WSTL - Earnings call transcript Q4 2018 | Westell Technologies, Inc.

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Operator

Good morning and welcome to the Westell’s Fiscal Year 2018 Fourth Quarter and Full Year Earnings Call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference call is being recorded. the to turn Chief Minichiello, now Officer. Financial will call Tom over Westell's I begin. may you Tom,

Thomas Minichiello

our President accomplishments to will Thank morning fourth CEO, for Brannock, the year call, Heilda. news quarter by on discuss year Chairman, you, our discussion conclude Good for Westell's begin release will you the call our appointed; a results westell.com. and afternoon fiscal to we conference new issued taking will year and is on results I our John. of newly you Technologies. website, our and with Kirk Steven XXXX introduce for update for Westell quarter we questions. yesterday full and the and then The welcome posted year financial to this On the

we financial guarantees description not may our results, are to of Company's to the performance Form believe, future for as that date time call. materially any is revise in Risk other please statements including ongoing Company's update The about such current ended non-GAAP and results, presentation provide obligation and Please operating the performance we achievements to that facilitates contain XX-K any performance conference forward-looking otherwise. assumptions. we XX, section comparisons the reflect statements Westell discussed. on because discussion risks note trend reflects supplemental believe achievements, and and factors. statements March information, periods. expect, made are the that uncertainties and Westell's that non-GAAP made core or across statements expectations, forward-looking presentation forward-looking differ being meaningful those provided information to note in management in from actual of fiscal and new as future this future estimates investors. involve management's factors These non-GAAP and Factors. intended Words this may present A The based forward-looking disclaims or and financial XXXX, identify results cause the under measures forward-looking expressions also news future and of such statements reporting or statements. information are our results affect information releases, that SEC or filings, These both should, begin, Before our performance year of similar

release. will results provided discussion Our call turn include GAAP reconciliations financial I’ll the now comparable today to most We over news of to With measures. non-GAAP measures in the that, our Kirk.

Kirk Brannock

percentage of building base you our diversify and digit fiscal CNS, distribution of made year. cabinets power progress intelligence remote integrated When more million. of look business safety within our good year and double Fiscal XX% year you, the Westell XXXX Thank actions for everyone. results financial turnaround taken have before. significant was significantly to expense and good structure to Tom, a compared morning, delivered reset cost better and and million. margin X XX.X non-GAAP XX% by increased X.X% Net from helped at XXXX units from the We and including our XX.X%. revenue. grew sales million, operations Gross to we our We profit income expanded cash of management by generated site a very healthy operating for by cash grew total in wireless we our generating positive by improved X.X public increased than it customer of sales products, Revenue and side products. new

their They UDIT previous than impacted came a Active Tray DAS rapid and new one operators. in wireless shifted abruptly below a fourth Interface deployments large Turning buyer quarters in-Building our was shift provider by architecture in expectations More service reduce to of been had dedicated in-Building quarter, the CapEx installations D-RAN Universal revenue fiscal centralized specifically, fairly or by mainly Unlike these Conditioner. D-RAN does locations. configuration or DAS in building. connected at or only exist a lay offsite network large that And to access venues. equipment point to that are a already traditional the at remote fully units from out distributed venue radio among DAS

do situations. In-Building in network we D-RAN operators Greenfield Going favoring see forward,

ongoing during to we a fiscal will DAS revenue quarter. provide of the for carriers capacity X.X% large demand cash for the profit X.X level positive on our product networks grew to a non-GAAP March the embedded However, add and by margin of UDIT the Even need line. fourth of a to base operating million in continue quarter, lower generated

operating have say me this tremendous lot again, leverage. have this let leverage And We of business. we in a

we three fiscal years the largest with to year April we and of topline. need On began grow our expect the XXXX June quarter. beginning strong we to in X, in Now backlog rebound

with share pursuing and revenue across now That's focus where the will we're be. opportunities business. the you me Let focus Steve's growth our

network are opportunities expansion expanded now emerging initial an small driven are to expand our areas, As which mentioned calls, rural for the Unlike the and broadband with significantly to high public the the safety. the and broadband by early products, products communication from testing our market local of in expect have also We that from safety first lineup. for thus public market the to growth stages the mobile suite potential further. wireless previous market phase the We're traction develop is well. very and generation next competencies. respect still on areas, relative public coverage the the once industry density safety wireless Steve for we well We're network in fits by in knows our the continued that municipalities area like soon. more fiber Also, we of mandates of fixed In-Building core In-Building wireless potential. gained transition an introduce to in safety commercial net with XG, with the about fact access encouraged will expect excited in This overall the macro we that market like set the densification, public far it XG we is of to completed,

invest generate our our seen revenue businesses to in Access revenue Radio continue in C-RAN growing result product CNS already address revenue portfolio known existing of ISM a needs. Centralized refresh have densification of recent to suite work we to we to our in units, as good and an remote from expanded a suited continue parties. and The example. customer's uptick capacity rapid a across for Last Westell to ISMS solutions certified market architecture our or densification as we which Network line week, is to third also fuse OEM for higher We're introduced well panels, distribution deployments. C-RAN initiatives power bring and continuing small We on cell of

that would in presence on cell the give us we One market. of currently focused these a small initiatives are

In in expanding He's to TTI addition, Westell. customer George President In product Technologies, George also his of an responsible for Wakileh, last with Vice relationships month initial role, us solution and on portfolio going is our former emphasis space. assist M&A the Development access new at activities. fiber join

it's of you engineering appointed headed Executive I I'm field is President at provider this joined of in than Chief us. and wireless Steven Rise Broadband, by previously pleasure next He Alfred my Steve saw was years think over way going experience he Senior he Steve introduce join the Steve more Technologies operations. announced UNSI, and and Revenue S., earlier we as Internet American that Steve We're development and fixed Leadership, delighted He Board broadband. John, Cheetah and just turn month in with and of before new that week Steve us was couple a have services management. Officer this goes to minutes. me he provider up this Steve of to of sales to right XX CEO today, here from Steve. CEO. and business Vice our and so President where and by all you, has to sitting is a of us him Directors to that started Westell’s President new to and

Alfred John

you, Kirk. Good everyone. Thank morning

the First cash of by it's company can fixed Tom. customer team, as and me coming product growth believe of tremendous high The have good relationships especially Westell markets. In-Building adjacent great all, now Kirk future Kirk am public real and I is cell, and hard grow join work densification, are solid in expected positive wireless the flow. how Thanks industry opportunity see significantly profits developed reputation and say some ahead just I years us. a all the network quality mentioned, access and the safety, a many a in has strong years. Furthermore, to and small excited leadership solutions, in we opportunities fiber existing areas Westell. of to generating for over to I let Westell and XG, of broadband

working I proudest people turn I'll my I and businesses employees. With business the shareholder father, will loving the back challenge. husband with soon. about a in enjoy passionate great to passionate increased a look Our myself, the accomplishment love little number amazing expand meeting person mission has enjoy call value. about forward be am is to and growing one with I that, beautiful interacting good family. and and to stakeholders over also and Tom. and A leading drive being you Westell profitably and

Thomas Minichiello

have and Thank you excited Steve to on we're you, board.

IBW the Beginning was me quarter revenue. had fiscal higher change which revenue, ISMS by and in sites, on of lower prior shift unit a already due compared to some was partially primarily XX.X that to at by for product March revenue been to to provide Let was our significant The quarter change with a XX, million D-RAN as our revenue, line, IBW one in quarters. UDIT results. lower XXXX carrier new Kirk customer The million CNS added was by previous color fourth ended impacted due sales mentioned, the quarter. offset sequential XX.X

quarters down highs. March ISMS, there from For historically December are quarter

segment, customers ISMS was one and case that for majority to we're units, continues Sales revenue. to by remote the this increased in this was backed of by on-site development the top be generate consistently up monitoring we our our it are year, network remote our overall up in used for a lower of which where and ongoing investment well revenue emphasis of devices isolated primarily our ISMS processing business. for services positive However the

where was fourth two primary increased new As product fixed in which growth in C-RAN, in our offering areas segment, products expanded wireless driven and continue by coming demand traction our expansion sales distribution power gaining revenue noted, the projects, up CNS of and broadband. sequentially primarily are good quarter. customer we network was in the we've lines cabinets integrated to from like see product including This

For year compared XX.X IBW XX The revenue XX, March year ended and year to million year due before. change over the million to revenue. lower was was XXXX full consolidated the CNS

sales of to annual remained revenue The change safety demand well primarily segment was sales repeaters in line conditioners. flat. as public to revenue. our IBW components increased lower system offset DAS interface change essentially increased for decrease are ISMS CNS annual The the repeaters, tower and integrated commercial public While expected due of primarily Partly, Partly as commercial increased units by the in off TX drop cabinet and passive amplifiers. the of by which in late safety network mounted of used of lifecycle from and was installations. offset due both

remote ISMS year essentially equally flat we business, over lower was units which by the offset while For of revenue. year increased services sales

were Now the to and in as greater, gross we for year quarter Non-GAAP was XX% XX% our the for million, rest XQ of the in moving the expenses fourth on the full the operating continued or same results, XQ. margin fiscal year. quarter to the and target XX.X% operating it X.X exceed for of

profit the For million XX% Gross of compared or XX% the X.X%. leverage OpEx tremendous improvement still in to of margin in quarter XX.X the non-GAAP operating reset was operating evident even was a year an revenue, a our when unexpectedly revenue of full revenue, model. clearly achieved OpEx period, year, before. created substantial has or where and in million low the XX business This expansion March non-GAAP we the margin

net in on business fiscal X.X%. basis, highest $X.XX the us compared net a $X.XX for basis, margin XX% a or prior loss achieved XQ we non-GAAP our $XX.X an income XXXX GAAP full On million year’s share sixth X.X and or share. target the and per adjusted less four fiscal the and compared were million X.X%, net basis EBITDA depreciation a For EPS adjusted the a and moving and healthy million to years operating positive generated and prior million generated consecutive year fiscal business profit On breakeven in profit our EPS XXXX and adjusted Fiscal of is of year. the to greater. which achieve EBITDA year, to the for quarter Westell’s X.X year loss of income closer the EBITDA per non-GAAP operating non-GAAP of X.X

Turning million the further quarter, sheet. by we increased balance strengthening fourth cash to balance our during the sheet, X.X

at million compared Our cash XQ increase and million The XX.X at was term XX, cash XXXX by XX, short driven December capital. investments largely March totaled XXXX. to improved XX working

cash of and million $X For of XXX,XXX This cash expenditures offset partly from share operations, flow of million. generated we generated year, the capital X.X for repurchases. consisted used by

grow present adjacent CEO, Steven XG, on by new to VP; Before existing Wakileh, management dedicated Business debt-free. significant substantial year growing by depth wireless Fiscal summarize. access of John driving our let resulted adding and to we to broadband operating Development are improvements revenue X to profit and income And implemented leadership and turnaround for fiber cells, densification, safety, expansion, new XXXX fixed markets. continue shareholder margin gross in now we Q&A opportunities In-Building a public operating increased our mission to million us Westell. in joined manage with and the at tremendous and while top and network me XX.X and we strength move net The value. to was remaining our cash efficiencies small in million, and George all big team

So now with up to the questions. call like for that, open your we

Operator

you. Thank

and now begin the answer question [Operator will Instructions] We session.

Kirk Brannock

Any questions?

Operator

question Bush Everglades We from a have Resources. Steve from

Steve Bush

Thanks taking Good for call. morning gentlemen. the

Alfred John

Steve, you? morning Good are how

Steve Bush

short as this you on kind on that seems the versus going delve C-RAN question, last kind discussion were displace just a be just Steve. our of can opportunity of Quick which versus you to to Welcome when currently? And little revenues a deeper we board, call? into to knew, D-RAN this

Thomas Minichiello

Sure, Steve.

you know us. been good product So product has for really the as a UDIT

bit into to If ultimately elements. And before, quarters line. even years it's and a product you we look been expected over back line, point at little get network longer during some time, our integrated previous technology trend of leading in the at year a that other

we we it was our knew orders of customer, the expecting say, we not was we the - in going midway that, trend That is remarks would to much were this get longer line. more getting but from term So reasons I for that that purchase the and a of they to for About them through CapEx gradual, orders outlined were new one quarter sites lower quarter, actually quarter. are forward. we purchase this a for Interestingly what here. moved June cost - enough, prepared in solution some those are we now getting the

So that's about knew midway. when we about

Kirk Brannock

could I rarely were an case. in was And happens, maybe Literally to designed did that that, for a they Steve, this it out lower and solution, because product this designed saw our and was change really we cost in abrupt add and carrier. one

UDIT it results sales We Actually, good And, strong have carrying some in the quarters. really was abrupt, of quarters. abrupt. pretty a was previous it couple pretty in

DAS out embedded still of good base of UDIT. news there large large embedded have base we and the a is, Now a

will our it's go the not to existing an where case, is venues continue, UDIT away. that going So

However, being Does that we locations help? designed do new Greenfield with D-RAN. see

Steve Bush

a Do have or? to we solution partake

Kirk Brannock

and solution the While in with C-RAN the we CNS space definitely at a our D-RAN, when you opportunities are, where have on are with look cabinets power. and side,

and on as As edge now the we're get I with bringing far George deeper earlier, passive. trying with fiber our as Wakileh on mentioned to

D-RAN? us benefit So definitely change as but at architecture, fiber there passives, the okay, do cabinets, job power, the with yeah, to is we C-RAN we the And I and side, our with this did -- with figure an opportunity think where there. in on D-RAN I the hurt opportunity. look can out, is the UDIT

Thomas Minichiello

power what's a Steve; need as, much. about it's bit note that could and the add of in a is as and our it happening active, customers I we've development efforts don't moving where to engineering little much smaller large spending market thing is maybe UDIT, been important are also too towards you But some other is, it's venues is, on not more UDIT and One derivative what's the DAS nice DAS, passive.

more that smaller them. into fit more here a where going, is but DAS nicely the spending have of will is a we venues, derivative which So product

as have an large to So base. there opportunity mentioned embedded for continue a quite Kirk the nice there's pretty and market will

Steve Bush

fiscal a down bit, Okay. discuss we are Can how out next from -- few to guys breaks the the where you our there? terms year we're or your trend little think feeding like backlog it you quarters going XXXX sales of in since up

Kirk Brannock

Steve. Yes.

is million as numbers, million prepared March, -- was from And we a So that you end December the in units, three up. had it's and increase of that we that our don't expect letting give segment, had doing last in one X.X up as segment, the from quarters total mentioned, a, around the $X.X mentioned quarter due well customer It large of had all -- with which in is that monitoring of remote to backlog to and the been up a the in remote this in. remarks, part deployments. in our I'll extremely customers of their a so see million ISMS end $X.X coming a to we we lot three backlog are We of business rebound in higher. our particular but has up about with, with X.X, we X it's ramped and

Steve Bush

Thank Good you All I'll much. luck. off. Okay. right, very hop

Kirk Brannock

Thank you, Steve.

Operator

Investment We from Advisors. question have from a Marc Silk Silk

Marc Silk

go and Hi what's though cash market me in cap even a even a dual And trading to half is, it's aggressively and when the Steve nice set in their, a half usually the I market nice position, vote. hand cash issue think on when I attitude. I their the though and in nice usually this you of sizable at or I talk guys, one have the just is their really because is really is can believe companies of stopping he's from better. on is having My got value, are kind shareholders a buy. shares control the encouraged room is, congratulations turnaround. and I think I to elephant cap like get see people do really not go-get-them half more,

opportunity it's beneficial? that that feel the those maybe So not, two inhibit I just maybe If persuade why not XX% I can for the Zenga and only the Steve this was I early maybe since did impacting Because taken then. it to it's you think that two? month merge stock who him could say did was are and it's fair founder up think maybe it, stocks holders maybe they hoping merger publicly to they really shares. and this

I'd I would that I really So to come And this. because doing. out you and you happen see in are more want again, good just do something going believe figured add I I to and like thank luck what guys to comment, so make forward.

Kirk Brannock

Marc. Thanks

Meeting XXX% of those at up. will, around Chairman the agree that. that, I June. we John, I'm there discussion not we're in and day. will where a are that with looked the I I'll Board, than we positioned up done you one value bring with companies coming could was We've has been to It's Board There would there's that. I that As night extrapolated and I tell tend growing have have be Steve class happy of with today revenue. am a that shares. better if a much confident ago. year in you,

will given board comments grow to up your at it have revenue, the We seriously. up. fact it meeting bring that an to And the brought item as agenda the board next take but you back I

Marc Silk

feel like to I I see would of more commenting. like do kind And why this and said, I thank more, to you like appreciate I if beneficial. they it's but they But I like add would that. resolved you much. would know so no, I appreciate to say

Kirk Brannock

Marc. Thanks Okay.

Operator

to to this turn have John questions moment. would the We for I call Steve back further like closing no remarks. at

Alfred John

us Well, thanks everyone again today. for joining

growing great comments you. you forward. the I'm Westell, be be reporting better And speaking team. appreciate we to going again. you topline, I growing and to of with this look thrilled participation and welcome, thank our here part and as to mentioned, morning. Thank the this profitably I results be forward I'm continue As your on for focused move to at We

Operator

Ladies gentlemen, you you. Thank Thank and conference. today's for concludes this participating.

You disconnect. may now

Westell (WSTL) 24 May 182018 Q4 Earnings call transcript