Westell posts revenue jump in Q3, points to carrier trials for new 'ClearLink DAS' product line

Westell Technologies posted improved revenue and narrowed its loss in the third quarter as it saw improvement from its in-building wireless segment and outdoor communications solutions. Additionally, the company expects to have carrier trials of its new distributed antenna system (DAS) product start in December.  

For the third quarter, which was the firm's fiscal second quarter, Westell posted consolidated revenue of $25.5 million, consisting of $10.8 million from its In-Building Wireless (IBW) segment and $14.7 million from the Communication Solutions Group (CSG) segment. That compares to $23.64 million in total revenue in the year-ago period. 

Both IBW and CSG segment revenues were up sequentially, increasing 19 percent and 18 percent, respectively.

Westell reported a net loss of $2.47 million, narrower than the loss of $15.54 million in the year-ago period. Westell CEO Tom Gruenwald said on the company's earnings conference call that returning Westell to long-term profitability is the firm's "fundamental goal" and said that reconfiguring its sales strategy was a critical first step, but that the company will continue to cut costs by doing things like taking costs out of its production process and curtailing any unproductive spending.

Gruenwald noted that over the last three quarters the company has reorganized and refocused its sales force. "Our sales team is now following the wider and deeper, and as a result we are now seeing potential revenue opportunities we had not seen previously," he said, according to a Seeking Alpha transcript. "Our improved revenue performance reflects our sales team's much enhanced coverage of network operators, channel partners and integrators. We believe, we can further penetrate existing customers while increasing outreach to potential new customers."

In the IBW segment, Westell said the sequential increase in revenue was driven by higher revenues across all product categories, including DAS conditioners, repeaters and ancillary products, and included record quarterly sales of the company's active DAS conditioner, the Universal DAS Interface Tray.

In the CSG unit, Westell noted that sales of intelligent site management (ISM), tower mounted amplifiers and outside plant solutions all increased, and that the company recorded the highest quarterly revenue level for its ISM solutions since December 2013.

In June the company introduced the ClearLink DAS, a distributed antenna system that the company says can solve the "near-far" issue. In other words, when a device gets a data signal from a DAS and a simultaneous signal from a distant macro tower, performance can be degraded.

Gruenwald said that "ClearLink DAS development is nearing completion" and will let the company enter the DAS head-end and remote equipment market, "which is significantly larger than the standalone DAS conditioner market which we currently address."

"ClearLink DAS is positioned where the market is headed and squarely within our core RF engineering competency," he added. "We anticipate shipping this new important product to customers during our fiscal fourth quarter with revenue recognition dependent on a number of factors including customer acceptance and approval."

Westell expects to bring the product into carrier labs in the next couple of months. "I would say certainly by the midpoint in December … we should have some trials going on," Gruenwald said.

For more:
- see this release (PDF)
- see this Seeking Alpha transcript

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