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. | ||||||
September 30, 2015 | By: | /s/ Ralph Marimon | ||||
Name: | Ralph Marimon | |||||
Title: | Chief Financial Officer and Senior Vice President |
Exhibit No. Under Regulation S-K, Item 601 | Description | |
99.1 | Press Release, issued by Aviat Networks, Inc. on September 8, 2015 |
News Release | ![]() | |
www.aviatnetworks.com |
• | Revenue at $87.8 million |
• | Book to bill was above 1 |
• | GAAP Gross Margin at 21.3%; Non-GAAP Gross Margin at 21.4% |
• | GAAP Operating Expense at $23.9 million; Non-GAAP Operating Expense at $23.2 million |
• | GAAP Net Loss Attributable to Aviat Networks at $(1.6) million, or $(0.03) per share |
• | Non-GAAP Loss from Continuing Operations Attributable to Aviat Networks at $(5.0) million, or $(0.08) per share |
• | Revenue at $335.9 million |
• | GAAP Gross Margin at 24.0%; non-GAAP Gross Margin at 24.1% |
• | Non-GAAP Operating Expense at $99.4 million |
• | GAAP Net Loss Attributable to Aviat Networks of $(24.7) million, or $(0.40) per share |
• | Non-GAAP Loss from Continuing Operations Attributable to Aviat Networks of $(20.6) million, or $(0.33) per share |
• | $0.5 million of share-based compensation expense; |
• | $0.2 million of restructuring charges; and |
• | $0.1 million of amortization of purchased intangibles. |
• | $1.9 million of depreciation and amortization on property, plant and equipment; and |
• | $0.1 million of interest expense. |
• | Revenue in the range of $78 million to $83 million; |
• | Breakeven to positive Adjusted EBITDA; and |
• | Cash breakeven to cash generation. |
• | material weaknesses identified in our system of internal control and associated remediation efforts and investments and other actions needed to remedy those material weaknesses; |
• | continued price and margin 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 financial covenant requirements which could impact our liquidity; |
• | 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 results of restructuring efforts; |
• | the effects of currency and interest rate risks; and |
• | the impact of political turmoil in countries where we have significant business. |
Quarter Ended | Fiscal Year Ended | |||||||||||||||
July 3, 2015 | June 27, 2014* | July 3, 2015 | June 27, 2014* | |||||||||||||
(In millions, except per share amounts) | ||||||||||||||||
Revenue from product sales and services | $ | 87.8 | $ | 85.4 | $ | 335.9 | $ | 346.0 | ||||||||
Cost of product sales and services | 69.1 | 66.0 | 255.2 | 260.8 | ||||||||||||
Gross margin | 18.7 | 19.4 | 80.7 | 85.2 | ||||||||||||
Research and development expenses | 6.0 | 8.0 | 25.4 | 35.5 | ||||||||||||
Selling and administrative expenses | 17.6 | 21.4 | 76.0 | 88.8 | ||||||||||||
Amortization of intangible assets | 0.1 | 0.1 | 0.4 | 0.4 | ||||||||||||
Restructuring charges | 0.2 | 2.1 | 4.9 | 11.1 | ||||||||||||
Operating loss | (5.2 | ) | (12.2 | ) | (26.0 | ) | (50.6 | ) | ||||||||
Interest income | 0.1 | 0.1 | 0.4 | 0.5 | ||||||||||||
Interest expense | (0.1 | ) | (0.1 | ) | (0.4 | ) | (0.4 | ) | ||||||||
Loss from continuing operations before income taxes | (5.2 | ) | (12.2 | ) | (26.0 | ) | (50.5 | ) | ||||||||
Provision for (benefit from) income taxes | (3.7 | ) | 1.3 | (1.3 | ) | 1.5 | ||||||||||
Loss from continuing operations | (1.5 | ) | (13.5 | ) | (24.7 | ) | (52.0 | ) | ||||||||
Income from discontinued operations, net of tax | 0.0 | 0.2 | 0.1 | 0.9 | ||||||||||||
Net loss | (1.5 | ) | (13.3 | ) | (24.6 | ) | (51.1 | ) | ||||||||
Less: Net income attributable to noncontrolling interests, net of tax | 0.1 | — | 0.1 | — | ||||||||||||
Net loss attributable to Aviat Networks | $ | (1.6 | ) | $ | (13.3 | ) | $ | (24.7 | ) | $ | (51.1 | ) | ||||
Amount attributable to Aviat Networks: | ||||||||||||||||
Net loss from continuing operations, net of tax | $ | (1.6 | ) | $ | (13.5 | ) | $ | (24.8 | ) | $ | (52.0 | ) | ||||
Net income from discontinued operations, net of tax | $ | 0.0 | $ | 0.2 | $ | 0.1 | $ | 0.9 | ||||||||
Loss per share attributable to Aviat Networks stockholders, basic and diluted: | ||||||||||||||||
Continuing operations | $ | (0.03 | ) | $ | (0.22 | ) | $ | (0.40 | ) | $ | (0.84 | ) | ||||
Discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.01 | ||||||||
Net loss | $ | (0.03 | ) | $ | (0.21 | ) | $ | (0.40 | ) | $ | (0.83 | ) | ||||
Weighted average shares outstanding, basic and diluted | 62.4 | 61.9 | 62.2 | 61.6 |
* | Revised to include a $0.4 million increase and a $0.1 million decrease in cost of services for the fourth quarter and fiscal year 2014, respectively, reflecting effects of the corrections to accrued cost of services revenue. |
July 3, 2015 | June 27, 2014* | |||||||
(In millions) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 34.7 | $ | 48.8 | ||||
Receivables, net | 88.2 | 77.2 | ||||||
Unbilled costs | 17.3 | 23.8 | ||||||
Inventories | 32.9 | 38.1 | ||||||
Customer service inventories | 6.2 | 11.4 | ||||||
Other current assets | 16.5 | 18.9 | ||||||
Property, plant and equipment, net | 24.3 | 29.3 | ||||||
Identifiable intangible assets, net | — | 0.4 | ||||||
Other assets | 9.3 | 5.3 | ||||||
$ | 229.4 | $ | 253.2 | |||||
Liabilities and Stockholders' Equity | ||||||||
Short-term debt | $ | 9.0 | $ | 6.0 | ||||
Accounts payable | 46.6 | 46.1 | ||||||
Accrued expenses and other current liabilities | 31.3 | 36.2 | ||||||
Advanced payments and unearned income | 41.7 | 33.3 | ||||||
Long-term liabilities | 16.9 | 19.7 | ||||||
Stockholders' equity | 83.9 | 111.9 | ||||||
$ | 229.4 | $ | 253.2 |
* | Revised to include a $9.3 million decrease in accrued expenses and other current liabilities and stockholders' equity as of June 27, 2014, reflecting effects of the corrections to accrued cost of service revenue. |
Fiscal Year Ended | |||||||
July 3, 2015 | June 27, 2014* | ||||||
(In millions) | |||||||
Operating Activities | |||||||
Net loss | $ | (24.6 | ) | $ | (51.1 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Amortization of identifiable intangible assets | 0.4 | 0.4 | |||||
Depreciation and amortization of property, plant and equipment | 7.2 | 7.1 | |||||
Bad debt expense | 0.9 | 0.8 | |||||
Share-based compensation expense | 2.2 | 3.4 | |||||
Deferred income taxes benefit | (4.7 | ) | (0.3 | ) | |||
Charges for inventory and customer service inventory write-downs | 9.3 | 7.2 | |||||
Loss (gain) on disposal of property, plant and equipment | 0.4 | (0.1 | ) | ||||
Gain on disposition of the WiMAX business | (0.1 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Receivables | (13.5 | ) | 8.2 | ||||
Unbilled costs | 6.1 | 5.1 | |||||
Inventories | (1.9 | ) | (7.0 | ) | |||
Customer service inventories | 2.3 | 1.5 | |||||
Accounts payable | 1.6 | (2.7 | ) | ||||
Accrued expenses | (4.1 | ) | (6.5 | ) | |||
Advance payments and unearned income | 9.3 | 14.6 | |||||
Income taxes payable or receivable | 1.4 | (11.9 | ) | ||||
Other assets and liabilities | (1.2 | ) | 2.0 | ||||
Net cash used in operating activities | (9.0 | ) | (29.3 | ) | |||
Investing Activities | |||||||
Additions of property, plant and equipment | (3.7 | ) | (9.4 | ) | |||
Net cash used in investing activities | (3.7 | ) | (9.4 | ) | |||
Financing Activities | |||||||
Proceeds from debt | 54.0 | — | |||||
Repayments of debt | (51.0 | ) | (2.8 | ) | |||
Issuance of common stock under employee stock plans | — | 0.1 | |||||
Payments on capital lease obligations | (0.1 | ) | (0.1 | ) | |||
Net cash provided by (used in) financing activities | 2.9 | (2.8 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (4.3 | ) | 0.3 | ||||
Net Decrease in Cash and Cash Equivalents | (14.1 | ) | (41.2 | ) | |||
Cash and Cash Equivalents, Beginning of Period | 48.8 | 90.0 | |||||
Cash and Cash Equivalents, End of Period | $ | 34.7 | $ | 48.8 |
* | Revised to include $0.1 million increase in net loss and $0.1 million increase in changes in accrued expenses for fiscal 2014, reflecting effects of the corrections to accrued cost of service revenue. This had no impact on cash used in operating activities. |
Quarter Ended | Fiscal Year Ended | |||||||||||||||||||||||||||
July 3, 2015 | % of Revenue | June 27, 2014(2) | % of Revenue | July 3, 2015 | % of Revenue | June 27, 2014(2) | % of Revenue | |||||||||||||||||||||
(In millions, except percentages and per share amounts) | ||||||||||||||||||||||||||||
GAAP gross margin | $ | 18.7 | 21.3 | % | $ | 19.4 | 22.7 | % | $ | 80.7 | 24.0 | % | $ | 85.2 | 24.6 | % | ||||||||||||
Share-based compensation | 0.1 | — | 0.2 | 0.1 | ||||||||||||||||||||||||
E&O inventory write down | — | 1.2 | — | 1.2 | ||||||||||||||||||||||||
Warehouse consolidation costs | — | — | — | 0.2 | ||||||||||||||||||||||||
Non-GAAP gross margin | 18.8 | 21.4 | % | 20.6 | 24.1 | % | 80.9 | 24.1 | % | 86.7 | 25.1 | % | ||||||||||||||||
GAAP research and development expenses | $ | 6.0 | 6.8 | % | $ | 8.0 | 9.4 | % | $ | 25.4 | 7.6 | % | $ | 35.5 | 10.3 | % | ||||||||||||
Share-based compensation | — | (0.1 | ) | (0.1 | ) | (0.3 | ) | |||||||||||||||||||||
Non-GAAP research and development expenses | 6.0 | 6.8 | % | 7.9 | 9.3 | % | 25.3 | 7.5 | % | 35.2 | 10.2 | % | ||||||||||||||||
GAAP selling and administrative expenses | $ | 17.6 | 20.0 | % | $ | 21.4 | 25.1 | % | $ | 76.0 | 22.6 | % | $ | 88.8 | 25.7 | % | ||||||||||||
Share-based compensation | (0.4 | ) | (0.5 | ) | (1.9 | ) | (3.0 | ) | ||||||||||||||||||||
Transactional taxes assessments | — | — | — | (0.6 | ) | |||||||||||||||||||||||
Non-GAAP selling and administrative expenses | 17.2 | 19.6 | % | 20.9 | 24.5 | % | 74.1 | 22.1 | % | 85.2 | 24.6 | % | ||||||||||||||||
GAAP operating loss | $ | (5.2 | ) | (5.9 | )% | $ | (12.2 | ) | (14.3 | )% | $ | (26.0 | ) | (7.7 | )% | $ | (50.6 | ) | (14.6 | )% | ||||||||
Share-based compensation | 0.5 | 0.6 | 2.2 | 3.4 | ||||||||||||||||||||||||
E&O inventory write down | — | 1.2 | — | 1.2 | ||||||||||||||||||||||||
Warehouse consolidation costs | — | — | — | 0.2 | ||||||||||||||||||||||||
Transactional taxes assessments | — | — | — | 0.6 | ||||||||||||||||||||||||
Amortization of intangible assets | 0.1 | 0.1 | 0.4 | 0.4 | ||||||||||||||||||||||||
Restructuring charges | 0.2 | 2.1 | 4.9 | 11.1 | ||||||||||||||||||||||||
Non-GAAP operating loss | (4.4 | ) | (5.0 | )% | (8.2 | ) | (9.6 | )% | (18.5 | ) | (5.5 | )% | (33.7 | ) | (9.7 | )% | ||||||||||||
GAAP income tax provision (benefit) | $ | (3.7 | ) | (4.2 | )% | $ | 1.3 | 1.5 | % | $ | (1.3 | ) | (0.4 | )% | $ | 1.5 | 0.4 | % | ||||||||||
Adjustment to reflect pro forma tax rate | 4.2 | (0.8 | ) | 3.3 | 0.5 | |||||||||||||||||||||||
Non-GAAP income tax provision | 0.5 | 0.6 | % | 0.5 | 0.6 | % | 2.0 | 0.6 | % | 2.0 | 0.6 | % | ||||||||||||||||
GAAP loss from continuing operations attributable to Aviat Networks | $ | (1.6 | ) | (1.8 | )% | $ | (13.5 | ) | (15.8 | )% | $ | (24.8 | ) | (7.4 | )% | $ | (52.0 | ) | (15.0 | )% | ||||||||
Share-based compensation | 0.5 | 0.6 | 2.2 | 3.4 | ||||||||||||||||||||||||
E&O inventory write down | — | 1.2 | — | 1.2 | ||||||||||||||||||||||||
Warehouse consolidation costs | — | — | — | 0.2 | ||||||||||||||||||||||||
Transactional taxes assessments | — | — | — | 0.6 | ||||||||||||||||||||||||
Amortization of intangible assets | 0.1 | 0.1 | 0.4 | 0.4 | ||||||||||||||||||||||||
Restructuring charges | 0.2 | 2.1 | 4.9 | 11.1 | ||||||||||||||||||||||||
Adjustment to reflect pro forma tax rate | (4.2 | ) | 0.8 | (3.3 | ) | (0.5 | ) | |||||||||||||||||||||
Non-GAAP loss from continuing operations attributable to Aviat Networks | $ | (5.0 | ) | (5.7 | )% | $ | (8.7 | ) | (10.2 | )% | $ | (20.6 | ) | (6.1 | )% | $ | (35.6 | ) | (10.3 | )% | ||||||||
Loss per share from continuing operations attributable to Aviat Networks stockholders, basic and diluted: | ||||||||||||||||||||||||||||
GAAP | $ | (0.03 | ) | $ | (0.22 | ) | $ | (0.40 | ) | $ | (0.84 | ) | ||||||||||||||||
Non-GAAP | $ | (0.08 | ) | $ | (0.14 | ) | $ | (0.33 | ) | $ | (0.58 | ) | ||||||||||||||||
Weighted average shares outstanding, basic and diluted: | ||||||||||||||||||||||||||||
GAAP | 62.4 | 61.9 | 62.2 | 61.6 | ||||||||||||||||||||||||
Non-GAAP | 62.4 | 61.9 | 62.2 | 61.6 | ||||||||||||||||||||||||
Quarter Ended | Fiscal Year Ended | |||||||||||||||||||||||||||
July 3, 2015 | % of Revenue | June 27, 2014(2) | % of Revenue | July 3, 2015 | % of Revenue | June 27, 2014(2) | % of Revenue | |||||||||||||||||||||
(In millions, except percentages and per share amounts) | ||||||||||||||||||||||||||||
ADJUSTED EBITDA: | ||||||||||||||||||||||||||||
GAAP loss from continuing operations attributable to Aviat Networks | $ | (1.6 | ) | (1.8 | )% | $ | (13.5 | ) | (15.8 | )% | $ | (24.8 | ) | (7.4 | )% | $ | (52.0 | ) | (15.0 | )% | ||||||||
Depreciation and amortization of property, plant and equipment | 1.9 | 1.8 | 7.2 | 7.1 | ||||||||||||||||||||||||
Interest expense | 0.1 | 0.1 | 0.4 | 0.4 | ||||||||||||||||||||||||
Share-based compensation | 0.5 | 0.6 | 2.2 | 3.4 | ||||||||||||||||||||||||
E&O inventory write down | — | 1.2 | — | 1.2 | ||||||||||||||||||||||||
Warehouse consolidation costs | — | — | — | 0.2 | ||||||||||||||||||||||||
Transactional taxes assessments | — | — | — | 0.6 | ||||||||||||||||||||||||
Amortization of intangible assets | 0.1 | 0.1 | 0.4 | 0.4 | ||||||||||||||||||||||||
Restructuring charges | 0.2 | 2.1 | 4.9 | 11.1 | ||||||||||||||||||||||||
Provision for (benefit from) income taxes | (3.7 | ) | 1.3 | (1.3 | ) | 1.5 | ||||||||||||||||||||||
Adjusted EBITDA | $ | (2.5 | ) | (2.8 | )% | $ | (6.3 | ) | (7.4 | )% | $ | (11.0 | ) | (3.3 | )% | $ | (26.1 | ) | (7.5 | )% |
(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 attributable to Aviat Networks excluded share-based compensation, E&O inventory write down, warehouse consolidation costs, transactional taxes assessments, amortization of intangible assets, restructuring charges and adjustment to reflect pro forma tax rate. Adjusted EBITDA attributable to Aviat Networks was determined by excluding depreciation and amortization on property, plant and equipment, interest expense, provision for or benefit from income taxes, and non-GAAP pre-tax adjustments, as set forth above, from the GAAP income from continuing operations attributable to Aviat Networks. 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. |
(2) | Revised to include a $0.4 million increase and a $0.1 million decrease in cost of services for the fourth quarter and fiscal year 2014, respectively, reflecting effects of the corrections to accrued cost of services revenue. |
Quarter Ended | Fiscal Year Ended | |||||||||||||||
July 3, 2015 | June 27, 2014 | July 3, 2015 | June 27, 2014 | |||||||||||||
(In millions) | ||||||||||||||||
North America | $ | 38.5 | $ | 37.2 | $ | 153.2 | $ | 142.0 | ||||||||
International: | ||||||||||||||||
Africa and Middle East | 27.9 | 24.2 | 97.1 | 108.9 | ||||||||||||
Europe and Russia | 7.9 | 7.9 | 36.0 | 36.0 | ||||||||||||
Latin America and Asia Pacific | 13.5 | 16.1 | 49.6 | 59.1 | ||||||||||||
49.3 | 48.2 | 182.7 | 204.0 | |||||||||||||
Total Revenue | $ | 87.8 | $ | 85.4 | $ | 335.9 | $ | 346.0 |
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