer
positioning, future orders, bookings, new contracts, cost
structure, profitability in fiscal 2025, its recent acquisitions
and acquisition strategy, process improvements, measures designed
to improve internal controls, its ability to maintain effective
internal control over financial reporting and management systems
and remediate material weaknesses, plans and objectives of
management, realignment plans and review of strategic alternatives
and expectations regarding future revenue, gross margin, Adjusted
EBITDA, operating income or earnings or loss per share. All
statements, trend analyses and other information contained herein
regarding the foregoing beliefs and expectations, as well as about
the markets for the services and products of Aviat and trends in
revenue, and other statements identified by the use of
forward-looking terminology, including "anticipate," "believe,"
"plan," "estimate," "expect," "goal," "will," "see," "continue,"
"delivering," "view," and "intend," or the negative of these terms
or other similar expressions, constitute forward-looking
statements. Forward-looking statements are neither historical facts
nor assurances of future performance. Instead, forward-looking
statements are based on estimates reflecting the current beliefs,
expectations and assumptions of the senior management of Aviat
regarding the future of its business, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Such forward-looking statements involve a number
of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking
statements. Forward-looking statements should therefore be
considered in light of various important factors, including those
set forth in this document. Therefore, you should not rely on any
of these forward-looking statements.
Important factors that could cause actual results to differ
materially from estimates or projections contained in the
forward-looking statements include the following: the disruption
the 4RF and NEC transactions may cause to customers, vendors,
business partners and our ongoing business; our ability to
integrate the operations of the acquired 4RF and NEC businesses
with our existing operations and fully realize the expected
synergies of the 4RF and NEC transactions on the expected timeline;
disruptions relating to the ongoing conflict between Russia and Ukraine and the conflict in Israel and surrounding areas; continued price
and margin erosion in the microwave transmission industry; the
impact of the volume, timing, and customer, product, and geographic
mix of our product orders; our ability to meet financial covenant
requirements; the timing of our receipt of payment; our ability to
meet product development dates or anticipated cost reductions of
products; our suppliers' inability to perform and deliver on time,
component shortages, or other supply chain constraints; the effects
of inflation; customer acceptance of new products; the ability of
our subcontractors to timely perform; 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; our failure to protect our intellectual property
rights or defend against intellectual property infringement claims;
the results of our restructuring efforts; the effects of currency
and interest rate risks; the ability to preserve and use our net
operating loss carryforwards; the effects of current and future
government regulations; general economic conditions, including
uncertainty regarding the timing, pace and extent of an economic
recovery in the United States and
other countries where we conduct business; the conduct of unethical
business practices in developing countries; the impact of political
turmoil in countries where we have significant business; our
ability to realize the anticipated benefits of any proposed or
recent acquisitions; the impact of tariffs, the adoption of trade
restrictions affecting our products or suppliers, a United States withdrawal from or significant
renegotiation of trade agreements, the occurrence of trade wars,
the closing of border crossings, and other changes in trade
regulations or relationships; our ability to implement our stock
repurchase program or that it will enhance long-term stockholder
value; and the impact of adverse developments affecting the
financial services industry, including events or concerns involving
liquidity, defaults or non-performance by financial
institutions.
For more information regarding the risks and uncertainties for
Aviat's business, see "Risk Factors" in Aviat's Form 10-K for the
fiscal year ended June 28, 2024 filed with the U.S. Securities
and Exchange Commission ("SEC") on October 4, 2024, as well as
other reports filed by Aviat with the SEC from time to time. Aviat
undertakes no obligation to update publicly any forward-looking
statement, whether written or oral, for any reason, except as
required by law, even as new information becomes available or other
events occur in the future.
Investor Relations:
Andrew
Fredrickson
Director, Corporate Development & Investor Relations
Phone: (512) 582-4626
Email: andrew.fredrickson@aviatnet.com
|
Table
1
AVIAT NETWORKS,
INC.
Fiscal Year 2025
First Quarter Summary
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three Months
Ended
|
|
(In thousands, except per share amounts)
|
September
27,
2024
|
|
September 29,
2023
|
|
Revenues:
|
|
|
|
|
Product
sales
|
$
61,116
|
|
$
59,545
|
|
Services
|
27,313
|
|
27,364
|
|
Total
revenues
|
88,429
|
|
86,909
|
|
Cost of
revenues:
|
|
|
|
|
Product
sales
|
52,201
|
|
36,313
|
|
Services
|
16,440
|
|
19,401
|
|
Total cost of
revenues
|
68,641
|
|
55,714
|
|
Gross
margin
|
19,788
|
|
31,195
|
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
10,408
|
|
6,424
|
|
Selling and
administrative
|
24,948
|
|
19,237
|
|
Restructuring
charges
|
—
|
|
644
|
|
Total operating
expenses
|
35,356
|
|
26,305
|
|
Operating (loss)
income
|
(15,568)
|
|
4,890
|
|
Interest expense,
net
|
1,115
|
|
99
|
|
Other expense,
net
|
710
|
|
802
|
|
(Loss) income before
income taxes
|
(17,393)
|
|
3,989
|
|
(Benefit from)
provision for income taxes
|
(5,514)
|
|
432
|
|
Net (loss)
income
|
$
(11,879)
|
|
$
3,557
|
|
|
|
|
|
Net (loss) income
per share of common stock outstanding:
|
|
|
|
|
Basic
|
$
(0.94)
|
|
$
0.31
|
|
Diluted
|
$
(0.94)
|
|
$
0.30
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
Basic
|
12,646
|
|
11,574
|
|
Diluted
|
12,646
|
|
11,943
|
|
Table
2
AVIAT NETWORKS,
INC.
Fiscal Year 2025
First Quarter Summary
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(In thousands)
|
September
27,
2024
|
|
June 28,
2024
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
51,034
|
|
$
64,622
|
|
Accounts receivable,
net
|
169,002
|
|
158,013
|
|
Unbilled
receivables
|
94,725
|
|
90,525
|
|
Inventories
|
79,559
|
|
62,267
|
|
Assets held for
sale
|
—
|
|
2,720
|
|
Other current
assets
|
32,942
|
|
27,076
|
|
Total current
assets
|
427,262
|
|
405,223
|
|
Property, plant and
equipment, net
|
11,883
|
|
9,480
|
|
Goodwill
|
15,153
|
|
8,217
|
|
Intangible assets,
net
|
28,754
|
|
13,644
|
|
Deferred income
taxes
|
91,317
|
|
83,112
|
|
Right-of-use
assets
|
3,665
|
|
3,710
|
|
Other assets
|
12,823
|
|
11,837
|
|
Total long-term
assets
|
163,595
|
|
130,000
|
|
Total
assets
|
$
590,857
|
|
$
535,223
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
$
104,926
|
|
$
92,854
|
|
Accrued
expenses
|
39,137
|
|
42,148
|
|
Short-term lease
liabilities
|
1,125
|
|
1,006
|
|
Advance payments and
unearned revenue
|
79,380
|
|
58,839
|
|
Other current
liabilities
|
21,234
|
|
21,614
|
|
Current portion of
long-term debt
|
2,395
|
|
2,396
|
|
Total current
liabilities
|
248,197
|
|
218,857
|
|
Long-term
debt
|
80,980
|
|
45,954
|
|
Unearned
revenue
|
7,522
|
|
7,413
|
|
Long-term operating
lease liabilities
|
2,782
|
|
2,823
|
|
Other long-term
liabilities
|
407
|
|
394
|
|
Reserve for uncertain
tax positions
|
3,445
|
|
3,485
|
|
Deferred income
taxes
|
412
|
|
412
|
|
Total
liabilities
|
343,745
|
|
279,338
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholder's
equity:
|
|
|
|
|
Preferred
stock
|
—
|
|
—
|
|
Common
stock
|
127
|
|
126
|
|
Treasury
stock
|
(6,479)
|
|
(6,479)
|
|
Additional
paid-in-capital
|
861,023
|
|
860,071
|
|
Accumulated
deficit
|
(590,392)
|
|
(578,513)
|
|
Accumulated other
comprehensive loss
|
(17,167)
|
|
(19,320)
|
|
Total stockholders'
equity
|
247,112
|
|
255,885
|
|
Total liabilities
and stockholders' equity
|
$
590,857
|
|
$
535,223
|
|
AVIAT NETWORKS,
INC.
Fiscal Year 2025
First Quarter Summary
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND REGULATION G
DISCLOSURE
|
|
To supplement the
consolidated financial statements presented in accordance with
accounting principles generally accepted in the United States
(GAAP), we provide additional measures of gross margin, research
and development expenses, selling and administrative expenses,
operating income, provision for or benefit from income taxes, net
income, net income per share, and adjusted income before interest,
tax, depreciation and amortization (Adjusted EBITDA), in each case,
adjusted to exclude certain costs, charges, gains and losses, as
set forth below. We believe that these non-GAAP financial measures,
when considered together with the GAAP financial measures provide
information that is useful to investors in understanding
period-over-period operating results separate and apart from items
that may, or could, have a disproportionate positive or negative
impact on results in any particular period. We also believe these
non-GAAP measures enhance the ability of investors to analyze
trends in our business and to understand our performance. In
addition, we may utilize non-GAAP financial measures as a guide in
our forecasting, budgeting and long-term planning process and to
measure operating performance for some management compensation
purposes. Any analysis of non-GAAP financial measures should be
used only in conjunction with results presented in accordance with
GAAP. Reconciliations of these non-GAAP financial measures with the
most directly comparable financial measures calculated in
accordance with GAAP follow.
|
|
|
1We have not
reconciled Adjusted EBITDA guidance to its corresponding GAAP
measure due to the high variability and difficulty in making
accurate forecasts and projections, particularly with respect to
merger and acquisition costs and share-based compensation. In
particular, share-based compensation expense is affected by future
hiring, turnover, and retention needs, as well as the future fair
market value of our common stock, all of which are difficult to
predict and subject to change. Accordingly, reconciliations of
forward-looking Adjusted EBITDA are not available without
unreasonable effort.
|
|
Table
3
AVIAT NETWORKS,
INC.
Fiscal Year 2025
First Quarter Summary
RECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURES (1)
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
Three Months
Ended
|
|
September 27,
2024
|
|
% of
Revenue
|
|
September 29,
2023
|
|
% of
Revenue
|
|
(In thousands, except
percentages and per share amounts)
|
|
GAAP gross
margin
|
$
19,788
|
|
22.4 %
|
|
$
31,195
|
|
35.9 %
|
|
Share-based
compensation
|
104
|
|
|
|
183
|
|
|
|
Merger and acquisition
and other expenses
|
608
|
|
|
|
43
|
|
|
|
Non-GAAP gross
margin
|
20,500
|
|
23.2 %
|
|
31,421
|
|
36.2 %
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
10,408
|
|
11.8 %
|
|
$
6,424
|
|
7.4 %
|
|
Share-based
compensation
|
(143)
|
|
|
|
(146)
|
|
|
|
Non-GAAP research
and development expenses
|
10,265
|
|
11.6 %
|
|
6,278
|
|
7.2 %
|
|
|
|
|
|
|
|
|
|
GAAP selling and
administrative expenses
|
$
24,948
|
|
28.2 %
|
|
$
19,237
|
|
22.1 %
|
|
Share-based
compensation
|
(1,417)
|
|
|
|
(1,505)
|
|
|
|
Merger and acquisition
and other expenses
|
(3,781)
|
|
|
|
(146)
|
|
|
|
Non-GAAP selling and
administrative expenses
|
19,750
|
|
22.3 %
|
|
17,586
|
|
20.2 %
|
|
|
|
|
|
|
|
|
|
GAAP operating
(loss) income
|
$
(15,568)
|
|
(17.6) %
|
|
$
4,890
|
|
5.6 %
|
|
Share-based
compensation
|
1,664
|
|
|
|
1,834
|
|
|
|
Merger and acquisition
and other expenses
|
4,389
|
|
|
|
189
|
|
|
|
Restructuring
charges
|
—
|
|
|
|
644
|
|
|
|
Non-GAAP operating
(loss) income
|
(9,515)
|
|
(10.8) %
|
|
7,557
|
|
8.7 %
|
|
|
|
|
|
|
|
|
|
GAAP income tax
(benefit) provision
|
$
(5,514)
|
|
(6.2) %
|
|
$
432
|
|
0.5 %
|
|
Adjustment to reflect
pro forma tax rate
|
6,014
|
|
|
|
(132)
|
|
|
|
Non-GAAP income tax
provision
|
500
|
|
0.6 %
|
|
300
|
|
0.3 %
|
|
|
|
|
|
|
|
|
|
GAAP net (loss)
income
|
$
(11,879)
|
|
(13.4) %
|
|
$
3,557
|
|
4.1 %
|
|
Share-based
compensation
|
1,664
|
|
|
|
1,834
|
|
|
|
Merger and acquisition
and other expenses
|
4,389
|
|
|
|
189
|
|
|
|
Restructuring
charges
|
—
|
|
|
|
644
|
|
|
|
Other expense,
net
|
710
|
|
|
|
802
|
|
|
|
Adjustment to reflect
pro forma tax rate
|
(6,014)
|
|
|
|
132
|
|
|
|
Non-GAAP net (loss)
income
|
$
(11,130)
|
|
(12.6) %
|
|
$
7,158
|
|
8.2 %
|
|
|
|
|
|
|
|
|
|
Diluted net (loss)
income per share:
|
|
GAAP
|
$
(0.94)
|
|
|
|
$
0.30
|
|
|
|
Non-GAAP
|
$
(0.87)
|
|
|
|
$
0.60
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted net (loss) income per share
|
|
|
|
|
|
|
|
|
GAAP
|
12,646
|
|
|
|
11,943
|
|
|
|
Non-GAAP
|
12,804
|
|
|
|
11,943
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
GAAP net (loss)
income
|
$
(11,879)
|
|
(13.4) %
|
|
$
3,557
|
|
4.1 %
|
|
Depreciation and
amortization of property, plant and equipment and intangible
assets
|
1,830
|
|
|
|
1,344
|
|
|
|
Interest expense,
net
|
1,115
|
|
|
|
99
|
|
|
|
Other expense,
net
|
710
|
|
|
|
802
|
|
|
|
Share-based
compensation
|
1,664
|
|
|
|
1,834
|
|
|
|
Merger and acquisition
and other expenses
|
4,389
|
|
|
|
189
|
|
|
|
Restructuring
charges
|
—
|
|
|
|
644
|
|
|
|
(Benefit from)
provision for income taxes
|
(5,514)
|
|
|
|
432
|
|
|
|
Adjusted
EBITDA
|
$
(7,685)
|
|
(8.7) %
|
|
$
8,901
|
|
10.2 %
|
|
|
|
(1)
|
The adjustments above
reconcile our GAAP financial results to the non-GAAP financial
measures used by us. Our non-GAAP net income excluded share-based
compensation, and other non-recurring charges (recovery). Adjusted
EBITDA was determined by excluding depreciation and amortization on
property, plant and equipment, interest, provision for or benefit
from income taxes, and non-GAAP pre-tax adjustments, as set forth
above, from GAAP net income. We believe that the presentation of
these non-GAAP items provides meaningful supplemental information
to investors, when viewed in conjunction with, and not in lieu of,
our GAAP results. However, the non-GAAP financial measures have not
been prepared under a comprehensive set of accounting rules or
principles. Non-GAAP information should not be considered in
isolation from, or as a substitute for, information prepared in
accordance with GAAP. Moreover, there are material limitations
associated with the use of non-GAAP financial measures.
|
|
Table
4
AVIAT NETWORKS,
INC.
Fiscal Year 2025
First Quarter Summary
SUPPLEMENTAL
SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
|
|
Three Months
Ended
|
|
September
27,
2024
|
|
September 29,
2023
|
|
(In
thousands)
|
|
|
|
|
North
America
|
$
42,225
|
|
$
54,853
|
|
International:
|
|
|
|
|
Africa and the Middle
East
|
10,450
|
|
9,954
|
|
Europe
|
5,600
|
|
5,252
|
|
Latin America and Asia
Pacific
|
30,154
|
|
16,850
|
|
Total
international
|
46,204
|
|
32,056
|
|
Total
revenue
|
$
88,429
|
|
$
86,909
|
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SOURCE Aviat Networks, Inc.
