Westell plans to reduce annual expenses by $11 million
Business Wire
AURORA - Westell Technologies, a provider of in-building wireless, intelligent site management, cell site optimization, and outside plant solutions, announced a comprehensive expense reduction plan and a preliminary revenue estimate for its fiscal 2017 first quarter ended June 30.
The company plans to implement a comprehensive program designed to reduce annual expenses by approximately $11 million, including discontinuing development of the ClearLink Distributed Antenna System, consolidating facilities in Manchester, NH and Aurora, and taking additional actions to reduce SG&A expenses.
"To accelerate our path to profitable growth and positive cash flow, we are taking actions to significantly lower our cost structure including, based on our latest analysis of the market and expected return, ceasing development of ClearLink DAS. Westell will continue as a leading supplier of Repeaters, DAS Conditioners, Antennas, and System Components to the IBW market," said Tom Gruenwald, Chairman, CEO, and President of Westell Technologies.
"We believe these actions are necessary to preserve the Company's strong balance sheet and position Westell to create shareholder value. At the same time, we intend to continue to advance our turnaround by staying focused on operational discipline and execution on new products and solutions that meet the challenges of a dynamic market," Gruenwald said.
Westell estimates preliminary consolidated revenue for 1Q17 of $14.8 million, compared to $21.6 million in the year-ago quarter and $20.9 million in the prior quarter. Cash and short-term investments were $25.3 million at June 30, 2016, compared to $29.7 million at March 31, 2016. The Company anticipates releasing 1Q17 financial results on Wednesday, August 10, 2016 and hosting its regular quarterly conference call on Thursday, August 11, 2016 (details will be provided at a later date).
"First quarter revenue weakness reflected a confluence of factors across our businesses, including a general slowdown in carrier spending and the adverse impact of a strike-related work stoppage at a major customer. We believe our strong customer relationships, recently announced new IBW and Power Distribution offerings, and opportunities in the Intelligent Site Management (ISM) and Integrated Cabinet markets can provide profitable growth," Gruenwald said.
Expense reduction actions are anticipated to be substantially completed by March 31, 2017, including workforce reductions and the consolidation of facilities in Manchester, NH and Aurora.