Overview


The following discussion should be read together with the Condensed Consolidated
Financial Statements and the related Notes thereto and other financial
information appearing elsewhere in this Form 10-Q. All references herein to the
term "fiscal year" shall mean a year ended March 31 of the year specified.
Westell Technologies, Inc., (the "Company") is a leading provider of
high-performance network infrastructure solutions focused on innovation and
differentiation at the edge of communication networks where end users connect.
The Company's portfolio of products and solutions enable service providers and
network operators to improve performance and reduce operating expenses. With
millions of products successfully deployed worldwide, Westell is a trusted
partner for transforming networks into high performance, reliable systems.
COVID-19 Impact
In March 2020, the World Health Organization declared the spread of COVID-19 a
pandemic. During the first quarter of fiscal year 2021, this outbreak grew and
continues to spread throughout the U.S. and around the world. As a result,
authorities continue to implement numerous measures to try to contain the virus,
including restrictions on travel, quarantines, shelter-in-place orders, business
restrictions and shut-downs. The Company is considered an "essential business"
due to the industries and customers we serve, including critical
telecommunications infrastructure. Accordingly, we have followed CDC
recommendations and have continued operations with enhanced safety precautions
throughout the pandemic.
To support the health and well-being of our workforce, customers, partners and
communities, all of our employees who do not have critical in-person functions
have been working remotely to lower the number of people working on-site at any
given time. For those employees working in our facilities, we have instituted
mediation measures including increased distancing of workstations, more frequent
cleanings, face mask requirements, restricting access to our premises, and other
safety precautions. We expect to continue our mediation efforts for the
foreseeable future.
The impact of COVID-19 continues to evolve. There is significant uncertainty
around the U.S. and global economy, future customer demand, supply chain
availability, increased airfreight costs, cash collections, costs related to our
mediation efforts and costs and timing related to anticipated easing of
shelter-in-place and shut-down orders going forward into the remainder of the
fiscal year. These uncertainties include the duration and severity of the
pandemic and containment measures and how our compliance with these measures
will impact our day-to-day operations as well as that of our customers, contract
manufacturers and other supply chain partners.
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We are continuing to monitor developments related to the pandemic on our own
operations as well as on our suppliers, contract manufacturers and customers. We
intend to adapt to the evolving environment while acting to ensure the health
and safety of our employees.
On April 14, 2020, the Company received $1.6 million pursuant to a loan under
the Paycheck Protection Program (the "PPP") of the 2020 Coronavirus Aid, Relief
and Economic Security Act (the "CARES Act") administered by the Small Business
Association. The Company used all of the funds from this loan only for the
purposes included in the PPP, but no assurance can be given that the Company
will obtain forgiveness of the PPP Loan, in whole or in part. The Company
applied for loan forgiveness on December 21, 2020, and is awaiting a
determination from the SBA. On January 22, 2021, the Company applied for a
second draw PPP loan (the "PPP2") pursuant to the Consolidated Appropriations
Act, 2021 (the "CAA") that was signed into law in December 2020, but the Company
can provide no assurance that the Company will obtain the PPP2. (See Liquidity
and Capital Resources).
Segments
The Company's three reportable segments are as follows:

In-Building Wireless ("IBW") Segment The IBW segment solutions enable cellular and public safety coverage in stadiums, arenas, malls, buildings, and other indoor areas not served well or at all by the existing "macro" outdoor wireless network. For cellular service, solutions include distributed antenna system ("DAS") conditioners and digital repeaters. For the public safety market, solutions include Class A repeaters, Class B repeaters, and battery backup units. IBW also offers ancillary products that consist of passive system components and antennas for both the cellular service and public safety markets.

Intelligent Site Management ("ISM") Segment ISM segment solutions include a suite of remote units, which provide machine-to-machine ("M2M") communications that enable operators to remotely monitor, manage, and control physical site infrastructure and support systems. Remote units can be and often are combined with the Company's Optima management software system. ISM also offers support services (i.e., maintenance agreements) and deployment services (i.e., installation).


  Communications Network Solutions ("CNS") Segment
CNS segment solutions include a broad range of hardened network infrastructure
offerings suitable for both indoor and outdoor use.  The offerings consist of
integrated cabinets, power distribution products, copper and fiber network
connectivity panels, and T1 network interface units ("NIUs").
Customers
The Company's customer base includes communications service providers, systems
integrators, neutral-host operators, and distributors. Service providers include
wireless and wireline carriers, cable or multiple systems operators ("MSOs"),
and Internet service providers ("ISPs"). Due to stringent customer quality
specifications and regulated environments in which many customers operate, the
Company must undergo lengthy approval and procurement processes prior to selling
most of its products. Accordingly, the Company must make significant up-front
investments in product and market development prior to actual commencement of
sales of new products. The prices for the Company's products vary based upon
volume, customer specifications, and other criteria, and are subject to change
for a variety of reasons, including cost and competitive factors.
To remain competitive, the Company must continue to invest in new product
development and/or in targeted sales and marketing efforts to launch new product
lines and features. Failure to increase revenues from new products, whether due
to lack of market acceptance, competition, technological change, purchasing
decisions, meeting technical specifications or otherwise, could have a material
adverse effect on the Company's business and results of operations. The Company
expects to continue to evaluate new product opportunities and invest in research
and development activities.
In view of the Company's reliance on the communications infrastructure market
for revenues, the project nature of the business, the unpredictability of
orders, and pricing pressures, the Company believes that period-to-period
comparisons of its financial results should not be relied upon as an indication
of future performance. The Company has experienced quarterly fluctuations in
customer ordering and purchasing activity due primarily to the project-based
nature of the business and to budgeting and procurement patterns toward the end
of the calendar year or the beginning of a new calendar year. While these
factors can result in the greatest fluctuations in the Company's third and
fourth fiscal quarters, this is not always consistent and may not always
correlate to financial results.
Other Matters
At the Annual Meeting of Stockholders held on September 29, 2020, the
stockholders approved a transaction whereby the Company would effect a
reverse/forward stock split of the Company's shares of Class A Common Stock and
Class B Common Stock, in conjunction with terminating the Company's public
company reporting obligations and delisting the Company's Class A Common Stock
from the NASDAQ Capital Market. This transaction was effectuated on October 1,
2020. As a result of the
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Transaction, the Company paid $7.2 million to repurchase approximately 4.9
million shares of the Class A Common Stock at a purchase price of $1.48 per
share.
The Company's ability to utilize NOL carryforwards and other tax attributes to
reduce future federal taxable income is subject to potential limitations under
Internal Revenue Code Section 382 ("Section 382") and its related tax
regulations. The utilization of these attributes may be limited if certain
ownership changes by 5% stockholders (as defined in Treasury regulations
pursuant to Section 382) and the effects of stock issuances by the Company
during any three-year period result in a cumulative change of more than 50% in
the beneficial ownership of the Company. The Company is currently conducting
Section 382 analysis to determine if an ownership change has occurred. If it is
determined that an ownership change has occurred under these rules, the Company
would generally be subject to an annual limitation on the use of pre-ownership
change NOL carryforwards and certain other losses and/or credits. In addition,
certain future transactions regarding the Company's equity, including the
cumulative effects of small transactions as well as transactions beyond the
Company's control, could cause an ownership change and therefore a potential
limitation on the annual utilization of the deferred tax assets.
On October 9, 2020, in conjunction with the process of terminating the Company's
public company reporting obligations and delisting the Company's Class A Common
Stock from the NASDAQ Capital Market, the Company filed a Form 25 with the SEC.
On October 21, 2020, the Financial Industry Regulatory Authority ("FINRA")
notified the Company the Class A Common Stock may be quoted and traded in the
market for unlisted securities (the "over-the-counter-market" or "OTC"). Westell
Class A Common Stock is currently trading on the Pink Open Markets under the
symbol "WSTL".
Information concerning the transaction is set forth in the definitive proxy
statement for the Company's 2020 Annual Meeting of Stockholders, which was filed
with the SEC on Schedule 14A on August 11, 2020. Stockholders are urged to read
the definitive proxy statement carefully.
Results of Operations
Below is a table that compares revenue for the three and nine months ended
December 31, 2020, and 2019, by segment.

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