Aviat Networks to Delay Form 10-K Filing for Fiscal Year 2024

Rhea-AI Summary

Aviat Networks (NASDAQ: AVNW) has announced a delay in filing its Form 10-K for fiscal year 2024, citing the need for additional time to finalize its assessment of internal control over financial reporting. The company has identified material weaknesses in its internal controls and is implementing measures to address them. Aviat also disclosed potential errors in previously reported financial information for fiscal years 2024 and 2023, which are under evaluation.

Preliminary estimates for FY2024 show:

• Revenue between $400-$409 million (up from $347 million in FY2023)
• Operating income between $15-$20 million (down from $26 million in FY2023)
• Net income between $8-$12 million (down from $12 million in FY2023)
• Cash and cash equivalents of approximately $65 million (up from $22 million in FY2023)
• Total outstanding debt of approximately $48 million (up from $0 in FY2023)

Positive

• Estimated revenue increase to $400-$409 million in FY2024 from $347 million in FY2023
• Cash and cash equivalents growth to approximately $65 million from $22 million in the previous year

Negative

• Delay in filing Form 10-K due to material weaknesses in internal controls
• Potential errors in previously reported financial information for FY2024 and FY2023
• Estimated decrease in operating income to $15-$20 million from $26 million in FY2023
• Estimated decrease in net income to $8-$12 million from $12 million in FY2023
• Increase in total outstanding debt to $48 million from $0 in the previous year

Insights

Financial Analyst

Aviat Networks' delayed 10-K filing and identified material weaknesses in internal controls raise significant red flags. While revenue growth is estimated at 15-18%, the projected decline in operating income (23-42%) and net income (0-33%) is concerning. The company's $48 million debt position, up from zero last year, coupled with increased cash reserves, suggests a major financial restructuring or acquisition.

The potential need for financial restatements for 2023 and 2024 adds uncertainty to the company's financial position. Investors should be cautious, as these issues often lead to increased scrutiny from auditors and regulators, potentially impacting stock performance in the short term.

Corporate Governance Expert

The identified material weaknesses in Aviat's internal control over financial reporting are a serious concern. This suggests potential systemic issues in the company's financial management processes. The delay in filing the 10-K and possible restatement of previous financial reports indicate a lack of robust financial oversight.

Positively, management's proactive approach in addressing these issues with the Audit Committee and external advisors demonstrates a commitment to rectifying the situation. However, shareholders should expect increased compliance costs and potential regulatory scrutiny in the coming months, which could impact the company's operational focus and financial performance.

Telecommunications Industry Analyst

Despite the financial reporting challenges, Aviat's estimated revenue growth to $400-409 million indicates strong market demand for its wireless transport and access solutions. This 15-18% growth outpaces the industry average, suggesting Aviat is gaining market share in the competitive telecom equipment sector.

However, the projected decline in operating income is concerning, possibly indicating pricing pressures or increased costs. The new debt position of $48 million could be linked to strategic investments or acquisitions to fuel growth. Investors should closely monitor how Aviat leverages this capital to maintain its competitive edge in the rapidly evolving 5G and beyond-5G infrastructure market.

AUSTIN, Texas, Sept. 11, 2024 /PRNewswire/ -- Aviat Networks, Inc. (NASDAQ: AVNW), ("Aviat" or the "Company") the leading expert in wireless transport and access solutions, announced today that it has filed a Notification of Late Filing on Form 12b-25 with respect to the Annual Report on Form 10-K for the fiscal year ended June 28, 2024.

Aviat has determined that it is unable to file, without unreasonable effort or expense, its Annual Report on Form 10-K for the fiscal year ended June 28, 2024 by the prescribed filing due date because the Company requires additional time to finalize its assessment of internal control over financial reporting and to complete certain closing processes and procedures. The Company is working diligently and expects to file the Form 10-K on or before the expiration of the fifteen calendar day extension period.

Management has identified certain material weaknesses in its preliminary assessment of internal control over financial reporting for the fiscal year ended June 28, 2024. The Company has initiated and will continue to implement measures designed to improve its internal control over financial reporting to remediate these material weaknesses with oversight from the Audit Committee of the Board of Directors and assistance from its external advisors.

In connection with the preparation of the Company's annual financial statements for the fiscal year ended June 28, 2024, the Company identified certain errors impacting previously reported financial information for the fiscal years 2024 and 2023. While the Company currently believes the effects are not material to the previously issued consolidated financial statements for any of its prior reporting periods, it continues to evaluate to determine whether revision or restatement of prior periods is required.

The Company estimates the following results for the fiscal year ended June 28, 2024:

Revenues

• The Company estimates revenues for the year ended June 28, 2024 between $400 million and $409 million, compared to revenues of $347 million reported in the prior year ended June 30, 2023.

Operating income

• The Company estimates operating income for the year ended June 28, 2024 between $15 million and $20 million, compared to operating income of $26 million reported in the prior year ended June 30, 2023.

Net income

• The Company estimates net income for the year ended June 28, 2024 between $8 million and $12 million, compared to net income of $12 million reported in the prior year ended June 30, 2023.

Cash and cash equivalents

• The Company estimates cash and cash equivalents for the year ended June 28, 2024 of approximately $65 million compared to cash and cash equivalents of $22 million reported in the prior year ended June 30, 2023.

Debt

• The Company estimates total outstanding debt for the year ended June 28, 2024 of approximately $48 million. The company had no debt outstanding in the prior year ended June 30, 2023.

These figures are preliminary, unaudited and subject to change pending the filing of the 2024 Form 10-K.

Forward-Looking Statements
Certain matters discussed constitute forward-looking statements within the meaning of the federal securities laws. All statements contained in this notification that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the potential revision or restatement of certain historical financial statements, the material weaknesses in the Company's internal control over financial reporting as of June 28, 2024, and the Company's expectations regarding the timing of the filing of the Form 10-K. These forward-looking statements are based on management's current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from expectations include, but are not limited to the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the potential for additional material weaknesses in the Company's internal controls over financial reporting or other potential control deficiencies of which the Company is not currently aware or which have not been detected; the risk that the completion and filing of the Form 10-K will take longer than expected; additional information that may arise during the finalization of the Form 10-K; and the risks discussed in detail in "Item 1A. Risk Factors" of the Company's most recent Annual Report on Form 10-K, as updated by its other filings with the SEC. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

About Aviat Networks, Inc.
Aviat Networks, Inc. is the leading expert in wireless transport and access solutions and works to provide dependable products, services and support to its customers. With more than one million systems sold into 170 countries worldwide, communications service providers and private network operators including state/local government, utility, federal government and defense organizations trust Aviat with their critical applications. Coupled with a long history of microwave innovations, Aviat provides a comprehensive suite of localized professional and support services enabling customers to drastically simplify both their networks and their lives. For more than 70 years, the experts at Aviat have delivered high performance products, simplified operations, and the best overall customer experience. Aviat is headquartered in Austin, Texas. For more information, visit www.aviatnetworks.com or connect with Aviat Networks on Facebook and LinkedIn.

Investor Contact
Andrew Fredrickson
Corporate Development and Investor Relations
(512) 582-4626
andrew.fredrickson@aviatnet.com 

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SOURCE Aviat Networks, Inc.

FAQ

Why is Aviat Networks (AVNW) delaying its Form 10-K filing for fiscal year 2024?

Aviat Networks is delaying its Form 10-K filing for fiscal year 2024 due to the need for additional time to finalize its assessment of internal control over financial reporting and to complete certain closing processes and procedures. The company has identified material weaknesses in its internal controls.

What are Aviat Networks' (AVNW) estimated revenue figures for fiscal year 2024?

Aviat Networks estimates revenues for the fiscal year ended June 28, 2024, to be between $400 million and $409 million, compared to $347 million reported in the previous fiscal year.

How has Aviat Networks' (AVNW) operating income changed in fiscal year 2024 compared to 2023?

Aviat Networks estimates operating income for fiscal year 2024 to be between $15 million and $20 million, which is lower than the $26 million reported in fiscal year 2023.

What is Aviat Networks' (AVNW) estimated cash position at the end of fiscal year 2024?

Aviat Networks estimates its cash and cash equivalents at the end of fiscal year 2024 to be approximately $65 million, compared to $22 million reported at the end of fiscal year 2023.