Proxim Wireless Reports First Quarter 2010 Financial Results
SILICON VALLEY, CA--(Marketwire - May 14, 2010) - Proxim Wireless Corporation (
Financial Highlights
As previously announced, effective before U.S. stock markets opened today, Proxim implemented a reverse split of its common stock at the ratio of one share for each 100 shares outstanding immediately before the split. All common stock share counts and earnings per share figures in this press release and attached tables reflect the impact of that reverse stock split, including retroactive restatement of historical information. The information in this press release and attached tables does not include the impacts of cashing out any fractional shares of common stock resulting from the reverse stock split.
On a GAAP basis, revenue for the quarter ended March 31, 2010 was $7.7 million, an increase of approximately 1% from revenue of $7.6 million for the quarter ended December 31, 2009 and a decrease of approximately 2% from revenue of $7.9 million for the quarter ended March 31, 2009.
In the first quarter ended March 31, 2010, gross margins were 45%, compared to 37% for the quarter ended December 31, 2009 and 55% for the quarter ended March 31, 2009.
On a GAAP basis, the net loss for the quarter ended March 31, 2010 was $1.7 million, or $7.29 per diluted share, compared to a net loss of $3.2 million, or $13.47 per diluted share for the quarter ended December 31, 2009, and a net loss of $0.2 million, or $0.83 per diluted share, for the quarter ended March 31, 2009.
The net loss was $0.8 million, or $3.40 per diluted share, on a non-GAAP basis for the quarter ended March 31, 2010, which excludes depreciation of fixed assets, amortization of intangible assets, and stock based compensation, compared to a non-GAAP net loss of $2.3 million, or $9.64 per diluted share for the quarter ended December 31, 2009, and a non-GAAP net income of $0.6 million, or $2.36 per diluted share, for the quarter ended March 31, 2009.
"Our first quarter 2010 revenues grew marginally over the fourth quarter 2009, which points to the underlying strength in our business during this quarter," said Pankaj Manglik, President and CEO of Proxim Wireless. "The true significance of this increase is that this is the first time in five years that our first quarter revenue was higher than our fourth quarter revenue. Our new 8100 product line continues to show good market acceptance, and based on that experience we intend to release new products in the next few months that will target additional markets. The positioning of the 8100 products has been very successful and has created a shift in the market. We believe our new products will continue that trend."
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 (
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 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; and the impacts and effects of any financing or other strategic transactions Proxim may evaluate or consummate. Further information on these and other factors that could affect Proxim's actual results is and will be contained in the filings made by Proxim with the OTCQX (available at [ www.otcqx.com ]), including without limitation in the Annual Report filed by Proxim on March 30, 2010, 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) March December 31, 2010 31, 2009 ----------- ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 4,150 $ 5,720 Accounts receivable, net of allowance for doubtful accounts, returns and discounts of $2,420 for March 31, 2010 and $2,032 for December 31, 2009 3,618 2,983 Inventory, net 2,696 2,948 Prepaid expenses 400 388 ----------- ----------- Total current assets 10,864 12,039 Property and equipment, net 2,626 2,615 Other assets: Restricted cash 77 77 Intangible assets, net 4,344 4,744 Deposits and prepaid expenses 380 382 ----------- ----------- Total other assets 4,801 5,203 ----------- ----------- Total assets $ 18,291 $ 19,857 =========== =========== LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 5,582 $ 5,787 Line of credit payable 2,055 2,055 Deferred revenue 1,297 1,344 ----------- ----------- Total current liabilities 8,934 9,186 Deferred revenue, net of current 415 397 Notes payable, net of discount 1,550 1,512 Other long term liabilities 152 159 ----------- ----------- Total liabilities 11,051 11,254 ----------- ----------- Commitments and contingencies Redeemable preferred stock: Series A convertible, $0.01 par value - 2,500,000 shares authorized as of March 31, 2010 and December 31, 2009; 2,500,000 issued and outstanding as of March 31, 2010 and December 31, 2009. Aggregate liquidation preferences $5,047 as of March 31, 2010 and December 31, 2009 4,612 4,598 Series B non-convertible, $0.01 par value - 1,250,000 shares authorized as of March 31, 2010 and December 31, 2009; 1,250,000 issued and outstanding as of March 31, 2010 and December 31, 2009. Aggregate liquidation preferences $2,714 as of March 31, 2010 and $2,648 as of December 31, 2009 2,497 2,423 ----------- ----------- Total redeemable preferred stock 7,109 7,021 ----------- ----------- Stockholders' equity: Common stock, $0.01 par value, 100,000,000 shares authorized, 235,190 issued and outstanding as of March 31, 2010 and December 31, 2009 2 2 Additional paid-in capital 65,555 65,380 Accumulated deficit (65,426) (63,800) ----------- ----------- Total stockholders' equity 131 1,582 ----------- ----------- Total liabilities, redeemable preferred stock and stockholders' equity $ 18,291 $ 19,857 =========== =========== The accompanying notes are an integral part of the consolidated financial statements. PROXIM WIRELESS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended March 31, ------------------------ 2010 2009 ----------- ----------- Revenues $ 7,717 $ 7,891 Cost of goods sold 4,262 3,544 ----------- ----------- Gross profit 3,455 4,347 ----------- ----------- Operating expenses: Selling costs 2,444 2,206 General and administrative 1,992 1,439 Research and development 523 609 ----------- ----------- Total operating expenses 4,959 4,254 ----------- ----------- Operating income (loss) (1,504) 93 ----------- ----------- Other income (expenses): Interest income - 3 Interest expense (187) (207) Other income (expense) 95 (22) Gain (loss) on sale of assets - (8) ----------- ----------- Total other income (expenses) (92) (234) ----------- ----------- Loss before income tax (1,596) (141) Provision for income taxes (30) (55) ----------- ----------- Net loss (1,626) (196) Accretion to redemption value of redeemable preferred stock 88 - ----------- ----------- Net loss attributable to common stockholders $ (1,714) $ (196) =========== =========== Weighted average number of shares-basic and diluted used in computing net loss per share 235 235 =========== =========== Basic and diluted net loss per share $ (7.29) $ (0.83) The accompanying notes are an integral part of the consolidated financial statements. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS Three Months Ended Three Months Ended ----------------------------- ---------------------------- March 31, 2010 March 31, 2009 ----------------------------- ---------------------------- GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP ------- ---------- -------- ------ ---------- -------- Revenues $ 7,717 $ 7,717 $7,891 $ 7,891 Cost of goods sold 4,262 (164)(a) 3,916 3,544 (120)(a) 3,327 (182)(c) (97)(c) ------- ---------- -------- ------ ---------- -------- Gross profit 3,455 346 3,801 4,347 217 4,564 Operating expenses: Selling costs 2,444 (21)(a) 2,398 2,206 (21)(a) 2,212 (25)(c) 27(c) General and Adminis- trative 1,992 (33)(a) 1,528 1,439 (36)(a) 932 (400)(b) (480)(b) (31)(c) 9(c) Research and development 523 (34)(a) 464 609 (28)(a) 577 (25)(c) (4)(c) ------- ---------- -------- ------ ---------- -------- Total operating expenses 4,959 (569) 4,390 4,254 (533) 3,721 ------- ---------- -------- ------ ---------- -------- Operating profit (loss) (1,504) 915 (589) 93 750 843 Other income (expenses): Interest income - - 3 3 Interest expense (187) (187) (207) (207) Other income (expense) 95 95 (22) (22) Gain (loss) on sale of assets - - (8) (8) ------- ---------- -------- ------ ---------- -------- Total other income (expenses) (92) (92) (234) (234) ------- ---------- -------- ------ ---------- -------- Income (loss) before income taxes (1,596) 915 (681) (141) 750 609 Provision for income taxes (30) (30) (55) (55) ------- ---------- -------- ------ ---------- -------- Net income (loss) $(1,626) 915 $ (711) $ (196) 750 $ 554 ------- ---------- -------- ------ ---------- -------- Accretion to redemption value of redeemable preferred stock 88 88 - - Net income (loss) attributable to common stockholders $(1,714) $ (799) $ (196) $ 554 ------- ---------- -------- ------ ---------- -------- Weighted average number of shares - basic and diluted used in computing net earnings (loss) per share 235 235 235 235 Basic and diluted net earnings (loss) per share $ (7.29) $ (3.40) $(0.83) $ 2.36 ======= ========== ======== ====== ========== ======== Three Months Ended ----------------------------- December 31, 2009 ----------------------------- GAAP Adjustments Non-GAAP ------- ---------- -------- Revenues $ 7,624 $ 7,624 Cost of goods sold 4,812 (184)(a) 4,521 (107)(c) ------- ---------- -------- Gross profit 2,812 291 3,103 Operating expenses: Selling costs 2,725 (21)(a) 2,700 (4)(c) General and Adminis- trative 2,175 (34)(a) 1,723 (400)(b) (18)(c) Research and development 866 (117)(a) 734 (15)(c) ------- ---------- -------- Total operating expenses 5,766 (609) 5,157 ------- ---------- -------- Operating profit (loss) (2,954) 900 (2,054) Other income (expenses): Interest income - - Interest expense (189) (189) Other income (expense) 114 114 Gain (loss) on sale of assets 8 8 ------- ---------- -------- Total other income (expenses) (67) (67) ------- ---------- -------- Income (loss) before income taxes (3,021) 900 (2,121) Provision for income taxes (38) (38) ------- ---------- -------- Net income (loss) $(3,059) 900 $ (2,159) ------- ---------- -------- Accretion to redemption value of redeemable preferred stock 106 106 Net income (loss) attributable to common stockholders $(3,165) $ (2,265) ------- ---------- -------- Weighted average number of shares - basic and diluted used in computing net earnings (loss) per share 235 235 Basic and diluted net earnings (loss) per share $(13.47) $ (9.64) ======= ========== ======== (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 ASC 718-20 (SFAS No. 123R), using the modified-prospective transition method.