Aviat Revises Second Quarter, First-Half Financial Guidance
Thursday, January 23, 2020 | Comments

Aviat Networks announced that its fiscal 2020 second quarter and first half results are anticipated to come in lower than previously forecasted because of a cyber attack at one of the company's contract manufacturing vendors.

The attack effectively shut down the vendor's production and shipments of Aviat products for three weeks. While this issue was remediated by the vendor and is not expected to have any impact on Aviat on a go-forward basis, the company's revenue, gross margins and anticipated profitability for the first half of its fiscal 2020 were affected. However, order flow continued to be strong, cash increased sequentially and from the prior year end, and the company remains on track for improved profitability for the full fiscal year.

"While it's disappointing to come in below our prior guidance, I'm quite pleased with how the team responded to assist our vendor and support our customers,” said Pete Smith, Aviat's president and CEO. “Business is not lost, just delayed, and our revenue outlook for the fiscal year has not changed. This event, however, impacted profitability for the first half of fiscal 2020.”

The company previously stated that for the comparable six-month periods in fiscal 2020 and fiscal 2019, total revenue would be down modestly, gross margins would improve, non-GAAP operating income would be about $6 million, and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) and other non-GAAP adjustments (adjusted EBITDA) would be about $7.5 million.

Aviat now expects total revenue to be $55.5 million to $56.5 million in the fiscal 2020 second quarter and $114 million to $115 million for the fiscal 2020 six-month period. North America revenue is expected to be up $10.5 million to $11.5 million, and international revenue is expected to be down $21.5 million to $22.5 million when comparing the fiscal 2020 and fiscal 2019 six-month periods.

Gross margins are anticipated to be 32.5% to 33% in the fiscal 2020 second quarter and 35.5% to 36% in the fiscal 2020 six-month period. In the fiscal 2019 six-month period, the company reported gross margins of 32.2%.

Cash and cash equivalents as of Dec. 27 were anticipated to be about $38 million, about a $6 million increase, compared with June 28, and a $3.5 million improvement sequentially, as compared to Sept. 27.

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