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Proxim Wireless Reports Fourth Quarter and Full Year 2009 Financial Results
(Market Wire Via Acquire Media NewsEdge) SILICON VALLEY, CA -- (MARKET WIRE) -- 03/04/10 --
Proxim Wireless Corporation (OTCQX: PRXM) (PINKSHEETS: PRXM), a leading provider of end-to-end broadband
wireless systems, today released financial results for the fourth quarter
and full fiscal year ended December 31, 2009.
Financial Highlights
On a GAAP basis, revenues for the quarter ended December 31, 2009 were $7.6
million compared to $7.0 million for the quarter ended September 30, 2009
and $11.6 million for the quarter ended December 31, 2008. Revenue was 9%
higher than the third quarter of 2009 driven primarily by strong demand for
the new Tsunami? 8100 product line.
In fact, the market acceptance of Proxim's 8100 wireless backhaul and
point-to-multipoint (PtMP) products was so dramatic that sales of these
products exceeded $1 million in the fourth quarter -- the first full
quarter of the products' availability. Proxim believes this adoption by
the marketplace is the result of several key benefits of the Tsunami 8100
products:
-- The only PtMP platform capable of delivering greater than 100 Mbps
connectivity
-- Proxim's use of MIMO and OFDM technology to provide NLOS capabilities
while maintaining higher performance
-- Better price/performance than competitive products
-- Greater ease of use and deployment for quicker deployment times
In 2010, Proxim plans to introduce additional products that not only expand
upon the 8100 platform, but also target high-growth markets including
wireless video surveillance, rural broadband, and military applications.
In the fourth quarter ended December 31, 2009, gross margins were 37%
compared to 30% for the quarter ended September 30, 2009 and 38% in the
quarter ended December 31, 2008.
On a GAAP basis, the net loss from continuing operations was $3.2 million,
or $0.13 per diluted share, compared to a net loss of $3.5 million, or
$0.15 per diluted share, for the quarter ended September 30, 2009 and a net
loss of $1.7 million, or $0.07 per diluted share, for the quarter ended
December 31, 2008.
The net loss on a non-GAAP basis for the quarter ended December 31, 2009,
which excludes depreciation of fixed assets, amortization of intangible
assets, and stock compensation, was $2.3 million, or $0.09 per diluted
share, compared to a non-GAAP net loss of $2.4 million, or $0.10 per
diluted share, for the quarter ended September 30, 2009.
For fiscal year 2009, Proxim reported revenue of $29.7 million, net loss on
a GAAP basis of $7.6 million, or $0.32 per diluted share, and a non-GAAP
net loss of $4.4 million, or $0.18 per diluted share. For fiscal year
2008, Proxim reported revenue of $49.0 million, net loss on a GAAP basis of
$10.0 million, or $0.43 per diluted share, and a non-GAAP net loss of $6.0
million, or $0.26 per diluted share.
The financial results above reflect discontinued operations accounting
treatment for a portion of Proxim's consolidated operations, specifically
the Harmonix Division discontinued during the second quarter of 2008.
"With the launch and immediate market acceptance of our Tsunami 8100
products, we saw promising growth at the end of 2009 that we believe will
drive revenue growth in 2010," said Pankaj Manglik, President and CEO of
Proxim Wireless. "In addition to these strong products, we also have an
exciting pipeline of products that we will bring to market in 2010 that
leverage the success of the 8100 platform and address some of the fastest
growing markets in wireless. These products will help us expand upon our
commitment to the video surveillance, rural broadband, and military markets
-- all of which have significant growth capabilities in 2010."
Highlights of Recent Press Announcements Include:
-- Proxim and Systems Integrated announced the deployment of a large
Intelligent Transportation System (ITS) deployment in the County of
Los Angeles, California. The County of LA estimated that utilization of
Proxim's wireless technology to connect the 1,000 traffic intersections
saved the County's ITS program $7 million in costs over traditional
copper or fiber optic installations. Additionally, the County of LA
estimated that the use of Proxim's radios will save the County $708,000
annually versus the cost of leased telephone lines.
-- The state of Bolivar, Venezuela has deployed Proxim's point-to-point
wireless technology as part of a large, integrated public safety
network in Bolivar City. The network, which connects both state and
local police, the National Guard, state transportation and public
safety agencies, utilizes Proxim's Tsunami QuickBridge.11 radios to
create a wireless video surveillance network.
-- Sunny Corner Enterprises, an engineering and fabrication company in
Canada, has deployed Proxim's new Tsunami QB-8150 point-to-point
wireless backhaul products to connect its buildings and increase
network capacity by nine times over its previous link.
-- Proxim announced a partnership with Quantum Networks, LLC to offer
a suite of services and products designed to help organizations prepare
grant applications for the next round of federal stimulus funding. The
partnership allows rural operators and WISPs to purchase, design and
deploy rural broadband networks efficiently and economically.
-- Proxim provided a live product demonstration of its 4.9 GHz equipment
focused on wireless video surveillance and security at the Futurecom
2009 conference in Sao Paulo, Brazil. Proxim's Tsunami product lines
are the first point-to-point (PtP) and point-to-multipoint (PtMP) radios
approved to support the 4.9GHz frequency in Brazil.
-- Proxim showcased its new Tsunami 8100 and QuickBridge 60250 solutions
for wireless HD video surveillance at the ISC East 2009 conference in
New York City. Proxim's Tsunami 8100 products provide the ultra high
capacity and range for point-to-point backhaul and point-to-multipoint
connectivity required to support today's most demanding HD video
surveillance deployments.
About Proxim Wireless
Proxim Wireless Corporation (OTCQX: PRXM) (PINKSHEETS: PRXM) is a leading
provider of end-to-end broadband wireless systems that deliver the
quadruple play of voice, video, data and mobility to all organizations
today. Our systems enable a variety of wireless applications including
security and surveillance, VOIP, last mile access, enterprise LAN
connectivity, and Point-to-Point backhaul. We have shipped more than 1.8
million wireless devices to more than 235,000 customers in over 65
countries worldwide. Proxim is ISO-9001 certified. Information about Proxim
can be found at www.proxim.com. For investor relations information, email
ir@proxim.com or call +1-413-584-1425.
Use of Non-GAAP Financial Information
To supplement Proxim Wireless' condensed consolidated financial statements
presented in accordance with GAAP, Proxim uses certain measures of
financial performance that are non-GAAP financial measures within the
meaning of Regulation G promulgated by the Securities and Exchange
Commission. These non-GAAP measures may include gross margin, net
income(loss), and net income(loss) per share data that are adjusted from
results based on GAAP to exclude certain expenses, gains, and losses, and
to enhance investors' overall understanding of Proxim's current financial
performance and Proxim's prospects for the future. Specifically Proxim
believes the non-GAAP measures provide useful information to both
management and investors by excluding certain expenses that may not be
indicative of its core operating results. These measures should be
considered in addition to results prepared in accordance with GAAP, but
should not be considered a substitute for, or superior to, GAAP results.
These non-GAAP measures included in this press release have been reconciled
to the GAAP results in the attached tables.
Safe Harbor Statement
Statements in this press release that are not statements of historical
facts are forward-looking statements that involve risks, uncertainties, and
assumptions. Proxim Wireless' actual results may differ materially from
the results anticipated in these forward-looking statements. The
forward-looking statements involve risks and uncertainties that could
contribute to such differences including those relating to and arising from
the ongoing uncertainty in the telecommunications industry and larger
economy; our ability to increase our sales in the Americas and elsewhere;
uncertainties whether the market demand for our Tsunami 8100 products will
continue; our limited capital resources and history of significant losses;
the intense competition in our industries and resulting impacts on our
pricing, gross margins, and general financial performance; risks and delays
in introducing contemplated products in 2010; uncertainties whether these
contemplated new products will increase our revenues in 2010; time and
costs associated with developing and launching new products; uncertainty
about market acceptance of products we introduce; potential long sales
cycles for new products such that there may be extended periods of time
before new products contribute positively to our financial results;
decisions we may make to delay or discontinue efforts to develop and
introduce certain new products; difficulties or delays in developing and
supplying new products with the contemplated or desired features,
performance, compliances, certifications, cost, price, and other
characteristics and at the times and in the quantities contemplated or
desired; commitments we may make to our suppliers relating to orders that
may end up getting cancelled; the difficulties in predicting Proxim's
future financial performance; reactions to and impacts of the financing
transaction undertaken by Proxim in August 2009; and the impacts and
effects of any other strategic transactions Proxim may evaluate or
consummate. Further information on these and other factors that could
affect Proxim's actual results is contained in the filings made by Proxim
with the Securities and Exchange Commission (available at www.sec.gov),
including without limitation in the Annual Report on Form 10-K filed by
Proxim on March 31, 2009, and has been and will be included in postings
made by Proxim from time to time with the OTCQX (www.otcqx.com) and in its
other public statements, which may be available on Proxim's website
(www.proxim.com).
PROXIM WIRELESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,720 $ 5,092
Accounts receivable, net 2,983 4,084
Inventory, net 2,948 3,947
Prepaid expenses 388 1,613
------------ ------------
Total current assets 12,039 14,736
Property and equipment, net 2,615 2,658
Other assets:
Restricted cash 77 77
Intangible assets, net 4,744 6,479
Deposits and prepaid expenses 382 387
Total other assets 5,203 6,943
------------ ------------
Total assets $ 19,857 $ 24,337
============ ============
LIABILITIES, REEDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 5,787 $ 8,100
Line of credit payable 2,055 1,500
Deferred revenue 1,344 1,649
License agreement payable - current maturities - 1,023
------------ ------------
Total current liabilities 9,186 12,272
Deferred revenue, net of current 397 474
Notes payable, net of discount 1,512 2,616
Other long term liabilities 159 305
------------ ------------
Total liabilities 11,254 15,667
Commitments and contingencies
Redeemable Preferred Stock:
Series A convertible, $0.01 par value -
2,500,000 shares authorized as of Dec. 31,
2009 and none authorized as of Dec. 31, 2008;
2,500,000 issued and outstanding as of Dec.
31, 2009 and none issued and outstanding as of
Dec. 31, 2008. Aggregate liquidation
preferences $5,047 as of Dec. 31, 2009 and
none as of Dec. 31, 2008 4,598 -
Series B non-convertible, $0.01 par value -
1,250,000 shares authorized as of Dec. 31,
2009 and none authorized as of Dec. 31, 2008;
1,250,000 issued and outstanding as of Dec.
31, 2009 and none issued and outstanding as of
Dec. 31, 2008. Aggregate liquidation
preferences $2,648 as of Dec. 31, 2009 and
none as of Dec. 31, 2008 2,423 -
Total redeemable preferred stock 7,021 -
Stockholders' Equity:
Common stock, $0.01 par value, 100,000,000
shares authorized, 23,519,069 issued and
outstanding as of Dec. 31, 2009 and Dec. 31,
2008 235 235
Additional paid-in capital 65,147 64,829
Accumulated deficit (63,800) (56,394)
------------ ------------
Total stockholders' equity 1,582 8,670
------------ ------------
Total liabilities, redeemable preferred
stock and stockholders' equity $ 19,857 $ 24,337
============ ============
PROXIM WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues $ 7,624 $ 11,610 $ 29,681 $ 49,007
Cost of goods sold 4,812 7,146 16,777 28,582
Gross profit 2,812 4,464 12,904 20,425
Operating expenses:
Selling costs 2,725 3,022 10,102 17,031
General and administrative 2,175 2,221 6,477 11,746
Research and development 866 647 2,689 3,793
--------- --------- --------- ---------
Total operating expenses 5,766 5,890 19,268 32,570
--------- --------- --------- ---------
Operating loss (2,954) (1,426) (6,364) (12,145)
Other income (expenses):
Interest income - 8 5 37
Interest expense (189) (193) (826) (493)
Other income (expense) 122 (15) (84) (165)
Gain (loss) on sale of assets - - - 545
--------- --------- --------- ---------
Total other income
(expenses) (67) (200) (905) (76)
--------- --------- --------- ---------
Loss from continuing operations
before income tax (3,021) (1,626) (7,269) (12,221)
Benefit (provision) for income
taxes (38) (56) (137) (208)
--------- --------- --------- ---------
Loss from continuing operations $ (3,059) $ (1,682) $ (7,406) $ (12,429)
--------- --------- --------- ---------
Income (loss) from discontinued
operations, net of income
taxes $ - $ - $ - $ 2,384
Net income (loss) $ (3,059) $ (1,682) $ (7,406) $ (10,045)
========= ========= ========= =========
Accretion to redemption value
of redeemable preferred stock 106 - 210 -
Net income (loss) attributable
to common stockholders $ (3,165) $ (1,682) $ (7,616) $ (10,045)
Weighted average number of
shares-basic and diluted used
in computing net earnings
(loss) per share 23,519 23,519 23,519 23,519
Basic and diluted net earnings
(loss) per share:
Continuing operations $ (0.13) $ (0.07) $ (0.32) $ (0.53)
--------- --------- --------- ---------
Discontinued operations $ - $ - $ - $ 0.10
--------- --------- --------- ---------
Total $ (0.13) $ (0.07) $ (0.32) $ (0.43)
--------- --------- --------- ---------
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2008
---------------------------- ----------------------------
Adjust- Non- Adjust- Non-
GAAP ment GAAP GAAP ment GAAP
------- ------ ------- ------ ------- -------
Revenues $ 7,624 $ - $ 7,624 $11,610 $ - $11,610
Cost of goods
sold 4,812 (184)(a) 4,521 7,146 (92)(a) 6,952
(107)(c) (102)(c)
------- ------ ------- ------ ------- -------
Gross profit 2,812 291 3,103 4,464 194 4,658
Operating
expenses:
Selling
costs 2,725 (21)(a) 2,700 3,022 (21)(a) 3,141
(4)(c) 140 (c)
General and
administra-
tive 2,175 (34)(a) 1,723 2,221 (40)(a) 1,672
(400)(b) (462)(b)
(18)(c) (47)(c)
Research and
development 866 (117)(a) 734 647 (29)(a) 613
(15)(c) (5)(c)
------- ------ ------- ------ ------- -------
Total
operating
expenses 5,766 (609) 5,157 5,890 (464) 5,426
------- ------ --- ------- ------ ------- --- -------
Operating
profit
(loss) (2,954) 900 (2,054) (1,426) 658 (768)
Other income
(expenses):
Interest
income - - - 8 - 8
Interest
expense (189) - (189) (193) - (193)
Other income
(expense) 114 - 114 (15) - (15)
Gain (loss)
on sale of
assets 8 - 8 - - -
------- ------ ------- ------ ------- -------
Total other
income
(expenses) (67) - (67) (200) - (200)
------- ------ ------- ------ ------- -------
Loss before
income taxes (3,021) 900 (2,121) (1,626) 658 (968)
Benefit
(provision)
for income
taxes (38) - (38) (56) - (56)
------- ------ ------- ------ ------- -------
Loss from
continuing
operations $(3,059) $ 900 $(2,159)$(1,682) $ 658 $(1,024)
------- ------ ------- ------ ------- -------
Income (Loss)
from
discontinued
operations,
net of
income taxes $ - $ - $ - $ - $ - $ -
------- ------ ------- ------ ------- -------
Net income
(loss) $(3,059) $ 900 $(2,159)$(1,682) $ 658 $(1,024)
------- ------ ------- ------ ------- -------
Accretion to
redemption
value of
redeemable
preferred
stock 106 - 106 - - -
Net income
(loss)
attributable
to common
stockholders $(3,165) - $(2,265)$(1,682) $ 658 $(1,024)
Weighted
average
number of
shares -
basic and
diluted used
in computing
net earnings
(loss) per
share 23,519 $ - 23,519 23,519 - 23,519
Basic and
diluted net
earnings
(loss) per
share:
Continuing
operations $ (0.13) $ - $ (0.09) $(0.07) $ - $ (0.04)
======= ====== ======= ====== ======= =======
Discontinued
operations $ - $ - $ - $ - $ - $ -
======= ====== ======= ====== ======= =======
Total $ (0.13) $ - $ (0.09) $(0.07) $ - $ (0.04)
======= ====== ======= ====== ======= =======
(a) The effect of depreciation of fixed assets
(b) The effect of amortization of intangible assets
(c) The effect of stock based compensation. The company adopted the
provisions of Statement of Financial Accounting Standards No. 123R,
"Share-Based Payment" on January 1, 2006 using the modified-prospective
transition method.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
Twelve Months Ended Twelve Months Ended
December 31, 2009 December 31, 2008
----------------------------- ------------------------------
Adjust- Adjust-
GAAP ment Non-GAAP GAAP ment Non-GAAP
------- ------- ------- -------- ------- -------
Revenues $29,681 $ - $29,681 $ 49,007 $ - $49,007
Cost of
goods sold 16,777 (547) (a) 15,814 28,582 (431) (a) 27,669
(416) (c) (482) (c)
------- ------- ------- -------- ------- -------
Gross
profit 12,904 963 13,867 20,425 913 21,338
Operating
expenses:
Selling 10,102 (82) (a) 10,045 17,031 (45) (a) 16,937
costs 25 (c) (49) (c)
General and 6,477 (137) (a) 4,519 11,746 (268) (a) 9,213
admini- (1,735) (b) (1,964) (b)
strative (86) (c) (301) (c)
Research
and 2,689 (191) (a) 2,451 3,793 (322) (a) 3,371
development (47) (c) (100) (c)
------- ------- ------- -------- ------- -------
Total
operating
expenses 19,268 (2,253) 17,015 32,570 (3,049) 29,521
------- ------- ------- -------- ------- -------
Operating
profit
(loss) (6,364) 3,216 (3,148) (12,145) 3,962 (8,183)
Other income
(expenses):
Interest
income 5 - 5 37 - 37
Interest
expense (826) - (826) (493) - (493)
Other
income
(expense) (84) - (84) (165) - (165)
Gain (loss)
on sale of
assets - - - 545 - 545
------- ------- ------- -------- ------- -------
Total
other
income
(expenses) (905) - (905) (76) - (76)
------- ------- ------- -------- ------- -------
Loss before
income
taxes (7,269) 3,216 (4,053) (12,221) 3,962 (8,259)
Benefit
(provision)
for income
taxes (137) - (137) (208) - (208)
------- ------- ------- -------- ------- -------
Loss from
continuing
operations $(7,406) $ 3,216 $(4,190) $(12,429) $ 3,962 $(8,467)
------- ------- ------- -------- ------- -------
Income (Loss)
from
discontinued
operations,
net of
income
taxes $ - $ - $ - $ 2,384 $ 85(a&b) $ 2,469
------- ------- ------- -------- ------- -------
Net income
(loss) $(7,406) $ 3,216 $(4,190) $(10,045) $ 4,047 $(5,998)
------- ------- ------- -------- ------- -------
Accretion to
redemption
value of
redeemable
preferred
stock 210 - 210 - - -
Net income
(loss)
attributable
to common
stock-
holders $(7,616) - $(4,400) $(10,045) $ 4,047 $(5,998)
Weighted
average
number of
shares -
basic and
diluted
used in
computing
net
earnings
(loss) per
share 23,519 $ - 23,519 23,519 - 23,519
Basic and
diluted net
earnings
(loss) per
share:
Continuing
operations $ (0.32) $ - $ (0.18) $ (0.53) $ - $ (0.36)
======= ======= ======= ======== ======= =======
Discontinued
operations $ - $ - $ - $ 0.10 $ - $ 0.10
======= ======= ======= ======== ======= =======
Total $ (0.32) $ - $ (0.18) $ (0.43) $ - $ (0.26)
======= ======= ======= ======== ======= =======
(d) The effect of depreciation of fixed assets
(e) The effect of amortization of intangible assets
(f) The effect of stock based compensation. The company adopted the
provisions of Statement of Financial Accounting Standards No. 123R,
"Share-Based Payment" on January 1, 2006 using the modified-prospective
transition method.
For Further Information Contact:
David Renauld
Vice President, Corporate Affairs
Proxim Wireless
(413) 584-1425
ir@proxim.com
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