Proxim Wireless Corporation (OTCQX: PRXM) (PINKSHEETS: PRXM), a
leading provider of indoor and outdoor wireless broadband
ecosystems, today released financial results for the second quarter
ended June 30, 2010.
Financial Highlights
-- Revenues for the second quarter of 2010 were $8.1 million compared to
$7.7 million in the first quarter of 2010 and $7.2 million in the
second quarter of 2009.
-- GAAP gross margins for the quarter were 52% compared to 45% in the
first quarter of 2010 and 50% in the second quarter of 2009. GAAP net
loss for the quarter was $1.4 million, or $(5.84) per share, compared
to $1.7 million, or $(7.29) per share, in the first quarter of 2010
and $0.7M, or $(2.77) per share, in the second quarter of 2009.
-- Non-GAAP gross margins for the second quarter of 2010 were 55% compared
to 49% in the first quarter of 2010 and 53% in the second quarter of
2009. These margins exclude depreciation of fixed assets, amortization
of intangible assets and stock based compensation. Non-GAAP net loss
for the second quarter of 2010 was $0.6 million, or $(2.54) per share,
compared to net loss of $0.8 million, or $(3.40) per share, in the
first quarter of 2010 and net income of $0.2 million, or $0.69 per
share for the second quarter of 2009.
"This quarter marked the fourth consecutive quarter of revenue
growth for Proxim, which illustrates both the strength of our
business and of the products we have introduced in the last year,"
said Pankaj Manglik, President and CEO of Proxim Wireless. "We have
seen consistent growth in the demand for our 8100 series of
wireless backhaul and point-to-multipoint connectivity products
since their introduction in July 2009, which validates the ongoing
strength of that platform. We continue to leverage the 8100
platform for new products, including the new 8100 CPE (customer
premise equipment) products -- just announced last month -- which
create an exciting new market opportunity for us with carriers and
service providers."
Highlights of Recent Press Announcements Include:
-- The City of Vancouver, along with ADT Advanced Integration/Intercon
Security and MDT Technical Services, deployed a Proxim wireless network
to extend video surveillance throughout the city during the 2010 Winter
Olympics and Paralympics. They selected Proxim's 4.9 Ghz point-to-point
and point-to-multipoint products to extend the city's public safety
network and connect video surveillance cameras in areas where fiber
connectivity was not an option.
-- Sunrise Wireless, a pioneer in the development of wireless broadband
systems for the maritime industry, has selected Proxim Wireless'
equipment to unwire the San Francisco Bay. Sunrise Wireless has
deployed a system that uses a combination of Proxim's point-to-point
wireless backhaul, license-free WiMAX, and Wi-Fi® products for an
end-to-end broadband wireless network that enables wireless
connectivity for vessels throughout 62 square miles of the Bay.
-- Aqaba Water Company (AWC), the official water treatment and management
company of Aqaba-Jordan, has deployed Proxim's equipment to wirelessly
connect the components of their water wells network. AWC is utilizing
both Proxim's point-to-multipoint (PtMP) and point-to-point (PtP)
wireless equipment to create a private network to connect their water
wells to a centralized supervisory control and data acquisition
(SCADA) network.
-- Proxim showcased its entire end-to-end wireless portfolio -- including
the Tsunami 8100 series -- at the Interop 2010 conference in Las
Vegas. Proxim illustrated how its end-to-end wireless portfolio
enables both indoor and outdoor Wi-Fi coverage, high capacity
building-to-building connectivity and remote wireless camera
connectivity for enterprises and organizations of all sizes.
About Proxim Wireless
Proxim Wireless Corporation (OTCQX: PRXM) (PINKSHEETS: PRXM)
provides Wi-Fi®, WiMAX, Point-to-Multipoint and Point-to-Point
Backhaul technologies for a complete indoor and outdoor wireless
broadband ecosystem. Our systems enable service providers,
governments and enterprises to deploy fixed and mobile security and
video surveillance, indoor and outdoor Wi-Fi, business and
residential internet access and cell tower backhaul. Proxim has
shipped more than 2 million wireless devices to more than 250,000
customers in over 65 countries worldwide. Proxim is ISO 9001-2008
certified. For more information, visit www.proxim.com. For investor
relations information, e-mail 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;
our limited capital resources and history of significant losses;
our possible need or desire to raise additional funds, the
availability of any such funds, and the terms of any such
fundraising; 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)
June 30, December 31,
2010 2009
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,161 $ 5,720
Accounts receivable, net of allowance for
doubtful accounts, returns and discounts of
$2,151 for June 30, 2010 and $2,032 for December
31, 2009 3,840 2,983
Inventory, net 2,117 2,948
Prepaid expenses 315 388
----------- -----------
Total current assets 9,433 12,039
Property and equipment, net 2,602 2,615
Other assets:
Restricted cash 77 77
Intangible assets, net 3,944 4,744
Deposits and prepaid expenses 365 382
----------- -----------
Total other assets 4,386 5,203
----------- -----------
Total assets $ 16,421 $ 19,857
=========== ===========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 5,256 $ 5,787
Line of credit payable 1,881 2,055
Deferred revenue 1,021 1,344
----------- -----------
Total current liabilities 8,158 9,186
Deferred revenue, net of current 413 397
Notes payable, net of discount 1,587 1,512
Other long term liabilities 145 159
----------- -----------
Total liabilities 10,303 11,254
----------- -----------
Commitments and contingencies
Redeemable preferred stock:
Series A convertible, $0.01 par value - 2,500,000
shares authorized as of June 30, 2010 and
December 31, 2009; 2,500,000 issued and
outstanding as of June 30, 2010 and December 31,
2009. Aggregate liquidation preferences $5,107
as of June 30, 2010 and $5,047 as of December
31, 2009 4,692 4,598
Series B non-convertible, $0.01 par value -
1,250,000 shares authorized as of June 30, 2010
and December 31, 2009; 1,250,000 issued and
outstanding as of June 30, 2010 and December 31,
2009. Aggregate liquidation preferences $2,783
as of June 30, 2010 and $2,648 as of December
31, 2009 2,576 2,423
----------- -----------
Total redeemable preferred stock 7,268 7,021
----------- -----------
Stockholders' equity (deficit):
Common stock, $0.01 par value, at amount paid in;
100,000,000 shares authorized; 235,088 shares
issued and outstanding as of June 30, 2010 and
235,190 shares issued and outstanding as of
December 31, 2009 65,489 65,382
Accumulated deficit (66,639) (63,800)
----------- -----------
Total stockholders' equity (deficit) (1,150) 1,582
----------- -----------
Total liabilities, redeemable preferred stock
and stockholders' equity (deficit) $ 16,421 $ 19,857
=========== ===========
PROXIM WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenues $ 8,053 $ 7,213 $ 15,770 $ 15,104
Cost of goods sold 3,887 3,574 8,149 7,118
-------- -------- -------- --------
Gross profit 4,166 3,639 7,621 7,986
-------- -------- -------- --------
Operating expenses:
Research and development 605 539 1,128 1,148
Selling costs 2,707 2,459 5,151 4,665
General and administrative 1,895 1,002 3,887 2,441
-------- -------- -------- --------
Total operating expenses 5,207 4,000 10,166 8,254
-------- -------- -------- --------
Operating loss (1,041) (361) (2,545) (268)
Other income (expenses):
Interest income (expense) (192) (216) (379) (420)
Other income (expense) (39) (56) 56 (86)
-------- -------- -------- --------
Total other income (expenses) (231) (272) (323) (506)
-------- -------- -------- --------
Loss before income tax (1,272) (633) (2,868) (774)
Benefit (Provision) for income taxes 59 (17) 29 (72)
-------- -------- -------- --------
Net income (loss) $ (1,213) $ (650) $ (2,839) $ (846)
======== ======== ======== ========
Accretion to redemption value of
redeemable preferred stock 159 - 247 -
Net loss attributable to common
stockholders $ (1,372) $ (650) $ (3,086) $ (846)
-------- -------- -------- --------
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 $ (5.84) $ (2.77) $ (13.13) $ (3.60)
-------- -------- -------- --------
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(In thousands, except per share data)
Three Months Ended Three Months Ended
June 30, 2010 March 31, 2010
----------------------------- -----------------------------
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
------- ---------- -------- ------- ---------- --------
Revenues $ 8,053 - $ 8,053 $ 7,717 - $ 7,717
Cost of goods
sold 3,887 (182)(a) 3,627 4,262 (164)(a) 3,916
- (78)(c) - - (182)(c) -
------- ---------- -------- ------- ---------- --------
Gross profit 4,166 260 4,426 3,455 346 3,801
Operating
expenses:
Research and
development 605 (22)(a) 566 523 (34)(a) 464
- (17)(c) - - (25)(c) -
Selling costs 2,707 (30)(a) 2,692 2,444 (21)(a) 2,398
- 15(c) - - (25)(c) -
General and
administra
-tive 1,895 (48)(a) 1,433 1,992 (33)(a) 1,528
- (400)(b) - - (400)(b) -
- (14)(c) - - (31)(c) -
------- ---------- -------- ------- ---------- --------
Total
operating
expenses 5,207 (516) 4,691 4,959 (569) 4,390
------- ---------- -------- ------- ---------- --------
Operating
profit
(loss) (1,041) 776 (265) (1,504) 915 (589)
Other income
(expenses):
Interest
income
(expense) (192) - (192) (187) - (187)
Other income
(expense) (39) - (39) 95 - 95
------- ---------- -------- ------- ---------- --------
Total other
income
(expenses) (231) - (231) (92) - (92)
------- ---------- -------- ------- ---------- --------
Income (loss)
before
income taxes (1,272) 776 (496) (1,596) 915 (681)
Benefit
(Provision)
for income
taxes 59 - 59 (30) - (30)
------- ---------- -------- ------- ---------- --------
Net income
(loss) $(1,213) 776 $ (437) $(1,626) 915 $ (711)
------- ---------- -------- ------- ---------- --------
Accretion to
redemption
value of
redeemable
preferred
stock 159 - 159 88 - 88
Net income
(loss)
attributable
to common
stockholders $(1,372) - $ (596) $(1,714) - $ (799)
------- ---------- -------- ------- ---------- --------
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 $ (5.84) - $ (2.54) $ (7.29) - $ (3.40)
======= ========== ======== ======= ========== ========
Three Months Ended
June 30, 2009
-----------------------------
GAAP Adjustments Non-GAAP
------- ---------- --------
Revenues $ 7,213 - $ 7,213
Cost of goods
sold 3,574 (114)(a) 3,355
- (105)(c) -
------- ---------- --------
Gross profit 3,639 219 3,858
Operating
expenses:
Research and
development 539 (24)(a) 505
- (10)(c) -
Selling costs 2,459 (20)(a) 2,445
- 6(c) -
General and
administra
-tive 1,002 (33)(a) 457
- (454)(b) -
- (58)(c) -
------- ---------- --------
Total
operating
expenses 4,000 (593) 3,407
------- ---------- --------
Operating
profit
(loss) (361) 812 451
Other income
(expenses):
Interest
income
(expense) (216) - (216)
Other income
(expense) (56) - (56)
------- ---------- --------
Total other
income
(expenses) (272) - (272)
------- ---------- --------
Income (loss)
before
income taxes (633) 812 179
Benefit
(Provision)
for income
taxes (17) - (17)
------- ---------- --------
Net income
(loss) $ (650) 812 $ 162
------- ---------- --------
Accretion to
redemption
value of
redeemable
preferred
stock - - -
Net income
(loss)
attributable
to common
stockholders $ (650) - $ 162
------- ---------- --------
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 $ (2.77) - $ 0.69
======= ========== ========
(a) The effect of depreciation of fixed assets
(b) The effect of amortization of intangible assets
(c) The effect of stock based compensation.
For Further Information Contact: Dave Renauld Vice President,
Corporate Affairs Proxim Wireless (413) 584-1425 ir@proxim.com
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