LONDON, UK / ACCESSWIRE / October 13, 2016 / Active Wall St. announces its post-earnings coverage on DragonWave Inc. (NASDAQ: DRWI). The company posted its financial results for the second quarter fiscal 2017 (Q2 FY17) on October 12, 2016. The Ottawa, Canada-based company reported a year-over-year decline in its quarterly revenues while its net loss narrowed during the reported quarter. Register with us now for your free membership at: http://www.activewallst.com/register/.
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In Q2 FY17, DragonWave's total revenue declined to $13.23 million from $26.92 million recorded at the end of Q2 FY16. Total revenue numbers for Q2 FY17 fell short of market consensus estimates of $14.25 million. The company's Hardware and other revenues for Q2 FY17 was $9.53 million compared to $22.61 million reported in Q2 FY16. The company's Services' revenues came in at $3.70 million in Q2 FY17 versus $4.30 million in Q2 FY16.
Meanwhile, total revenue registered a sequentially growth during the reported quarter. The company's total revenue surged 30% on sequential basis excluding the Nokia channel during the reported quarter. The revenues from Nokia channel contributed 24% to total revenue in Q2 FY17, versus 38% to total revenue in Q1 FY17.
The global supplier of packet microwave radio systems' net loss came narrowed down to $3.94 million, or $0.96 per diluted share, in Q2 FY17, from net loss of $20.97 million, or $6.96 loss per diluted share, in the prior year's comparable quarter. However, net loss for the reported period missed market consensus net loss estimate of $0.95 per diluted share.
Peter Allen, President and CEO of DragonWave said in the earnings release:
"We are pleased with the growth in our direct revenue in the quarter and the progress that we have seen on our renewal and restructuring approach. We expect to continue this progress in coming quarters. We remain focused on revenue and margin growth opportunities presented by our new feature rich products while maintaining strong cost control."
In the quarter ended on August 31, 2016, DragonWave's gross profit was $3.86 million compared to $3.99 million in the year ago quarter. Furthermore, gross profit before inventory provisions came in at 31.9% of total revenue in Q2 FY17 versus 31.0% of total revenues in Q1 FY17. Operating expenses for Q2 FY17 was down by $0.4 million from $7.3 million in Q1 FY17 to $6.9 million Q2 FY17.
Cash Matters and Balance Sheet
At the end of quarter on August 31, 2016, the company reported inventories of $22.70 million, which stood at the same level as on February 29, 2016. The company reported cash and cash equivalents balance of $7.47 million on August 31, 2016, which was above $4.28 million as on close of books on February 29, 2016. Additionally, the company reported total long-term liabilities of $3.88 million as on August 31, 2016, compared to $0.50 million as on February 29, 2016.
On August 08, 2016, DragonWave closed its public offering amounting to $6.0 million. The company sold 1,760,880 of its Class A Units and 30,164 of Class B Units. The Class A and Class B Units were priced at $3.35 per Unit and $3.34 per Unit, respectively. The company stated that the money raised from the public offering would be utilized for general corporate purposes, including working capital, general and administrative expenses, capital expenditures, and implementation of strategic priorities. After the public issue the number of outstanding shares increased to approximately 5.49 million from 3.02 million approximately.
At the close of trading session on October 12, 2016, DragonWave's stock price rose 2.26% to end the day at $2.72. A total volume of 87,133 thousand shares were exchanged during the session, which was above the 3-month average volume of 76.78 thousand shares. The stock currently has a market cap of $9.90 million.
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SOURCE: Active Wall Street