Westell Technologies Inc. designs manufactures markets and services a broad range of digital and analog products used by telcos to deliver services primarily over existing copper telephone wires that connect end users to a telco\'s central office. The company also markets its products and services to other telecommunications and information service providers seeking direct access to end-user customers. The company\'s customersinclude all the Regional Bell Operating Companies as well as GTE and other carriers. Westell Technologies Inc. has a market cap of $89.9 million; its shares were traded at around $1.31 with and P/S ratio of 0.6.
Highlight of Business Operations:Sales and marketing expense decreased 21.0% in the ConferencePlus services segment when comparing the three months ended June 30, 2009 to the same period last year due to the reduction of 12 employees which resulted in lower personnel-related costs of $271,000, lower expenses of $141,000 related to travel, meeting and tradeshows, a reduction of $165,000 of international sales expense, and a net increase of approximately $15,000 of other sales and marketing expenses.
reduction of 18 employees, lower bonus targets and the elimination of a 401(k) match, a reduction in maintenance expense of $114,000, a reduction of research and development expenses incurred by Contineo of $249,000, and a net reduction of approximately $208,000 of other research and development expenses.
Restructuring The Company had a reduction in force across all business units in the first quarter of fiscal 2010 that resulted in a total restructuring charge of $609,000, of which $414,000, $46,000 and $149,000 was related to the CNS, OSPlant Systems and ConferencePlus services segments, respectively. A $58,000 reversal was recorded in the period ended June 30, 2008 to record a change in estimate for related severance and outplacement.
The Companys operating activities provided cash of $3.4 million in the three months ended June 30, 2009. Cash was provided primarily from net income of $1.6 million plus non-cash items of $1.8 million consisting of depreciation, amortization, stock-based compensation and restructuring. The Companys investing activities used $331,000 for capital expenditures primarily in the ConferencePlus services segment. The Companys financing activities used $14,000 of cash for capital lease payments in the three months ended June 30, 2009.
Future obligations and commitments decreased $16.2 million in the first quarter ended June 30, 2009 to $74.4 million down from $90.6 million at March 31, 2009, due primarily to a reduction in inventory purchase obligations in the CNS equipment segment.
As of June 30, 2009, the Company had deferred tax assets of approximately $69.1 million before a valuation allowance of $62.9 million, which reduced the recorded net deferred tax asset to $6.2 million. The remaining deferred tax asset is fully reserved by a FIN 48 liability recorded in other long-term liabilities.
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