Westell Technologies Reports 3rd Quarter Fiscal 2005 Results; Revenue from Customer Networking Equipment Increases 52% Year over Year

Business Wire, Jan 19, 2005

AURORA, Ill. -- Company posts its Eleventh Consecutive Profitable Quarter

Westell Technologies, Inc. (NASDAQ:WSTL), a leading provider of broadband access solutions and conferencing services, today announced the results for the quarter ending December 31, 2004.

Total revenues for the December quarter increased 24% to $74.5 million from $60.0 million in the same quarter of last year and increased 21% from $61.4 million in the quarter ended September 30, 2004.

Westell reported net income for the December quarter of $3.7 million, or $0.05 per diluted share, which includes tax expense of $2.6 million, or $0.04 per diluted share. Excluding the tax expense, the non-GAAP net income in the December quarter was $6.3 million, or $0.09 per diluted share. A reconciliation of non-GAAP results to GAAP results is provided as part of this press release.

"Our Customer Networking Equipment revenue performance in the December quarter was well beyond our expectations. The early success of our new wireless gateway product, VersaLink(TM), far exceeded even our most optimistic forecast," said Van Cullens, Westell President and CEO. "As a result of this overwhelming initial demand, we expedited production and product delivery, which caused us to incur an incremental cost of approximately $3 million for the quarter. We expect these incremental expediting costs will decrease in the next quarter. We expect only approximately $750 thousand of such expense in the March quarter which should contribute to margin improvement," Cullens added.

Mr. Cullens continued, "We remain encouraged by the growth in the broadband market. It is now very evident that our service provider customers are determined to be leaders in the delivery of broadband service, including video and VoIP. Aside from marketing promotions, we believe that market growth will be fueled by continued advancements in DSL, fiber, WiFi, VoIP, Video/Media gateways, home networking and ancillary services. We believe Westell is building a solid foundation of solutions to help customers successfully compete for these emerging opportunities. Our products, including the recently announced TriLink(TM) and Verizon One Gateways; UltraLine(TM); VersaLink(TM); ProLine; and EnVoy(TM) support multiple access options, service management and home networking requirements, all with the high quality and reliability that are Westell hallmarks. We believe these new products, and those we are planning, will expand Westell's traditional position as a preferred supplier in the broadband space," Cullens added.

Outlook

Westell provided guidance for the fourth fiscal quarter ending March 31, 2005. The Company expects revenue to be in the range of $73-$77 million. Westell expects EPS to be in a range of $0.07 to $0.08 per diluted share (including a provision for income tax expense in the range of $3.2 to $3.7 million) and non-GAAP EPS in a range of $0.11 to $0.13 per diluted share, excluding the provision for tax expense.

Reconciliation of Non-GAAP to GAAP Results

A detailed calculation of non-GAAP net income and net income per share is included in the attached statement of operations, which also includes equivalent GAAP net income and GAAP net income per share.

Westell will host its earnings call on Thursday, January 20 at 9:30 AM Eastern Time for analysts, shareholders, investors and the public.

The live earnings call will be available to the public. Participants can join for the voice portion of the call by following the instructions below. Participants must separately register for the call.

To participate in the voice portion:

1. All participants must pre-register by dialing 1-800-222-9743, International 1-402-220-4357.

2. Leave your name and the company whom you represent.

3. To participate in the call on the 19th please dial ConferencePlus at 1-800-446-1671 no later than 9:15 AM, Eastern Time and ask for the "Westell Technologies Analyst Call". International participants may dial 847-413-3362.

The Company's earnings press release and any related earnings information to be discussed on the earnings call will be posted on the Investor Relations section of the Company's web site at http://www.westell.com. Digital Audio Replay of this call will be available one hour following the conclusion of the call by dialing 1-888-843-8996 or 630-652-3044 and entering 10721149#.

About Westell

Westell Technologies, Inc. (NASDAQ: WSTL) headquartered in Aurora, Illinois is a Tier-1 provider of intelligent, carrier-class broadband access products, manufactured using a TL9000 registered quality management system. Westell offers high-speed broadband/DSL and VoIP technology products for carriers, service providers and business enterprises around the world. Additional information can be obtained by visiting Westell's Web site at www.westell.com.

About ConferencePlus

Conference Plus, Inc., (ConferencePlus(TM)) a leading global provider of audio, web and videoconferencing services is dedicated to the workplace of the future - now. ConferencePlus is transforming the way work is done through its market-leading multimedia conferencing solutions that combine innovation, proven technology and exceptional customer service. Headquartered in Schaumburg, Illinois with an international headquarters in Dublin, Ireland, ConferencePlus is a subsidiary of Westell Technologies, Inc. (NASDAQ: WSTL). Additional information about ConferencePlus can be obtained by visiting http://www.conferenceplus.com.