Aviat Networks(US:AVNW)2025-02-04 21:13Revenue Performance - Total revenue for the second quarter of fiscal 2025 was $118.2 million, representing a 26.2% increase compared to $93.7 million in the same period of fiscal 2024[127]. - Revenue in North America increased by $7.3 million (14.5%) in the second quarter of fiscal 2025, but decreased by $5.3 million (5.0%) in the first six months compared to fiscal 2024[127]. - Revenue in Europe increased by $2.8 million (49.7%) in the second quarter and $3.1 million (28.8%) in the first six months of fiscal 2025, primarily due to increased sales from the NEC transaction[129]. - Revenue in Latin America and Asia Pacific increased by $16.2 million (70.4%) in the second quarter and $29.5 million (74.0%) in the first six months of fiscal 2025, driven by contributions from the NEC transaction[130]. - Product sales revenue increased by 26.6% to $82.3 million in the second quarter of fiscal 2025, while service revenue increased by 25.2% to $35.9 million[131]. Acquisitions and Investments - The acquisition of 4RF Limited for $18.2 million enhances Aviat's offerings in the industrial wireless access market, including Private LTE and 5G[121]. - The acquisition of NEC's wireless transport business was completed for approximately $54.5 million, which is expected to enhance Aviat's product portfolio and scale[123]. Financial Performance and Expenses - Gross margin for the second quarter of fiscal 2025 was $40.9 million, a 12.5% increase from $36.3 million in the same quarter of fiscal 2024[132]. - Research and development expenses increased by $1.8 million (21.8%) for the three months ended December 27, 2024, and by $5.8 million (39.2%) for the six months ended December 27, 2024, primarily due to development activity related to the NEC transaction[134]. - Selling and administrative expenses decreased by $1.3 million (5.6%) for the three months ended December 27, 2024, but increased by $4.4 million (10.6%) for the six months ended December 27, 2024, mainly due to merger and acquisition expenses[135]. - Restructuring charges were $1.4 million for the three months ended December 27, 2024, a decrease of $0.6 million (29.3%) compared to the prior year, and $1.4 million for the six months ended December 27, 2024, down $1.2 million (46.5%) from the previous year[136]. - Interest expense, net increased by $1.2 million (301.0%) for the three months ended December 27, 2024, and by $2.2 million (446.7%) for the six months ended December 27, 2024, primarily due to interest on incremental Term Loan borrowings[138]. - Other expense, net increased by $0.9 million (142.2%) for the three months ended December 27, 2024, and by $0.8 million (493.3%) for the six months ended December 27, 2024, mainly due to losses on debt extinguishment and foreign exchange rate movements[141]. Cash Flow and Financial Position - As of December 27, 2024, the Company had total cash and cash equivalents of $52.6 million, with $21.6 million held in the United States and $31.0 million (59%) held outside the United States[144]. - Net cash used in operating activities was $(6.4) million for the first six months of fiscal 2025, a decrease of $13.3 million compared to $6.9 million in the prior year, primarily due to increases in working capital and decreased earnings[145]. - Net cash used in investing activities was $23.5 million for the first six months of fiscal 2025, a decrease of $10.1 million compared to $33.5 million in the prior year, mainly due to higher acquisition payments in the prior year[146]. - As of December 27, 2024, the Company had $75.0 million outstanding under its Term Loan and no borrowings under its Revolver, in compliance with all financial covenants[150]. - A 10% change in interest rates is estimated to have a $0.5 million impact on annual interest expense on the Company's outstanding long-term debt as of December 27, 2024[161]. Market Conditions - The company anticipates ongoing pricing pressures due to competition and macroeconomic conditions affecting its market performance[124].