Aviat Networks, Inc. (AVNW) research, news, and more from GeoInvesting

Company description

Thu, 16 Aug 2012 04:00:00 GMT

Aviat Networks, Inc. engages in the design, manufacture, and sale of a range of wireless networking products, solutions, and services worldwide. It offers point-to-point and point-to-multipoint digital microwave transmission systems for first/last mile access, middle mile/backhaul, and long distance trunking applications. The company’s products include broadband wireless access base stations and customer premises equipment for fixed and mobile; point-to-point digital microwave radio systems for access, backhaul, trunking, and license-exempt applications; and supporting network deployments, network expansion, and capacity upgrades. It also provides network management software solutions to enable operators to deploy, monitor, and manage its systems, as well as third party equipment, such as antennas, routers, and multiplexers to build and deploy a wireless transmission network and a suite of turnkey support services. In addition, the company offers professional services, such as network planning and design, site surveys and builds, systems integration, installation, maintenance, network monitoring, training, and customer services. It serves mobile and fixed communications service providers, original equipment manufacturers, private network operators, government agencies, transportation and utility companies, system integrators, public safety agencies, and broadcast system operators, as well as pipeline, railroad, and other industrial enterprises that operate wireless networks. The company was formerly known as Harris Stratex Networks, Inc. and changed its name to Aviat Networks, Inc. in January 2010. Aviat Networks, Inc. is headquartered in Santa Clara, California.

Research

Wed, 07 May 2025 14:00:11 GMT

Aviat Networks (NASDAQ: AVNW) ($19.67; $249.4M market cap) announced Q3 2025 results:

Q3 sales of $112.6 million vs. $110.8 million in the prior year
Q3 EPS of $0.88 (non-GAAP) vs. $0.78 (non-GAAP) in the prior year

"Set a new record for quarterly Adjusted EBITDA driven by strong margins and operating expense cost management."

"Accepted first orders for ProVision Plus network management software from Pasolink customers, marking initial steps in capturing a $50 million opportunity over the next five years."

Noteworthy Disclosures:

Backlog: Company achieved its 19th consecutive quarter of trailing twelve-month revenue growth.
Guidance: Reiterated full year 2025 guidance of $430M to $470M in revenue and $30M to $40M in Adjusted EBITDA.
Product Milestone: First orders received for ProVision Plus from Pasolink customers.
Capital Structure: Ended Q3 with $49.4M in cash and $24.5M in net debt.

Aviat Networks, Inc. provides microwave and wireless networking solutions, including radios, routers, private LTE, and network management software. Its solutions serve both communications service providers and private network operators across sectors like government, transportation, energy, utilities, public safety, and broadcasting.

Research

Thu, 09 Feb 2017 15:08:04 GMT

AVNW ($12.02; was marked up 10% pre market) - Wireless networking company AVNW could be setting up for an interesting growth + value play, considering the following:

Cash per share of $6.60
Tangible book value per share of $10.50
The company turning a substantial profit, per Q2 2017 earnings reported this morning, for the first time since Q2 2013.
PositiveInformation Arbitrage (see Maj’s article, Multi-bagger Infor Arb Opportunities) commentary in conference call
Activist involvement

The company reported Q2 2017 results:

Sales of $68.5 million vs $70.4 million in the prior year
Non-GAAP EPS of $0.33 vs a loss of $1.00 in the prior year

Guidance:

“The Company today provided commentary around its financial outlook for the second half of fiscal 2017. Revenue is expected to be in the range of $130.0 - $140.0 million, with the fiscal 2017 third quarter expected to be in the low to mid $60 million range and the fiscal 2017 fourth quarter higher, most likely in excess of $70.0 million. This would result in a revenue increase of 9.0% – 17.0% as compared to the second half of fiscal 2016. Additionally, the Company anticipates that it will report positive operating income in the second half of the year and positive Adjusted EBITDA in both the fiscal 2017 third and fourth quarters. Furthermore, the Company expects to end fiscal year 2017 with an increase in its net cash position.”

Sales were flat, but management has been embarking on restructuring moves to improve gross margins before aggressively focusing on driving top-line growth.

Here is a quote from management:

"I'm pleased to report that we have achieved our objective of returning Aviat to profitability. Revenue is stabilizing, margins and working capital metrics are improving and we are operating at a lower cost structure strengthening our ability to sustain profitability and cash generation. With a stronger foundation, we are now in a better position to pursue profitable top line growth. We continue to explore all options that enhance our market position, offering and valuation.”

After reading the press release, we were still unsure if management had reached an inflection point (See Maj’s article, Maximizing Returns and Avoid Risk Through Inflection Point Investing) with respect to maintaining its higher margin profile achieved in Q2 and if it was in near term position to pursue revenue growth opportunities. However, the related Q2 conference call transcript was able to address many of these topics.

Some takeaways from the conference call include:

On Margins: It appears that the company will be able to achieve gross and operating margins at levels to sustain profitability.

“This quarter, we reported non-GAAP gross margins of 31.3%, an improvement of 140 basis points sequentially. When comparing to last year’s second quarter, gross margins increased by approximately 800 basis points, higher volumes in North America led to a favorable mix and positively impacted margins, stronger operational execution in our supply chain and services areas also contributed to better performance. And we believe these improvements are sustainable moving forward. Looking ahead, we expect 30% as the new norm for gross margins.”

The Q2 press release insinuated that OP-EX/SG&A were unusually low, but did not give any indication where they will be going forward. This makes it difficult to conclude if the company can maintain profitability moving forward. Luckily the conference call gave us some direction on this point:

“Non-GAAP operating expenses this quarter came in at $18.1 million, an improvement of 1.6 million over Q1 and 2.9 million over last year's quarter - last year’s second quarter. Of note, our OpEx for the quarter included a bad debt recovery of approximately $750,000 which impacted expenses favorably in Q2. There were also other timing related benefits of approximately 250,000. Notwithstanding these factors, our OpEx was still substantially better sequentially and year over year. Our current quarterly run rate excluding one-time events or any upticks in spending to support growth is approximately 19 to 19.5 million.”

We calculated what Q2 non-GAAP EPS would have been using these margins assumptions which yielded of $0.17. If we use these same assumptions for the Company’s Q3 and Q4 revenue guidance

Q3 revenue guidance of low to mid $60 million range would equate to a non-gaap EPS range of a loss of $019 to $0.27 to break even to a positive $0.09.
Q4 revenue guidance in excess of $70 million would equate to a non-gaap EPS of $0.27 to $0.37.

It is still unclear if the company will be able to consistently report non-gaap profitability quarter to quarter. But again, management did insinuate that it is in much better position to sustain profitability moving forward.

Company Comment on Outlook:

“In closing, the strategy we put in place was intended to drive us to profitability this fiscal year. This was achieved in the fiscal second quarter and we believe we're positioned for growth in the second half of the year, while sustaining profitability.”

Company Comment on top line Growth opportunities:

“We will soon unveil some exciting new products that will serve as a catalyst for addressing new customers and markets and support our future growth ambitions.”

These findings, along with a 13D filing filed on September 9, 2016, has us watching the stock closely.

“The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. On September 13, 2016, the Reporting Persons entered into a letter agreement (the “Agreement”) with the Issuer. Pursuant to the Agreement, the Issuer agreed that it would include Wayne Barr, Jr. on the Issuer’s slate of nominees standing for election at the Issuer’s 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”). The Issuer also agreed that it would take all action necessary to permit the Reporting Persons to increase their collective ownership to no more than 7.9% of the Shares.”

Comments & Business Outlook

Thu, 16 Aug 2012 04:00:00 GMT

Fourth Quarter 2012 Results

Revenue for the quarter was above guidance range at $116.0M
GAAP Gross Margin of 28.3%; Non-GAAP Gross Margin was below guidance range at 28.6% due to unfavorable product mix and negative FX impacts
GAAP Net Loss including discontinued operations of $(1.3)M or $(0.02) per share; Non-GAAP Net Income from continuing operations of $1.2M or $0.02 per share
Generated positive cash flow from operations of $9.2M

"We are now at the inflection point of our business strategy. We have an improved financial model and with restructuring largely behind us, we are seeing the potential to more consistently generate cash and non-GAAP profitability," said Michael Pangia, president and CEO, Aviat Networks. "As we move into our new fiscal year, we will enhance our value proposition with the continued rollout of additional new products and remain focused on increasing shareholder value."

Outlook

Based on current trends, the first quarter of fiscal 2013 revenue outlook range is $111M-$116M. Gross margins in the quarter are expected to be in the range of 29.0%-30.0% and non-GAAP operating expenses are expected to be in the $31.0-$32.0M range. Cash balances are estimated to increase modestly in the quarter.