Science & Technology
Science and Technology
Science and Technology
Mon, November 16, 2009
Sun, November 15, 2009
Fri, November 13, 2009 Proxim Wireless Reports Third Quarter 2009 Financial Results
SILICON VALLEY, CA--(Marketwire - November 13, 2009) - Proxim Wireless Corporation (
Financial Highlights
On a GAAP basis, revenues for the quarter ended September 30, 2009 were $7.0 million, a decrease of approximately 3% from revenue of $7.2 million for the quarter ended June 30, 2009 and a decrease of approximately 42% from revenue of $12.1 million for the quarter ended September 30, 2008. Revenues in the third quarter 2009 were impacted by continuing worldwide economic difficulties as well as it traditionally being a softer quarter. However, the third quarter 2009 revenue was positively impacted by Proxim's recently-introduced 4G Tsunami™ 8100 product line. In fact, the demand for those products exceeded expectations such that Proxim was not able to ship all the 8100 products that were ordered for delivery in the quarter.
On a GAAP basis, the net loss for the third quarter ended September 30, 2009 was $3.5 million or $0.15 per diluted share, compared to a net loss of $0.7 million, or $0.03 per diluted share, for the quarter ended June 30, 2009 and a net loss of $1.7 million, or $0.07 per diluted share, for the quarter ended September 30, 2008.
The net loss was $2.7 million, or $0.12 per diluted share, on a non-GAAP basis for the quarter ended September 30, 2009, which excludes depreciation of fixed assets, amortization of intangible assets, and stock based compensation, compared to a non-GAAP net income of $0.2 million or $0.01 per diluted share for the quarter ended June 30, 2009 and a non-GAAP net loss of $0.8 million or $0.04 per diluted share for the quarter ended September 30, 2008.
The financial results above reflect discontinued operations accounting treatment for a portion of Proxim's consolidated operations. The discontinued operations consisted of the Harmonix Division that was sold during the third quarter of 2008.
"While our third quarter financial results continue to reflect the worldwide economic downturn, we believe that the market reaction to our 4G 8100 product lines is a silver lining on which we intend to capitalize," said Pankaj Manglik, President and CEO of Proxim Wireless. "In our opinion, these products are without peer in the combined unlicensed WiMAX and Point to Point Wireless Backhaul market, which we believe has led to the quick and enthusiastic adoption of these products by the market and our channels. We are pleased that these products are becoming an important contributor to our overall revenue very early in their product life cycle. Also in the third quarter, we strengthened our balance sheet with a significant equity investment, reflecting confidence in our company from both existing and new major investors."
Highlights of Recent Press Announcements Include:
-- Proxim introduced its new 4G Backhaul product lines -- the Tsunami™ QB-8100 point-to-point (PtP) and the Tsunami™ MP-8100 point-to- multipoint (PtMP) -- which combine MIMO and OFDM technologies with Proxim's Wireless Outdoor Routing Protocol (WORP) to provide PtP and PtMP backhaul for carriers, WISPs and government entities. Both enthusiasm and demand for these products has been very strong. -- The new, enhanced Proxim Partner Program was introduced to more aggressively support the company's North American resellers' business needs and help drive more business to its valued channel partners. As a result, Proxim has recruited over 120 new partners since the launch of the program in August. -- Proxim received an equity investment of $7.5 million, with $5 million coming from SRA OSS, Inc., a wholly owned subsidiary of SRA Holdings, Inc. of Japan. -- Proxim and NetLogix partnered to make available a broad suite of stimulus grant application services and resources for organizations preparing stimulus grant applications in the United States. -- Khrons, a long time Proxim partner based in Sao Paulo, Brazil, deployed networks using several hundreds of Proxim radios in the states of Minas Gerais and Sao Paulo, both of which support Digital City initiatives. -- Property management company Resource Residential selected Proxim's indoor and outdoor Wi-Fi® equipment to provide free Wi-Fi to all 50 of the apartment communities that they manage throughout the U.S. -- The Punjab Engineering College (PEC) University of Technology in Chandigarh, India, deployed Proxim's Wi-Fi mesh equipment to provide a secure wireless Local Area Network (WLAN) for its residential faculty areas. -- Proxim introduced its 802.11n Compatibility Guarantee program for any Proxim 802.11n draft 2.0 WLAN products that have been or are purchased from our distribution channel worldwide prior to formal IEEE approval of the 802.11n standard.
About Proxim Wireless
Proxim Wireless Corporation (
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; our limited capital resources and recent history of significant losses; the intense competition in our industries and resulting impacts on our pricing, gross margins, and general financial performance; 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; 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 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) September 30, December 31, 2009 2008 ------------ ------------ (unaudited) ASSETS Current assets: Cash and cash equivalents $ 6,376 $ 5,092 Accounts receivable, net of allowance for doubtful accounts, returns and discounts of $1,584 for Sept. 30, 2009 and $2,132 for December 31, 2008 respectively 3,578 4,084 Inventory 3,473 3,947 Prepaid expenses 489 1,613 ------------ ------------ Total current assets 13,916 14,736 Property and equipment, net 2,857 2,658 Other Assets: Restricted cash 77 77 Intangible assets, net 5,145 6,479 Deposits and prepaid expenses 327 387 Total other assets 5,549 6,943 ------------ ------------ Total assets $ 22,322 $ 24,337 ============ ============ LIABILITIES, REEDEEMABLE PREFERRED STOCK AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable and accrued expenses $ 5,157 $ 8,100 Line of credit payable 2,287 1,500 Deferred revenue 1,300 1,649 License agreement payable - current maturities - 1,023 ------------ ------------ Total current liabilities 8,744 12,272 Deferred revenue, net of current 415 474 Notes payable, net of discount 1,474 2,616 Other long term liabilities 171 305 ------------ ------------ Total liabilities 10,804 15,667 Commitments and contingencies Redeemable Preferred Stock: Series A convertible, $0.01 par value - 2,500,000 shares authorized as of Sept 30, 2009 and none authorized as of Dec. 31, 2008; 2,500,000 issued and outstanding as of Sept 30, 2009 and none issued and outstanding as of Dec. 31, 2008. Aggregate liquidation preferences $5,048 as of Sept. 30, 2009 and none as of Dec. 31, 2008 4,591 - Series B non-convertible , $0.01 par value - 1,250,000 shares authorized as of Sept 30, 2009 and none authorized as of Dec. 31, 2008; 1,250,000 issued and outstanding as of Sept 30, 2009 and none issued and outstanding as of Dec. 31, 2008. Aggregate liquidation preferences $2,553 as of Sept 30, 2009 and none as of Dec. 31, 2008 2,324 - Total redeemable preferred stock 6,915 - Stockholders' Equity: Common stock, $0.01 par value, 100,000,000 shares authorized, 23,519,069 issued and outstanding as of Sept 30, 2009 and Dec. 31, 2008 235 235 Additional paid-in capital 65,109 64,829 Accumulated deficit (60,741) (56,394) ------------ ------------ Total stockholders' equity 4,603 8,670 ------------ ------------ Total liabilities, redeemable preferred stock and stockholder's equity $ 22,322 $ 24,337 ============ ============ PROXIM WIRELESS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30 September 30 -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Revenues $ 6,952 $ 12,067 $ 22,056 $ 37,397 Cost of goods sold 4,846 7,685 11,964 21,436 Gross profit 2,106 4,382 10,092 15,961 Operating expenses: Selling costs 2,712 3,845 7,377 14,009 General and administrative 1,861 3,101 4,302 9,525 Research and development 675 1,019 1,823 3,146 --------- --------- --------- --------- Total operating expenses 5,248 7,965 13,502 26,680 --------- --------- --------- --------- Operating loss (3,142) (3,583) (3,410) (10,719) Other income (expenses): Interest income 1 9 5 29 Interest expense (213) (186) (637) (300) Other income (expense) (120) (33) (198) (151) Gain (loss) on sale of assets - (178) (8) 546 --------- --------- --------- --------- Total other income (expenses) (332) (388) (838) 124 --------- --------- --------- --------- Loss from continuing operations before income tax (3,474) (3,971) (4,248) (10,595) Benefit (Provision) for income taxes (27) (39) (99) (152) --------- --------- --------- --------- Loss from continuing operations $ (3,501) $ (4,010) $ (4,347) $ (10,747) --------- --------- --------- --------- Income (Loss) from discontinued operations, net of income taxes $ - $ 2,282 $ - $ 2,381 Net income (loss) $ (3,501) $ (1,728) $ (4,347) $ (8,366) ========= ========= ========= ========= Accretion to redemption value of redeemable preferred stock 104 - 104 - Net income (loss) attributable to common Stockholders $ (3,605) $ (1,728) $ (4,451) $ (8,366) 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 $ (0.15) $ (0.17) $ (0.19) $ (0.46) --------- --------- --------- --------- Discontinued Operations $ - $ 0.10 $ - $ 0.10 --------- --------- --------- --------- Total $ (0.15) $ (0.07) $ (0.19) $ (0.36) --------- --------- --------- --------- RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS Three Months Ended Three Months Ended September 30, 2009 June 30, 2009 --------------------------- ------------------------- GAAP Adjustment Non-GAAP GAAP Adjustment Non-GAAP ------- --------- ------- ------ --------- ------ Revenues $ 6,952 $ - $ 6,952 $7,213 $ - $7,213 Cost of goods sold 4,846 (128)(a) 4,611 3,574 (114)(a) 3,355 (107)(c) (105)(c) ------- --------- ------- ------ --------- ------ Gross profit 2,106 235 2,341 3,639 219 3,858 Operating expenses: (21)(a) (20)(a) Selling costs 2,712 (5)(c) 2,686 2,459 6(c) 2,445 General and (33)(a) (33)(a) administrative (400)(b) (454)(b) 1,861 (18)(c) 1,410 1,002 (58)(c) 456 Research and (24)(a) (24)(a) development 675 (18)(c) 633 539 (10)(c) 505 ------- --------- ------- ------ --------- ------ Total operating expenses 5,248 (519) 4,729 4,000 (594) 3,406 ------- --------- ------- ------ --------- ------ Operating profit (loss) (3,142) 754 (2,388) (361) 813 452 Other income (expenses): Interest income 1 - 1 1 - 1 Interest expense (213) - (213) (217) - (217) Other income (expense) (120) - (120) (56) - (56) Gain (loss) on sale of assets - - - - - - ------- --------- ------- ------ --------- ------ Total other income (expenses) (332) - (332) (272) - (272) ------- --------- ------- ------ --------- ------ Loss before income taxes (3,474) 754 (2,720) (633) 813 180 Benefit (provision) for income taxes (27) - (27) (17) - (17) ------- --------- ------- ------ --------- ------ Loss from continuing operations $(3,501) $ 754 $(2,747) $ (650) $ 813 $ 163 ------- --------- ------- ------ --------- ------ Income (Loss) from discontinued operations, net of income taxes $ - $ - $ - $ - $ - $ - ------- --------- ------- ------ --------- ------ Net income (loss) $(3,501) $ 754 $(2,747) $ (650) $ 813 $ 163 ------- --------- ------- ------ --------- ------ Accretion to redemption value of redeemable preferred stock 104 - 104 - - - Net income (loss) attributable to common stockholders $(3,605) - $(2,851) $ (650) $ 813 $ 163 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 $ (0.15) $ - $ (0.12) $(0.03) $ - $ 0.01 ======= ========= ======= ====== ========= ====== Discontinued operations $ - $ - $ - $ - $ - $ - ======= ========= ======= ====== ========= ====== Total $ (0.15) $ - $ (0.12) $(0.03) $ - $ 0.01 ======= ========= ======= ====== ========= ====== Three Months Ended September 30, 2008 --------------------------- GAAP Adjustment Non-GAAP ------- --------- ------- Revenues $12,067 $ - $12,067 Cost of goods sold 7,685 (52)(a) 7,517 (116)(c) ------- --------- ------- Gross profit 4,382 168 4,550 Operating expenses: (5)(a) Selling costs 3,845 (23)(c) 3,817 General and (46)(a) administrative (435)(b) 3,101 (69)(c) 2,551 Research and (58)(a) development 1,019 (28)(c) 933 ------- --------- ------- Total operating expenses 7,965 (664) 7,301 ------- --------- ------- Operating profit (loss) (3,583) 832 (2,751) Other income (expenses): Interest income 9 - 9 Interest expense (186) - (186) Other income (expense) (33) - (33) Gain (loss) on sale of assets (178) - (178) ------- --------- ------- Total other income (expenses) (388) - (388) ------- --------- ------- Loss before income taxes (3,971) 832 (3,139) Benefit (provision) for income taxes (39) - (39) ------- --------- ------- Loss from continuing operations $(4,010) $ 832 $(3,178) ------- --------- ------- Income (Loss) from discontinued operations, net of income taxes $ 2,282 85 (b) $ 2,367 ------- --------- ------- Net income (loss) $(1,728) $ 917 $ (811) ------- --------- ------- Accretion to redemption value of redeemable preferred stock - - - Net income (loss) attributable to common stockholders $(1,728) $ 917 $ (811) Weighted average number of shares - basic and diluted used in computing net earnings (loss) per share 23,519 - 23,519 Basic and diluted net earnings (loss) per share: Continuing operations $ (0.17) $ - $ (0.14) ======= ========= ======= Discontinued operations $ 0.10 $ - $ 0.10 ======= ========= ======= Total $ (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.
