AVNW - Earnings call transcript Q1 2021

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Operator

Good afternoon. Welcome to Aviat Networks First Quarter Fiscal 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. conference your the Mr. turn now over host, to I'd and of Keith President Finance Investor Fanneron, Vice Global Relations. you. Thank

may You begin.

Keith Fanneron

Thank you results conference and first call XXXX welcome and to Aviat webcast. Networks fiscal quarter

updated of our at our press Form today's You replay with website in two call can section release in www.aviatnetworks.com, find approximately and IR the investor a XX-Q, of along presentation hours.

who'll Aviat's company's review begin with Chang, on the first As will followed closing will our financial then for followed opening remarks strategy, the CEO our CFO, today, results. Pete on President and Q&A. Pete outlook Eric quarter, Smith, by by provide remarks and Aviat's

As assumptions, regarding reflect to business in drivers, per other webcast statements Aviat's and business, the call new products including, forward-looking call, and light as financial company's statements materially of only projections, and make limited Harbor, of involve in undertakes to statements. results cause from information of opinions uncertainties activity no the relating future economic of during expansions, COVID-XX these differ but or and revise revision today's forward-looking The statements different these forward-looking management may the this that public to new or impact These actual company make not the statements could and risks of regions. obligation Safe to, events. date any and

like other management the information. both at press non-GAAP and this tables GAAP website call Pete? supplemental and webcast, reference which financial to non-GAAP Please will of and turn I'd in available Pete. At GAAP release our therein over call the refer and financial to time, measures. today's to during IR reconciliation to Additionally, www.aviatnetworks.com include our financial section

Pete Smith

across everyone many a COVID-XX. the many everyone. for well, areas focus joining execution review to Thanks, our I record where yielded safe of to business. in continue us for quarter respects, quarter is and positive company and Keith what Thanks and face key the a challenges long-term results for afternoon, remaining good our we the was, as hope

the improving up efforts, increased execution, same EBITDA the from improved quarter, benefited million we in restructuring period mix. sales, quarter, $X.X well XXX% for on quarter year, of from full as fourth the at doubled than in a million over our first year or million. progress operational and XX% XXXX of the more fiscal During coming $X.X EBITDA quarter, equaled software sales our Adjusted versus adjusted and our up last XXXX reported $XX.X XX% as

quarter same $X.X million remains Our the balance year. fourth up up net from position sheet and from $XX.X strong cash million with the our period last

in we laser-focused I've costs, areas, increasing demonstrate on overall and increasing performance As on consistency revenue, to differentiation, being calls, and driving mentioned our four key improvements our value. ultimately striving Aviat's shareholder prior up focal are capturing by

XX% year-over-year, made quarter, ago XX% from sales year XX% partnership first on first increased progress and new with sequentially these fourth expansion and to X% American excellent quarter the growth, over fronts. execution, revenue revenue from wins, North to increased During almost all Due revenue XXXX quarter. improving the we strong quarter returning our international focused customer year-over-year.

we demonstrating quarter, XG, our the wins for viability the transport multi-band During solution offering. to differentiation for capture Aviat's our continued of with

interference a microwave total monitoring allows initial with to issues, of unlicensed the reliability analysis especially for multi-band Xe, of in uptime. multi-band with and box customer's gigabits band analysis, Frequency WiFi with key radio regulators interference received ownership orders system recently network in emergence costs. for Our lowers FAS increased customers which data of The the FAS, critical or unique solution cost and XX is the spectrum links, capacity operate single US. proprietary mission-critical work Assurance simplest microwave and our providing and Software, reducing provides Aviat necessary industry's reliability solution, software which our We customers a the provides microwave devices platform by to to regarding

focus Services I'd before, the growth. for we've long-term pleased As is key that software Software were solutions we benefit made our with forward And will a announcing mentioned while we our progress and look thus platform far, new customers. to

we released in us market, US mission-critical extra Additionally, our will segment. also high-power business the our radio important allow expand which this Federal into to

to improving realize of our $X.X make as and structure savings plans, to of on remain restructuring continue optimizing progress benefit team our cost announced members, million on of a to annual fiscal $X-plus We these and million our year cost savings currently significant result and of cost initiatives. track approximately to with partners. suppliers expect XXXX savings credit all other We Aviat and our

Before Eric, and me let a observations turning to couple over of the provide insights. call additional

networks team First, and first sales ever-growing for XG The backhaul both expand upon networks. continued drive quarter, American data business the during team Emerging North the working seize of perform with continues to unique the automation the complexity American to require the have our simplify hard to products and products core to that applications. the our and capacity differentiation. to XG growing services meet North solutions demand Aviat's

solutions the value Our challenges. the and innovations only broadband provide customers. the industry's continues rural AviatStore our the finally, in platform, to to to deliver e-commerce service parts and network XG meet all And to mobile leverage reliability, capacity of team operators'

where microwave the removing With from customers business. the AviatStore, quotes stacks products and margin receive online directly we're can Aviat's where purchase

business capitalize networks well that from rural for value economical are dis-intermediating in new satisfaction significant launched network subsidize $X believe billion We positioned seen infrastructure the over by and FCC billion billion growth the planned driven II the BXB in more and America CAF from rural billion rural broadband, this recently $XX growing digital business the and building provide fund there higher upgrading with the each to As year. already fund meaningful our customer auction to such, part we earlier to broadband opportunities we We've $XX customers. cost current the in a needs. rural current be to channel rural funding these in for rural $X.X on could sales chain and of upside opportunity of growth believe are

to growth Turning opportunities. international

Our team X commercial winning strategy, accounts, sales Tier to international telecom partnerships our we and our defending began includes, business, expanding value through reach new are which X Tier differentiated. new implement capturing where

regions, of more sales strategy, hiring our While, during of our Wen With reversing Europe, with for and regions, team Vice contracting ago President execution, fiscal coming We to Sales Sales trend some me international up international year we President let the its this Asia the XX% in the early with comments. the over the since first and new financials quarter, are of benefits things Africa turn see Steve Eric a Middle for the to Wen period, final starting of international further from to pay East to Aviat our revenues Steve great and international versus Vice Eric? international off, organization. welcome back the for Lien. call family support revenues look before that, Toteda, strategy strengthened to than To and of XXXX. our we forward our Pacific review

Eric Chang

good and Thank afternoon, you, everyone. Pete

our revenue first release. All of as period the and reported to line remarks total for my year, same some our all $X.X quarter can growth the noted of between quarter compared first network financial increase coming business. our quarter or quarter items, for last America, the quarter, the than International Form $XX.X XX.X% the to same year, driven fiscal We was for $XX.X found almost in same they otherwise. XXXX, revenue million the first returned comparisons revenue review million million first million at reading as will press North or of be an and an of XXXX $XX.X period by of are first last fiscal compared XX.X%. both unless last period million, for the total million as quarter to first comprised private of primarily $XX.X the year. During XX% increase through million from which $XX.X today, $X.X of highlights rather in I XX-Q

with first over the exited $XXX backlog also a We quarter million.

respectively, of gross for margin quarter XX.X% on non-GAAP strong, remained XX.X%, and to XXXX. than QX a basis, compared and First fiscal GAAP XX.X% XX.X%

cost million expenses initiatives restructuring operating savings first XX%, quarter at the Both operating XXXX, $XX were which expenses, million operating of plans, to in reduce compared down million $XX.X decreased the the and year. including restructuring to fiscal year. hiring and half the non-GAAP announced in year-over-year, a excludes, coming for last approximately XXXX, for and expenses compared slowdown GAAP of of to $XX.X second compensation impact due down in quarter First travel. primarily approximately charges XX% our Non-GAAP based implemented $XX.X million GAAP same were period last share

first last for share last period was the the compared Adjusted the at up first million, quarter year. $X.X $X.X for per the was income coming quarter reported non-GAAP same to $X.X a net in EPS million to last million the improvement XXX% period XXX%, $X.XX we from non-GAAP million, period with same EBITDA for share, same per $X.X quarter for year. First nearly compared year, $X.XX

$XX.X sheet, the no fiscal debt our at XXXX increased million our basis, onto million QX Moving XXXX. the outstanding. a and or balance loan with cash On cash cash cash net $X.X of QX end was from equivalents

our At XXXX. based on the was balance loan fiscal a call, borrowing we the $X of which AR fully is quarter, mentioned which on I last we our have As repaid facility, of fourth quarter earnings first base. the during end million, credit eligible

anticipate to to facility the be occur historical position, the course, Given to fiscal net time on would our and based cash time strong trends of quarter. position against timing delays, net credit first remainder improve the natural to, cash as which throughout may XXXX, of in subject from customer our we

to continue Pete we necessary. I'll some it that, So to comments. for the Pete? have to line, With back access turn if final that

Pete Smith

Thanks, Eric.

our we few and good for before This Aviat, are we long-term on a demonstrated Q&A. new that and a was comments for we strategy. up that quarter opening key Just initiatives executing can additional very

improved are We adjusted record those of put the higher financial fiscal also margin quarter since to on inception. operational than quarter was any other To EBITDA in XX.X%, for efforts this XXXX and context, the results first performance. demonstrated that quarter leading our company's

While clear is and our I'm executing we team do, is that to still far. proud it very lot collective thus efforts the have a work of of

principal the COVID-XX. overall of ahead, obviously concern the with being Looking business feel good impact potential the we about

Fortunately, during of field our we sites. lifted as significant first many uptick the service lockdowns saw had activities in been customers' quarter, in a

the anticipate some given do have COVID disconnects navigate we successfully as as these done we to arise, environment, they challenges While today. do expect we and to situations continue

current expect to grow fiscal environment, continue on the XXXX plans, the and compared made we EBITDA to fiscal Given as of we've XXXX. revenue market view strategic progress the adjusted so to our far business, our and overall

range the in $XXX in $XXX be to XXXX EBITDA adjusted million and million. fiscal for to to of of the be $XX revenue $XX anticipate currently range we Specifically, million to million

messages key investors and execution. remain Our takeaway for focus

greater Aviat's same, the to where expenses and ability path. to reductions, on profitability continue and shareholder bottom-line value. questions. and need expansion, must maintaining We drive the on Operator, margin deliver can momentum lower now have to plan to and this to for value. we demonstrated continue expense we shareholders. opportunities remain We growth, all And goals capitalize for grow, must the improvements our long-term we're ready meaningful we

Operator

question Research. from [Operator Theodore Hills of comes first with the Instructions] Your line Litchfield O'Neill

Theodore O'Neill

Congratulations on you. quarter. Thank incredible

Pete Smith

Thanks, Theo.

Theodore O'Neill

bottom that much revenue. did twice to the lines. haven't as time dropped add much With last you You

Pete Smith

Yeah.

Theodore O'Neill

if expenses. looks there for making for you? And year-over-year you're us operating that kind in plausible question of are are you like a could the what Eric, wondering highlights So headed it I give that was for sir, reduction

Eric Chang

fiscal costs So to two you remember, cut announced was we the plans. that the we operating cost fiscal and across sales right restructuring announced as And actually well. in of some the both goal 'XX of

more Our and least $X.X year, million, that to in should the target $X this we was see fiscal $X.X million, for 'XX, than line. we have expected about bottom annualized million in at

Pete Smith

catalytic expense a us as our control. to then you add know, to we to bit, And know, you for that was little tighten COVID have tightened,

the spent. more So being we prudent with that all we're dollars

Theodore O'Neill

in XG what win key Okay. customers the there? are we multi-band solution, do for drivers And, with Pete, a have the

Pete Smith

XG for drivers - key The

Theodore O'Neill

the For multi-band solution.

Pete Smith

Okay.

spectrum. high know, spectrum radios So we at And mobile to low use of can ownership. the you that's, having value multiple priced bands talk we in network switch as to about cost, where opposed there have deliver a a basically, more total are putting operators where we between of costs, cost is that higher you

allow inexpensively So out. much solution if you multi-band think about from a competition laid that operator price we is point any it, which economy class into an with make needed, of class to up first we for the the of at them bumped to we've operator, as analogy, or But kind then run business an for very possible. when our do as difficult our the airliner for

Theodore O'Neill

much very thanks Okay, -

Pete Smith

helpful. That

Theodore O'Neill

Yeah -

Pete Smith

you. Thank

Operator

questions [Operator Instructions] this further time. at And there are no

Pete Smith

closing. so Well I right. All will go to

So more confident to our team, gave and everyone that's enjoy thanks. feeling It know Thanks business we Aviat was suppliers we're guidance and we're on this the quarter. why on great a our in broadband and customers. our we to as opposed We XG and of mission-critical to everyone. quarter forward days. role to stay last business, about XX in Thanks, networks you and look to talking focused going the and

Operator

this conference We call. for thank gentlemen, conclude your today's and participation. Ladies does you

You may now disconnect.

Aviat Networks (AVNW) 8 Nov 202021 Q1 Earnings call transcript