Delaware | 001-33278 | 20-5961564 | ||
(State or other jurisdiction | (Commission File | (I.R.S. Employer | ||
of incorporation) | Number) | Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition |
Item 7.01 Regulation FD Disclosure |
Item 9.01 Financial Statements and Exhibits |
SIGNATURE |
EX-99.1 |
AVIAT NETWORKS, INC. | ||||||
January 30, 2013 | By: | /s/ Edward J. Hayes, Jr. | ||||
Name: | Edward J. Hayes, Jr. | |||||
Title: | Senior Vice President and Chief Financial Officer |
Exhibit No. Under Regulation S-K, Item 601 | Description | |
99.1 | Press Release, issued by Aviat Networks, Inc. on January 30, 2013 |
• | Revenue for the quarter exceeded the top-end of the Company's guidance range at $129.0 million |
• | Orders greater than revenue |
• | GAAP Gross Margin of 30.0%; Non-GAAP Gross Margin was within the guidance range at 30.2% |
• | GAAP Operating Expense of $33.8 million; Non-GAAP Operating Expense was within the guidance range at $31.8 million |
• | GAAP Net Loss including discontinued operations was $(5.3) million or $(0.09) per share; Non-GAAP Net Income from continuing operations of $6.5 million or $0.11 per diluted share |
• | $1.8 million for share-based compensation expense |
• | $0.3 million for amortization of purchased intangibles |
• | $0.2 million of restructuring charges |
• | continued price erosion as a result of increased competition 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 projected new product development dates or anticipated cost reductions of new products; |
• | our suppliers' inability to perform and deliver on time as a result of their financial condition, component shortages or other supply chain constraints; |
• | customer acceptance of new products; |
• | the ability of our subcontractors to timely perform; |
• | continued 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; |
• | the timing of our receipt of payment for products or services from our customers; |
• | our failure to protect our intellectual property rights or defend against intellectual property infringement claims by others; |
• | the effects of currency and interest rate risks; and |
• | the impact of political turmoil in countries where we have significant business. |
Quarter Ended | Two Quarters Ended | |||||||||||||||
December 28, 2012 | December 30, 2011 (1) | December 28, 2012 | December 30, 2011 (1) | |||||||||||||
(In millions, except per share amounts) | ||||||||||||||||
Revenue from product sales and services | $ | 129.0 | $ | 105.0 | $ | 244.0 | $ | 216.4 | ||||||||
Cost of product sales and services | 90.3 | 73.1 | 171.6 | 151.8 | ||||||||||||
Gross margin | 38.7 | 31.9 | 72.4 | 64.6 | ||||||||||||
Research and development expenses | 9.8 | 8.8 | 19.1 | 17.8 | ||||||||||||
Selling and administrative expenses | 23.7 | 25.3 | 46.4 | 49.9 | ||||||||||||
Amortization of intangible assets | 0.1 | 0.7 | 0.2 | 1.4 | ||||||||||||
Goodwill impairment charges | — | 5.6 | — | 5.6 | ||||||||||||
Restructuring charges | 0.2 | 0.1 | 0.5 | 1.0 | ||||||||||||
Operating income (loss) | 4.9 | (8.6 | ) | 6.2 | (11.1 | ) | ||||||||||
Other expenses, net | — | (0.3 | ) | (0.6 | ) | (0.3 | ) | |||||||||
Interest income | 0.2 | 0.1 | 0.5 | 0.3 | ||||||||||||
Interest expense | (0.2 | ) | (0.4 | ) | (0.5 | ) | (0.8 | ) | ||||||||
Income (loss) from continuing operations before income taxes | 4.9 | (9.2 | ) | 5.6 | (11.9 | ) | ||||||||||
Provision for income taxes | 9.9 | 0.8 | 11.4 | 1.8 | ||||||||||||
Loss from continuing operations | (5.0 | ) | (10.0 | ) | (5.8 | ) | (13.7 | ) | ||||||||
Loss from discontinued operations, net of tax | (0.3 | ) | (2.8 | ) | (1.7 | ) | (5.9 | ) | ||||||||
Net loss | $ | (5.3 | ) | $ | (12.8 | ) | $ | (7.5 | ) | $ | (19.6 | ) | ||||
Loss per common share, basic and diluted: | ||||||||||||||||
Continuing operations | $ | (0.08 | ) | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.23 | ) | ||||
Discontinued operations | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.10 | ) | ||||
Net loss | $ | (0.09 | ) | $ | (0.22 | ) | $ | (0.13 | ) | $ | (0.33 | ) | ||||
Weighted average shares outstanding, basic and diluted | 60.0 | 59.0 | 59.7 | 58.9 |
(1) | Certain prior year period amounts are reclassified to conform to current period presentation. |
December 28, 2012 | June 29, 2012 | |||||||
(In millions) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 94.8 | $ | 96.0 | ||||
Receivables, net | 99.1 | 90.7 | ||||||
Unbilled costs | 16.8 | 25.9 | ||||||
Inventories | 56.4 | 56.8 | ||||||
Customer service inventories | 17.5 | 18.5 | ||||||
Other current assets | 17.2 | 16.7 | ||||||
Property, plant and equipment, net | 22.7 | 21.7 | ||||||
Identifiable intangible assets, net | 1.3 | 1.8 | ||||||
Other assets | 1.3 | 1.5 | ||||||
$ | 327.1 | $ | 329.6 | |||||
Liabilities and Stockholders' Equity | ||||||||
Current portion of long-term debt | $ | 4.1 | $ | 4.1 | ||||
Accounts payable | 42.4 | 51.6 | ||||||
Accrued expenses and other current liabilities | 100.7 | 99.7 | ||||||
Long-term debt | 6.7 | 8.8 | ||||||
Reserve for uncertain tax positions and other long-term liabilities | 19.0 | 7.9 | ||||||
Stockholders' equity | 154.2 | 157.5 | ||||||
$ | 327.1 | $ | 329.6 |
Two Quarters Ended | |||||||
December 28, 2012 | December 30, 2011 | ||||||
(In millions) | |||||||
Operating Activities | |||||||
Net loss | $ | (7.5 | ) | $ | (19.6 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Amortization of identifiable intangible assets | 0.5 | 1.7 | |||||
Depreciation and amortization of property, plant and equipment | 2.9 | 2.1 | |||||
Goodwill impairment charges | — | 5.6 | |||||
Bad debt expenses | 2.0 | 1.9 | |||||
Share-based compensation expense | 3.3 | 2.3 | |||||
Deferred income tax expense | 11.4 | — | |||||
Charges for inventory write-downs | 1.6 | 2.6 | |||||
Loss on disposition of the WiMAX business | — | 2.0 | |||||
Changes in operating assets and liabilities: | |||||||
Receivables | (10.3 | ) | 17.4 | ||||
Unbilled costs | 9.1 | (1.0 | ) | ||||
Inventories | (0.8 | ) | 7.2 | ||||
Customer service inventories | 0.6 | 0.3 | |||||
Accounts payable | (9.6 | ) | (28.0 | ) | |||
Accrued expenses | (8.4 | ) | 1.8 | ||||
Advance payments and unearned income | 11.4 | (8.7 | ) | ||||
Income taxes payable or receivable | (1.2 | ) | 1.1 | ||||
Other assets and liabilities | (1.5 | ) | 3.8 | ||||
Net cash provided by (used in) operating activities | 3.5 | (7.5 | ) | ||||
Investing Activities | |||||||
Cash disbursed related to sale of WiMAX business, net | — | (1.2 | ) | ||||
Additions of property, plant and equipment | (3.6 | ) | (3.4 | ) | |||
Net cash used in investing activities | (3.6 | ) | (4.6 | ) | |||
Financing Activities | |||||||
Payments on long-term debt | (2.1 | ) | — | ||||
Proceeds from share-based compensation awards | 0.1 | — | |||||
Net cash used in financing activities | (2.0 | ) | — | ||||
Effect of exchange rate changes on cash and cash equivalents | 0.9 | (1.8 | ) | ||||
Net Decrease in Cash and Cash Equivalents | (1.2 | ) | (13.9 | ) | |||
Cash and Cash Equivalents, Beginning of Period | 96.0 | 98.2 | |||||
Cash and Cash Equivalents, End of Period | $ | 94.8 | $ | 84.3 |
Quarter Ended | Two Quarters Ended | |||||||||||||||||||||||||||
December 28, 2012 (1) | % of Revenue | December 30, 2011 (1) | % of Revenue | December 28, 2012 (1) | % of Revenue | December 30, 2011 (1) | % of Revenue | |||||||||||||||||||||
(In millions, except percentages and per share amounts) | ||||||||||||||||||||||||||||
GAAP gross margin | $ | 38.7 | 30.0 | % | $ | 31.9 | 30.4 | % | $ | 72.4 | 29.7 | % | $ | 64.6 | 29.9 | % | ||||||||||||
Share-based compensation | 0.1 | 0.2 | 0.2 | 0.3 | ||||||||||||||||||||||||
Write-off of deferred inventory and E&O costs | — | 0.9 | — | 1.0 | ||||||||||||||||||||||||
Amortization of purchased technology | 0.2 | 0.1 | 0.4 | 0.3 | ||||||||||||||||||||||||
Non-GAAP gross margin | 39.0 | 30.2 | % | 33.1 | 31.5 | % | 73.0 | 29.9 | % | 66.2 | 30.6 | % | ||||||||||||||||
GAAP research and development expenses | $ | 9.8 | 7.6 | % | $ | 8.8 | 8.4 | % | $ | 19.1 | 7.8 | % | $ | 17.8 | 8.2 | % | ||||||||||||
Share-based compensation | (0.5 | ) | (0.3 | ) | (0.8 | ) | (0.5 | ) | ||||||||||||||||||||
Non-GAAP research and development expenses | 9.3 | 7.2 | % | 8.5 | 8.1 | % | 18.3 | 7.5 | % | 17.3 | 8.0 | % | ||||||||||||||||
GAAP selling and administrative expenses | $ | 23.7 | 18.4 | % | $ | 25.3 | 24.1 | % | $ | 46.4 | 19.0 | % | $ | 49.9 | 23.1 | % | ||||||||||||
Share-based compensation | (1.2 | ) | (0.9 | ) | (2.3 | ) | (1.5 | ) | ||||||||||||||||||||
Other nonrecurring charges | — | (0.4 | ) | — | (0.4 | ) | ||||||||||||||||||||||
Non-GAAP selling and administrative expenses | 22.5 | 17.4 | % | 24.0 | 22.9 | % | 44.1 | 18.1 | % | 48.0 | 22.2 | % | ||||||||||||||||
GAAP operating income (loss) | $ | 4.9 | 3.8 | % | $ | (8.6 | ) | (8.2 | )% | $ | 6.2 | 2.5 | % | $ | (11.1 | ) | (5.1 | )% | ||||||||||
Share-based compensation | 1.8 | 1.4 | 3.3 | 2.3 | ||||||||||||||||||||||||
Write-off of excess and obsolete inventories | — | 0.9 | — | 1.0 | ||||||||||||||||||||||||
Amortization of purchased technology | 0.2 | 0.1 | 0.4 | 0.3 | ||||||||||||||||||||||||
Other nonrecurring charges | — | 0.4 | — | 0.4 | ||||||||||||||||||||||||
Amortization of intangible assets | 0.1 | 0.7 | 0.2 | 1.4 | ||||||||||||||||||||||||
Goodwill impairment charges | — | 5.6 | — | 5.6 | ||||||||||||||||||||||||
Restructuring charges | 0.2 | 0.1 | 0.5 | 1.0 | ||||||||||||||||||||||||
Non-GAAP operating income | 7.2 | 5.6 | % | 0.6 | 0.6 | % | 10.6 | 4.3 | % | 0.9 | 0.4 | % | ||||||||||||||||
GAAP other expense, net | $ | — | — | % | $ | (0.6 | ) | (0.6 | )% | $ | (0.6 | ) | (0.2 | )% | $ | (0.8 | ) | (0.4 | )% | |||||||||
Transactional taxes assessments | — | 0.3 | 0.6 | 0.3 | ||||||||||||||||||||||||
Non-GAAP other expense, net | — | — | % | (0.3 | ) | (0.3 | )% | — | — | % | (0.5 | ) | (0.2 | )% | ||||||||||||||
GAAP income tax provision | $ | 9.9 | 7.7 | % | $ | 0.8 | 0.8 | % | $ | 11.4 | 4.7 | % | $ | 1.8 | 0.8 | % | ||||||||||||
Adjustment to reflect pro forma tax rate | (9.2 | ) | (0.8 | ) | (10.1 | ) | (1.8 | ) | ||||||||||||||||||||
Non-GAAP income tax provision | 0.7 | 0.5 | % | — | — | % | 1.3 | 0.5 | % | — | — | % | ||||||||||||||||
GAAP loss from continuing operations | $ | (5.0 | ) | (3.9 | )% | $ | (10.0 | ) | (9.5 | )% | $ | (5.8 | ) | (2.4 | )% | $ | (13.7 | ) | (6.3 | )% | ||||||||
Share-based compensation | 1.8 | 1.4 | 3.3 | 2.3 | ||||||||||||||||||||||||
Write-off of excess and obsolete inventories | — | 0.9 | — | 1.0 | ||||||||||||||||||||||||
Amortization of purchased technology | 0.2 | 0.1 | 0.4 | 0.3 | ||||||||||||||||||||||||
Other nonrecurring charges | — | 0.4 | — | 0.4 | ||||||||||||||||||||||||
Amortization of intangible assets | 0.1 | 0.7 | 0.2 | 1.4 | ||||||||||||||||||||||||
Goodwill impairment charges | — | 5.6 | — | 5.6 | ||||||||||||||||||||||||
Restructuring charges | 0.2 | 0.1 | 0.5 | 1.0 | ||||||||||||||||||||||||
Transactional taxes assessments | — | 0.3 | 0.6 | 0.3 | ||||||||||||||||||||||||
Adjustment to reflect pro forma tax rate | 9.2 | 0.8 | 10.1 | 1.8 | ||||||||||||||||||||||||
Non-GAAP income from continuing operations | $ | 6.5 | 5.0 | % | $ | 0.3 | 0.3 | % | $ | 9.3 | 3.8 | % | $ | 0.4 | 0.2 | % | ||||||||||||
Income (loss) per share from continuing operations | ||||||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||||||
GAAP | $ | (0.08 | ) | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.23 | ) | ||||||||||||||||
Non-GAAP | $ | 0.11 | $ | — | $ | 0.15 | $ | 0.01 | ||||||||||||||||||||
Diluted: | ||||||||||||||||||||||||||||
GAAP | $ | (0.08 | ) | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.23 | ) | ||||||||||||||||
Non-GAAP | $ | 0.11 | $ | — | $ | 0.15 | $ | 0.01 | ||||||||||||||||||||
Shares used in computing income (loss) per share from continuing operations | ||||||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||||||
GAAP | 60.0 | 59.0 | 59.7 | 58.9 | ||||||||||||||||||||||||
Non-GAAP | 61.2 | 61.1 | 61.2 | 60.7 | ||||||||||||||||||||||||
Diluted: |
GAAP | 60.0 | 59.0 | 59.7 | 58.9 | ||||||||||||||||||||||||
Non-GAAP | 61.5 | 61.1 | 61.4 | 60.7 | ||||||||||||||||||||||||
Quarter Ended | Two Quarters Ended | |||||||||||||||||||||||||||
ADJUSTED EBITA: | December 28, 2012 (1) | % of Revenue | December 30, 2011 (1) | % of Revenue | December 28, 2012 (1) | % of Revenue | December 30, 2011 (1) | % of Revenue | ||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||||
GAAP loss from continuing operations | $ | (5.0 | ) | (3.9 | )% | $ | (10.0 | ) | (9.5 | )% | $ | (5.8 | ) | (2.4 | )% | $ | (13.7 | ) | (6.3 | )% | ||||||||
Depreciation and amortization of property, plant and equipment | 1.3 | 0.8 | 2.9 | 2.1 | ||||||||||||||||||||||||
Interest expense | 0.2 | 0.4 | 0.5 | 0.8 | ||||||||||||||||||||||||
Share-based compensation | 1.8 | 1.4 | 3.3 | 2.3 | ||||||||||||||||||||||||
Write-off of excess and obsolete inventories | — | 0.9 | — | 1.0 | ||||||||||||||||||||||||
Amortization of purchased technology | 0.2 | 0.1 | 0.4 | 0.3 | ||||||||||||||||||||||||
Other nonrecurring charges | — | 0.4 | — | 0.4 | ||||||||||||||||||||||||
Amortization of intangible assets | 0.1 | 0.7 | 0.2 | 1.4 | ||||||||||||||||||||||||
Goodwill impairment charges | — | 5.6 | — | 5.6 | ||||||||||||||||||||||||
Restructuring charges | 0.2 | 0.1 | 0.5 | 1.0 | ||||||||||||||||||||||||
Transactional tax assessments | — | 0.3 | 0.6 | 0.3 | ||||||||||||||||||||||||
Adjustment to reflect pro forma tax rate | 9.9 | 0.8 | 11.4 | 1.8 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 8.7 | 6.7 | % | $ | 1.5 | 1.4 | % | $ | 14.0 | 5.7 | % | $ | 3.3 | 1.5 | % |
(1) | The adjustments above reconcile our GAAP financial results to the non-GAAP financial measures used by us. Our non-GAAP income or loss from continuing operations excluded share-based compensation, write-off of excess and obsolete inventory, amortization of purchased technology, amortization of intangible assets, goodwill impairment charges, restructuring charges, transactional tax assessments, and adjustment to reflect pro forma tax rate. Adjusted EBITDA was determined by excluding depreciation and amortization on property, plant and equipment, interest expense, provision for income taxes, and non-GAAP pre-tax adjustments, as set forth above, from the GAAP income from continuing operations. 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. |
Quarter Ended | Two Quarters Ended | ||||||||||||||||
December 28, 2012 | December 30, 2011 | December 28, 2012 | December 30, 2011 | ||||||||||||||
(in millions) | |||||||||||||||||
North America | $ | 41.4 | $ | 44.2 | $ | 80.1 | $ | 81.2 | |||||||||
International: | |||||||||||||||||
Africa and Middle East | 63.9 | 24.0 | 112.9 | 66.7 | |||||||||||||
Europe and Russia | 9.2 | 15.8 | 21.6 | 28.2 | |||||||||||||
Latin America and Asia Pacific | 14.5 | 21.0 | 29.4 | 40.3 | |||||||||||||
87.6 | 60.8 | 163.9 | 135.2 | ||||||||||||||
Total Revenue | $ | 129.0 | $ | 105.0 | $ | 244.0 | $ | 216.4 |