Aviat Networks Reports Quarterly and Full-Year Financial Results
Thursday, September 07, 2017 | Comments

Aviat Networks reported financial results for its fiscal 2017 fourth quarter and year ended June 30.

The company reported total revenues of $56.4 million for its fiscal 2017 fourth quarter as compared with $58.3 million in the comparable fiscal 2016 period, a decline of $1.8 million or 3.1 percent. The year-over-year decline is primarily related to lower international revenue offset in part by an increase in North America and Latin America revenue.

GAAP gross margins for the fiscal 2017 fourth quarter were 34.1 percent compared with 16.9 percent in the fiscal 2016 fourth quarter, an improvement of about 1,720 basis points. The percentage improvements were primarily driven by better efficiencies within the company's services business combined with process enhancements within supply chain operations. The improvement was also driven by a higher concentration of North America business as a percentage of revenue.

GAAP total operating expenses for the fiscal 2017 fourth quarter were $19.9 million as compared to $23.1 million reported in the fiscal 2016 fourth quarter, a reduction of $3.2 million or 13.9 percent. The improvements in operating expenses were driven by operational efficiencies and continued reductions in overhead expenses. Additionally, as it relates to prior guidance, the company incurred higher engineering costs in support of new product introductions, among other factors.

GAAP operating loss was $600,000 for the fiscal 2017 fourth quarter as compared to a GAAP operating loss of $13.3 million for the comparable fiscal 2016 period, an improvement of $12.6 million. Cash and cash equivalents were $35.7 million as of June 30, as compared to $30.5 million as of July 1, 2016, an improvement of $5.2 million. Cash and cash equivalents, net of a $1 million increase in borrowing, declined by about $4.3 million when compared against the fiscal 2017 third quarter ended March 31, which is primarily due to timing associated with payments from two customers.

"Fiscal 2017 was a transformative year for Aviat Networks,” said Michael Pangia, president and CEO of Aviat Networks. “We successfully realigned our organizational structure, drove process reforms and enhanced our solutions portfolio. All of these initiatives helped drive significant year-over-year improvements in gross margins, operating expenses and bottom-line performance. We also strengthened our market-leading positions, particularly in North America and with private network customers. Process reforms also enabled us to strengthen our balance sheet and drive year-over-year improvements across virtually all key working capital metrics. As we move into fiscal 2018, we are confident that we will continue to build our momentum and generate further profitability improvements, with the potential for top-line growth."

Total revenues of $241.9 million in the full fiscal year (FY) 2017 represent a decline of $26.8 million or 10 percent from fiscal 2016. Within this, international revenues declined as anticipated, while North America revenues increased by $6.6 million or 5.3 percent. GAAP gross margins were 31.2 percent as compared to 23 percent, an improvement of approximately 820 basis points.

GAAP operating loss was $1 million compared with a GAAP operating loss of $27.4 million, an improvement of $26.5 million. GAAP net loss from continuing operations attributable to Aviat Networks was $800,000 compared with a 2016 GAAP net loss from continuing operations attributable to Aviat Networks of $30.4 million. GAAP net loss improved by $29.6 million year-over-year.

"Approximately a year ago, we embarked on a strategic process to explore avenues that would help us improve our market position and, ultimately, valuation,” Pangia said. “We have looked at multiple options and over the past quarter, we have narrowed this down further and are now in the later stages of the process. Our goal is to ensure that we structure the best outcome for our company and our shareholders, both near- and long-term."

The company anticipates revenue to be in the range of $57 million to $60 million for the first quarter of fiscal 2018. Aviat anticipates full-year revenue to be in the range of $245 million to $260 million, which would equate to a 1 to 8 percent increase year-over-year.

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