DragonWave Revenues Jump on Nokia Siemens Networks Deal

Published on: 11th Oct 2012

­DragonWave has announced that its second quarter revenues jumped to US$44.2 million, compared with US$13.6 million a year ago. DragonWave had one customer, Nokia Siemens Networks, who generated more than 10% of revenue a year ago, but revenue through the Nokia Siemens Networks channel totaled $32.3 million in this quarter.

Gross margin for the second quarter of fiscal year 2013 was 15%, compared with 42% in the second quarter of fiscal year 2012 and 32% in the first quarter of fiscal year 2013. The gross margin in the second quarter of fiscal year 2013 reflects the inclusion of an inventory impairment provision of $2.6 million. Without the inventory provision, the gross margin in the second quarter was 21%.

The company still posted a loss though, of US$1.1 million, compared to a loss of US$2.2 million a year ago. These results include a one-time gain of $19.4 million related to the accounting treatment for the acquisition of the Nokia Siemens Networks microwave transport business.

"We continue to advance our strategic priorities," said DragonWave President and CEO Peter Allen. "Our partnership with Nokia Siemens Networks is still in the integration phase and involves a wide range of activities, including access to a wide range of major global operators. Following the June 1, 2012 closing of the acquisition of Nokia Siemens Networks' microwave transport business, we rationalized our operations and reduced costs; we will continue to manage our cost profile to achieve profitability as we gain greater visibility into revenue opportunities."

Cash, cash equivalents and restricted cash totaled $44 million, compared to $42.6 million at the end of the first quarter of fiscal year 2013.

DragonWave also announced today that Gerry Spencer, Chairman of the Board, is stepping down as a director for family reasons. "Gerry has made a significant contribution to DragonWave," said Mr. Allen. "We thank him for his service and wish him well in his future endeavours. Company director Claude Haw will become the new board chair. Claude has more than 30 years of experience in the technology and telecommunications industry. He first joined the DragonWave Board in 2003. I look forward to working with Claude in his new capacity."

DragonWave expects revenue for the third quarter of fiscal year 2013 to be in the range of $43 million to $50 million.

 

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