WESTELL TECHNOLOGIES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 18, 2016

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Exhibit 99.1
 
NEWS RELEASE


Westell Technologies Reports Fiscal Fourth Quarter 2016 Results

Year-over-year revenue grew 12% to $20.9 million

AURORA, IL, May 18, 2016 – Westell Technologies, Inc. (NASDAQ: WSTL), a leading provider of in-building wireless, intelligent site management, cell site optimization, and outside plant solutions, today announced results for its fiscal 2016 fourth quarter ended March 31, 2016 (4Q16). Management will host a conference call to discuss financial and business results tomorrow, Thursday, May 19, 2016 at 9:30 AM Eastern Time (details below).
Consolidated revenue for 4Q16 was $20.9 million, up 12% year-over-year and 3% on a sequential quarter basis, and consisted of $5.8 million from the In-Building Wireless (IBW) segment and $15.1 million from the Communication Solutions Group (CSG) segment. Consolidated revenue for fiscal year 2016 (FY16) grew 5% to $88.2 million. More significantly, gross margin increased year-over-year from 31.9% in FY15 to 39.1% in FY16.
“CSG delivered strong 4Q16 results, with segment revenue up 31% on both a year-over-year and sequential quarter basis, led by solid performances from our Intelligent Site Management (ISM) and Outside Plant (OSP) product areas. While IBW was affected by the integration of our Distributed Antennas System (DAS) Conditioner products into larger network elements, we anticipate future IBW growth from our new ClearLink DAS and from enhancements to our Repeater product line,” said Tom Gruenwald, Chairman, CEO, and President of Westell Technologies.

“FY16 was a year of powerful change for Westell, during which we successfully launched our multi-phase ‘fix-build-expand’ turnaround plan. Under new leadership, we gained positive momentum in transforming several key areas of the business, most notably a significant upgrade of our sales organization, a more effective supply chain, and the establishment of a CTO (Chief Technology Office) function. While we face headwinds with the decline of some of our late-lifecycle products, we are firmly focused on returning the Company to profitability through continued scrutiny of expenses and structure, and the introduction of new products,” Gruenwald said.
Total cash and short-term investments were $29.7 million at March 31, 2016, compared to $34.8 million at December 31, 2015. The use of cash increased when compared to each of the three previous quarters primarily due to a revenue pattern weighted more towards the latter part of the quarter, resulting in a higher customer receivable balance at March 31, 2016.




4Q16 Performance
 
4Q16
3Q16
4Q15
4Q16
4Q16
3 months ended
3 months ended
3 months ended
vs.
vs.
03/31/16
12/31/15
03/31/15
3Q16
4Q15
Consolidated Revenue
$20.9M
$20.2M
$18.6M
+3%
+12%
Gross Margin
37.8%
39.4%
25.1%
-1.6%
+12.7%
Net Income (Loss)
($5.1M)
($4.8M)
($13.0M)
($0.3M)
$7.9M
Earnings (Loss) Per Share
($0.08)
($0.08)
($0.22)
$—
$0.14
Non-GAAP Earnings (Loss) Per Share (1)
($0.04)
($0.05)
($0.09)
$0.01
$0.05
(1)  Please refer to the schedule at the end of this press release for a complete GAAP to non-GAAP reconciliation and other information related to non-GAAP financial measures.

FY16 Performance
 
FY16
FY15
FY16
12 months ended
12 months ended
vs.
03/31/16
03/31/15
FY15
Consolidated Revenue
$88.2M
$84.1M
+5%
Gross Margin
39.1%
31.9%
+7.2%
Net Income (Loss)
($16.2M)
($58.9M)
$42.7M
Earnings (Loss) Per Share
($0.27)
($0.98)
$0.71
Non-GAAP Earnings (Loss) Per Share (1)
($0.14)
($0.20)
$0.06
(1)  Please refer to the schedule at the end of this press release for a complete GAAP to non-GAAP reconciliation and other information related to non-GAAP financial measures.

In-Building Wireless (IBW) Segment
IBW’s 4Q16 revenue performance year-over-year and on a sequential quarter basis was largely indicative of a market shifting away from stand-alone DAS conditioners, as the function served by these devices are increasingly integrated into larger network elements. IBW’s 4Q16 gross margin improvement compared to 4Q15 was primarily due to lower excess and obsolete inventory costs, and decrease compared to 3Q16 was principally a result of the change in segment revenue.
 
4Q16
3Q16
4Q15
4Q16
4Q16
3 months ended
3 months ended
3 months ended
vs.
vs.
03/31/16
12/31/15
03/31/15
3Q16
4Q15
IBW Segment Revenue
$5.8M
$8.7M
$7.1M
-33%
-18%
IBW Segment Gross Margin
35.6%
38.2%
23.0%
-2.6%
+12.6%
IBW Segment R&D Expense
$2.4M
$2.7M
$2.3M
($0.3M)
$0.1M
IBW Segment Profit (Loss)
($0.3M)
$0.6M
($0.7M)
($0.9M)
$0.4M

Communication Solutions Group (CSG) Segment
CSG’s 4Q16 year-over-year revenue growth was due to increased ISM revenue and significantly higher OSP revenue, while the same growth level on a sequential quarter basis was due to the significantly higher OSP




revenue and increased sales of Tower Mounted Amplifiers. OSP achieved its highest quarterly revenue level since the June 2013 quarter, driven predominately by sales of Integrated Cabinets. CSG’s 4Q16 gross margin improvement compared to 4Q15 was primarily due to lower excess and obsolete inventory costs, and decrease compared to 3Q16 was mainly due to a less favorable mix.
 
4Q16
3Q16
4Q15
4Q16
4Q16
3 months ended
3 months ended
3 months ended
vs.
vs.
03/31/16
12/31/15
03/31/15
3Q16
4Q15
CSG Segment Revenue
$15.1M
$11.5M
$11.5M
+31%
+31%
CSG Segment Gross Margin
38.6%
40.3%
26.4%
-1.7%
+12.2%
CSG Segment R&D Expense
$2.3M
$2.2M
$1.9M
$0.1M
$0.4M
CSG Segment Profit (Loss)
$3.5M
$2.5M
$1.1M
$1.0M
$2.4M

Conference Call Information
Management will discuss financial and business results during the quarterly conference call on Thursday, May 19, 2016, at 9:30 AM Eastern Time. Investors may quickly register online in advance of the call at https://www.conferenceplus.com/westell. After registering, participants receive dial-in numbers, a passcode and a registration ID that is used to uniquely identify their presence and automatically join them into the audio conference. A participant may also register by telephone on May 19 by dialing 888-206-4073 no later than 9:15 AM Eastern Time and providing the operator confirmation number 41589143.
This news release and related information that may be discussed on the conference call, will be posted on the Investor Relations section of Westell's website: http://www.westell.com. A digital recording of the entire conference will be available for replay on Westell's website by approximately 1:00 PM Eastern Time after the call ends.

About Westell
Westell Technologies, Inc. is a leading provider of in-building wireless, intelligent site management, cell site optimization, and outside plant solutions focused on innovation and differentiation at the edge of telecommunication networks, where end users connect. The Company's comprehensive set of products and solutions enable service providers and network operators to improve network performance and reduce operating expenses. With millions of products successfully deployed worldwide, Westell is a trusted partner for transforming networks into high quality, reliable systems. For more information, please visit www.westell.com.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
Certain statements contained herein that are not historical facts or that contain the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” “will,” “plan,” “should,” or derivatives thereof and other words of similar meaning are forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those expressed in or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, product demand and market acceptance risks, customer spending patterns, need for financing and capital, economic weakness in the United States (“U.S.”) economy and telecommunications market, the effect of international economic conditions and trade, legal, social and economic risks (such as import, licensing and trade restrictions), the impact of competitive products or technologies, competitive pricing pressures, customer product selection decisions, product cost increases, component supply shortages, new product development, excess and obsolete inventory, commercialization and technological delays or difficulties (including delays or difficulties in developing, producing, testing and selling new products and technologies), the ability to successfully consolidate and rationalize operations, the ability to




successfully identify, acquire and integrate acquisitions, the effect of the Company's accounting policies, retention of key personnel and other risks more fully described in the Company's SEC filings, including the Form 10-K/A for the fiscal year ended March 31, 2015, under Item 1A - Risk Factors. The Company undertakes no obligation to publicly update these forward-looking statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, or otherwise.

Financial Tables to Follow:





Westell Technologies, Inc.
Condensed Consolidated Statement of Operations
(Amounts in thousands, except per share amounts)
(Unaudited)
 
 
Three months ended
 
Twelve months ended
 
 
 
March 31, 2016
 
December 31, 2015
 
March 31, 2015
 
March 31, 2016
 
March 31, 2015
 
Revenue
 
$
20,904

 
$
20,215

 
$
18,613

 
$
88,203

 
$
84,127

 
Gross profit
 
7,893

 
7,963

 
4,666

 
34,516

 
26,810

 
Gross margin
 
37.8
%
 
39.4
%
 
25.1
%
 
39.1
%
 
31.9
%
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Research & development
 
4,713

 
4,893

 
4,220

 
19,317

 
17,348

 
Sales & marketing
 
4,608

 
3,900

 
3,343

 
15,817

 
12,407

 
General & administrative
 
1,747

 
2,627

 
5,547

 
9,836

 
14,678

 
Intangibles amortization
 
1,305

 
1,418

 
1,520

 
5,554

 
6,377

 
Restructuring
 
731

(1) 
—

 
3,188

(2) 
748

(1) 
3,243

(2) 
Goodwill impairment (3)
 
—

 
—

 
—

 
—

 
31,997

 
Total operating expenses
 
13,104

 
12,838

 
17,818

 
51,272

 
86,050

 
Operating income (loss) from continuing operations
 
(5,211
)
 
(4,875
)
 
(13,152
)
 
(16,756
)
 
(59,240
)
 
Other income (expense), net
 
107

 
85

 
(18
)
 
169

 
(2
)
 
Income (loss) before income taxes and discontinued operations
 
(5,104
)
 
(4,790
)
 
(13,170
)
 
(16,587
)
 
(59,242
)
 
Income tax benefit (expense)
 
27

 
(7
)
 
31

 
102

 
201

 
Net income (loss) from continuing operations
 
(5,077
)
 
(4,797
)
 
(13,139
)
 
(16,485
)
 
(59,041
)
 
Income (loss) from discontinued operations, net of income tax (4)
 
1

 
—

 
139

 
273

 
139

 
Net income (loss)
 
$
(5,076
)
 
$
(4,797
)
 
$
(13,000
)
 
$
(16,212
)
 
$
(58,902
)
 
Basic and diluted net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted net income (loss) from continuing operations
 
$
(0.08
)
 
$
(0.08
)
 
$
(0.22
)
 
$
(0.27
)
 
$
(0.98
)
 
Basic and diluted net income (loss) from discontinued operations
 
—

 
—

 
—

 
—

 
—

 
Basic and diluted net income (loss)
 
$
(0.08
)
 
$
(0.08
)
 
$
(0.22
)
 
$
(0.27
)
 
$
(0.98
)
 
Weighted-average number of shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
60,847

 
60,810

 
60,286

 
60,786

 
59,985

 
(1) The Company recorded restructuring expense primarily relating to severance costs for terminated employees.
(2) The Company recorded restructuring expense relating to severance costs for terminated employees and abandonment of excess office space at
its headquarters.
(3) The Company recorded a non-cash charge of $32.0 million to record an impairment of the full carrying amount of goodwill.
(4) Income from discontinued operations resulted from the expiration of indemnity periods and release of contingency reserves related to the sale of ConferencePlus.






Westell Technologies, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
 
Assets:
 
March 31, 2016
(Unaudited)
 
March 31, 2015
Cash and cash equivalents
 
$
19,169

 
 
$
14,026

 
Short-term investments
 
10,555
 
 
 
23,906
 
 
Accounts receivable, net
 
16,361
 
 
 
11,845
 
 
Inventories
 
13,498
 
 
 
16,205
 
 
Prepaid expenses and other current assets
 
1,900
 
 
 
3,285
 
 
Land held-for-sale
 
—
 
 
 
264
 
 
Total current assets
 
61,483
 

 
69,531
 

Property and equipment, net
 
3,977
 
 
 
3,603
 
 
Intangible assets, net
 
20,388
 
 
 
25,942
 
 
Other non-current assets
 
183
 
 
 
258
 
 
Total assets
 
$
86,031

 
 
$
99,334

 
Liabilities and Stockholders’ Equity:
 
 
 
 
Accounts payable
 
$
7,856

 
 
$
4,011

 
Accrued expenses
 
5,932
 
 
 
5,576
 
 
Accrued restructuring
 
1,537
 
 
 
1,161
 
 
Contingent consideration
 
311
 
 
 
1,184
 
 
Deferred revenue
 
1,601
 
 
 
2,415
 
 
Total current liabilities
 
17,237
 

 
14,347
 

Deferred revenue non-current
 
1,236
 
 
 
751
 
 
Net deferred income tax liability
 
10
 
 
 
46
 
 
Accrued restructuring non-current
 
550
 
 
 
1,642
 
 
Contingent consideration non-current
 
—
 
 
 
400
 
 
Other non-current liabilities
 
314
 
 
 
409
 
 
Total liabilities
 
19,347
 
 
 
17,595
 

Total stockholders’ equity
 
66,684
 
 
 
81,739
 
 
Total liabilities and stockholders’ equity
 
$
86,031

 
 
$
99,334

 







Westell Technologies, Inc.
Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
 
 
 
Twelve Months Ended March 31,
Cash flows from operating activities:
 
2016 (Unaudited)
 
2015
Net income (loss)
 
$
(16,212
)
 
$
(58,902
)
Reconciliation of net income to net cash provided by (used in) operating activities:
 
 
 
 
Depreciation and amortization
 
7,098

 
7,416

Goodwill impairment
 
—

 
31,997

Stock-based compensation
 
1,265

 
2,605

Restructuring
 
748

 
3,243

Deferred taxes
 
(36
)
 
(127
)
Impairment loss or loss (gain) on sale of fixed assets
 
14

 
117

Exchange rate loss (gain)
 
(38
)
 
23

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
(4,476
)
 
3,986

Inventories
 
2,707

 
8,186

Accounts payable and accrued expenses
 
2,192

 
(6,912
)
Other
 
1,131

 
(919
)
Net cash provided by (used in) operating activities
 
(5,607
)
 
(9,287
)
Cash flows from investing activities:
 
 
 
 
Net purchases of short-term investments and debt securities
 
13,351

 
(8,322
)
Acquisitions, net of cash acquired
 
—

 
(304
)
Proceeds from sale of land
 
264

 
—

Purchases of property and equipment
 
(1,932
)
 
(2,137
)
Net cash provided by (used in) investing activities
 
11,683

 
(10,763
)
Cash flows from financing activities:
 
 
 
 
Payment of contingent consideration
 
(808
)
 
(1,104
)
Purchases of treasury stock
 
(108
)
 
(863
)
Proceeds from stock options exercised
 
—

 
257

Net cash provided by (used in) financing activities
 
(916
)
 
(1,710
)
Gain (loss) of exchange rate changes on cash
 
(17
)
 
(7
)
Net increase (decrease) in cash and cash equivalents
 
5,143

 
(21,767
)
Cash and cash equivalents, beginning of period
 
14,026

 
35,793

Cash and cash equivalents, end of period
 
$
19,169

 
$
14,026









Westell Technologies, Inc.
Segment Statement of Operations
(Amounts in thousands)
(Unaudited)
 Sequential Quarter Comparison
 
 
Three months ended March 31, 2016
 
Three Months Ended December 31, 2015
 
 
IBW
 
CSG
 
Total
 
IBW
 
CSG
 
Total
Revenue
 
$
5,838

 
$
15,066

 
$
20,904

 
$
8,680

 
$
11,535

 
$
20,215

Cost of revenue
 
3,761

 
9,250

 
13,011

 
5,361

 
6,891

 
12,252

Gross profit
 
2,077

 
5,816

 
7,893

 
3,319

 
4,644

 
7,963

Gross margin
 
35.6
%
 
38.6
%
 
37.8
%
 
38.2
%
 
40.3
%
 
39.4
%
Research & development
 
2,421

 
2,292

 
4,713

 
2,701

 
2,192

 
4,893

Segment profit (loss)
 
$
(344
)
 
$
3,524

 
$
3,180

 
$
618

 
$
2,452

 
$
3,070


Year-over-Year Quarter Comparison
 
 
Three months ended March 31, 2016
 
Three months ended March 31, 2015
 
 
IBW
 
CSG
 
Total
 
IBW
 
CSG
 
Total
Revenue
 
$
5,838

 
$
15,066

 
$
20,904

 
$
7,082

 
$
11,531

 
$
18,613

Cost of revenue
 
3,761

 
9,250

 
13,011

 
5,456

 
8,491

 
13,947

Gross profit
 
2,077

 
5,816

 
7,893

 
1,626

 
3,040

 
4,666

Gross margin
 
35.6
%
 
38.6
%
 
37.8
%
 
23.0
%
 
26.4
%
 
25.1
%
Research & development
 
2,421

 
2,292

 
4,713

 
2,315

 
1,905

 
4,220

Segment profit (loss)
 
$
(344
)
 
$
3,524

 
$
3,180

 
$
(689
)
 
$
1,135

 
$
446


Full Year Comparison
 
 
Twelve months ended March 31, 2016
 
Twelve months ended March 31, 2015
 
 
IBW
 
CSG
 
Total
 
IBW
 
CSG
 
Total
Revenue
 
$
34,407

 
$
53,796

 
$
88,203

 
$
37,714

 
$
46,413

 
$
84,127

Cost of revenue
 
20,463

 
33,224

 
53,687

 
23,999

 
33,318

 
57,317

Gross profit
 
13,944

 
20,572

 
34,516

 
13,715

 
13,095

 
26,810

Gross margin
 
40.5
%
 
38.2
%
 
39.1
%
 
36.4
%
 
28.2
%
 
31.9
%
Research & development
 
11,059

 
8,258

 
19,317

 
8,955

 
8,393

 
17,348

Segment profit (loss)
 
$
2,885

 
$
12,314

 
$
15,199

 
$
4,760

 
$
4,702

 
$
9,462


 












Westell Technologies, Inc.
Reconciliation of GAAP to non-GAAP Financial Measures
(Amounts in thousands, except per share amounts)
(Unaudited)
 
 
 
Three months ended
 
Twelve months ended
 
 
March 31,
2016
 
December 31,
2015
 
March 31,
2015
 
March 31,
2016
 
March 31,
2015
GAAP net income (loss)
 
$
(5,076
)
 
$
(4,797
)
 
$
(13,000
)
 
$
(16,212
)
 
$
(58,902
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
Inventory fair value step-up (1)
 
—

 
—

 
36

 
—

 
576

Deferred revenue adjustment (1)
 
63

 
73

 
64

 
281

 
386

Amortization of intangibles (2)
 
1,305

 
1,418

 
1,520

 
5,554

 
6,377

Restructuring, separation and transition (3)
 
799

 
—

 
4,989

 
1,022

 
5,044

Stock-based compensation (4)
 
291

 
264

 
977

 
1,265

 
2,605

Land impairment
 
—

 
—

 
108

 
—

 
108

Goodwill impairment (5)
 
—

 
—

 
—

 
—

 
31,997

(Income) loss from discontinued operations (6)
 
(1
)
 
—

 
(139
)
 
(273
)
 
(139
)
Total adjustments
 
2,457

 
1,755

 
7,555

 
7,849

 
46,954

Non-GAAP net income (loss)
 
$
(2,619
)
 
$
(3,042
)
 
$
(5,445
)
 
$
(8,363
)
 
$
(11,948
)
GAAP net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
(0.08
)
 
$
(0.08
)
 
$
(0.22
)
 
$
(0.27
)
 
$
(0.98
)
Non-GAAP net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
(0.04
)
 
$
(0.05
)
 
$
(0.09
)
 
$
(0.14
)
 
$
(0.20
)
Average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic and diluted
 
60,847

 
60,810

 
60,286

 
60,786

 
59,985

 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
Twelve months ended
 
 
March 31,
2016
 
December 31,
2015
 
March 31,
2015
 
March 31,
2016
 
March 31,
2015
GAAP operating expenses
 
$
13,104

 
$
12,838

 
$
17,818

 
$
51,272

 
$
86,050

Adjustments:
 
 
 
 
 
 
 
 
 
 
Amortization of intangibles (2)
 
(1,305
)
 
(1,418
)
 
(1,520
)
 
(5,554
)
 
(6,377
)
Restructuring, separation and transition (3)
 
(799
)
 
—

 
(4,989
)
 
(1,022
)
 
(5,044
)
Stock-based compensation (4)
 
(320
)
 
(251
)
 
(953
)
 
(1,270
)
 
(2,516
)
Land impairment
 
—

 
—

 
(108
)
 
—

 
(108
)
Goodwill impairment (5)
 
—

 
—

 
—

 
—

 
(31,997
)
Total adjustments
 
(2,424
)
 
(1,669
)
 
(7,570
)
 
(7,846
)
 
(46,042
)
Non-GAAP operating expense
 
$
10,680

 
$
11,169

 
$
10,248

 
$
43,426

 
$
40,008









 
 
Three months ended March 31, 2016
 
Three months ended March 31, 2015
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - consolidated
 
$
20,904

 
$
7,893

 
37.8
%
 
$
18,613

 
$
4,666

 
25.1
%
Deferred revenue adjustment (1)
 
63

 
63

 
 
 
64

 
64

 
 
Inventory fair value step-up (1)
 
—

 
—

 
 
 
—

 
36

 
 
Stock-based compensation (4)
 
—

 
(29
)
 
 
 
—

 
24

 
 
Non-GAAP - consolidated
 
$
20,967

 
$
7,927

 
37.8
%
 
$
18,677

 
$
4,790

 
25.6
%
 
 
Twelve months ended March 31, 2016
 
Twelve months ended March 31, 2015
 
 
Revenue
 
Gross Profit
 
Gross Margin
 
Revenue
 
Gross Profit
 
Gross Margin
GAAP - consolidated
 
$
88,203

 
$
34,516

 
39.1
%
 
$
84,127

 
$
26,810

 
31.9
%
Deferred revenue adjustment (1)
 
281

 
281

 
 
 
386

 
386

 
 
Inventory fair value step-up (1)
 
—

 
—

 
 
 
—

 
576

 
 
Stock-based compensation (4)
 
—

 
(5
)
 
 
 
—

 
89

 
 
Non-GAAP - consolidated
 
$
88,484

 
$
34,792

 
39.3
%
 
$
84,513

 
$
27,861

 
33.0
%
The Company conforms to U.S. Generally Accepted Accounting Principles (GAAP) in the preparation of its financial statements. The schedules above reconcile the Company's non-GAAP financial measures to the most directly comparable GAAP measure. The adjustments share one or more of the following characteristics: they are unusual and the Company does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of the Company's control. Management believes that the non-GAAP financial information provides meaningful supplemental information to investors. Management also believes the non-GAAP financial information reflects the Company's core ongoing operating performance and facilitates comparisons across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results. Non-GAAP measures should not be viewed as a substitute for the Company's GAAP results.

(1)
On April 1, 2013 and on March 1, 2014, the Company purchased Kentrox and CSI. These acquisitions required the step-up of certain assets to fair value, which resulted in cost that will not recur once those assets have fully settled. The adjustments remove the increased costs associated with the third-party sales of inventory that was stepped-up and the step-down on acquired deferred revenue that was recognized in the periods presented.
(2)
Amortization of intangibles is a non-cash expense arising from the acquisition of intangible assets.
(3)
Restructuring expenses are not directly related to the ongoing performance of our fundamental business operations. This adjustment also includes severance benefits related to the departure of certain former executives.
(4)
Stock-based compensation is a non-cash expense incurred in accordance with share-based compensation accounting.
(5)
The Company recorded a non-cash charge of $32.0 million during fiscal 2015 to record the impairment of the full carrying value of the Company's goodwill.
(6)
Income from discontinued operations resulted from the expiration of indemnity periods and release of contingency reserves related to the sale of ConferencePlus.


For additional information, contact:
Tom Minichiello
Chief Financial Officer
Westell Technologies, Inc.
+1 (630) 375-4740
 tminichiello@westell.com



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