Aviat Networks Announces Fiscal First Quarter 2013 Financial Results

     Aviat Networks Announces Fiscal First Quarter 2013 Financial Results

PR Newswire

SANTA CLARA, Calif., Nov. 1, 2012

SANTA CLARA, Calif., Nov. 1, 2012 /PRNewswire/ -- Aviat Networks, Inc.
(NASDAQ: AVNW), a leading expert in microwave networking solutions, today
reported financial results for the first quarter of fiscal year 2013, which
ended September 28, 2012.

Financial Highlights for Q1FY13

  oBook to Billat 1
  oRevenue for the quarter was near the top of guidance range at $115.0M
  oGAAP Gross Margin of 29.3%; Non-GAAP Gross Margin was above the mid-point
    of guidance range at 29.6%
  oGAAP Net Loss including discontinued operations was $(2.2)M or $(0.04) per
    share; Non-GAAP Net Income from continuing operations of $2.8M or $0.05
    per share

GAAP Financial Results

For the first quarter of fiscal year 2013, revenue was $115.0 million,
compared with $111.4 million in the year-ago quarter. Revenue and results of
operations from our WiMAX business are classified as discontinued operations
for all periods presented. The Company reported a net loss, including
discontinued operations, of $(2.2) million or $(0.04) per share, compared with
a net loss of $(6.8) million or $(0.12) per share in the year-ago quarter.
Loss from continuing operations for the quarter was $(0.8) million or $(0.01)
per share, compared with the loss from continuing operations of $(3.7) million
or $(0.06) per share in the year-ago quarter.

Cash and cash equivalents were $85.1 million as of September 28, 2012 compared
with $96.0 million as of the end of the prior quarter. The decrease in cash
was due to a delay in the timing of a number of large collections that were
recovered during the month of October 2012.

Non-GAAP Financial Results

Non-GAAP income from continuing operations for the quarter was $2.8 million or
$0.05 per share, compared with a non-GAAP income from continuing operations of
$0.1 million, or $0.00 per share, in the year-ago quarter. Adjusted EBITDA was
$4.7 million compared with $1.3 million in the year ago period.

The first quarter of fiscal year 2013 non-GAAP results excluded $2.7 million
of pre-tax charges composed primarily of the following:

  o$1.5 million for share-based compensation expense
  o$0.3 million for amortization of purchased intangibles
  o$0.6 million for transactional tax assessments
  o$0.3 million of restructuring charges

The first quarter of fiscal year 2013 non-GAAP results also excluded an income
tax provision of $0.9 million. Loss from discontinued operations, net of taxes
was $(1.4) million for the quarter. A reconciliation of GAAP to non-GAAP
financial measures for the quarter comparison with the year-ago period is
provided on Table 4 along with the accompanying notes.

First Quarter Revenue by Region

Revenue in the North America region was $38.7 million in the first quarter of
fiscal 2013, compared with $37.1 million in the year-ago quarter and $40.7
million in the prior quarter. International revenue was $76.3 million,
compared with $74.3 million in the year ago quarter and $75.3 million in the
prior quarter.

"We are very pleased with our first quarter results and now are beginning to
get traction with our new products and the resulting total cost of ownership
benefits to our customers," said Michael Pangia, president and CEO, Aviat
Networks. "I am increasingly confident that we are on the right track to
profitably expand our business and create shareholder value."

Outlook

Based on current trends, the second quarter of fiscal 2013 revenue outlook
range is $115M-$120M. Non-GAAP gross margins in the quarter are expected to be
in the range of 29.5%-30.5% and non-GAAP operating expenses are expected to be
in the $31.0-$32.0M range Our expectation is that we will restore our cash and
equivalents balances in the coming quarters to levels observed at the end of
the previous fiscal year.

Conference Call Details

Aviat Networks, Inc. will host a conference call today at 4:30 p.m. Eastern
Time to discuss the Company's financial results. Those wishing to join the
call should dial 480-629-9645 or toll free at 800-762-8779 access code 4557175
at approximately 4:20 p.m. Eastern Time. A replay also will be available
starting approximately one hour after the completion of the call until
November 21, 2012. To access the replay, dial 303-590-3030 or toll free at
800-406-7325 access code 4557175. A live and archived webcast of the
conference call will also be available via the Company's Web site at
http://investors.aviatnetworks.com/events.cfm.

Non-GAAP Measures and Comparative Financial Information

Aviat Networks, Inc. reports information in accordance with U.S. Generally
Accepted Accounting Principles ("GAAP"). Management of Aviat Networks monitors
gross margin, research and development expenses, selling and administrative
expenses, operating income or loss, income tax provision or benefit, income or
loss from continuing operations, basic and diluted income or loss per share
from continuing operations, adjusted earnings before interest, tax,
depreciation and amortization ("EBITDA") on a non-GAAP basis for planning and
forecasting results in future periods, and may use these measures for some
management compensation purposes. These measures exclude certain costs,
expenses, gains and losses as shown on the attached Reconciliation of Non-GAAP
Financial Measures table. As a result, management is presenting these non-GAAP
measures in addition to results reported in accordance with GAAP to better
communicate underlying operational and financial performance in each period.
Management believes these non-GAAP measures provide information that is useful
to investors in understanding period-over-period operating results separate
and apart from items that may, or could, have a disproportionate positive or
negative impact on results in any given period. Management also believes that
these non-GAAP measures enhance the ability of an investor to analyze trends
in Aviat Networks' business and to better understand our performance.

Aviat Networks' management does not, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from, or as a
substitute for, financial information prepared in accordance with GAAP. Aviat
Networks presents such non-GAAP financial measures in reporting its financial
results to provide investors with an additional tool to evaluate the Company's
financial performance. Reconciliations of these non-GAAP financial measures
with the most directly comparable financial measures calculated in accordance
with GAAP are included in the tables below.

About Aviat Networks

Aviat Networks, Inc. (NASDAQ: AVNW) is a leading global provider of microwave
networking solutions transforming communications networks to handle the
exploding growth of IP-centric, multi-Gigabit data services. With more than
750,000 systems installed around the world, Aviat Networks provides LTE-proven
microwave networking solutions to mobile operators, including some of the
largest and most advanced 4G/LTE networks in the world. Public safety,
utility, government and defense organizations also trust Aviat Networks'
solutions for their mission-critical applications where reliability is
paramount. In conjunction with its networking solutions, Aviat Networks
provides a comprehensive suite of localized professional and support services
enabling customers to effectively and seamlessly migrate to next generation
Carrier Ethernet/IP networks. For more than 50 years, customers have relied on
Aviat Networks' high performance and scalable solutions to help them maximize
their investments and solve their most challenging network problems.
Headquartered in Santa Clara, California, Aviat Networks operates in 46
countries around the world. For more information, visit
www.aviatnetworks.comor connect with Aviat Networks on Twitter, Facebook and
LinkedIn.

Forward-Looking Statements

The information contained in this document includes forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
Section 21E of the Securities Exchange Act and Section 27A of the Securities
Act. All statements, trend analyses and other information contained herein
about the markets for the services and products of Aviat Networks, Inc. and
trends in revenue, as well as other statements identified by the use of
forward-looking terminology, including "anticipates," "believe," "plan,"
"estimate," "expect," "goal," "will," "see," "continues," "delivering,"
"view," and "intend," or the negative of these terms or other similar
expressions, constitute forward-looking statements. These forward-looking
statements are based on estimates reflecting the current beliefs of the senior
management of Aviat Networks. These forward-looking statements involve a
number of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements.
Forward-looking statements should therefore be considered in light of various
important factors, including those set forth in this document. Important
factors that could cause actual results to differ materially from estimates or
projections contained in the forward-looking statements include the following:

  ocontinued price erosion as a result of increased competition in the
    microwave transmission industry;
  othe impact of the volume, timing and customer, product and geographic mix
    of our product orders;
  oour ability to meet projected new product development dates or anticipated
    cost reductions of new products;
  oour suppliers' inability to perform and deliver on time as a result of
    their financial condition, component shortages or other supply chain
    constraints;
  ocustomer acceptance of new products;
  othe ability of our subcontractors to timely perform;
  ocontinued weakness in the global economy affecting customer spending;
  oretention of our key personnel;
  oour ability to manage and maintain key customer relationships;
  ouncertain economic conditions in the telecommunications sector combined
    with operator and supplier consolidation;
  othe timing of our receipt of payment for products or services from our
    customers;
  oour failure to protect our intellectual property rights or defend against
    intellectual property infringement claims by others;
  othe effects of currency and interest rate risks; and
  othe impact of political turmoil in countries where we have significant
    business.

For more information regarding the risks and uncertainties for our business,
see "Risk Factors" in our Form 10-K filed with the U.S. Securities and
Exchange Commission ("SEC") on September 4, 2012 as well as other reports
filed by Aviat Networks, Inc. with the SEC from time to time. Aviat Networks
undertakes no obligation to update publicly any forward-looking statement for
any reason, except as required by law, even as new information becomes
available or other events occur in the future.

Financial Tables to Follow:





Table 1

AVIAT NETWORKS, INC.

Fiscal Year 2013 First Quarter Summary

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


                                       Quarter Ended
                                       September28, 2012   September30, 2011
                                       (In millions, except per share amounts)
Revenue from product sales and         $     115.0          $    111.4
services
Cost of product sales and services     81.1                 78.5
Amortization of purchased technology   0.2                  0.2
Gross margin                           33.7                 32.7
Research and development expenses      9.3                  9.0
Selling and administrative expenses    22.7                 24.6
Amortization of intangible assets      0.1                  0.7
Restructuring charges                  0.3                  0.9
Operating income (loss)                1.3                  (2.5)
Other expenses, net                    (0.6)                —
Interest income                        0.3                  0.2
Interest expense                       (0.3)                (0.4)
Income (loss) from continuing          0.7                  (2.7)
operations before income taxes
Provision for income taxes             1.5                  1.0
Loss from continuing operations        (0.8)                (3.7)
Loss from discontinued operations,     (1.4)                (3.1)
net of tax
Net loss                               $     (2.2)          $    (6.8)
Basic and diluted net loss per common
share:
Continuing operations                  $     (0.01)         $    (0.06)
Discontinued operations                $     (0.02)         $    (0.05)
Net loss per common share              $     (0.04)         $    (0.12)
Basic and diluted weighted average     59.3                 58.8
shares outstanding





Table 2

AVIAT NETWORKS, INC.

Fiscal Year 2013 First Quarter Summary

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


                                             September28, 2012  June 29, 2012
                                             (In millions)
Assets
Cash and cash equivalents                    $     85.1          $   96.0
Receivables, net                             109.3               90.7
Unbilled costs                               21.0                25.9
Inventories                                  52.9                56.8
Customer service inventories                 18.4                18.5
Other current assets                         15.4                16.7
Property, plant and equipment, net           21.5                21.7
Identifiable intangible assets, net          1.5                 1.8
Other assets                                 1.5                 1.5
                                             $     326.6         $   329.6
Liabilities and Stockholders' Equity
Current portion of long-term debt            $     4.1           $   4.1
Accounts payable                             58.8                51.6
Accrued expenses and other current           89.2                99.7
liabilities
Long-term debt                               7.7                 8.8
Reserve for uncertain tax positions
                                             9.2                 7.9
 and other long-term liabilities
Stockholders' equity                         157.6               157.5
                                             $     326.6         $   329.6



Table 3

AVIAT NETWORKS, INC.

Fiscal Year 2013 First Quarter Summary

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


                                   Quarter Ended
                                   September 28, 2012  September 30, 2011 ^(1)
                                   (In millions)
Operating Activities
Net loss                           $     (2.2)         $      (6.8)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Amortization of identifiable       0.3                 0.9
intangible assets
Depreciation and amortization of   1.6                 0.8
property, plant and equipment
Bad debt expenses                  1.1                 0.5
Share-based compensation expense   1.5                 1.0
Deferred income tax expense        1.5                 —
Charges for inventory write-downs  0.8                 1.4
Loss on disposition of the WiMAX   —                   2.0
business
Changes in operating assets and
liabilities:
Receivables                        (19.7)              7.8
Unbilled costs                     4.9                 (3.4)
Inventories                        3.2                 0.2
Customer service inventories       —                   (0.1)
Accounts payable                   7.1                 (8.6)
Accrued expenses                   (8.5)               (0.7)
Advance payments and unearned      (0.8)               (5.5)
income
Income taxes payable or receivable (0.5)               0.5
Other assets and liabilities       0.5                 3.8
Net cash used in operating         (9.2)               (6.2)
activities
Investing Activities
Cash disbursed related to sale of  (0.1)               (0.6)
WiMAX business, net
Additions of property, plant and   (1.3)               (2.8)
equipment
Net cash used in investing         (1.4)               (3.4)
activities
Financing Activities
Payments on long-term debt         (1.0)               —
Net cash used in financing         (1.0)               —
activities
Effect of exchange rate changes on 0.7                 (1.0)
cash and cash equivalents
Net Decrease in Cash and Cash      (10.9)              (10.6)
Equivalents
Cash and Cash Equivalents,         96.0                98.2
Beginning of Period
Cash and Cash Equivalents, End of  $     85.1          $      87.6
Period
(1) Certain prior year period amounts are reclassified to conform to current
period presentation.



AVIAT NETWORKS, INC.
Quarter Ended September28, 2012 Summaries
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE
To supplement the consolidated financial statements presented in accordance
with accounting principles generally accepted in the United States ("GAAP"),
we provide additional measures of gross margin, research and development
expenses, selling and administrative expenses, operating income or loss, other
income or loss, income tax provision or benefit, income or loss from
continuing operations, basic and diluted income or loss per share from
continuing operations, and adjusted earnings before interest, tax,
depreciation and amortization ("EBITDA"), adjusted to exclude certain costs,
charges, gains and losses. We believe that these non-GAAP financial measures,
when considered together with the GAAP financial measures provide information
that is useful to investors in understanding period-over-period operating
results separate and apart from items that may, or could, have a
disproportionate positive or negative impact on results in any particular
period. We also believe these non-GAAP measures enhance the ability of
investors to analyze trends in our business and to understand our performance.
In addition, we may utilize non-GAAP financial measures as a guide in our
forecasting, budgeting and long-term planning process and to measure operating
performance for some management compensation purposes. Any analysis of
non-GAAP financial measures should be used only in conjunction with results
presented in accordance with GAAP. Reconciliations of these non-GAAP
financial measures with the most directly comparable financial measures
calculated in accordance with GAAP follow.



Table 4

AVIAT NETWORKS, INC.

Fiscal Year 2013 First Quarter Summary

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (1)

Condensed Consolidated Statements of Operations

(Unaudited)


                     Quarter Ended
                                             % of        September    % of
                     September28, 2012                  30, 2011
                                             Revenue                  Revenue
                     (In millions, except % and per share amounts)
GAAP gross margin    $     33.7              29.3   %    $  32.7      29.4  %
Share-based          0.1                                 0.1
compensation
Write-off of excess
and obsolete         —                                   0.1
inventories
Amortization of      0.2                                 0.2
purchased technology
Non-GAAP gross       $     34.0              29.6   %    $  33.1      29.7  %
margin
GAAP research and    $     9.3               8.1    %    $  9.0       8.1   %
development expenses
Share-based          (0.3)                               (0.2)
compensation
Non-GAAP research
and development      $     9.0               7.8    %    $  8.8       7.9   %
expenses
GAAP selling and
administrative       $     22.7              19.7   %    $  24.6      22.1  %
expenses
Share-based          (1.1)                               (0.6)
compensation
Non-GAAP selling and
administrative       $     21.6              18.8   %    $  24.0      21.5  %
expenses
GAAP operating       $     1.3               1.1    %    $  (2.5)     (2.2) %
income (loss)
Share-based          1.5                                 0.9
compensation
Write-off of excess
and obsolete         —                                   0.1
inventories
Amortization of      0.2                                 0.2
purchased technology
Amortization of      0.1                                 0.7
intangible assets
Restructuring        0.3                                 0.9
charges
Non-GAAP operating   $     3.4               3.0    %    $  0.3       0.3   %
income
GAAP interest and    $     (0.6)             (0.5)  %    $  (0.2)     (0.2) %
other expense, net
Transactional tax
assessments and      0.6                                 —
other
Non-GAAP interest
and other expense,   $     —                 —      %    (0.2)        (0.2) %
net
GAAP income tax      $     1.5               1.3    %    $  1.0       0.9   %
provision
Adjustment to
reflect pro forma    (0.9)                               (1.0)
tax rate
Non-GAAP income tax  $     0.6               0.5    %    $  —         —     %
provision
GAAP loss from
continuing           $     (0.8)             (0.7)  %    $  (3.7)     (3.3) %
operations
Share-based          1.5                                 0.9
compensation
Write-off of excess
and obsolete         —                                   0.1
inventories
Amortization of      0.2                                 0.2
purchased technology
Amortization of      0.1                                 0.7
intangible assets
Restructuring        0.3                                 0.9
charges
Transactional tax
assessments and      0.6                                 —
other
Adjustment to
reflect pro forma    0.9                                 1.0
tax rate
Non-GAAP income from
continuing           $     2.8               2.4    %    $  0.1       0.1   %
operations
Basic and diluted
income (loss) per
share from
continuing
operations
GAAP                 $     (0.01)                        $  (0.06)
Non-GAAP             $     0.05                          $  —
Shares used in
computing income
(loss) per share
from continuing
operations
GAAP - basic and     59.3                                58.8
diluted
Non-GAAP - basic     61.3                                60.4
Non-GAAP - diluted   61.4                                60.4
GAAP loss from
continuing           $     (0.8)             (0.7)  %    $  (3.7)     (3.3) %
operations
Depreciation and
amortization of      1.6                                 0.8
property, plant and
equipment
Interest expense     0.3                                 0.4
Share-based          1.5                                 0.9
compensation
Write-off of excess
and obsolete         —                                   0.1
inventories
Amortization of      0.2                                 0.2
purchased technology
Amortization of      0.1                                 0.7
intangible assets
Restructuring        0.3                                 0.9
charges
Transactional tax
assessments and      0.6                                 —
other
Adjustment to
reflect pro forma    0.9                                 1.0
tax rate
Adjusted EBITDA      $     4.7               4.1    %    $  1.3       1.2   %


(1) The adjustments above reconcile our GAAP financial results to the non-GAAP
financial measures used by us. Our non-GAAP financial measures exclude
share-based compensation, write-off of excess and obsolete inventory,
amortization of purchased technology, amortization of intangible assets,
restructuring charges, transactional tax assessments, adjustment to reflect
pro forma tax rate, depreciation and amortization of property, plant and
equipment and interest expense. 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.





Table 5

AVIAT NETWORKS, INC.

Fiscal Year 2013 First Quarter Summary

SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA

(Unaudited)


                                Quarter Ended
                                September28, 2012  September30, 2011
                                (in millions)
North America                   $     38.7          $     37.1
International:
Africa and Middle East          49.0                42.7
Europe and Russia               12.4                12.4
Latin America and Asia Pacific  14.9                19.2
                                76.3                74.3
Total Revenue                   $     115.0         $     111.4





SOURCE Aviat Networks, Inc.

Website: http://www.aviatnetworks.com
Contact: Ned Hayes, Aviat Networks, Inc., +1-408-567-7120,
Ned.Hayes@aviatnet.com
 
Press spacebar to pause and continue. Press esc to stop.