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x
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Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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36-3154957
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered:
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Class A Common Stock, $.01 par value
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NASDAQ Global Select Market
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Large Accelerated Filer
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¨
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Accelerated Filer
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x
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Non-Accelerated Filer
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¨
(Do not check if a smaller reporting company),
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Smaller Reporting Company
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¨
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Page
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Item
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1.
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1A.
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1B.
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2.
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3.
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4.
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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10.
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11.
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12.
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13.
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14.
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15.
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ITEM 1.
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BUSINESS
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IBW
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CSG
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Corporate
|
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Total
|
||||
Operations
|
27
|
|
|
46
|
|
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—
|
|
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73
|
|
Sales and marketing
|
—
|
|
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—
|
|
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53
|
|
|
53
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|
Research and development
|
40
|
|
|
35
|
|
|
—
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|
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75
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General and administrative
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—
|
|
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—
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|
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31
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|
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31
|
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Total employees
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67
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|
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81
|
|
|
84
|
|
|
232
|
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ITEM 1A.
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RISK FACTORS
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•
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business integration issues;
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•
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disruption to our ongoing or our acquired business;
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•
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difficulty realizing the intended benefits of the transaction;
|
•
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impairment of assets related to acquired goodwill and intangibles; and
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•
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key employee retention.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Location
|
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Purpose
|
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Square footage
|
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Termination year
|
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Segment
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Aurora, IL
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Corporate headquarters, office, CSG distribution and manufacturing
|
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179,000
|
|
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2017
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Regina, Saskatchewan, Canada
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Design center
|
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2,500
|
|
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2017
|
|
CSG
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Dublin, OH
|
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Design center
|
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9,465
|
|
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2019
|
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CSG
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Manchester, NH
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IBW distribution and manufacturing
|
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16,932
|
|
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2018
|
|
IBW
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Manchester, NH
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IBW office
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19,525
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2018
|
|
IBW
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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High
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Low
|
||||
Fiscal Year 2015
|
|
|
|
||||
First Quarter ended June 30, 2014
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$
|
3.99
|
|
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$
|
2.21
|
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Second Quarter ended September 30, 2014
|
2.59
|
|
|
1.62
|
|
||
Third Quarter ended December 31, 2014
|
1.87
|
|
|
1.22
|
|
||
Fourth Quarter ended March 31, 2015
|
1.60
|
|
|
0.96
|
|
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Fiscal Year 2014
|
|
|
|
||||
First Quarter ended June 30, 2013
|
$
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2.57
|
|
|
$
|
1.90
|
|
Second Quarter ended September 30, 2013
|
3.65
|
|
|
2.35
|
|
||
Third Quarter ended December 31, 2013
|
4.90
|
|
|
3.28
|
|
||
Fourth Quarter ended March 31, 2014
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4.73
|
|
|
3.27
|
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Period
|
Total Number of Shares Purchased (a)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as
Part of Publicly Announced
Programs (b)
|
|
Maximum Number (or Approximate Dollar
Value) that May Yet Be Purchased Under the
Programs (b)
|
||||||
January 1-31, 2015
|
—
|
|
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$
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—
|
|
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—
|
|
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$
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112,741
|
|
February 1-28, 2015
|
69,661
|
|
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$
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1.4700
|
|
|
—
|
|
|
$
|
112,741
|
|
March 1-31, 2015
|
46,711
|
|
|
$
|
1.4688
|
|
|
—
|
|
|
$
|
112,741
|
|
Total
|
116,372
|
|
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$
|
1.4695
|
|
|
—
|
|
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$
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112,741
|
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(a)
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In the quarter ended March 31, 2015, the Company repurchased 116,372 shares from employees that were surrendered to satisfy the minimum statutory tax withholding obligations on the vesting of restricted stock units. These repurchases, which are not included in the authorized share repurchase program, had a weighted-average purchase price of $1.47 per share.
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(b)
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In August 2011, the Board of Directors authorized a share repurchase program whereby the Company could repurchase up to an additional aggregate of $20.0 million of its outstanding Class A Common Stock. There was approximately $0.1 million remaining under this program as of March 31, 2015.
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3/10
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3/11
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3/12
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3/13
|
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3/14
|
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3/15
|
||||||
Westell Technologies, Inc.
|
100.00
|
|
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246.48
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164.08
|
|
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141.55
|
|
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259.86
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|
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92.25
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NASDAQ Composite
|
100.00
|
|
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116.88
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|
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132.91
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|
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143.55
|
|
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188.17
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|
|
219.78
|
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NASDAQ Telecommunications
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100.00
|
|
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100.68
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|
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97.60
|
|
|
103.52
|
|
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130.88
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|
|
137.97
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ITEM 6.
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SELECTED FINANCIAL DATA
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(in thousands, except per share data)
|
Fiscal Year Ended March 31,
|
||||||||||||||||||
Statement of Operations Data:
|
2015
|
|
2014
(adjusted
(1) (2)
)
|
|
2013
(adjusted (1) ) |
|
2012
(adjusted (1) ) |
|
2011
(adjusted (1) ) |
||||||||||
Revenue
|
$
|
84,127
|
|
|
$
|
102,073
|
|
|
$
|
38,808
|
|
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$
|
43,629
|
|
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$
|
58,770
|
|
Cost of revenue
|
57,317
|
|
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61,612
|
|
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26,192
|
|
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27,144
|
|
|
35,088
|
|
|||||
Gross profit
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26,810
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|
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40,461
|
|
|
12,616
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|
|
16,485
|
|
|
23,682
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
12,407
|
|
|
13,304
|
|
|
6,783
|
|
|
5,156
|
|
|
7,959
|
|
|||||
Research and development
|
17,348
|
|
|
11,339
|
|
|
5,928
|
|
|
5,460
|
|
|
5,038
|
|
|||||
General and administrative
|
14,678
|
|
|
14,027
|
|
|
9,310
|
|
|
6,996
|
|
|
8,623
|
|
|||||
Intangible amortization
|
6,377
|
|
|
4,889
|
|
|
887
|
|
|
544
|
|
|
—
|
|
|||||
Restructuring
|
3,243
|
|
|
335
|
|
|
149
|
|
|
276
|
|
|
—
|
|
|||||
Goodwill impairment
|
31,102
|
|
|
—
|
|
|
2,884
|
|
|
—
|
|
|
540
|
|
|||||
Total operating expenses
|
85,155
|
|
|
43,894
|
|
|
25,941
|
|
|
18,432
|
|
|
22,160
|
|
|||||
Operating income (loss) from continuing operations
|
(58,345
|
)
|
|
(3,433
|
)
|
|
(13,325
|
)
|
|
(1,947
|
)
|
|
1,522
|
|
|||||
Other income (expense), net
|
(2
|
)
|
|
(56
|
)
|
|
175
|
|
|
331
|
|
|
20
|
|
|||||
Income (loss) before income tax and before discontinued operations
|
(58,347
|
)
|
|
(3,489
|
)
|
|
(13,150
|
)
|
|
(1,616
|
)
|
|
1,542
|
|
|||||
Income tax (expense) benefit
|
201
|
|
|
8,460
|
|
|
(29,392
|
)
|
|
686
|
|
|
53,326
|
|
|||||
Net income (loss) from continuing operations
|
(58,146
|
)
|
|
4,971
|
|
|
(42,542
|
)
|
|
(930
|
)
|
|
54,868
|
|
|||||
Income (loss) from discontinued operations, net of income tax
|
139
|
|
|
(45
|
)
|
|
(1,496
|
)
|
|
42,912
|
|
|
13,068
|
|
|||||
Net income (loss)
|
$
|
(58,007
|
)
|
|
$
|
4,926
|
|
|
$
|
(44,038
|
)
|
|
$
|
41,982
|
|
|
$
|
67,936
|
|
Basic net income (loss) per share
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income (loss) from continuing operations
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.71
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.81
|
|
Basic net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.64
|
|
|
0.19
|
|
|||||
Basic net income (loss) per share
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.73
|
)
|
|
$
|
0.63
|
|
|
$
|
1.00
|
|
Weighted average number of basic common shares outstanding
|
59,985
|
|
|
58,786
|
|
|
59,944
|
|
|
66,657
|
|
|
67,848
|
|
|||||
Diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted net income (loss) from continuing operations
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.71
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.79
|
|
Diluted net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.64
|
|
|
0.19
|
|
|||||
Diluted net income (loss) per share
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.73
|
)
|
|
$
|
0.63
|
|
|
$
|
0.98
|
|
Weighted average number of diluted common shares outstanding
|
59,985
|
|
|
60,048
|
|
|
59,944
|
|
|
66,657
|
|
|
69,477
|
|
|||||
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
14,026
|
|
|
$
|
35,793
|
|
|
$
|
88,233
|
|
|
$
|
120,832
|
|
|
$
|
86,408
|
|
Working capital
(3)
|
19,670
|
|
|
24,281
|
|
|
12,637
|
|
|
12,461
|
|
|
29,457
|
|
|||||
Total assets
|
100,307
|
|
|
160,874
|
|
|
142,437
|
|
|
197,426
|
|
|
201,387
|
|
|||||
Total stockholders’ equity
|
$
|
83,184
|
|
|
$
|
139,192
|
|
|
$
|
131,077
|
|
|
$
|
186,364
|
|
|
$
|
159,281
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Revenue
|
Fiscal Year Ended March 31,
|
|
Increase (Decrease)
|
||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015 vs.
2014 |
|
2014 vs.
2013 |
||||||||||
IBW
|
$
|
37,714
|
|
|
$
|
13,096
|
|
|
$
|
904
|
|
|
$
|
24,618
|
|
|
$
|
12,192
|
|
CSG
|
46,413
|
|
|
88,977
|
|
|
37,904
|
|
|
(42,564
|
)
|
|
51,073
|
|
|||||
Consolidated revenue
|
$
|
84,127
|
|
|
$
|
102,073
|
|
|
$
|
38,808
|
|
|
$
|
(17,946
|
)
|
|
$
|
63,265
|
|
Sales and marketing (S&M)
|
Fiscal Year Ended March 31,
|
|
Increase (Decrease)
|
||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015 vs.
2014 |
|
2014 vs.
2013 |
||||||||||
Consolidated S&M expense
|
$
|
12,407
|
|
|
$
|
13,304
|
|
|
$
|
6,783
|
|
|
$
|
(897
|
)
|
|
$
|
6,521
|
|
Percentage of Revenue
|
15
|
%
|
|
13
|
%
|
|
17
|
%
|
|
|
|
|
Research and development (R&D)
|
Fiscal Year Ended March 31,
|
|
Increase (Decrease)
|
||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015 vs.
2014 |
|
2014 vs.
2013 |
||||||||||
IBW
|
$
|
8,955
|
|
|
$
|
1,360
|
|
|
$
|
305
|
|
|
$
|
7,595
|
|
|
$
|
1,055
|
|
CSG
|
8,393
|
|
|
9,979
|
|
|
5,623
|
|
|
(1,586
|
)
|
|
4,356
|
|
|||||
Consolidated R&D expense
|
$
|
17,348
|
|
|
$
|
11,339
|
|
|
$
|
5,928
|
|
|
$
|
6,009
|
|
|
$
|
5,411
|
|
Percentage of Revenue
|
21
|
%
|
|
11
|
%
|
|
15
|
%
|
|
|
|
|
General and administrative (G&A)
|
Fiscal Year Ended March 31,
|
|
Increase (Decrease)
|
||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015 vs.
2014 |
|
2014 vs.
2013 |
||||||||||
Consolidated G&A expense
|
$
|
14,678
|
|
|
$
|
14,027
|
|
|
$
|
9,310
|
|
|
$
|
651
|
|
|
$
|
4,717
|
|
Percentage of Revenue
|
17
|
%
|
|
14
|
%
|
|
24
|
%
|
|
|
|
|
Restructuring
|
Fiscal Year Ended March 31,
|
|
Increase (Decrease)
|
||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015 vs.
2014 |
|
2014 vs.
2013 |
||||||||||
Consolidated restructuring expense
|
$
|
3,243
|
|
|
$
|
335
|
|
|
$
|
149
|
|
|
$
|
2,908
|
|
|
$
|
186
|
|
Intangible amortization
|
Fiscal Year Ended March 31,
|
|
Increase (Decrease)
|
||||||||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015 vs.
2014 |
|
2014 vs.
2013 |
||||||||||
Consolidated intangible amortization
|
$
|
6,377
|
|
|
$
|
4,889
|
|
|
$
|
887
|
|
|
$
|
1,488
|
|
|
$
|
4,002
|
|
|
Payments due by fiscal year
|
||||||||||||||||||||||||||
(in thousands)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Purchase obligations
|
$
|
9,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,030
|
|
Future minimum lease payments for operating leases
|
2,638
|
|
|
2,635
|
|
|
1,023
|
|
|
189
|
|
|
58
|
|
|
—
|
|
|
6,543
|
|
|||||||
Contingent consideration
|
$
|
1,184
|
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,584
|
|
Future obligations and commitments
|
$
|
12,852
|
|
|
$
|
3,035
|
|
|
$
|
1,023
|
|
|
$
|
189
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
17,157
|
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
|
Exhibit
Number
|
|
Document Description
|
|
|
|
2.1
|
|
Asset Purchase Agreement dated as of March 17, 2011, by and between Westell Technologies, Inc., Westell, Inc., NETGEAR, Inc., and NETGEAR Ltd. (incorporated herein by reference to Exhibit 2.1 to the Company's Form 8-K filed on March 18, 2011).
|
|
|
|
2.2
|
|
Stock Purchase Agreement, dated December 20, 2011, among Arkadin S.A.S, Arkadin, Inc. and Westell Technologies, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on December 21, 2011).
|
|
|
|
2.3
|
|
Agreement and Plan of Merger, dated as of March 15, 2013, by and among Westell, Inc., Wes Acquisition Sub, Inc., Kentrox, Inc., and Investcorp Technology Ventures II, L.P. (incorporated by reference to Exhibit 2.1 to the Westell Technologies, Inc. Form 8-K filed on March 18, 2013).
|
|
|
|
2.4
|
|
Stock Purchase Agreement, dated as of March 1, 2014, by and among Westell, Inc., Cellular Specialties, Inc., the shareholders of Cellular Specialties, Inc., Scott T. Goodrich and R. Bruce Wilson, in their capacity as the sellers’ representative and each of Scott T. Goodrich, Fred N.S. Goodrich, Kelley Carr, and R. Bruce Wilson (incorporated by reference to Exhibit 2.1 to the Westell Technologies, Inc. Form 8-K filed on March 3, 2014).
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation, as amended (incorporated herein by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
|
|
|
|
3.2
|
|
Amended and Restated By-laws (incorporated herein by reference to Exhibit 3.1 to the Company's Form 8-K filed on December 18, 2009).
|
|
|
|
9.1
|
|
Voting Trust Agreement dated February 23, 1994, as amended (incorporated herein by reference to Exhibit 9.1 to the Company's Registration Statement on Form S-1, as amended, Registration No. 33-98024).
|
|
|
|
9.1(a)
|
|
Third Amendment to Voting Trust Agreement, dated as of April 30, 2015 (incorporated herein by reference to Exhibit 1 to Amendment No. 16 to Schedule 13D filed by Robert C. Penny III, Robert W. Foskett and Patrick J. McDonough, Jr. filed on May 5, 2015).
|
|
|
|
|
|
|
10.1
|
|
Stock Transfer Restriction Agreement entered into by members of the Penny family, as amended (incorporated herein by reference to Exhibits 10.4 and 10.16 to the Company's Registration Statement on Form S-1, as amended, Registration No. 33-98024).
|
|
|
|
10.2
|
|
Form of Registration Rights Agreement among Westell Technologies, Inc. and trustees of the Voting Trust dated February 23, 1994 (incorporated herein by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1, as amended, Registration No. 33-98024).
|
|
|
|
*10.3
|
|
1995 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-1, as amended, Registration No. 33-98024).
|
|
|
|
*10.4
|
|
Offer letter for Charles S. Bernstein.
|
|
|
|
10.5
|
|
Lease dated September 29, 1997, between WTI (IL) QRS 12-36, Inc., and Westell, Inc. (incorporated herein by reference to Exhibit 99.3 to the Company's Form 8-K filed on October 2, 1997).
|
|
|
|
10.6
|
|
Settlement Agreement dated November 30, 2002, with respect to the lease dated September 29, 1997 (incorporated herein by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended March 31, 2008).
|
|
|
|
*10.7
|
|
Form of Indemnification Agreement for Directors and Officers of the Company (incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010).
|
|
|
|
*10.8
|
|
Westell Technologies, Inc. 2004 Stock Incentive Plan, as amended and restated as of June 29, 2010 (incorporated herein by reference to Annex A to the Company's Proxy Statement for the 2010 Annual Meeting of Stockholders filed on July 29, 2010).
|
|
|
|
*10.9(a)
|
|
Form of Restricted Stock Unit Award for awards granted on or prior to April 4, 2011, under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended March 31, 2010).
|
|
|
|
*10.9(b)
|
|
Form of Restricted Stock Unit Award Agreement for awards granted to Richard S. Gilbert on April 4, 2011 under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 6, 2011).
|
|
|
|
*10.9(c)
|
|
Form of Restricted Stock Unit Award Agreement for awards granted subsequent to April 4, 2011, under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.10(c) to the Company's Annual Report on Form 10-K for the year ended March 31, 2012).
|
|
|
|
*10.10
|
|
Form of Non-Qualified Stock Option Award under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2008).
|
|
|
|
*10.11
|
|
Severance agreement for Amy T. Forster (incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed for the quarter ended June 30, 2013).
|
|
|
|
*10.12
|
|
Form of Performance Stock Unit Award Agreement for awards granted subsequent to March 31, 2013 under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K filed on March 28, 2014).
|
|
|
|
*10.13
|
|
Form of Incentive Stock Option Award under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year ended March 31, 2010).
|
|
|
|
*10.14
|
|
Employment Agreement, dated January 18, 2011, by and among Westell Technologies, Inc., Westell, Inc. and Richard S. Gilbert (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed on January 19, 2011).
|
|
|
|
*10.15
|
|
Westell Technologies, Inc. Incentive Compensation Plan (incorporated herein by reference to Annex B to the Company's Proxy Statement for the 2010 Annual Meeting of Stockholders filed on July 29, 2010).
|
|
|
|
*10.16
|
|
Summary of Director Compensation.
|
|
|
|
*10.17
|
|
Form of Non-Employee Director Restricted Stock Award under the 2004 Stock Incentive Plan for awards granted prior to April 2010 (incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2010).
|
|
|
*10.18
|
|
Form of Non-Employee Director Restricted Stock Award under the 2004 Stock Incentive Plan for awards granted on or after April 1, 2010 (incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2010).
|
|
|
|
*10.19
|
|
Form of Non-Qualified Stock Option Award granted subsequent to May 2010 under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 18, 2013).
|
|
|
|
*10.20
|
|
Form of Performance Stock Unit Award Agreement for awards granted in fiscal year 2014 under the Westell Technologies, Inc. 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K filed on June 18, 2013).
|
|
|
|
*10.21
|
|
Offer letter for Richard S. Cremona (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 26, 2013).
|
|
|
|
*10.22
|
|
Employment agreement for Thomas P. Minichiello (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 28, 2013).
|
|
|
|
*10.23
|
|
Offer letter for Benjamin S. Stump (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed for the quarter ended June 30, 2013).
|
|
|
|
*10.24
|
|
Offer letter for Scott T. Goodrich (incorporated herein by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2014).
|
|
|
|
*10.25
|
|
Offer letter for Mark Skurla (incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed for the quarter ended October 31, 2014).
|
|
|
|
*10.26
|
|
Form of Non-Employee Director Restricted Stock Award (as amended) (incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed for the quarter ended October 31, 2014).
|
|
|
|
*10.27
|
|
Offer Letter for J. Thomas Gruenwald (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K filed on February 11, 2015).
|
|
|
|
*10.28
|
|
Form of Stock Option Award Agreement for award granted to J. Thomas Gruenwald on February 10, 2015.
|
|
|
|
*10.29
|
|
Form of Restricted Stock Unit Award Agreement for award granted to J. Thomas Gruenwald on February 10, 2015.
|
|
|
|
18.1
|
|
Preference letter regarding change in accounting principle (incorporated herein by reference to Exhibit 18 to the Company's Form 10-Q filed on August 1, 2014).
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant.
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following financial information from the Annual Report on Form 10-K for the year ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income (Loss); (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to the Consolidated Financial Statements.
|
*
|
Management contract or compensatory plan or arrangement.
|
|
|
|
WESTELL TECHNOLOGIES, INC.
|
||
|
|
|
By
|
|
/s/ J. Thomas Gruenwald
|
|
|
J. Thomas Gruenwald
|
|
|
President and Chief Executive Officer
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ J. Thomas Gruenwald
|
|
President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
|
J. Thomas Gruenwald
|
|
|
|
|
|
/s/ Thomas P. Minichiello
|
|
Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer)
|
Thomas P. Minichiello
|
|
|
|
|
|
/s/ Amy T. Forster
|
|
Vice President and Corporate Controller
(Principal Accounting Officer)
|
Amy T. Forster
|
|
|
|
|
|
/s/ Fared Adib
|
|
Director
|
Fared Adib
|
|
|
|
|
|
/s/ Robert W. Foskett
|
|
Director
|
Robert W. Foskett
|
|
|
|
|
|
/s/ Dennis O. Harris
|
|
Director
|
Dennis O. Harris
|
|
|
|
|
|
/s/ Martin Hernandez
|
|
Director
|
Martin Hernandez
|
|
|
|
|
|
/s/ Eileen A. Kamerick
|
|
Director
|
Eileen A. Kamerick
|
|
|
|
|
|
/s/ Robert C. Penny III
|
|
Director
|
Robert C. Penny III
|
|
|
Page
|
Item
|
|
|
|
|
|
|
|
|
|
(In thousands, except share amounts
)
|
March 31, 2015
|
|
March 31, 2014(adjusted
(1)
)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14,026
|
|
|
$
|
35,793
|
|
Short-term investments
|
23,906
|
|
|
15,584
|
|
||
Accounts receivable (net of allowance of $408 and $82 as of March 31, 2015 and 2014, respectively)
|
11,845
|
|
|
15,831
|
|
||
Inventories
|
16,205
|
|
|
24,056
|
|
||
Prepaid expenses and other current assets
|
3,285
|
|
|
1,952
|
|
||
Deferred income tax assets
|
973
|
|
|
899
|
|
||
Land held-for-sale
|
264
|
|
|
264
|
|
||
Total current assets
|
70,504
|
|
|
94,379
|
|
||
Land, Property and equipment:
|
|
|
|
||||
Land
|
672
|
|
|
780
|
|
||
Machinery and equipment
|
1,701
|
|
|
1,413
|
|
||
Office, computer and research equipment
|
6,260
|
|
|
9,039
|
|
||
Leasehold improvements
|
7,451
|
|
|
7,450
|
|
||
Total property and equipment, gross
|
16,084
|
|
|
18,682
|
|
||
Less accumulated depreciation and amortization
|
(12,481
|
)
|
|
(16,001
|
)
|
||
Property and equipment, net
|
3,603
|
|
|
2,681
|
|
||
Goodwill
|
—
|
|
|
31,102
|
|
||
Other intangible assets, net
|
25,942
|
|
|
32,319
|
|
||
Other non-current assets
|
258
|
|
|
393
|
|
||
Total assets
|
$
|
100,307
|
|
|
$
|
160,874
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,011
|
|
|
$
|
7,508
|
|
Accrued expenses
|
3,157
|
|
|
2,920
|
|
||
Accrued restructuring
|
1,161
|
|
|
57
|
|
||
Accrued compensation
|
974
|
|
|
4,395
|
|
||
Contingent consideration
|
1,184
|
|
|
2,067
|
|
||
Deferred revenue
|
2,415
|
|
|
1,774
|
|
||
Total current liabilities
|
12,902
|
|
|
18,721
|
|
||
Deferred revenue non-current
|
751
|
|
|
787
|
|
||
Deferred income tax liability
|
1,019
|
|
|
1,072
|
|
||
Accrued restructuring non-current
|
1,642
|
|
|
—
|
|
||
Contingent consideration non-current
|
400
|
|
|
574
|
|
||
Other non-current liabilities
|
409
|
|
|
528
|
|
||
Total liabilities
|
17,123
|
|
|
21,682
|
|
||
Commitments and contingencies (see Notes 2 and 6)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Class A common stock, par $0.01, Authorized – 109,000,000 shares
Outstanding – 46,839,361 and 45,852,740 shares at March 31, 2015 and 2014, respectively |
468
|
|
|
459
|
|
||
Class B common stock, par $0.01, Authorized – 25,000,000 shares
Issued and outstanding – 13,937,151 shares at both March 31, 2015 and 2014 |
139
|
|
|
139
|
|
||
Preferred stock, par $0.01, Authorized – 1,000,000 shares Issued and outstanding – none
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
413,026
|
|
|
410,176
|
|
||
Treasury stock at cost – 17,466,855 and 17,130,965 shares at March 31, 2015 and 2014, respectively
|
(35,066
|
)
|
|
(34,206
|
)
|
||
Cumulative translation adjustment
|
608
|
|
|
608
|
|
||
Accumulated deficit
|
(295,991
|
)
|
|
(237,984
|
)
|
||
Total stockholders’ equity
|
83,184
|
|
|
139,192
|
|
||
Total liabilities and stockholders’ equity
|
$
|
100,307
|
|
|
$
|
160,874
|
|
(In thousands, except per share amounts)
|
Fiscal Year Ended March 31,
|
||||||||||
|
2015
|
|
2014
(adjusted
(1) (2)
)
|
|
2013
(adjusted
(1)
)
|
||||||
Revenue
|
$
|
84,127
|
|
|
$
|
102,073
|
|
|
$
|
38,808
|
|
Cost of revenue
|
57,317
|
|
|
61,612
|
|
|
26,192
|
|
|||
Gross profit
|
26,810
|
|
|
40,461
|
|
|
12,616
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
12,407
|
|
|
13,304
|
|
|
6,783
|
|
|||
Research and development
|
17,348
|
|
|
11,339
|
|
|
5,928
|
|
|||
General and administrative
|
14,678
|
|
|
14,027
|
|
|
9,310
|
|
|||
Intangible amortization
|
6,377
|
|
|
4,889
|
|
|
887
|
|
|||
Restructuring
|
3,243
|
|
|
335
|
|
|
149
|
|
|||
Goodwill impairment
|
31,102
|
|
|
—
|
|
|
2,884
|
|
|||
Total operating expenses
|
85,155
|
|
|
43,894
|
|
|
25,941
|
|
|||
Operating loss from continuing operations
|
(58,345
|
)
|
|
(3,433
|
)
|
|
(13,325
|
)
|
|||
Other income (expense), net
|
(2
|
)
|
|
(56
|
)
|
|
175
|
|
|||
Loss before income taxes and discontinued operations
|
(58,347
|
)
|
|
(3,489
|
)
|
|
(13,150
|
)
|
|||
Income tax (expense) benefit
|
201
|
|
|
8,460
|
|
|
(29,392
|
)
|
|||
Net income (loss) from continuing operations
|
(58,146
|
)
|
|
4,971
|
|
|
(42,542
|
)
|
|||
Discontinued operations (Note 1):
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations, net of tax benefit (expense) of $(88), $0 and $813 for fiscal years 2015, 2014 and 2013, respectively
|
139
|
|
|
(45
|
)
|
|
(1,496
|
)
|
|||
Net income (loss)
|
$
|
(58,007
|
)
|
|
$
|
4,926
|
|
|
$
|
(44,038
|
)
|
Basic net income (loss) per share:
|
|
|
|
|
|
||||||
Basic net income (loss) from continuing operations
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.71
|
)
|
Basic net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
|||
Basic net income (loss) per share
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.73
|
)
|
Diluted net income (loss) per share:
|
|
|
|
|
|
||||||
Diluted net income (loss) from continuing operations
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.71
|
)
|
Diluted net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
|||
Diluted net income (loss) per share
|
$
|
(0.97
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.73
|
)
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
59,985
|
|
|
58,786
|
|
|
59,944
|
|
|||
Effect of dilutive securities: restricted stock, restricted stock units, performance stock units and stock options
(3)
|
—
|
|
|
1,262
|
|
|
—
|
|
|||
Diluted
|
59,985
|
|
|
60,048
|
|
|
59,944
|
|
(In thousands)
|
Fiscal Year Ended March 31,
|
||||||||||
|
2015
|
|
2014
(adjusted
(1)
)
|
|
2013
|
||||||
Net income (loss)
|
$
|
(58,007
|
)
|
|
$
|
4,926
|
|
|
$
|
(44,038
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||
Total comprehensive income (loss)
|
$
|
(58,007
|
)
|
|
$
|
4,926
|
|
|
$
|
(44,049
|
)
|
(In thousands)
|
Common
Stock
Class A
|
|
Common
Stock
Class B
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Translation
Adjustment
|
|
Accumulated
Deficit
|
|
Treasury
Stock
|
|
Total
Stockholders’
Equity
|
||||||||||||||
Balance, March 31, 2012
|
$
|
504
|
|
|
$
|
139
|
|
|
$
|
405,147
|
|
|
$
|
619
|
|
|
$
|
(198,872
|
)
|
|
$
|
(21,173
|
)
|
|
$
|
186,364
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,038
|
)
|
|
—
|
|
|
(44,038
|
)
|
|||||||
Translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||
Options exercised and other
|
3
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|||||||
Purchase of treasury stock
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,675
|
)
|
|
(12,733
|
)
|
|||||||
Restricted stock grant, net of forfeitures
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,407
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,407
|
|
|||||||
Balance, March 31, 2013
|
$
|
450
|
|
|
$
|
139
|
|
|
$
|
406,638
|
|
|
$
|
608
|
|
|
$
|
(242,910
|
)
|
|
$
|
(33,848
|
)
|
|
$
|
131,077
|
|
Net income
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,926
|
|
|
—
|
|
|
4,926
|
|
|||||||
Options exercised and other
|
10
|
|
|
—
|
|
|
1,667
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,677
|
|
|||||||
Purchase of treasury stock
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(358
|
)
|
|
(359
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,871
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,871
|
|
|||||||
Balance, March 31, 2014
(1)
|
$
|
459
|
|
|
$
|
139
|
|
|
$
|
410,176
|
|
|
$
|
608
|
|
|
$
|
(237,984
|
)
|
|
$
|
(34,206
|
)
|
|
$
|
139,192
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,007
|
)
|
|
—
|
|
|
(58,007
|
)
|
|||||||
Options exercised and other
|
12
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|||||||
Purchase of treasury stock
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(860
|
)
|
|
(863
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,605
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,605
|
|
|||||||
Balance, March 31, 2015
|
$
|
468
|
|
|
$
|
139
|
|
|
$
|
413,026
|
|
|
$
|
608
|
|
|
$
|
(295,991
|
)
|
|
$
|
(35,066
|
)
|
|
$
|
83,184
|
|
(In thousands)
|
Fiscal Year Ended March 31,
|
||||||||||
|
2015
|
|
2014
(adjusted
(1)
)
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(58,007
|
)
|
|
$
|
4,926
|
|
|
$
|
(44,038
|
)
|
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
7,416
|
|
|
5,511
|
|
|
1,381
|
|
|||
Goodwill impairment
|
31,102
|
|
|
—
|
|
|
2,884
|
|
|||
Stock-based compensation
|
2,605
|
|
|
1,871
|
|
|
1,407
|
|
|||
Exchange rate loss
|
23
|
|
|
33
|
|
|
—
|
|
|||
Impairment loss or loss (gain) on sale of fixed assets
|
117
|
|
|
8
|
|
|
(8
|
)
|
|||
Restructuring
|
3,243
|
|
|
335
|
|
|
149
|
|
|||
Deferred taxes
|
(127
|
)
|
|
(8,990
|
)
|
|
29,865
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
3,986
|
|
|
(2,139
|
)
|
|
(979
|
)
|
|||
Inventories
|
8,186
|
|
|
595
|
|
|
(2,002
|
)
|
|||
Prepaid expenses and other current assets
|
(1,661
|
)
|
|
742
|
|
|
(233
|
)
|
|||
Other assets
|
137
|
|
|
190
|
|
|
(240
|
)
|
|||
Deferred revenue
|
605
|
|
|
(404
|
)
|
|
(128
|
)
|
|||
Accounts payable and accrued expenses
|
(3,492
|
)
|
|
(3,223
|
)
|
|
23
|
|
|||
Accrued compensation
|
(3,420
|
)
|
|
2,142
|
|
|
(206
|
)
|
|||
Net cash provided by (used in) operating activities
|
(9,287
|
)
|
|
1,597
|
|
|
(12,125
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Maturities of held-to maturity short-term debt securities
|
22,776
|
|
|
28,514
|
|
|
16,817
|
|
|||
Maturities of other short-term investments
|
1,985
|
|
|
3,682
|
|
|
6,796
|
|
|||
Purchases of held-to maturity short-term debt securities
|
(24,662
|
)
|
|
(21,955
|
)
|
|
(29,090
|
)
|
|||
Purchases of other short-term investments
|
(8,421
|
)
|
|
(1,476
|
)
|
|
(4,417
|
)
|
|||
Purchases of property and equipment
|
(2,137
|
)
|
|
(443
|
)
|
|
(379
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
15
|
|
|||
Acquisitions, net of cash acquired
|
(304
|
)
|
|
(66,170
|
)
|
|
(2,524
|
)
|
|||
Changes in restricted cash
|
—
|
|
|
2,500
|
|
|
4,951
|
|
|||
Net cash used in investing activities
|
(10,763
|
)
|
|
(55,348
|
)
|
|
(7,831
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Purchase of treasury stock
|
(863
|
)
|
|
(359
|
)
|
|
(12,733
|
)
|
|||
Payment of contingent consideration
|
(1,104
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from stock options exercised
|
257
|
|
|
1,677
|
|
|
87
|
|
|||
Net cash provided by (used in) financing activities
|
(1,710
|
)
|
|
1,318
|
|
|
(12,646
|
)
|
|||
(Gain) loss of exchange rate changes on cash
|
(7
|
)
|
|
(7
|
)
|
|
3
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(21,767
|
)
|
|
(52,440
|
)
|
|
(32,599
|
)
|
|||
Cash and cash equivalents, beginning of period
|
35,793
|
|
|
88,233
|
|
|
120,832
|
|
|||
Cash and cash equivalents, end of period
|
$
|
14,026
|
|
|
$
|
35,793
|
|
|
$
|
88,233
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid (refunded) for income taxes, net
|
$
|
14
|
|
|
$
|
965
|
|
|
$
|
(524
|
)
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Discontinued CPI Revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Discontinued CNS Revenue
|
—
|
|
|
—
|
|
|
1,236
|
|
|||
Total discontinued operations revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,236
|
|
|
|
|
|
|
|
||||||
CPI income (loss) before income taxes
|
$
|
227
|
|
|
$
|
—
|
|
|
$
|
(1,358
|
)
|
CNS income (loss) before income taxes
|
—
|
|
|
(45
|
)
|
|
(951
|
)
|
|||
Total discontinued operations income (loss) before income taxes
|
$
|
227
|
|
|
$
|
(45
|
)
|
|
$
|
(2,309
|
)
|
|
|
Fiscal Year ended March 31, 2014
|
|
Fiscal Year ended March 31, 2013
|
||||||||||||||||||||||||
(in thousands)
|
|
Previously reported
|
|
Effect of Accounting Principle Change
(1)
|
|
Effect of CSI Purchase Accounting Adjustment
(2)
|
|
Adjusted
|
|
Previously reported
|
|
Effect of Accounting Principle Change
|
|
Adjusted
|
||||||||||||||
Revenue
|
|
$
|
102,073
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102,073
|
|
|
$
|
38,808
|
|
|
$
|
—
|
|
|
$
|
38,808
|
|
Cost of revenue
|
|
60,115
|
|
|
1,359
|
|
|
138
|
|
|
61,612
|
|
|
25,483
|
|
|
709
|
|
|
26,192
|
|
|||||||
Gross profit
|
|
$
|
41,958
|
|
|
$
|
(1,359
|
)
|
|
$
|
(138
|
)
|
|
$
|
40,461
|
|
|
$
|
13,325
|
|
|
$
|
(709
|
)
|
|
$
|
12,616
|
|
Gross margin
|
|
41.1
|
%
|
|
|
|
|
|
39.6
|
%
|
|
34.3
|
%
|
|
|
|
32.5
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and marketing
|
|
$
|
14,663
|
|
|
$
|
(1,359
|
)
|
|
$
|
—
|
|
|
$
|
13,304
|
|
|
$
|
7,492
|
|
|
$
|
(709
|
)
|
|
$
|
6,783
|
|
Intangible Amortization
|
|
$
|
4,908
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
4,889
|
|
|
$
|
887
|
|
|
$
|
—
|
|
|
$
|
887
|
|
Income tax (expense) benefit
|
|
$
|
8,782
|
|
|
$
|
—
|
|
|
$
|
(322
|
)
|
|
$
|
8,460
|
|
|
$
|
(29,392
|
)
|
|
$
|
—
|
|
|
$
|
(29,392
|
)
|
Net income (loss)
|
|
$
|
5,367
|
|
|
$
|
—
|
|
|
$
|
(441
|
)
|
|
$
|
4,926
|
|
|
$
|
(44,038
|
)
|
|
$
|
—
|
|
|
$
|
(44,038
|
)
|
(in thousands)
|
Preliminary Amounts Recognized as of Acquisition Date
(1)
|
|
Measurement Period Adjustments
|
|
Final Amounts Recognized
|
||||||
Cash
|
$
|
6,513
|
|
|
$
|
—
|
|
|
$
|
6,513
|
|
Accounts receivable
|
2,920
|
|
|
(20
|
)
|
(4)
|
2,900
|
|
|||
Inventories
|
7,625
|
|
|
(242
|
)
|
(4)
|
7,383
|
|
|||
Prepaid expenses and other current assets
|
158
|
|
|
(23
|
)
|
(4)
|
135
|
|
|||
Property and equipment
|
816
|
|
|
(45
|
)
|
(4)
|
771
|
|
|||
Intangible assets
|
16,230
|
|
|
(57
|
)
|
(2)
|
16,173
|
|
|||
Accounts payable, accruals and other liabilities
|
(2,875
|
)
|
|
(37
|
)
|
(4)
|
(2,912
|
)
|
|||
Income tax payable
|
(1,175
|
)
|
|
—
|
|
|
(1,175
|
)
|
|||
Deferred income tax liability
|
(6,616
|
)
|
|
323
|
|
(2)
|
(6,293
|
)
|
|||
Goodwill
|
20,142
|
|
|
405
|
|
|
20,547
|
|
|||
Total Consideration
|
$
|
43,738
|
|
|
$
|
304
|
|
(3)
|
$
|
44,042
|
|
(in thousands)
|
|
Fair Value
|
|
Estimated Life
|
||
Backlog
|
|
$
|
90
|
|
|
1 month
|
Customer relationships
|
|
11,410
|
|
|
9 years
|
|
Trademark
|
|
303
|
|
|
1 year
|
|
Developed technology
|
|
3,860
|
|
|
3 years
|
|
Non-compete
|
|
510
|
|
|
2 years
|
|
Total intangible assets
|
|
$
|
16,173
|
|
|
|
(in thousands)
|
|
Fair Value
|
|
Life
|
||
Backlog
|
|
$
|
1,440
|
|
|
1 year
|
Customer relationships
|
|
8,960
|
|
|
10 years
|
|
Trade name
|
|
1,170
|
|
|
7 years
|
|
Developed technology
|
|
4,410
|
|
|
9 years
|
|
Total intangible assets
|
|
$
|
15,980
|
|
|
|
(in thousands)
|
|
2014
|
|
2013
|
||||
Consolidated pro forma revenue
|
|
$
|
141,456
|
|
|
$
|
92,671
|
|
Consolidated pro forma operating income (loss) from continuing operations
|
|
$
|
7,784
|
|
|
$
|
(22,843
|
)
|
Machinery and equipment
|
5
|
-
|
7 years
|
Office, computer and research equipment
|
2
|
-
|
5 years
|
|
Fiscal Year Ended March 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Statutory federal income tax rate
|
34.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
Meals and entertainment
|
(0.1
|
)
|
|
(1.5
|
)
|
|
(0.2
|
)
|
State income tax, net of federal tax effect
|
3.7
|
|
|
2.4
|
|
|
3.1
|
|
Valuation allowance
|
(17.6
|
)
|
|
208.3
|
|
|
(256.1
|
)
|
Goodwill impairment
|
(18.7
|
)
|
|
—
|
|
|
(2.1
|
)
|
Deferred tax adjustments
|
(0.1
|
)
|
|
8.3
|
|
|
1.4
|
|
Foreign tax credit
|
—
|
|
|
3.3
|
|
|
(0.3
|
)
|
Equity compensation
|
(0.8
|
)
|
|
(6.4
|
)
|
|
(0.6
|
)
|
Capitalized transaction costs
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
Other
|
(0.1
|
)
|
|
(3.2
|
)
|
|
(2.7
|
)
|
Effective income tax rate
|
0.3
|
%
|
|
242.5
|
%
|
|
(223.5
|
)%
|
|
March 31,
|
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Deferred income tax assets:
|
|
||||||
Allowance for doubtful accounts
|
$
|
17
|
|
|
$
|
33
|
|
Alternative minimum tax credit carryforward
|
697
|
|
|
697
|
|
||
Foreign tax credit carryforward
|
824
|
|
|
785
|
|
||
Depreciation
|
1,025
|
|
|
940
|
|
||
Deferred revenue
|
1,227
|
|
|
950
|
|
||
Compensation accruals
|
887
|
|
|
2,323
|
|
||
Inventory reserves
|
3,492
|
|
|
1,903
|
|
||
Warranty reserves
|
196
|
|
|
92
|
|
||
Net operating loss carryforward
|
35,380
|
|
|
29,510
|
|
||
Restructuring reserve
|
1,048
|
|
|
—
|
|
||
Other
|
1,129
|
|
|
863
|
|
||
Gross deferred tax assets
|
45,922
|
|
|
38,096
|
|
||
Valuation allowance
|
(39,117
|
)
|
|
(28,864
|
)
|
||
Net deferred income tax assets
|
6,805
|
|
|
9,232
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Inventory step-up
|
—
|
|
|
(379
|
)
|
||
Intangibles and goodwill
|
(6,851
|
)
|
|
(9,026
|
)
|
||
Net deferred income tax liabilities
|
$
|
(46
|
)
|
|
$
|
(173
|
)
|
|
March 31,
|
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Deferred income tax assets
|
$
|
973
|
|
|
$
|
899
|
|
Deferred income tax liability
|
(1,019
|
)
|
|
(1,072
|
)
|
||
Net deferred income tax liabilities
|
$
|
(46
|
)
|
|
$
|
(173
|
)
|
Jurisdiction
|
Open Tax Years
|
||
U.S. Federal
|
2011
|
-
|
2014
|
U.S. State
|
2010
|
-
|
2014
|
Foreign
|
2010
|
-
|
2014
|
(in thousands)
|
Kentrox
|
|
CSI
|
|
CSG
|
|
IBW
|
|
Total
|
||||||||||
March 31, 2013 balance, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Business acquisition (adjusted
(1)
)
|
10,555
|
|
|
20,547
|
|
|
—
|
|
|
—
|
|
|
31,102
|
|
|||||
March 31, 2014 balance, net (adjusted
(1)
)
|
10,555
|
|
|
20,547
|
|
|
—
|
|
|
—
|
|
|
31,102
|
|
|||||
Change in reporting units
|
(10,555
|
)
|
|
(20,547
|
)
|
|
10,555
|
|
|
20,547
|
|
|
—
|
|
|||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
(10,555
|
)
|
|
(20,547
|
)
|
|
(31,102
|
)
|
|||||
March 31, 2015 balance, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
March 31, 2015
|
|
March 31, 2014 (adjusted
(1)
)
|
||||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization and Impairment
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization and Impairment
|
|
Net Carrying Amount
|
||||||
Backlog
|
|
1,530
|
|
|
(1,530
|
)
|
|
—
|
|
|
1,530
|
|
|
(1,530
|
)
|
|
—
|
|
Customer relationships
|
|
24,867
|
|
|
(7,917
|
)
|
|
16,950
|
|
|
24,867
|
|
|
(4,416
|
)
|
|
20,451
|
|
Product technology
|
|
45,234
|
|
|
(37,370
|
)
|
|
7,864
|
|
|
45,234
|
|
|
(35,370
|
)
|
|
9,864
|
|
Non-compete
|
|
510
|
|
|
(276
|
)
|
|
234
|
|
|
510
|
|
|
(21
|
)
|
|
489
|
|
Trade name and trademark
|
|
1,848
|
|
|
(954
|
)
|
|
894
|
|
|
1,848
|
|
|
(333
|
)
|
|
1,515
|
|
Total finite-lived intangible assets, net
|
|
73,989
|
|
|
(48,047
|
)
|
|
25,942
|
|
|
73,989
|
|
|
(41,670
|
)
|
|
32,319
|
|
(in thousands)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
thereafter
|
||||||||||||
Intangible amortization expense
|
$
|
5,365
|
|
|
$
|
4,486
|
|
|
$
|
3,958
|
|
|
$
|
3,679
|
|
|
$
|
2,952
|
|
|
$
|
5,502
|
|
|
Payments due by fiscal year
|
||||||||||||||||||||||||||
(in thousands)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Purchase obligations
(1)
|
$
|
9,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,030
|
|
Future minimum lease payments for operating leases
|
2,638
|
|
|
2,635
|
|
|
1,023
|
|
|
189
|
|
|
58
|
|
|
—
|
|
|
6,543
|
|
|||||||
Contingent consideration
|
1,184
|
|
|
400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,584
|
|
|||||||
Future obligations and commitments
|
$
|
12,852
|
|
|
$
|
3,035
|
|
|
$
|
1,023
|
|
|
$
|
189
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
17,157
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Total product warranty reserve at the beginning of the period
|
$
|
328
|
|
|
$
|
152
|
|
|
$
|
243
|
|
Warranty reserves from business acquisitions
|
—
|
|
|
149
|
|
|
25
|
|
|||
Specific pre-acquisition ANTONE product warranty in excess of acquired limit
|
—
|
|
|
—
|
|
|
303
|
|
|||
Warranty expense (reversal)
|
446
|
|
|
183
|
|
|
(45
|
)
|
|||
Utilization
|
(269
|
)
|
|
(156
|
)
|
|
(374
|
)
|
|||
Total product warranty reserve at the end of the period
|
$
|
505
|
|
|
$
|
328
|
|
|
$
|
152
|
|
|
Common Shares Outstanding
|
|
|
|||||
(in thousands)
|
Class A
|
|
Class B
|
|
Treasury
|
|||
Total shares outstanding, March 31, 2012
|
50,429
|
|
|
13,937
|
|
|
(11,181
|
)
|
Options exercised
|
158
|
|
|
—
|
|
|
—
|
|
Purchase of Treasury Stock
|
(5,788
|
)
|
|
—
|
|
|
(5,788
|
)
|
Restricted stock grants, including conversion of certain RSUs and PSUs, net of forfeitures
|
171
|
|
|
—
|
|
|
—
|
|
Total shares outstanding, March 31, 2013
|
44,970
|
|
|
13,937
|
|
|
(16,969
|
)
|
Options exercised
|
808
|
|
|
—
|
|
|
—
|
|
Purchase of Treasury Stock
|
(162
|
)
|
|
—
|
|
|
(162
|
)
|
Restricted stock grants, including conversion of certain RSUs and PSUs, net of forfeitures
|
237
|
|
|
—
|
|
|
—
|
|
Total shares outstanding, March 31, 2014
|
45,853
|
|
|
13,937
|
|
|
(17,131
|
)
|
Options exercised
|
415
|
|
|
—
|
|
|
—
|
|
Purchase of Treasury Stock
|
(336
|
)
|
|
—
|
|
|
(336
|
)
|
Restricted stock grants, including conversion of certain RSUs and PSUs, net of forfeitures
|
907
|
|
|
—
|
|
|
—
|
|
Total shares outstanding, March 31, 2015
|
46,839
|
|
|
13,937
|
|
|
(17,467
|
)
|
|
Fiscal Year Ended March 31,
|
||||||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of revenue
|
$
|
89
|
|
|
$
|
53
|
|
|
$
|
27
|
|
Sales and marketing
|
170
|
|
|
337
|
|
|
190
|
|
|||
Research and development
|
452
|
|
|
338
|
|
|
115
|
|
|||
General and administrative
|
1,894
|
|
|
1,143
|
|
|
1,075
|
|
|||
Stock-based compensation expense
|
2,605
|
|
|
1,871
|
|
|
1,407
|
|
|||
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total stock-based compensation expense after taxes
|
$
|
2,605
|
|
|
$
|
1,871
|
|
|
$
|
1,407
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
Weighted-
Average
Remaining
Contractual
Term (in
years)
|
|
Aggregate
Intrinsic
Value
(1)
(in thousands)
|
|||||
Outstanding on March 31, 2014
|
1,835,445
|
|
|
$
|
2.02
|
|
|
|
|
|
||
Granted
|
290,000
|
|
|
$
|
1.75
|
|
|
|
|
|
||
Exercised
|
(415,000
|
)
|
|
$
|
0.62
|
|
|
|
|
|
||
Forfeited
|
(287,500
|
)
|
|
$
|
2.45
|
|
|
|
|
|
||
Expired
|
(252,430
|
)
|
|
$
|
2.68
|
|
|
|
|
|
||
Outstanding on March 31, 2015
|
1,170,515
|
|
|
$
|
2.20
|
|
|
2.9
|
|
$
|
0
|
|
Vested or expected to vest as of March 31, 2015
|
1,121,371
|
|
|
$
|
2.22
|
|
|
2.8
|
|
$
|
0
|
|
Exercisable on March 31, 2015
|
697,682
|
|
|
$
|
2.38
|
|
|
1.4
|
|
$
|
0
|
|
|
Fiscal Year Ended March 31,
|
||||||||||
|
2015
|
|
2014
|
|
2015
|
||||||
Input assumptions:
|
|
|
|
|
|
||||||
Expected volatility
|
45
|
%
|
|
42
|
%
|
|
49
|
%
|
|||
Risk-free interest rate
|
1.2
|
%
|
|
1.1
|
%
|
|
0.7
|
%
|
|||
Expected life
|
4 years
|
|
|
5 years
|
|
|
5 years
|
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Output weighted-average grant-date fair value
|
$
|
0.63
|
|
|
$
|
0.91
|
|
|
$
|
0.89
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Non-vested as of March 31, 2014
|
407,500
|
|
|
$
|
1.94
|
|
Granted
|
100,000
|
|
|
$
|
3.53
|
|
Vested
|
(337,500
|
)
|
|
$
|
1.89
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Non-vested as of March 31, 2015
|
170,000
|
|
|
$
|
2.98
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Non-vested as of March 31, 2014
|
285,000
|
|
|
$
|
2.45
|
|
Granted
|
217,500
|
|
|
$
|
3.83
|
|
Vested
|
(130,011
|
)
|
|
$
|
2.44
|
|
Forfeited
|
(190,601
|
)
|
|
$
|
3.36
|
|
Non-vested as of March 31, 2015
|
181,888
|
|
|
$
|
3.14
|
|
|
Fiscal Year Ended March 31, 2015
|
||||||||||
(in thousands)
|
IBW
|
|
CSG
|
|
Total
|
||||||
Revenue
|
$
|
37,714
|
|
|
$
|
46,413
|
|
|
$
|
84,127
|
|
Gross profit
|
13,715
|
|
|
13,095
|
|
|
26,810
|
|
|||
Gross margin
|
36.4
|
%
|
|
28.2
|
%
|
|
31.9
|
%
|
|||
Research & development
|
8,955
|
|
|
8,393
|
|
|
17,348
|
|
|||
Segment profit
|
$
|
4,760
|
|
|
$
|
4,702
|
|
|
9,462
|
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Sales & marketing
|
|
|
|
|
12,407
|
|
|||||
General & administrative
|
|
|
|
|
14,678
|
|
|||||
Intangible amortization
|
|
|
|
|
6,377
|
|
|||||
Restructuring
|
|
|
|
|
3,243
|
|
|||||
Goodwill impairment
|
|
|
|
|
31,102
|
|
|||||
Operating income (loss)
|
|
|
|
|
(58,345
|
)
|
|||||
Other income (expense), net
|
|
|
|
|
(2
|
)
|
|||||
Income tax (expense) benefit
|
|
|
|
|
201
|
|
|||||
Net income (loss) from continuing operations
|
|
|
|
|
$
|
(58,146
|
)
|
||||
|
|
|
|
|
|
||||||
|
Fiscal Year Ended March 31, 2014
|
||||||||||
(in thousands)
|
IBW
|
|
CSG
|
|
Total
|
||||||
Revenue
|
$
|
13,096
|
|
|
$
|
88,977
|
|
|
$
|
102,073
|
|
Gross profit
|
4,161
|
|
|
36,300
|
|
|
40,461
|
|
|||
Gross margin
|
31.8
|
%
|
|
40.8
|
%
|
|
39.6
|
%
|
|||
Research & development
|
1,360
|
|
|
9,979
|
|
|
11,339
|
|
|||
Segment profit
|
$
|
2,801
|
|
|
$
|
26,321
|
|
|
29,122
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|||||
Sales & marketing
|
|
|
|
|
13,304
|
|
|||||
General & administrative
|
|
|
|
|
14,027
|
|
|||||
Intangible amortization
|
|
|
|
|
4,889
|
|
|||||
Restructuring
|
|
|
|
|
335
|
|
|||||
Operating income (loss)
|
|
|
|
|
(3,433
|
)
|
|||||
Other income (expense), net
|
|
|
|
|
(56
|
)
|
|||||
Income tax (expense) benefit
|
|
|
|
|
8,460
|
|
|||||
Net income (loss) from continuing operations
|
|
|
|
|
$
|
4,971
|
|
|
Fiscal Year Ended March 31, 2013
|
||||||||||
(in thousands)
|
IBW
|
|
CSG
|
|
Total
|
||||||
Revenue
|
$
|
904
|
|
|
$
|
37,904
|
|
|
$
|
38,808
|
|
Gross profit
|
391
|
|
|
12,225
|
|
|
12,616
|
|
|||
Gross margin
|
43.3
|
%
|
|
32.3
|
%
|
|
32.5
|
%
|
|||
Research & development
|
305
|
|
|
5,623
|
|
|
5,928
|
|
|||
Segment profit
|
$
|
86
|
|
|
$
|
6,602
|
|
|
6,688
|
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Sales & marketing
|
|
|
|
|
6,783
|
|
|||||
General & administrative
|
|
|
|
|
9,310
|
|
|||||
Intangible amortization
|
|
|
|
|
887
|
|
|||||
Restructuring
|
|
|
|
|
149
|
|
|||||
Goodwill impairment
|
|
|
|
|
2,884
|
|
|||||
Operating income (loss)
|
|
|
|
|
(13,325
|
)
|
|||||
Other income (expense), net
|
|
|
|
|
175
|
|
|||||
Income tax (expense) benefit
|
|
|
|
|
(29,392
|
)
|
|||||
Net income (loss) from continuing operations
|
|
|
|
|
$
|
(42,542
|
)
|
(in thousands)
|
Employee
-related
|
|
Other
costs
|
|
Total
|
||||||
Liability at March 31, 2014
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
57
|
|
Charged
|
337
|
|
|
2,906
|
|
|
3,243
|
|
|||
Accelerated depreciation of leasehold improvements
|
—
|
|
|
(71
|
)
|
|
(71
|
)
|
|||
Payments
|
(379
|
)
|
|
(46
|
)
|
|
(425
|
)
|
|||
Liability at March 31, 2015
|
$
|
15
|
|
|
$
|
2,789
|
|
|
$
|
2,804
|
|
(in thousands)
|
Employee
-related
|
|
Other
costs
|
|
Total
|
||||||
Liability at March 31, 2013
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Charged
|
335
|
|
|
—
|
|
|
335
|
|
|||
Payments
|
(284
|
)
|
|
—
|
|
|
(284
|
)
|
|||
Liability at March 31, 2014
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
57
|
|
(in thousands)
|
Employee
-related |
|
Other
costs |
|
Total
|
||||||
Liability at March 31, 2012
|
$
|
561
|
|
|
$
|
52
|
|
|
$
|
613
|
|
Charged
|
89
|
|
|
60
|
|
|
149
|
|
|||
Payments
|
(644
|
)
|
|
(112
|
)
|
|
(756
|
)
|
|||
Liability at March 31, 2013
|
$
|
6
|
|
|
$
|
—
|
|
|
6
|
|
(in thousands)
|
March 31, 2015
|
|
March 31, 2014
|
||||
Certificates of deposit
|
$
|
7,912
|
|
|
$
|
1,476
|
|
Held-to-maturity, pre-refunded municipal bonds
|
15,994
|
|
|
14,108
|
|
||
Total investments
|
$
|
23,906
|
|
|
$
|
15,584
|
|
•
|
Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
|
(in thousands)
|
Total Fair Value
of Asset or
Liability
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
|
Balance Sheet
Classification
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||||||
Money market funds
|
$
|
2,879
|
|
|
$
|
2,879
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||
Contingent consideration, current
|
$
|
1,184
|
|
|
—
|
|
|
—
|
|
|
$
|
1,184
|
|
|
Contingent consideration
|
|
Contingent consideration, long-term
|
$
|
400
|
|
|
—
|
|
|
—
|
|
|
$
|
400
|
|
|
Contingent consideration non-current
|
(in thousands)
|
Total Fair Value
of Asset or
Liability
|
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
|
Significant Other
Observable
Inputs (Level 2)
|
|
Significant
Unobservable
Inputs (Level 3)
|
|
Balance Sheet Classification
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||||||
Money market funds
|
$
|
117
|
|
|
$
|
117
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||
Contingent consideration, current
|
2,067
|
|
|
—
|
|
|
—
|
|
|
2,067
|
|
|
Contingent consideration
|
|||
Contingent consideration, long-term
|
$
|
574
|
|
|
—
|
|
|
—
|
|
|
$
|
574
|
|
|
Contingent consideration non-current
|
|
Unobservable Inputs for Fiscal Year Ended March 31,
|
||||||
($ in thousands)
|
2015
|
|
2014
|
||||
Estimated earn-out contingent consideration
|
$
|
3,500
|
|
|
$
|
3,500
|
|
Working capital and other adjustment
|
$
|
(444
|
)
|
|
$
|
(444
|
)
|
Indemnification related to warranty claims
|
$
|
(303
|
)
|
|
$
|
(303
|
)
|
Discount rate
|
6.3
|
%
|
|
7.5
|
%
|
||
Approximate timing of cash flows
|
1.4 years
|
|
|
1.4 years
|
|
|
Fiscal Year Ended March 31,
|
||||||
($ in thousands)
|
2015
|
|
2014
|
||||
Balance beginning of period
|
$
|
2,641
|
|
|
$
|
2,333
|
|
Contingent consideration – payments
|
(1,104
|
)
|
|
—
|
|
||
Contingent consideration – change in fair value (included in G&A expense)
|
47
|
|
|
308
|
|
||
Balance end of period
|
$
|
1,584
|
|
|
$
|
2,641
|
|
|
Fiscal Year 2015 Quarter Ended
|
||||||||||||||
|
June 30, 2014
|
|
Sept. 30, 2014
|
|
Dec. 31, 2014
|
|
Mar. 31, 2015
|
||||||||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
27,825
|
|
|
$
|
23,646
|
|
|
$
|
14,043
|
|
|
$
|
18,613
|
|
Gross profit
|
9,684
|
|
|
8,065
|
|
|
4,395
|
|
|
4,666
|
|
||||
Goodwill impairment
|
—
|
|
|
10,555
|
|
|
20,547
|
|
|
—
|
|
||||
Restructuring
|
57
|
|
|
(2
|
)
|
|
—
|
|
|
3,188
|
|
||||
Total operating expenses
|
12,592
|
|
|
22,767
|
|
|
31,978
|
|
|
17,818
|
|
||||
Loss before income taxes and discontinued operations
|
(2,847
|
)
|
|
(14,718
|
)
|
|
(27,612
|
)
|
|
(13,170
|
)
|
||||
Income tax (expense) benefit
|
29
|
|
|
69
|
|
|
72
|
|
|
31
|
|
||||
Net income (loss) from continuing operations
|
(2,818
|
)
|
|
(14,649
|
)
|
|
(27,540
|
)
|
|
(13,139
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
||||
Net income (loss)
|
(2,818
|
)
|
|
(14,649
|
)
|
|
(27,540
|
)
|
|
(13,000
|
)
|
||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.22
|
)
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.22
|
)
|
|
Fiscal Year 2014 Quarter Ended
|
||||||||||||||
|
June 30, 2013
|
|
Sept. 30, 2013
|
|
Dec. 31, 2013
|
|
Mar. 31, 2014
|
||||||||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
22,456
|
|
|
$
|
29,960
|
|
|
$
|
25,236
|
|
|
$
|
24,421
|
|
Gross profit
|
8,417
|
|
|
12,022
|
|
|
11,932
|
|
|
8,090
|
|
||||
Restructuring
|
66
|
|
|
169
|
|
|
38
|
|
|
62
|
|
||||
Total operating expenses
|
11,018
|
|
|
10,728
|
|
|
9,909
|
|
|
12,239
|
|
||||
Loss before income taxes and discontinued operations
|
(2,731
|
)
|
|
1,392
|
|
|
1,992
|
|
|
(4,142
|
)
|
||||
Income tax (expense) benefit
|
(19
|
)
|
|
(68
|
)
|
|
(38
|
)
|
|
8,585
|
|
||||
Net income (loss) from continuing operations
|
(2,750
|
)
|
|
1,324
|
|
|
1,954
|
|
|
4,443
|
|
||||
Income (loss) from discontinued operations, net of tax
|
(14
|
)
|
|
4
|
|
|
(29
|
)
|
|
(6
|
)
|
||||
Net income (loss)
|
(2,764
|
)
|
|
1,328
|
|
|
1,925
|
|
|
4,437
|
|
||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
|
$
|
0.08
|
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
|
$
|
0.07
|
|
(In thousands)
|
Balance at
Beginning
of Year
|
|
Net Additions
Charged to
Cost
and Expenses
|
|
Additions
(Deductions)
|
|
Balance at
End
of Year
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances
|
$
|
40
|
|
|
$
|
85
|
|
|
$
|
(72
|
)
|
(1)
|
$
|
53
|
|
Reserve for excess and obsolete inventory and net realizable value
|
4,266
|
|
|
5,674
|
|
|
(893
|
)
|
(2)
|
9,047
|
|
||||
Deferred tax assets valuation allowance
|
28,864
|
|
|
—
|
|
|
10,253
|
|
(3)
|
39,117
|
|
||||
Reserve for returns
(4)
|
42
|
|
|
973
|
|
|
(660
|
)
|
|
355
|
|
||||
2014
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances
|
$
|
10
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Reserve for excess and obsolete inventory and net realizable value
|
2,032
|
|
|
2,881
|
|
|
(647
|
)
|
(2)
|
4,266
|
|
||||
Deferred tax assets valuation allowance
|
36,285
|
|
|
—
|
|
|
(7,421
|
)
|
(3)
|
28,864
|
|
||||
Reserve for returns
(4)
|
19
|
|
|
189
|
|
|
(166
|
)
|
|
42
|
|
||||
2013
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances
|
$
|
12
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
10
|
|
Reserve for excess and obsolete inventory and net realizable value
|
1,479
|
|
|
1,090
|
|
|
(537
|
)
|
(2)
|
2,032
|
|
||||
Deferred tax assets valuation allowance
|
2,253
|
|
|
—
|
|
|
34,032
|
|
(3)
|
36,285
|
|
||||
Reserve for returns
(4)
|
13
|
|
|
218
|
|
|
(212
|
)
|
|
19
|
|
(1)
|
Accounts written off, net of recoveries.
|
(2)
|
Inventory charged against inventory reserves.
|
(3)
|
Change in valuation allowance due to assessment of realizability of deferred tax assets.
|
(4)
|
Included in allowance for account receivable.
|
•
|
The Company may terminate your employment without Cause at any time upon at least thirty
|
•
|
The Company also shall pay you, on the sixtieth (60
th
) day following the Date of Termination, a
|
•
|
The Company may terminate your employment for Cause at any time upon written notice
|
•
|
You may resign from and terminate your employment with the Company at any time upon at least
|
•
|
All payments will be less tax withholdings.
|
4.
|
CONDITIONS
|
(A)
|
the consummation of the purchase by any person, entity
|
(B)
|
a reorganization, merger or consolidation of the
|
(C)
|
a sale of all or substantially all of the Company’s assets,
|
(b)
|
Vesting Conditions and Provisions Applicable to Award
. The period of
|
(a)
|
Notwithstanding the provisions of Section 2, in the event of a Triggering
|
(b)
|
For purposes of this Agreement, "Change in Control", "Triggering Event"
|
(i)
|
A
“Change in Control”
of the Company shall be deemed to have
|
(A)
|
the consummation of the purchase by any person, entity or
|
(B)
|
a reorganization, merger or consolidation of the Company,
|
(C)
|
a sale of all or substantially all of the Company’s assets,
|
(ii)
|
A
"
Triggering Event"
shall be deemed to have occurred as of the
|
(A)
|
the Participant resigns from and terminates his employment
|
(B)
|
the Company or its successor terminates the Participant’s
|
(iii)
|
"Good Reason"
means that concurrent with or within twelve
|
(iv)
|
“Cause”
means (A) the failure by the Participant to comply with a
|
(c)
|
Solely for purposes of the definitions of “Triggering Event”, “Good
|
(a)
|
This Agreement shall be governed and construed in accordance with the
|
(b)
|
This Agreement may not be amended or modified except by the written
|
(c)
|
The captions of this Agreement are inserted for convenience of reference
|
(d)
|
This Agreement shall be binding upon and inure to the benefit of the
|
Subsidiary
|
Jurisdiction of Incorporation
|
Westell, Inc.
|
Illinois
|
TLT Merger LLC
|
Delaware
|
Noran Tel, Inc.
|
Saskatchewan
|
|
/s/ J. THOMAS GRUENWALD
|
J. Thomas Gruenwald
|
Chief Executive Officer
|
|
/s/ THOMAS P. MINICHIELLO
|
Thomas P. Minichiello
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of and for the periods covered in the Report.
|
|
/s/ J. THOMAS GRUENWALD
|
J. Thomas Gruenwald
|
May 22, 2015
|
|
/s/ THOMAS P. MINICHIELLO
|
Thomas P. Minichiello
|
May 22, 2015
|