Proxim Wireless Corporation (OTCQX: PRXM) (PINKSHEETS: PRXM), a
leading provider of indoor and outdoor wireless broadband systems,
today released financial results for the third quarter ended
September 30, 2010.
Financial Highlights
-- Revenues for the third quarter of 2010 were $7.6 million compared to
$8.1 million in the second quarter of 2010 and $7.0 million in the
third quarter of 2009.
-- GAAP gross margins for the quarter were 44% compared to 52% in the
second quarter of 2010 and 30% in the third quarter of 2009. GAAP net
loss for the quarter was $2.0 million, or $(8.53) per share, compared
to $1.4 million, or $(5.84) per share, in the second quarter of 2010
and $3.6 million, or $(15.34) per share, in the third quarter of 2009.
-- Non-GAAP gross margins for the second quarter of 2010 were 46% compared
to 55% in the second quarter of 2010 and 34% in the third quarter of
2009. These margins exclude depreciation of fixed assets, amortization
of intangible assets, and stock based compensation. Non-GAAP net loss
for the third quarter of 2010 was $1.3 million, or $(5.58) per share,
compared to $0.6 million, or $(2.54) per share, in the second quarter
of 2010 and $2.9 million, or $(12.13) per share, in the third quarter
of 2009.
"While we would have liked to maintain the quarter-over-quarter
revenue increases that had occurred for the last four fiscal
quarters, the third quarter typically is a softer quarter for the
company," said Mike Sophie, Interim CEO of Proxim Wireless. "We are
pleased with the orders we have received that we believe position
us well for a solid fourth quarter. We are seeing consistent growth
in the 8100 series of wireless backhaul and point-to-multipoint
products, and we recently expanded the 8100 series product line
with the introduction of the Tsunami 8100 Customer Premise
Equipment (CPE). In addition, we also introduced our new Tsunami
GX800 line of licensed backhaul products that position us for
greater growth in the carrier and service provider markets."
Highlights of Recent Press Announcements Include:
-- Proxim introduced the Tsunami® GX800 series of licensed
point-to-point wireless backhaul products for the carrier, service
provider, WISP, government and enterprise markets. The GX800 delivers
622 Mbps aggregate capacity, providing a cost-effective solution for
the increased capacity demands on today's networks due to
data-intensive smartphones on mobile networks, HD video streaming over
wireless networks, and the need for organizations of all sizes to share
bandwidth amongst buildings.
-- Proxim introduced the Tsunami™ MP-8150-CPE (Customer Premise
Equipment) series of products, designed to dramatically reduce the cost
and complexity of deploying wireless broadband service for carriers and
service providers of all sizes. The 8150-CPE products leverage the same
high-performance 4G technology utilized in Proxim's Tsunami MP-8150 and
QB-8150 line of products, and are designed to provide over 100 Mbps of
performance.
-- The City of Courtenay, BC deployed Proxim's wireless backhaul solutions
to connect buildings throughout the city. The City of Courtenay
selected Proxim's Tsunami® QB-8150 and Proxim's 60 GHz wireless
backhaul solutions to connect two recreational facilities back to the
City Hall, for a cost-effective way to share bandwidth between the
buildings while the city's fiber network was being built out.
-- Vidarbha Infotech Pvt.Ltd. (VIPL), a telecom and IT solutions provider,
selected Proxim's point-to-multipoint (PtMP) solutions to provide a
city-wide wireless network to enable automated tax collection and
eGovernment initiatives in the city of Nagpur, India. VIPL utilized
Proxim's Tsunami™ MP.11 5054 radios and ProximVision ES central
management system to connect over 34 locations throughout central
India's largest city.
About Proxim Wireless
Proxim Wireless Corporation (OTCQX: 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; uncertainties whether these contemplated new products
will increase our revenues; 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)
September 30, December 31,
2010 2009
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,384 $ 5,720
Accounts receivable, net of allowance for
doubtful accounts, returns and discounts of
$2,344 for September 30, 2010 and $2,032 for
December 31, 2009 3,436 2,983
Inventory, net 2,099 2,948
Prepaid expenses 294 388
------------ ------------
Total current assets 9,213 12,039
Property and equipment, net 2,434 2,615
Other assets:
Restricted cash 77 77
Intangible assets, net 3,543 4,744
Deposits and prepaid expenses 344 382
------------ ------------
Total other assets 3,964 5,203
------------ ------------
Total assets $ 15,611 $ 19,857
============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 4,606 $ 5,229
Line of credit payable 2,556 2,055
Deferred revenue 1,081 1,344
Notes payable, net of discount, current 2,539 558
Total current liabilities 10,782 9,186
Deferred revenue, net of current 375 397
Notes payable, net of discount, net of current - 1,512
Other long term liabilities 133 159
------------ ------------
Total liabilities 11,290 11,254
------------ ------------
Commitments and contingencies
Redeemable preferred stock:
Series A convertible, $0.01 par value -
2,500,000 shares authorized as of September
30, 2010 and December 31, 2009; 2,500,000
issued and outstanding as of September 30,
2010 and December 31, 2009. Aggregate
liquidation preferences $5,198 as of
September 30, 2010 and $5,047 as of December
31, 2009 4,811 4,598
Series B non-convertible, $0.01 par value -
1,250,000 shares authorized as of September
30, 2010 and December 31, 2009; 1,250,000
issued and outstanding as of September 30,
2010 and December 31, 2009. Aggregate
liquidation preferences $2,854 as of
September 30, 2010 and $2,648 as of
December 31, 2009 2,660 2,423
------------ ------------
Total redeemable preferred stock 7,471 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 September
30, 2010 and 235,191 shares issued and
outstanding as of December 31, 2009 65,290 65,382
Accumulated deficit (68,440) (63,800)
------------ ------------
Total stockholders' equity (deficit) (3,150) 1,582
------------ ------------
Total liabilities, redeemable preferred
stock and stockholders' equity (deficit) $ 15,611 $ 19,857
============ ============
PROXIM WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenues $ 7,636 $ 6,952 $ 23,406 $ 22,056
Cost of goods sold 4,307 4,846 12,456 11,964
-------- -------- -------- --------
Gross profit 3,329 2,106 10,950 10,092
-------- -------- -------- --------
Operating expenses:
Research and development 658 675 1,786 1,823
Selling costs 2,795 2,712 7,946 7,377
General and administrative 1,427 1,861 5,314 4,302
-------- -------- -------- --------
Total operating expenses 4,880 5,248 15,046 13,502
-------- -------- -------- --------
Operating loss (1,551) (3,142) (4,096) (3,410)
Other income (expenses):
Interest income (expense) (205) (212) (584) (632)
Other income (expense) (1) (120) 55 (206)
-------- -------- -------- --------
Total other income (expenses) (206) (332) (529) (838)
-------- -------- -------- --------
Loss before income tax (1,757) (3,474) (4,625) (4,248)
Benefit (Provision) for income
taxes (44) (27) (15) (99)
-------- -------- -------- --------
Net income (loss) $ (1,801) $ (3,501) $ (4,640) $ (4,347)
======== ======== ======== ========
Accretion to redemption value of
redeemable preferred stock 203 104 450 104
Net loss attributable to common
stockholders $ (2,004) $ (3,605) $ (5,090) $ (4,451)
-------- -------- -------- --------
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 $ (8.53) $ (15.34) $ (21.66) $ (18.94)
-------- -------- -------- --------
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL RESULTS
(In thousands, except per share data)
Three Months Ended Three Months Ended
September 30, 2010 June 30, 2010
---------------------------- ----------------------------
Adjust- Adjust-
GAAP ments Non-GAAP GAAP ments Non-GAAP
-------- -------- -------- -------- -------- --------
Revenues $ 7,636 - $ 7,636 $ 8,053 - $ 8,053
Cost of goods
sold 4,307 (212)(a) 4,087 3,887 (182)(a) 3,627
- (8)(c) - - (78)(c) -
-------- -------- -------- -------- -------- --------
Gross profit 3,329 220 3,549 4,166 260 4,426
Operating
expenses:
Research and
development 658 (30)(a) 628 605 (22)(a) 566
- (-)(c) - - (17)(c) -
Selling costs 2,795 (21)(a) 2,779 2,707 (30)(a) 2,692
- 5(c) - - 15(c) -
General and
administr-
ative 1,427 (25)(a) 1,001 1,895 (48)(a) 1,433
- (400)(b) - - (400)(b) -
- (1)(c) - - (14)(c) -
-------- -------- -------- -------- -------- --------
Total
operating
expenses 4,880 (472) 4,408 5,207 (516) 4,691
-------- -------- -------- -------- -------- --------
Operating
profit (loss) (1,551) 692 (859) (1,041) 776 (265)
Other income
(expenses):
Interest
income
(expense) (205) - (205) (192) - (192)
Other income
(expense) (1) - (1) (39) - (39)
-------- -------- -------- -------- -------- --------
Total other
income
(expenses) (206) - (206) (231) - (231)
-------- -------- -------- -------- -------- --------
Income (loss)
before income
taxes (1,757) 692 (1,065) (1,272) 776 (496)
Benefit
(Provision)
for income
taxes (44) - (44) 59 - 59
-------- -------- -------- -------- -------- --------
Net income
(loss) $ (1,801) 692 $ (1,109) $ (1,213) 776 $ (437)
-------- -------- -------- -------- -------- --------
Accretion to
redemption
value of
redeemable
preferred
stock 203 - 203 159 - 159
Net income
(loss)
attributable
to common
stockholders $ (2,004) - $ (1,312) $ (1,372) - $ (596)
-------- -------- -------- -------- -------- --------
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 $ (8.53) - $ (5.58) $ (5.84) - $ (2.54)
======== ======== ======== ======== ======== ========
Three Months Ended
September 30, 2009
----------------------------
Adjust-
GAAP ments Non-GAAP
-------- -------- --------
Revenues $ 6,952 - $ 6,952
Cost of goods
sold 4,846 (128)(a) 4,611
- (107)(c) -
-------- -------- --------
Gross profit 2,106 235 2,341
Operating
expenses:
Research and
development 675 (24)(a) 633
- (18)(c) -
Selling costs 2,712 (21)(a) 2,686
- (5)(c) -
General and
administr-
ative 1,861 (33)(a) 1,410
- (400)(b) -
- (18)(c) -
-------- -------- --------
Total
operating
expenses 5,248 (519) 4,729
-------- -------- --------
Operating
profit (loss) (3,142) 754 (2,388)
Other income
(expenses):
Interest
income
(expense) (212) - (212)
Other income
(expense) (120) - (120)
-------- -------- --------
Total other
income
(expenses) (332) - (332)
-------- -------- --------
Income (loss)
before income
taxes (3,474) 754 (2,720)
Benefit
(Provision)
for income
taxes (27) - (27)
-------- -------- --------
Net income
(loss) $ (3,501) 754 $ (2,747)
-------- -------- --------
Accretion to
redemption
value of
redeemable
preferred
stock 104 - 104
Net income
(loss)
attributable
to common
stockholders $ (3,605) - $ (2,851)
-------- -------- --------
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 $ (15.34) - $ (12.13)
======== ======== ========
(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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