Aviat Networks Announces Q2 Fiscal 2010 Financial Results
Reports Q2 revenue of $123 million
RESEARCH TRIANGLE PARK, N.C., Feb. 3 /PRNewswire-FirstCall/ -- Aviat Networks, Inc. (Nasdaq: AVNW), previously known as Harris Stratex Networks, Inc., is the wireless expert in advanced IP network migration, today reported financial results for the second quarter of fiscal year 2010, which ended January 1, 2010.
Revenue for the second quarter of fiscal 2010 was $122.6 million, compared with $190.9 million in the year ago period. GAAP net loss was $7.9 million or $0.13 per share, compared with GAAP net loss of $318.7 million or $5.43 per share in the year ago quarter. In Q2 of fiscal 2009 GAAP results included $327.1 million of charges comprised primarily of a $301.0 million expense for impairment of goodwill and other indefinite-lived intangible assets.
Non-GAAP Financial Results
Non-GAAP net income for the quarter was $0.8 million, or $0.01 per share, compared with non-GAAP net income of $8.4 million, or $0.14 per share in the year ago quarter. Non-GAAP results exclude $7.3 million of pre-tax charges comprised of $3.8 million for amortization of purchased intangibles, $2.0 million of restructuring and stock compensation expense, and $1.5 million of expense associated with rebranding and expense incurred in transitioning from a Harris Corporation subsidiary to an independent company.
A reconciliation of GAAP to non-GAAP financial measures is provided on Table 4 along with the accompanying notes.
As of the quarter ended January 1, 2010 cash and cash equivalents were $126.4 million, compared with $133.0 million as of the quarter ended October 2, 2009.
Second Quarter Revenue by Business Segment
Revenue in the North America segment was $49.4 million in the second quarter of fiscal 2010, compared with $66.6 million in the year ago period. International revenue was $73.2 million, compared with $124.3 million in the year ago period. Beginning in Q1 of fiscal 2010, Network Operations revenue is now reported within the North America and International segments.
"As our first earnings report under our new company name, we are pleased to report a sequential improvement in revenue, from $120 million in our first quarter to approximately $123 million this quarter, despite the ongoing challenges in the global economy. The demand for our innovative wireless products and services in various Asia Pacific regions continues to be a source of financial strength, as well as pride and accomplishment with the customers we serve," said Harald Braun, president and chief executive officer of Aviat Networks. "Signs of stabilization in North America continue, and evidence of a recovery is also emerging in other select regions of the world."
Outlook and Guidance
Due to the current macro-economic situation, it is difficult to provide financial guidance, and it is likely that Aviat Networks' actual results could differ materially from current expectations.
The Company's current revenue expectations for the third quarter of fiscal year 2010 are in the range of $120 million to $130 million.
Conference Call
Aviat Networks 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 480-629-9724 (Conference ID: 4195176) at approximately 4:20 p.m. A replay of the call will be available starting approximately one hour after the call's completion until February 10. To access the replay, dial 303-590-3030 (Conference ID: 4195176). A live and archived webcast of the conference call will also be available via the company's Web site at http://investors.aviatnetworks.com/eventdetail.cfm?eventid=76918.
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 revenues, cost of product sales and services, research and development expenses, selling and administrative expenses, operating income or loss, tax expense or benefit, net income or loss, and net income or loss per share 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 and expenses as shown on the attached GAAP reconciliation 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), previously known as Harris Stratex Networks, Inc., is the wireless expert in advanced IP network migration, building the foundation for the 4G/LTE broadband future. We offer best-of-breed transformational wireless solutions, including LTE-ready microwave backhaul, WiMAX access and a complete portfolio of essential service options that enable wireless public and private telecommunications operators to deliver advanced data, voice and video and mobility services around the world. Aviat is agile and adaptive to anticipate what's coming to help our customers make the right choices, and our products and services are designed for flexible evolution, no matter what the future brings. With global reach and local presence on the ground we work by the side of our customers, allowing them to quickly and cost effectively seize new market and service opportunities, while managing migration toward an all- IP future. For more information, please visit www.aviatnetworks.com or join the dialogue at www.twitter.com/aviat_networks.
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 and trends in revenue, as well as other statements identified by the use of forward-looking terminology, including "anticipated", "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:
- continued weakness in the global economy affecting customer spending;
- continued price erosion as a result of increased competition in the microwave transmission industry;
- the volume, timing and customer, product and geographic mix of our product orders may have an impact on our operating results;
- the ability to achieve business plans for Aviat Networks;
- the ability to manage and maintain key customer relationships;
- the ability to maintain projected product rollouts, product functionality, anticipated cost reductions or market acceptance of planned products;
- future costs or expenses related to litigation;
- the ability of our subcontractors to perform or our key suppliers to manufacture or deliver material;
- customers may not pay for products or services in a timely manner, or at all;
- the failure of Aviat Networks to protect its intellectual property rights and its ability to defend itself against intellectual property infringement claims by others;
- currency and interest rate risks;
- the impact of political, economic and geographic risks on international sales;
- uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation which makes it difficult to estimate growth.
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, 2009 as well as other reports filed by Aviat Networks,Inc., previously known as Harris Stratex 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 BELOW
Table 1
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year 2010 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended Two Quarters Ended
------------- ------------------
January January January January
1, 2010 2, 2009 1, 2010 2, 2009
-------- -------- -------- --------
(In millions, except per share amounts)
Revenue from product sales
and services $122.6 $190.9 $242.6 $386.7
Cost of product sales and
services (78.2) (138.0) (158.4) (272.9)
Amortization of purchased
technology (2.1) (1.8) (4.2) (3.6)
Gross margin 42.3 51.1 80.0 110.2
Research and development
expenses (10.1) (9.5) (20.8) (19.7)
Selling and administrative
expenses (35.4) (32.9) (66.2) (69.4)
Amortization of intangible
assets (1.5) (1.4) (3.0) (2.8)
Goodwill impairment
charges - (279.0) - (279.0)
Trade name impairment
charges - (22.0) - (22.0)
Restructuring charges (1.5) (1.1) (2.6) (4.4)
Operating loss (6.2) (294.8) (12.6) (287.1)
Interest income 0.1 0.3 0.1 0.7
Interest expense (0.4) (0.7) (0.9) (1.4)
Loss before income
taxes (6.5) (295.2) (13.4) (287.8)
Income tax expense
benefit (1.4) (23.5) (2.3) (24.4)
Net loss $(7.9) $(318.7) $(15.7) $(312.2)
Net loss per common share of
Class A and Class B common
stock (Note 1):
Basic and diluted $(0.13) $(5.43) $(0.27) $(5.33)
Basic and diluted
weighted average
shares outstanding 59.3 58.7 59.1 58.6
(1) The net loss per common share amounts were the same for Class
A and Class B in the quarter and two quarters ended January 2, 2009
because the holders of each class were legally entitled to equal per
share distributions whether through dividends or in liquidation. There
were no shares of Class B common stock outstanding during the quarter
and two quarters ended January 1, 2010. Effective November 19, 2009,
under a change to our Articles of Incorporation approved by
shareholders, all shares of our Class A common stock were reclassified
on a one-to-one basis to shares Common Stock without a class
designation; we no longer have Class A or Class B common stock
authorized, issued or outstanding.
Table 2
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year 2010 Second Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
January 1, 2010 July 3, 2009(1)
--------------- --------------
(In millions)
Assets
Cash and cash equivalents $126.4 $136.8
Short-term investments - 0.3
Receivables 133.3 142.9
Inventories and unbilled costs 118.4 126.4
Other current assets 28.1 29.7
Property, plant and equipment 56.9 57.4
Goodwill 3.5 3.2
Identifiable intangible assets 77.3 84.1
Non-current deferred taxes 7.5 8.0
Other assets 11.2 11.4
---- ----
$562.6 $600.2
====== ======
Liabilities and Shareholders' Equity
Short-term debt $10.0 $10.0
Accounts payable 54.5 69.6
Accrued expenses and other current
liabilities 106.6 114.8
Restructuring and other long-term
liabilities 1.4 4.3
Redeemable preference shares 8.3 8.3
Non-current deferred taxes and
reserve for uncertain tax
positions 6.0 5.3
Shareholders' equity 375.8 387.9
----- -----
$562.6 $600.2
====== ======
(1) Derived from audited financial statements.
Table 3
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year 2010 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Two Quarters Ended
-------------------------
January 1, January 2,
2010 2009
---- ----
Operating Activities
Net loss $(15.7) $(312.2)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization of identifiable intangible assets 7.2 6.4
Depreciation and amortization of property, plant
and equipment and capitalized software 10.8 11.7
Non-cash stock-based compensation expense 1.5 1.4
Goodwill impairment charges - 279.0
Trade name impairment charges - 22.0
Decrease in fair value of warrants - (0.3)
Deferred income tax expense 1.3 22.6
Changes in operating assets and liabilities:
Receivables 9.9 20.6
Unbilled costs and inventories 7.9 (26.2)
Accounts payable and accrued expenses (16.2) -
Advance payments and unearned income (2.5) 2.8
Restructuring liabilities and other (0.3) (11.4)
Net cash provided by operating activities 3.9 16.4
Investing Activities
Cash paid related to acquisition of Telsima in
prior fiscal year (4.2) -
Purchases of short-term investments and available
for sale securities - (1.2)
Sales of short-term investments and available for
sale securities 0.3 2.7
Additions of property, plant and equipment (9.4) (7.2)
Additions of capitalized software (1.5) (2.2)
Net cash used in investing activities (14.8) (7.9)
Financing Activities
Increase in short-term debt - 10.0
Payments on long-term debt - (8.8)
Payments on capital lease obligations (0.2) (0.5)
Net cash (used in) provided by financing
activities (0.2) 0.7
Effect of exchange rate changes on cash
and cash equivalents 0.7 (6.5)
Net (decrease) increase in cash and cash
equivalents (10.4) 2.7
Cash and cash equivalents, beginning of year 136.8 95.0
Cash and cash equivalents, end of quarter $126.4 $97.7
Table 3 (Continued)
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year 2010 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Quarter Ended
------------------------
January 1, January 2,
2010 2009
---- ----
Operating Activities
Net loss $(7.9) $(318.7)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Amortization of identifiable intangible assets 3.5 3.0
Depreciation and amortization of property, plant
and equipment and capitalized software 4.8 6.1
Non-cash stock-based compensation expense 0.5 0.4
Goodwill impairment charges - 279.0
Trade name impairment charges - 22.0
Deferred income tax expense 0.9 23.3
Changes in operating assets and liabilities, net of
effects from acquisition:
Receivables (18.9) 15.1
Unbilled costs and inventories 9.8 (12.6)
Accounts payable and accrued expenses (2.8) (4.3)
Advance payments and unearned income 4.7 1.8
Restructuring liabilities and other 4.9 (2.6)
Net cash (used in) provided by operating
activities (0.5) 12.5
Investing Activities
Sales of short-term investments and available for
sale securities - 0.9
Additions of property, plant and equipment (5.5) (2.8)
Additions of capitalized software (0.6) (1.2)
Net cash used in investing activities (6.1) (3.1)
Financing Activities
Payments on long-term capital lease obligations (0.2) (0.5)
Net cash used in financing activities (0.2) (0.5)
Effect of exchange rate changes on cash
and cash equivalents 0.2 (5.6)
Net (decrease) increase in cash and cash
equivalents (6.6) 3.3
Cash and cash equivalents, beginning of quarter 133.0 94.4
Cash and cash equivalents, end of quarter $126.4 $97.7
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Quarter and Two Quarters Ended January 1, 2010 Summaries
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE
To supplement our consolidated financial statements presented in
accordance with accounting principles generally accepted in the United
States (GAAP), we provide additional measures of revenue, cost of product
sales and services, gross margin, research and development expenses,
selling and administrative expenses, operating income (loss), income
(loss) before income taxes, income taxes, net income (loss), and net
income (loss) per basic and diluted share adjusted to exclude certain
costs, charges, expenses and losses, including such amounts related to our
merger with Stratex Networks. Aviat Networks, Inc. ("we" or "our")
believes 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. A reconciliation of these non GAAP
financial measures with the most directly comparable financial measures
calculated in accordance with GAAP follows.
Table 4
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year 2010 Second Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
January 1, 2010
---------------
As Non-GAAP % of
Reported Adjustments Non-GAAP Sales
-------- ----------- -------- -----
(In millions, except per share amounts)
Revenue from
product sales
and services $122.6 $ - $122.6
Cost of
product sales
and services (A) (78.2) 0.1 (78.1)
Amortization
of purchased
technology (B) (2.1) 2.1 -
Gross margin 42.3 2.2 44.5 36.3%
Research and
development
expenses (C) (10.1) 0.2 (9.9) 8.1%
Selling and
administrative
expenses (D) (35.4) 1.9 (33.5) 27.3%
Amortization
of intangible
assets (E) (1.5) 1.5 -
Goodwill
impairment
charges (F) - - -
Trade name
impairment
charges (F) - - -
Restructuring
charges (G) (1.5) 1.5 -
Operating
(loss) income (6.2) 7.3 1.1 0.9%
Interest
income 0.1 - 0.1
Interest
expense (0.4) - (0.4)
---- --- ----
(Loss) income
before income
taxes (6.5) 7.3 0.8 Tax rate
Income tax
(expense)
benefit (H) (1.4) 1.4 - 0%
Net (loss)
income $(7.9) $8.7 $0.8
Net (loss)
income per
common share:
Basic and
diluted $(0.13) $0.01
Basic and
diluted
weighted
average
shares
outstanding 59.3 59.3
Quarter Ended
-------------
January 2, 2009
---------------
As Non-GAAP % of
Reported Adjustments Non-GAAP Sales
-------- ----------- -------- -----
(In millions, except per share amounts)
Revenue from
product sales
and services $190.9 $- $190.9
Cost of
product sales
and services (A) (138.0) 0.3 (137.7)
Amortization
of purchased
technology (B) (1.8) 1.8 -
Gross margin 51.1 2.1 53.2 27.9%
Research and
development
expenses (C) (9.5) 0.1 (9.4) 4.9%
Selling and
administrative
expenses (D) (32.9) 0.6 (32.3) 16.9%
Amortization
of intangible
assets (E) (1.4) 1.4 -
Goodwill
impairment
charges (F) (279.0) 279.0 -
Trade name
impairment
charges (F) (22.0) 22.0 -
Restructuring
charges (G) (1.1) 1.1 -
Operating
(loss) income (294.8) 306.3 11.5 6.0%
Interest income 0.3 - 0.3
Interest expense (0.7) - (0.7)
---- --- ----
(Loss) income
before income
taxes (295.2) 306.3 11.1 Tax rate
Income tax
(expense)
benefit (H) (23.5) 20.8 (2.7) 24%
Net (loss)
income $(318.7) $327.1 $8.4
Net (loss)
income per
common share:
Basic and
diluted $(5.43) $0.14
Basic and
diluted
weighted
average
shares
outstanding 58.7 58.7
Notes to Table 4:
Note A – Cost of sales and services – Includes adjustment to cost of
product sales and services for the second quarter of fiscal 2010 to remove
purchase accounting adjustments for the amortization of the step-up in the
value of fixed assets ($0.1 million).
For the second quarter of fiscal 2009, includes adjustment to cost of
product sales and services to remove purchase accounting adjustments for
the amortization of the step-up in the value of fixed assets
($0.2 million) and adjustment to remove non-cash share-based compensation
expense ($0.1 million).
Note B – Amortization of purchased technology - Adjustment for the second
quarter of fiscal 2010 and 2009 to remove amortization of purchased
intangibles.
Note C – Research and development expenses - Adjustment for the second
quarter of fiscal 2010 to remove non-cash share-based compensation expense
of $0.2 million.
For the second quarter of fiscal 2009, adjustment is to remove non-cash
share-based compensation expense of $0.1 million.
Note D – Selling and administrative expenses – Includes adjustment for the
second quarter of fiscal 2010 to remove purchase accounting adjustments
related to the amortization of the step-up in the value of fixed assets
($0.1 million), to remove non-cash share-based compensation expense ($0.3
million). Also includes adjustments to remove expenses related to
rebranding in connection with the change in Company name required by the
license agreement termination notice from Harris Corporation ($0.5
million) and expenses related to implementing new internal information
systems required to provide services currently being phased out under the
Transitional Services Agreement with Harris ($1.0 million).
For the second quarter of fiscal 2009, includes adjustment to remove
purchase accounting adjustments related to the amortization of the step-up
in the value of fixed assets ($0.4 million) and non-cash share-based
compensation expense ($0.2 million).
Note E – Amortization of intangible assets - Adjustment for the second
quarter of fiscal 2010 and 2009 to remove amortization of purchased
intangibles.
Note F — Goodwill and Trade name impairment charges — Adjustment to remove
charges for impairment incurred during the second quarter of fiscal 2009.
Note G – Restructuring charges - Adjustment to remove charges for
restructuring incurred during the second quarter of fiscal 2010 and 2009.
Note H – Provision for income taxes - Adjustment to reflect a zero percent
pro forma tax rate for the second quarter of fiscal 2010 and a pro forma
24 percent tax rate for the second quarter of fiscal 2009. We estimate
zero tax expense for the second quarter of fiscal 2010 due to breakeven
pre-tax pro forma income for the first two quarters of fiscal 2010 and
zero pro forma tax expense recorded in the first quarter of fiscal 2010.
The adjustment in the second quarter of fiscal 2009 primarily consisted of
removing the effect of a $20.8 million increase in the valuation allowance
on certain deferred tax assets.
Table 5
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year-to-Date 2010 Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Condensed Consolidated Statements of Operations
(Unaudited)
Two Quarters Ended
January 1, 2010
------------------------------------------------
As Non-GAAP % of
Reported Adjustments Non-GAAP Sales
--------- ----------- -------- -----
(In millions, except per share amounts)
Revenue from
product sales
and services $242.6 $-- $242.6
Cost of product
sales and
services (A) (158.4) 0.3 (158.1)
Amortization
of purchased
technology (B) (4.2) 4.2 --
Gross margin 80.0 4.5 84.5 34.8%
Research and
development
expenses (C) (20.8) 0.3 (20.5) 8.5%
Selling and
administrative
expenses (D) (66.2) 3.0 (63.2) 26.1%
Amortization of
intangible
assets (E) (3.0) 3.0 --
Goodwill impairment
charges (F) -- -- --
Trade name impairment
charges (F) -- -- --
Restructuring
charges (G) (2.6) 2.6 --
Operating (loss)
income (12.6) 13.4 0.8 0.3%
Interest income 0.1 - 0.1
Interest expense (0.9) - (0.9)
(Loss) income before
income Taxes (13.4) 13.4 -- Tax rate
Income tax (expense)
benefit (H) (2.3) 2.3 -- 16%
Net (loss) income $(15.7) $15.7 $--
Net (loss) income
per common share:
Basic and diluted $(0.27) $--
Basic and diluted
weighted
average shares
outstanding 59.1 59.1
Two Quarters Ended
January 2, 2009
--------------------------------------------
As Non-GAAP % of
Reported Adjustments Non-GAAP Sales
-------- ----------- -------- -----
(In millions, except per share amounts)
Revenue from
product sales
and services $386.7 $-- $386.7
Cost of product
sales and
services (A) (272.9) 0.7 (272.2)
Amortization
of purchased
technology (B) (3.6) 3.6 --
Gross margin 110.2 4.3 114.5 29.6%
Research and
development
expenses (C) (19.7) 0.3 (19.4) 5.0%
Selling and
administrative
expenses (D) (69.4) 1.7 (67.7) 17.5%
Amortization of
intangible
assets (E) (2.8) 2.8 --
Goodwill impairment
charges (F) (279.0) 279.0 --
Trade name
impairment
charges (F) (22.0) 22.0 --
Restructuring
charges (G) (4.4) 4.4 --
Operating (loss)
income (287.1) 314.5 27.4 7.1%
Interest income 0.7 - 0.7
Interest expense (1.4) - (1.4)
(Loss) income before
income Taxes (287.8) 314.5 26.7 Tax rate
Income tax (expense)
benefit (H) (24.4) 18.0 (6.4) 24%
Net (loss) income $(312.2) $332.5 $20.3
Net (loss) income
Per common share:
Basic and diluted $(5.33) $0.35
Basic and diluted
weighted average
shares outstanding 58.6 58.6
Notes to Table 5:
Note A – Cost of sales and services – Includes adjustment to cost of
product sales and services for the two quarters ended January 1, 2010
to remove purchase accounting adjustments for the amortization of the
step-up in the value of fixed assets ($0.2 million) and adjustment to
remove non-cash share-based compensation expense ($0.1 million).
For the two quarters ended January 2, 2009, includes adjustment to cost
of product sales and services to remove purchase accounting adjustments
for the amortization of the step-up in the value of fixed assets ($0.4
million) and adjustment to remove non-cash share-based compensation
expense ($0.3 million).
Note B – Amortization of purchased technology - Adjustment for the two
quarters ended January 1, 2010 and January 2, 2009 to remove
amortization of purchased intangibles.
Note C – Research and development expenses - Adjustment for the two
quarters ended January 1, 2010 to remove non-cash share-based
compensation expense of $0.3 million.
For the two quarters ended January 2, 2009, adjustment is to remove
non-cash share-based compensation expense of $0.3 million.
Note D – Selling and administrative expenses – Includes adjustment for
the two quarters ended January 1, 2010 to remove purchase accounting
adjustments related to the amortization of the step-up in the value of
fixed assets ($0.2 million), to remove non-cash share-based
compensation expense ($1.2 million). Also includes adjustments to remove
expenses related to rebranding in connection with the change in Company
name required by the license agreement termination notice from Harris
Corporation ($0.6 million) and expenses related to implementing new
internal information systems required to provide services currently
being phased out under the Transitional Services Agreement with Harris
($1.0 million).
For the two quarters ended January 2, 2009, includes adjustment to
remove purchase accounting adjustments related to the amortization of
the step-up in the value of fixed assets ($0.8 million) and non-cash
share-based compensation expense ($0.9 million).
Note E – Amortization of intangible assets - Adjustment for the two
quarters ended January 1, 2010 and January 2, 2009 to remove
amortization of purchased intangibles.
Note F — Goodwill and Trade name impairment charges — Adjustment to
remove charges for impairment incurred during the two quarters ended
January 2, 2009.
Note G – Restructuring charges - Adjustment to remove charges for
restructuring incurred during the two quarters ended January 1, 2010
and January 2, 2009.
Note H – Provision for income taxes - Adjustment to reflect a 16 percent
pro forma tax rate for the two quarters ended January 1, 2010 and a pro
forma 24 percent tax rate for the two quarters ended January 2, 2009.
The adjustment in the two quarters ended January 2, 2009 primarily
consisted of removing the effect of a $20.8 million increase in the
valuation allowance on certain deferred tax assets.
Table 6
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year 2010 Second Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Quarter Ended
-------------------------------------------------------------
January 1, 2010 January 2, 2009
------------------------------ ----------------------------
(In millions)
As Non-GAAP As Non-GAAP
Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
------------------------------- -----------------------------
North
America (1) $49.4 $ - $49.4 $66.6 $ - $66.6
International
(1):
Africa 18.6 - 18.6 51.7 - 51.7
Europe,
Middle
East,
and Russia 29.9 - 29.9 49.1 - 49.1
Latin
America and
AsiaPac 24.7 - 24.7 23.5 - 23.5
---- --- ---- ---- --- ----
Total
International 73.2 - 73.2 124.3 - 124.3
---- --- ---- ----- --- -----
$122.6 $ - $122.6 $190.9 $ - $190.9
===== ======= ====== ====== ======= ======
(1) We previously reported three operating segments in our public
filings: North America Microwave, International Microwave and Network
Operations. During the first quarter of fiscal 2010, we realigned the
management structure of our Network Operations segment to geographically
integrate with our North America Microwave and International Microwave
segments to gain cost efficiencies. As a result, we eliminated the Network
Operations segment as a separate reporting unit and consolidated this
segment into our remaining two segments that are based on the geographical
location where revenue is recognized. Additionally, we have dropped the
word "Microwave" from the name of our North America and International
segments. Segment information in the table above has been adjusted to
reflect this change.
Table 7
AVIAT NETWORKS, INC. (FORMERLY HARRIS STRATEX NETWORKS, INC.)
Fiscal Year-to-Date 2010 Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Two Quarters Ended
------------------------------------------------------------
January 1, 2010 January 2, 2009
----------------------------- ----------------------------
(In millions)
As Non-GAAP As Non-GAAP
Reported Adjustments Non-GAAP Reported Adjustments Non-GAAP
------------------------------ -----------------------------
North
America (1) $97.4 $ - $97.4 $129.6 $ - $129.6
International
(1):
Africa 48.5 - 48.5 117.5 - 117.5
Europe,
Middle East,
and Russia 48.5 - 48.5 86.9 - 86.9
Latin
America and
AsiaPac 48.2 - 48.2 52.7 - 52.7
---- --- ---- ---- --- ----
Total
International 145.2 - 145.2 257.1 - 257.1
----- --- ----- ----- --- -----
$242.6 $ - $242.6 $386.7 $ - $386.7
====== ======= ====== ====== ======= ======
(1) We previously reported three operating segments in our public
filings: North America Microwave, International Microwave and Network
Operations. During the first quarter of fiscal 2010, we realigned the
management structure of our Network Operations segment to geographically
integrate with our North America Microwave and International Microwave
segments to gain cost efficiencies. As a result, we eliminated the Network
Operations segment as a separate reporting unit and consolidated this
segment into our remaining two segments that are based on the geographical
location where revenue is recognized. Additionally, we have dropped the
word "Microwave" from the name of our North America and International
segments. Segment information in the table above has been adjusted to
reflect this change.
SOURCE Aviat Networks, Inc.
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