For Further Information Contact:
David Renauld
Vice President, Corporate Affairs
Proxim Wireless
(413) 584-1425
ir@proxim.com
PROXIM WIRELESS REPORTS FOURTH QUARTER AND FULL YEAR 2009 FINANCIAL RESULTS
New Tsunami™ 8100 Product Line Drives Sequential Quarterly Revenue Growth; New Products in Pipeline to Increase 2010 Revenue
Silicon Valley, CA, March 4, 2010 – Proxim Wireless Corporation (OTCQX: 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) 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 STOCKHOLDER'S 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 December 31, | Twelve Months Ended 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 December 31, 2009 | Three Months Ended December 31,2008 | ||||||||||||
GAAP | Adjustment | Non-GAAP | GAAP | Adjustment | Non-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 administrative........ ..................................................... | 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 December 31, 2009 | Twelve Months Ended December 31,2008 | ||||||||||||
GAAP | Adjustment | Non-GAAP | GAAP | Adjustment | 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 costs.............................. | 10,102 | (82) | (a) | 10,045 | 17,031 | (45) | (a) | 16,937 | |||||
25 | (c) | (49) | (c) | ||||||||||
General and administrative........ ..................................................... | 6,477 | (137) | (a) | 4,519 | 11,746 | (268) | (a) | 9,213 | |||||
(1,735) | (b) | (1,964) | (b) | ||||||||||
(86) | (c) | (301) | (c) | ||||||||||
Research and development........ | 2,689 | (191) | (a) | 2,451 | 3,793 | (322) | (a) | 3,371 | |||||
(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 stockholders.............. | $ (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.