Aviat Networks Reports Fiscal Quarterly, Annual Financials
Wednesday, August 29, 2018 | Comments

Aviat Networks reported financial results for its fiscal 2018 fourth quarter and the year ended June 29.

"We had a strong fiscal fourth quarter … What drove bottom-line performance was exceptionally strong gross margins both year-over-year and sequentially,” said Michael Pangia, president and CEO of Aviat Networks. “We enter fiscal 2019 expecting growth and improved profitability. Further, our solution set and competitive position is among the best in our company's history."

The company reported total revenues of $62.5 million for its fiscal 2018 fourth quarter compared with $56.4 million in the comparable fiscal 2017 period, an increase of $6.1 million or 10.8 percent. International revenue increased by $9.7 million or 45.1 percent, offset by a decline in North American revenue of $3.6 million or 10.4 percent.

GAAP gross margin for the fiscal 2018 fourth quarter was 37.1 percent compared to 34.1 percent in the comparable fiscal 2017 period, an increase of 300 basis points. Service margins continue to trend upwards and both product and service margins improved year-over-year.

GAAP total operating expenses, excluding restructuring charges, for the fiscal 2018 fourth quarter were $20.6 million compared with $19.7 million in the comparable fiscal 2017 period, an increase of $1 million or 5 percent. The increase in both GAAP and non-GAAP operating expenses were primarily related to increased variable expenses as a result of higher revenues, as well as an increase in marketing expenses related to lead-generation programs.

GAAP operating income was $1 million for the fiscal 2018 fourth quarter as compared with an operating loss of $600,000 for the comparable fiscal 2017 period, a year-over-year improvement of $1.7 million.

The company reported GAAP net income from continuing operations of $100,000 compared with a GAAP loss from continuing operations of $1.5 million for the comparable fiscal 2017 period. GAAP and non-GAAP net income attributable to Aviat Networks improved by $1.5 million and $3 million year-over-year.

Cash, cash equivalents and restricted cash were $37.4 million as of June 29, as compared with $36.2 million as of June 30, 2017, an increase of $1.2 million.

The company reported total revenues of $242.5 million for the fiscal 2018 12-month period as compared with $241.9 million in the comparable fiscal 2017 period, an increase of $600,000 or 0.3 percent. International revenue increased $1.6 million or 1.5 percent, offset by a decline in North America revenue of $1 million or 0.8 percent.

GAAP operating income for the fiscal 2018 12-month period was $1.3 million as compared with a GAAP operating loss of $1 million in the comparable fiscal 2017 period, an improvement of $2.3 million. Aviat reported GAAP income from continuing operations of $1.8 million for the year as compared to a GAAP loss from continuing operations of $800,000 in the comparable fiscal 2017 period.

"Aviat Networks achieved moderate growth in fiscal 2018, and the next fiscal year should be stronger based on new accounts we've recently won and others we're pursuing, our improved market position globally and our strong backlog,” Pangia said. “Additionally, the international markets, after years of decline are showing signs of strength, which bodes well for our future. The recent changes in our organizational structure should position us well to drive further efficiencies in our business, and we expect our expense structure to improve in future years. Our focus remains on technology innovation, customer service and targeted growth. We are confident in our ability to achieve our fiscal 2019 financial outlook and intend to be more active in promoting the Aviat Networks story to enhance shareholder value."

The company anticipates fiscal 2019 revenue to be in the range of $255 million to $265 million, representing year-over-year growth of between 5.2 and 9.3 percent. Further, revenue in both North America and the International markets is anticipated to increase year-over-year, with Africa a key driver of International growth.

Additionally, the company anticipates continued improvements in working capital and balance sheet metrics and expects to finish the year with an improvement in its cash position.

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