Aviat Networks Provides Update on Its Fiscal 2020 Second Quarter and Six-Month Results and Additional Commentary on Its Fiscal Year Outlook
The Company had 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 approximately
- Total revenue is expected to be
$55.5 to $56.5 millionin the fiscal 2020 second quarter and $114.0 to $115.0 millionfor the fiscal 2020 six-month period. North Americarevenue is expected to be up $10.5 to $11.5 millionand international revenue is expected to be down $21.5 to $22.5 millionwhen comparing the fiscal 2020 and fiscal 2019 six-month periods.
- Gross margins are anticipated to be 32.5% to 33.0% in the fiscal 2020 second quarter and 35.5% to 36.0% in the fiscal 2020 six-month period. In the fiscal 2019 six-month period, the Company reported gross margins of 32.2%.
- Non-GAAP operating loss in the fiscal 2020 second quarter is anticipated to be
$0.9 million to $1.1 millionand for the fiscal 2020 six-month period, non-GAAP operating income is expected to be $2.0 to $2.2 million. Adjusted EBITDA in the fiscal 2020 second quarter is anticipated to be near break-even, and for the fiscal 2020 six-month period is expected to be $4.0 to $4.2 million. Capacity constraints caused by a cyberattack at one of our contract manufacturers, and higher sales commissions based on stronger than anticipated bookings, among others, have the most direct impact on non-GAAP operating income and Adjusted EBITDA.
- Cash and cash equivalents as of
December 27, 2019were anticipated to be approximately $38 million, approximately a $6 millionincrease, as compared to June 28, 2019, and an approximately $3.5 millionimprovement sequentially, as compared to September 27, 2019.
About Aviat Networks
The information contained in this document includes forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933 including Aviat's beliefs and expectations regarding business conditions, new product solutions, customer positioning, revenue, future orders, bookings, new contracts, cost structure, operating income, profitability in fiscal 2020, process improvements, realignment plans and review of strategic alternatives. All statements, trend analyses and other information contained herein regarding the foregoing beliefs and expectations, as well as about the markets for the services and products of Aviat and trends in revenue, and other statements identified by the use of forward-looking terminology, including "anticipate," "believe," "plan," "estimate," "expect," "goal," "will," "see," "continue," "delivering," "view," and "intend," or the negative of these terms or other similar expressions, constitute forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, forward-looking statements are based on estimates reflecting the current beliefs, expectations and assumptions of the senior management of Aviat regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Such 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. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include the following:
- continued price and margin erosion as a result of increased competition in the microwave transmission industry;
- the impact of the volume, timing and customer, product and geographic mix of our product orders;
- Aviat's ability to meet financial covenant requirements which could impact, among other things, its liquidity;
- the timing of Aviat's receipt of payment for products or services from its customers;
- Aviat's ability to meet projected new product development dates or anticipated cost reductions of new products;
- Aviat's suppliers' inability to perform and deliver on time as a result of their financial condition, component shortages, or other supply chain constraints;
- customer acceptance of new products;
- the ability of Aviat's subcontractors to timely perform;
- continued weakness in the global economy affecting customer spending;
- retention of Aviat's key personnel;
- Aviat's ability to manage and maintain key customer relationships;
- uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation;
- Aviat's failure to protect its intellectual property rights or defend against intellectual property infringement claims by others;
- the results of restructuring efforts;
- the ability to preserve and use Aviat's net operating loss carryforwards;
- the effects of currency and interest rate risks;
- the conduct of unethical business practices in developing countries;
- the impact of political turmoil in countries where Aviat has significant business; and
- Aviat's ability to implement its stock repurchase program or that it will enhance long-term stockholder value.
For more information regarding the risks and uncertainties for Aviat's business, see "Risk Factors" in Aviat's Form 10-K filed with the U.S. Securities and Exchange Commission ("
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