0001377789false200 Parker Dr., Suite C100AAustinTexas78728(408)941-710000013777892022-11-022022-11-02

Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2022
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
(Commission File
(I.R.S. Employer
of incorporation)
Identification No.)
(Address of principal executive offices, including zip code)
200 Parker Dr., Suite C100A, Austin, Texas 78728
Registrant’s telephone number, including area code: (408)-941-7100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value, $0.01 per shareAVNWThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02 Results of Operations and Financial Condition.
On November 2, 2022, Aviat Networks, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter and three months ended September 30, 2022. A copy of the press release is filed as Exhibit 99.1 to this report. The Company also posted to its website an Investor Presentation with respect to its first quarter ended September 30, 2022.
The information in this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
The press release and Investor Presentation refer to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in Exhibit 99.1 of this report.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.    Description
99.1    Press Release, issued by Aviat Networks, Inc. on November 2, 2022
104     Cover Page Interactive Data File (embedded within the Inline XBRL document)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
November 2, 2022
/s/ David M. Gray
David M. Gray
Senior Vice President and Chief Financial Officer




Aviat Networks Announces Fiscal 2023 First Quarter Financial Results

Total Revenue of $81.3 million; Up 11.1% Year-Over-Year
GAAP Gross Margin of 36.3%; Compared to 35.7% in Prior Year;
Adjusted EBITDA of $10.7 million; Up 11.3% Compared to Prior Year

AUSTIN, Texas, November 2, 2022 -- Aviat Networks, Inc. (“Aviat Networks,” “Aviat,” or the “Company”), (Nasdaq: AVNW), the leading expert in wireless transport solutions, today reported financial results for its fiscal 2023 first quarter ended September 30, 2022.

First Quarter Highlights
Company executed on key long-term strategic objectives resulting in continued year-over-year increase in quarterly revenues, gross margins, and Adjusted EBITDA.
Closed first acquisition in over a decade (Redline Communications) and integration has progressed as planned.
Bharti Airtel win proves the Company’s differentiation in products and services for 5G, supply chain, and operating system.
Company launched its Vendor Agnostic Multi-Band solution which allows customers to cost-effectively add significant capacity to their network.
Released new software that enables integrated IP/MPLS and Segment Routing to be deployed out to the network edge using Aviat's WTM 4000 all-outdoor microwave, millimeter-wave and multi-band radio platform for lower total cost of ownership for 5G and private LTE deployments.
First Quarter Financial Highlights

Total Revenues: $81.3 million, +11.1% from same quarter last year
GAAP Results: Gross Margin 36.3%; Operating Expenses $25.5 million; Operating Income $3.9 million; Net Income before tax $1.1 million
Non-GAAP Results: Adjusted EBITDA $10.7 million; Gross Margin 36.5%; Operating Expenses $20.4 million; Operating Income $9.2 million; Net Income $8.8 million; Net Income per share $0.75
Net Cash and Marketable Securities: $22.9 million; no loans outstanding at quarter-end
Fiscal 2023 First Quarter
The Company reported total revenues of $81.3 million for its fiscal 2023 first quarter, compared to $73.2 million in the comparable fiscal 2022 period, an increase of $8.1 million or 11.1%. North America revenue of $48.8 million decreased by $(2.1) million or (4.1)%, compared to $50.9 million in the comparable fiscal 2022 period. International revenue was $32.4 million compared to $22.2 million in the comparable fiscal 2022 period, an increase of $10.2 million or 45.8%.

Gross Margins
In the fiscal 2023 first quarter, the Company reported GAAP gross margin of 36.3% and non-GAAP gross margin of 36.5%. This compares to GAAP gross margin of 35.7% and non-GAAP gross margin of 35.7% in the comparable fiscal 2022 period, an increase of 60 and 80 basis points respectively. The improvement resulted from pricing actions to offset inflationary pressures, and the accretive contribution of the Redline business, partially offset by mix.

Operating Expenses
GAAP total operating expenses for the fiscal 2023 first quarter were $25.5 million, compared to $19.3 million in the comparable fiscal 2022 period, an increase of $6.3 million or 32.6%. The increase was primarily due to the addition of Redline Operating Expenses and related restructuring charge as well as merger and acquisition related costs. Non-GAAP total operating expenses, excluding the impact of restructuring charges, share-based compensation, and merger and acquisition expenses for the fiscal 2023 first quarter were $20.4 million, as compared to $17.8 million in the comparable fiscal 2022 period, an increase of $2.6 million or 14.6%. The increase primarily resulted from the consolidation of Redline Operating Expenses.

Operating Income
The Company reported GAAP operating income of $3.9 million for the fiscal 2023 first quarter, compared to $6.8 million in the comparable fiscal 2022 period. On a non-GAAP basis, the Company reported operating income of $9.2 million for the fiscal 2023 first quarter, compared to $8.3 million in the comparable fiscal 2022 period.

Income Taxes
The Company reported GAAP income tax expense of $3.9 million in the fiscal 2023 first quarter, compared to $2.2 million in the comparable fiscal 2022 period, or an increase of $1.7 million.

Net Income (Loss) / Net Income (Loss) Per Share
The Company reported GAAP net loss of $(2.7) million in the fiscal 2023 first quarter or GAAP net loss per fully diluted share of $(0.25). This compared to GAAP net income of $4.7 million or $0.39 per fully diluted share in the comparable fiscal 2022 period. On a non-GAAP basis, the Company reported net income of $8.8 million or non-GAAP net income per fully diluted share of $0.75 in the fiscal 2023 first quarter, compared to a non-GAAP net income of $8.1 million or $0.67 per share in the comparable fiscal 2022 period.

Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) for the fiscal 2023 first quarter was $10.7 million, compared to $9.6 million in the comparable fiscal 2022 period.

Balance Sheet Highlights
The Company reported cash and marketable securities of $22.9 million as of September 30, 2022, compared to $47.8 million as of July 1, 2022. As of September 30, 2022, the Company has no loans outstanding. The decline in cash balance was primarily attributable to the closure of the Redline acquisition and related expenses.
Conference Call Details
Aviat Networks will host a conference call at 5:00 p.m. Eastern Time (ET) today, November 2, 2022, to discuss its financial and operational results for the fiscal 2023 first quarter. Participating on the call will be Peter Smith, President and Chief Executive Officer; David M. Gray, Sr. Vice President and Chief Financial Officer; and Andrew Fredrickson, Director of Corporate Development and Investor Relations. Following management's remarks, there will be a question and answer period.

Interested parties may access the conference call live via the webcast through Aviat Network's Investor Relations website at https://investors.aviatnetworks.com/events-and-presentations/events, or may participate via telephone by registering using this online form. Once registered, telephone participants will receive the dial-in number along with a unique PIN number that must be used to access the call. A replay of the conference call webcast will be available after the call on the Company's investor relations website.

About Aviat Networks    
Aviat Networks, Inc. is the leading expert in wireless transport solutions and works to provide dependable products, services and support to its customers. With more than one million systems sold in 170 countries worldwide, communications service providers and private network operators including state/local government, utility, federal government and defense organizations trust Aviat with their critical applications. Coupled with a long history of microwave innovations, Aviat provides a comprehensive suite of localized professional and support services enabling customers to simplify both their networks and their lives. For more than 70 years, the experts at Aviat have delivered high-performance products, simplified operations, and the best overall customer experience. Aviat

Networks is headquartered in Austin, Texas. For more information, visit www.aviatnetworks.com or connect with Aviat Networks on TwitterFacebook and LinkedIn.

Forward-Looking Statements

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, 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 2023, 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: the impact of COVID-19; disruptions relating to the ongoing conflict between Russia and Ukraine; continued price and margin erosion in the microwave transmission industry; the impact of the volume, timing, and customer, product, and geographic mix of our product orders; the timing of our receipt of payment; our ability to meet product development dates or cost reductions of products; our suppliers' inability to perform and deliver on time, component shortages, or other supply chain constraints; the effects of inflation; the ability of our subcontractors to timely perform; weakness in the global economy affecting customer spending; retention of our key personnel; our failure to protect our intellectual property rights or defend against intellectual property infringement claims; the results of our restructuring efforts; the ability to preserve and use our net operating loss carryforwards; the effects of currency and interest rate risks; the effects of current and future government regulations; general economic conditions, including uncertainty regarding the timing, pace and extent of an economic recovery in the United States and other countries where we conduct business; the conduct of unethical business practices in developing countries; the impact of political turmoil in countries where we have significant business; our ability to realize the anticipated benefits of any proposed or recent acquisitions; the impact of tariffs, the adoption of trade restrictions affecting our products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships.

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 ("SEC") on September 14, 2022, as well as other reports filed by Aviat with the SEC from time to time. Aviat undertakes no obligation to update publicly any forward-looking statement, whether written or oral, for any reason, except as required by law, even as new information becomes available or other events occur in the future.

Investor Relations:
Andrew Fredrickson
Director, Corporate Development & Investor Relations
Phone: (408) 501-6214
Email: andrew.fredrickson@aviatnet.com

Table 1
Fiscal Year 2023 First Quarter Summary
 Three Months Ended
(In thousands, except per share amounts)September 30,
October 1,
Revenue from product sales$55,101 $50,847 
Revenue from services26,150 22,311 
Total revenues81,251 73,158 
Cost of revenues:
Cost of product sales35,253 31,925 
Cost of services16,544 15,152 
Total cost of revenues51,797 47,077 
Gross margin29,454 26,081 
Operating expenses:
Research and development expenses6,087 5,910 
Selling and administrative expenses17,504 12,698 
Restructuring charges1,950 659 
Total operating expenses25,541 19,267 
Operating income3,913 6,814 
Other expense/(income), net2,782 (28)
Income before income taxes1,131 6,842 
Provision for income taxes3,877 2,160 
Net (loss) income$(2,746)$4,682 
Net (loss) income per share of common stock outstanding:
Weighted-average shares outstanding:
Basic11,200 11,159 
Diluted11,200 11,954 

Table 2
Fiscal Year 2023 First Quarter Summary
(In thousands)September 30,
July 1,
Current Assets:
Cash and cash equivalents$21,607 $36,877 
Marketable securities1,252 10,893 
Accounts receivable, net72,471 73,168 
Unbilled receivables50,389 45,857 
Inventories32,888 25,394 
Customer service inventories2,069 1,775 
Other current assets16,279 12,437 
Total current assets196,955 206,401 
Property, plant and equipment, net11,923 8,887 
Goodwill4,950 — 
Intangible assets, net7,166 — 
Deferred income taxes92,310 95,412 
Right of use assets2,987 2,759 
Other assets10,437 10,445 
Total long-term assets129,773 117,503 
TOTAL ASSETS$326,728 $323,904 
Current Liabilities:
Accounts payable$48,236 $42,394 
Accrued expenses24,806 26,451 
Short-term lease liabilities833 513 
Advance payments and unearned revenue35,483 33,740 
Restructuring liabilities1,522 1,381 
Total current liabilities110,880 104,479 
Unearned revenue7,844 8,920 
Long-term lease liabilities2,407 2,412 
Other long-term liabilities246 273 
Reserve for uncertain tax positions5,366 5,504 
Deferred income taxes563 563 
Total liabilities127,306 122,151 
Commitments and contingencies
Preferred stock — 
Common stock113 112 
Treasury stock(6,147)(6,147)
Additional paid-in-capital824,786 823,259 
Accumulated deficit(602,188)(599,442)
Accumulated other comprehensive loss(17,142)(16,029)
Total equity199,422 201,753 

Fiscal Year 2023 First Quarter Summary
To supplement the consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (GAAP), we provide additional measures of gross margin, research and development expenses, selling and administrative expenses, operating income, provision for or benefit from income taxes, net income, net income per share, and adjusted income before interest, tax, depreciation and amortization (Adjusted EBITDA), in each case, adjusted to exclude certain costs, charges, gains and losses, as set forth below. We believe 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. Reconciliations of these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP follow.

Table 3
Fiscal Year 2023 First Quarter Summary
Condensed Consolidated Statements of Operations

 Three Months Ended
 September 30, 2022% of
October 1, 2021% of
 (In thousands, except percentages and per share amounts)
GAAP gross margin$29,454 36.3 %$26,081 35.7 %
Share-based compensation172 68 
Non-GAAP gross margin29,626 36.5 %26,149 35.7 %
GAAP research and development expenses$6,087 7.5 %$5,910 8.1 %
Share-based compensation(135)(76)
Non-GAAP research and development expenses5,952 7.3 %5,834 8.0 %
GAAP selling and administrative expenses$17,504 21.5 %$12,698 17.4 %
Share-based compensation(1,531)(719)
Merger and acquisition related expense(1,516)— 
Non-GAAP selling and administrative expenses14,457 17.8 %11,979 16.4 %
GAAP operating income$3,913 4.8 %$6,814 9.3 %
Share-based compensation1,838 863 
Merger and acquisition related expense1,516 — 
Restructuring charges1,950 659 
Non-GAAP operating income9,217 11.3 %8,336 11.4 %
GAAP income tax provision$3,877 4.8 %$2,160 3.0 %
Adjustment to reflect pro forma tax rate(3,577)(1,860)
Non-GAAP income tax provision300 0.4 %300 0.4 %
GAAP net (loss) income$(2,746)(3.4)%$4,682 6.4 %
Share-based compensation1,838 863 
Merger and acquisition related expense1,516 — 
Restructuring charges1,950 659 
Other expense 2,659 — 
Adjustment to reflect pro forma tax rate3,577 1,860 
Non-GAAP net income$8,794 10.8 %$8,064 11.0 %
Net income per share:
Non-GAAP$0.75 $0.67 
Shares used in computing net income per share
GAAP11,200 11,954 
Non-GAAP11,777 11,954 
Adjusted EBITDA:
GAAP net (loss) income$(2,746)(3.4)%$4,682 6.4 %
Depreciation and amortization of property, plant and equipment
1,468 1,264 
Other expense/(income), net2,782 (28)
Share-based compensation1,838 863 
Merger and acquisition related expense1,516 — 
Restructuring charges1,950 659 
Provision for income taxes3,877 2,160 
Adjusted EBITDA
$10,685 13.2 %$9,600 13.1 %
(1)     The adjustments above reconcile our GAAP financial results to the non-GAAP financial measures used by us. Our non-GAAP net income excluded share-based compensation, and other non-recurring charges (recovery). Adjusted EBITDA was determined by excluding depreciation and amortization on property, plant and equipment, interest, provision for or benefit from

income taxes, and non-GAAP pre-tax adjustments, as set forth above, from GAAP net income. We believe that the presentation of these non-GAAP items provides meaningful supplemental information to investors, when viewed in conjunction with, and not in lieu of, our GAAP results. However, the non-GAAP financial measures have not been prepared under a comprehensive set of accounting rules or principles. Non-GAAP information should not be considered in isolation from, or as a substitute for, information prepared in accordance with GAAP. Moreover, there are material limitations associated with the use of non-GAAP financial measures.

Table 4
Fiscal Year 2023 First Quarter Summary
 Three Months Ended
September 30,
October 1,
 (In thousands)
North America$48,848 $50,937 
Africa and the Middle East10,984 10,702 
Europe4,500 2,703 
Latin America and Asia Pacific16,919 8,816 
32,403 22,221 
Total revenue$81,251 $73,158