Westell (WSTL) 14 Nov 192020 Q2 Earnings call transcript

Welcome to the Westell Fiscal Year 2020 Second Quarter Earnings Call. My name is Vanessa, and I will be your operator for today's call. 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.

I would now like to turn the call over to Jeniffer Jaynes, Westell's Interim Chief Financial Officer. begin. may you Jennifer

afternoon Good the welcome quarter fiscal The issued Westell Vanessa. westell.com. our call results our to Technologies. yesterday we release discuss year news posted morning, you, on to website, and conference for is Thank XXXX second

a Tim I with taking will results you our of this then will call, Chief for Officer and financial and questions. by Westell's update your Duitsman, On our we'll the and business President Executive begin discussion initiatives. conclude quarter, growth on

we please note that achievements, assumptions. and Before forward-looking management's identify such trend presentation statements otherwise. to forward-looking or intended expect, as such and reflect our current performance and statements. contain expectations, begin, are statements and similar should, believe, estimates about discussion future financial expressions Words results, These

are not results, Westell's cause of from those guarantees that and discussed. to materially future actual uncertainties and involve differ forward-looking These statements risks may performance achievements or performance

results that fiscal A in year description the the factors XX, SEC risk ended for the section, of our March may XXXX is including XX-K, Factors. company's under provided filings, Form Risk future affect

call. forward-looking The disclaims update information, presentation made in conference made obligation other being of any future date statements factors. any based statements or and on of or events this are revise the to time forward-looking as this Westell new

information investors. non-GAAP non-GAAP reporting periods. we Please across meaningful also The note, performance we the supplemental management present and in ongoing our measures operating provide believe and comparisons to non-GAAP releases because company's financial news facilitates information information core both reflects

reconciliations comparable measures to today will include most in Our financial GAAP release. non-GAAP We've results discussion provided measures. of our news the

to Tim. now will call turn I the over

everyone. and good morning, Thank you, Jeniffer

business non-public about well interim Andersen organizational accounting want at than good shown career experience a years. a accounting and as her few roles the judgment, Arthur Westell been Jeniffer Jeniffer, and has with in blend skills a auditor XX I begin, an Jeniffer is and more to of responsibilities. increasing for understands began say consistently with public Before She our I CPA with has CFO. and words senior finance expertise.

accounting confidence I we CFO. Jeniffer have can permanent look and handle while secure to team a complete matters that our

keep CFO process the evaluating candidates. actively as I will are you updated We continues.

my is taking with President about company to and as this the first actions me. return opportunity As of to the share profitability. you turn little we're speak to I most perspective to But bit CEO, on around a Westell's first, growth my and revenue and want

helped many I years President Vice was team. point, Westell Board Manager that new a Joining for history the developed that At that me. to decision have products, year worked and our out Products memories successfully revenue Westell in General June new homecoming and Telco this We profitability. run Westell, previously products for my business. that was at I of I played served company one of of many large a at Directors XX rejoin working in leading good business. of teams rolled Access what as the then grow Westell and part

Klein their known I growing product new At has Westell, company new new many through we most leadership and industry many years. the XX out centered rolled corporate the served at Tools for to growth Klein team tool and new tenure last in in sales. products over innovation the product led first at significant executive Tools, and now revenue that on profit Intermatic Tools strategy awards. is won my After recently similar Klein product a my new roles developed where

its to and CEO my to high speed CEO our connectivity Westell accepted quickly. challenges chose people. I monitoring. opportunities familiar The new summer, I with remote the the products the I time me of the August, spent I fiber public the and in I the Board President Westell helped bring because role of was in with we Directors role and for over When like safety, accept also face. brand regard for the up

innovative successfully healthy believe growth new is products return I experience -- Westell delivering to helping well addition, Westell In to and suited my in profitability.

the have working seen this in continuing followed. results As in across to product and we work to entire trend hard revenue you Since have safety, we second public I have downward recent Westell's our company trend. legacy urgently revenue, do. turn management lines expenses customer the team continued base. and reducing around. expanding on been broadly working Despite The joined increasing September, quarter growth profitability our declined is

direct results company. expenses. operating entire that Over the took we months two improve our our significant included October a restructuring the covered This actions to last by reducing in

result a to we quarterly non-GAAP the expect operating As down bring term. for under near to $X.X million expenses

on is public building Westell a are We want and right resources the IBW's to and a those products of offerings. committed new sharpening to our in business to to bring a that is to devoting touch our In-Building revenue particular timely safety key efforts. fashion. few I market focus Wireless more to in to

of of promising Class repeaters driven inventory and expanding lead new that agreement a that requiring jurisdictions with family local We're and market safety Public buildings. are our new our A a strong of times, is control public demand greater by business, in costs. manufacturing addressing coverage licensing number safety an of the successful provides demand commercial as introduction

We to fourth in fiscal expect under new to agreement our customers quarter. product begin shipping license this

safety us opportunity new addition, this affords offerings. product the In public our to expand agreement

this are deemphasizing of market. effort, we part refocusing related and OnGo activities our to CBRS As the

second sales moved market trials, increasingly product margins large inventory rollouts with payback. competitors, large at the investments accredited is We are large personnel. and resources projects and are half with delayed eroding, engineering into IBW We CBRS The are to field calendar XXXX. additional better other and looking of and those

a for fixed team sites. monitoring about the site provided cell The our developing new deployment We specifically business wireless. management the is opportunity designed accelerating by excited intelligent XG wireless and are opportunities the product of engineering small

ISM adjacent into expanding markets. are the business We also

we large deployment a one to revenue example, that monitoring generators in solution kicked custom recognize off that retailer, for remote our enables national continue at June. of backup As a

On connectivity products we and and connections side, quick CNS fiber broadband Internet deliver products. Things. continue with new to for the easy XG, Communication of fiber solution the reliable develop Solutions deployments These Network new

quarter, Last belowground the company discussed a vault solution.

moved that the two roll put customers we decided out solutions Our not on time. belowground resources those connectivity deliver this expect lead revenue. at delayed, hold that to development for were solution near-term Since to to projects network other we the fiber product and a

we to fiber in site connectivity and In-Building expand promising by our customer Westell's on monitoring new products Wireless, and for around In invest customers new base summary, the drive product bringing new and profitability most company expenses, intelligent are turn beginning we managing revenue areas. the developing to and while growth

that said, me turn call With let now Jennifer. to the back

our revenue. Thank key will beginning financial highlights on you, quarterly with results provide some I Tim.

For the quarter million, second XXXX, fiscal June segments. as XXXX, million revenue decreased total XX, $X.X three September the all XX, quarter first across revenue ended fiscal was $X ended compared in with

increases system Class than repeaters, to lower Our continue safety conditioners, customers IBW public but passive repeaters. segment those released by from components. more revenue active our embrace produced DAS and increased our commercial revenue offset from RF and conditioners newly highest public A DAS were Within revenue safety, to-date

revenue more units. monitoring In sales lower was than of offset the remote by ISM segment, support and higher agreement Optima software

the interface across was by Difficulty] the lower than segment, the revenue of TX For units network remainder from more [Technical CNS offset increased revenue

our Please by presenters. standing stand for we reconnect you by. while Thank

Our rejoined. speakers have

beginning Tim. the from from I will Sorry presentation with for the revenue. hand with you my the off quarterly highlights at technical results difficulties. top I some key will our begin provide of

For as all was million the segments. revenue compared September decreased across June second ended three $X.X the first XX, XXXX XXXX total quarter in quarter fiscal ended XX, fiscal with revenue million, $X

public lower newly IBW to-date from Our highest increased Within active those conditioners than DAS from and revenue released repeaters. system passive offset repeaters DAS and were continue safety Class but our A embrace segment commercial, revenue our RF by public safety, produced components. increases more customers to conditioners revenue

units. by and of The more revenue higher software offset ISM agreement segment than sales Optima remote lower support monitoring was

from network segment. CNS interface was revenue increased offset of the revenue by than segment, For the units lower TX across remainder the more

XX.X% at $X.X lower the in and charges customer product some obsolete of with margin to each compared margin it as million. preceding two in Excess high inventory in in and of costs excess Looking This quarter's inventory Consolidated were amounting also QX unexpected quarters. unusual rapid the shifts rest results. demand. was significant for the changes in was The obsolete the QX. technologies gross reflects reflected QX XX.X% operating in and

our and are the provision E&O to forward. and expect inventory believe moving We see assumptions we estimates lower underlying charges reasonable,

negative revenue. the in XX.X% been pressure the is lower because in remaining E&O primarily gross margin would absorption of and Excluding have on of XX.X% costs, QX. The fixed cost QX's margin QX effect

costs fixed We our have these addressed with October some restructuring. of

QX. million basis, million expenses were million operating GAAP in down QX. QX in On $X.X in a down $X.X non-GAAP $X operating $X.X QX, from million, were in expenses from

mentioned, and through operating than The statement QX. lower $X.X non-GAAP million, already offset near-term. compared than flow the to quarter expenses of was operating in GAAP once in expect QX which revenue resulted the lower with financial the Tim restructuring less were the impact completed October, actions full that As million reduce of we to per expense the gross for loss a $X.X in by in million more operating $X.X profit,

quarter. million $X.X $X.X million loss operating the in non-GAAP compared Our in prior was with QX

$X.X loss $X.X compared million, QX per QX per net was share share QX. in with in or million loss in or $X.XX compared net QX. with Non-GAAP share million $X.XX per GAAP $X.X in $X.X $X.XX per or $X.XX share or million was

result licensing quarter balance June operating during for with the $X.X items our sheet. XXXX, at for $XX.X to totaled a in On initial agreement the safety million the the $X in public non-cash Turning adjusted The the products. and used million was cash million million associated $XX.X the with XX, September payment loss compared XX. of cash

call time, we will this your the open questions. to At

Thank you.

have begin will first with now We Silk our from question-and-answer our Silk [Operator Marc question Instructions] Investments. We session.

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Silk. This Hi, Mr. Duitsman. is Tim

Hi, Tim.

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of quotes is pipeline growing rapidly. Our

out deployment, there? of see do fiber opportunities On kind you what your

to their got now, the We help X-level installations. to customers Tier one XG Right attach promising going. most is several

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it a So, It in way they're a product fits deploying fits the rapidly them. and then, exactly And the prototype turn product. it's generic around for we not that needs their that market.

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what you do you focusing to remote areas there? opportunities what regards see monitoring, on? In are And out

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to a But me of were let there. in questions it. base lot of the There get

And current largest is getting we problem This our to is to that the way I -- acceptable problem while expenses. going new products. think do the to our back our need we're is and growing trend grow revenue not revenue revenue. watching through

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Daniel will a to is shareholder. next our We proceed [ph] It comes from who question. Tonner

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see. I

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say understand management's which X.XX be that's years I hope now of -- about a would reach out? breakeven operation X.X end to to is that at goal years XXXX, you Did the fiscal of level I

year. a over little A

Okay.

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fiscal we reduce get the plan and can. the year. in trying there now, like third We're next there we or quarter right burn to of can fast get that But looks as rate as fourth

Got it.

Thank very much. right. Okay. you All

I Thank this I we in for closing over time. call no remarks. further Duitsman have Tim see to queue you, questions turn sir. the will at

of you all us joining today. for I thank

turn shareholder do up our As business have revenue to line around much is mentioned value. we highest Top priority. drive previously, to and growth the

and new connectivity remote developing safety, monitoring are We fiber public products.

new also and product in are customers particularly areas. ISM expanding the We to IBW

We look We our invest and the speaking you new forward most will in to promising with manage expenses strategically product areas. again.

our Thank you you, for This your conference. participation. ladies concludes thank gentlemen. and We

You may now disconnect.