TRBM Terabeam (MM)

Terabeam, Inc. (NASDAQ:TRBM), a leading developer and supplier of broadband wireless solutions, today announced its financial results for the second quarter ended June 30, 2006. Revenue for the quarter ended June 30, 2006 was $20.8 million, an increase of approximately 12% from the revenue of $18.5 million for the quarter ended March 31, 2006 and an increase of approximately 189% from the revenue of $7.2 million for the quarter ended June 30, 2005. The significant increase in revenue over the prior year's comparable quarter resulted primarily from Terabeam's acquisition of the operations of Proxim Corporation in the third quarter of 2005. The net loss for the quarter ended June 30, 2006 was $3.0 million ($0.14 per share-diluted) compared to net loss of $4.5 million ($0.21 per share-diluted) for the quarter ended March 31, 2006 and net loss of $987,000 ($0.04 per share-diluted) for the quarter ended June 30, 2005. The significant increase in net loss over the prior year's comparable quarter resulted primarily from Terabeam's acquisition of the operations of Proxim Corporation in the third quarter of 2005. Robert Fitzgerald, Terabeam's Chief Executive Officer, stated, "The second quarter has been a quarter of transition for the company. Our new President, Pankaj Manglik, has brought an ambitious and decisive management style that has energized the organization. We have taken cost reduction actions that have decreased our operating expenses. We are very encouraged by the response of the market to our AP-4000-MR family of metropolitan scale Wi-Fi mesh products, and we expect our mesh products to contribute an increasing percentage of our overall revenues over the second half of the year. We still have less visibility into the revenue side of the equation than we would like but are addressing the situation with an enhanced management team and renewed energy." Conference Call Information Terabeam will host a conference call to discuss this release, financial results, developments at the company, and other matters of interest to investors and others today, August 2, 2006 starting at 5:00 p.m. Eastern Time. The discussion may include forward-looking information. To participate in this conference call, please dial 800-500-0177 (or 719-457-2679 for international callers), confirmation code 9274323 for all callers, at least ten minutes before start time. The conference call will also be broadcast live over the Internet. Investors and others are invited to visit Terabeam's website at http://www.terabeam.com to access this broadcast. Replays will be available telephonically for approximately one week by dialing 888-203-1112 for domestic callers and 719-457-0820 for international callers, confirmation code 9274323 for all callers, and over the Internet for approximately 90 days at Terabeam's website at http://www.terabeam.com. About Terabeam Terabeam, Inc. has two primary subsidiaries Proxim Wireless Corporation and Ricochet Networks, Inc. Proxim Wireless Corporation is a global leader in providing mesh, WiMAX, Wi-Fi, and other broadband wireless solutions to meet the performance, scalability, and security requirements of enterprises, government, and service providers. Ricochet Networks, Inc. is a leading portable Wireless Internet Service Provider (WISP) with operational markets in Denver, Colorado and San Diego, California. Additional information about the company can be found at the company's website located at http://www.terabeam.com or by contacting the company by telephone at 413-584-1425 or by email at IR@terabeam.com. 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. Terabeam's 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; 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; time, costs, political considerations, typical multitude of constituencies, and other factors involved in evaluating, equipping, installing, and operating municipal networks; 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; the difficulties in predicting Terabeam's future financial performance; Terabeam's acquisition of Proxim Corporation's operations, assets, and relationships; and the impacts and effects of any other strategic transactions Terabeam may evaluate or consummate. Further information on these and other factors that could affect Terabeam's actual results is and will be included in filings made by Terabeam from time to time with the Securities and Exchange Commission and in its other public statements. -0- *T TERABEAM, INC. CONSOLIDATED BALANCE SHEETS (in thousands) June 30, December 31, 2006 2005 ----------- ----------- Assets (unaudited) Current assets: Cash and cash equivalents $13,426 $14,133 Investment securities - available-for-sale 181 260 Accounts receivable, net 5,901 8,378 Inventory 10,822 10,070 Prepaid expenses 1,661 1,045 ----------- ----------- Total current assets 31,991 33,886 Property and equipment, net 3,406 3,924 Other Assets: Restricted cash 76 5,076 Goodwill 7,923 7,380 Intangible assets, net 21,881 23,817 Deposits and prepaid expenses 238 675 ----------- ----------- Total other assets 30,118 36,948 ----------- ----------- Total assets $65,515 $74,758 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $12,152 $15,600 Deferred revenue 4,229 2,503 License agreement payable - current maturities 813 981 ----------- ----------- Total current liabilities 17,194 19,084 License agreement payable, net of current maturities 2,527 2,956 ----------- ----------- Total liabilities 19,721 22,040 Commitments and contingencies Stockholders' Equity Preferred stock, $0.01 par value; authorized 4,500,000, none issued at June 30, 2006 and December 31, 2005 - - Common stock, $0.01 par value, 100,000,000 shares authorized, 21,540,865 issued and outstanding at June 30, 2006, and 21,446,217 issued and outstanding at December 31, 2005 215 214 Additional paid-in capital 57,261 56,638 Retained earnings (accumulated deficit) (11,590) (4,122) Accumulated other comprehensive income: Net unrealized gain (loss) on available-for- sale securities (92) (12) ----------- ----------- Total stockholders' equity 45,794 52,718 ----------- ----------- Total liabilities and stockholders' equity $65,515 $74,758 =========== =========== TERABEAM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------ ----------------- 2006 2005 2006 2005 ---------- ------- -------- -------- Revenues $20,750 $7,165 $39,286 $13,762 Cost of goods sold 12,062 3,687 22,957 7,006 ---------- ------- -------- -------- Gross profit 8,688 3,478 16,329 6,756 Operating expenses: Selling costs 4,027 1,034 8,296 2,031 Restructuring Charges 116 - 116 - General and administrative 4,021 2,777 7,355 5,285 Research and development 3,762 879 8,648 1,650 ---------- ------- -------- -------- Total operating expenses 11,926 4,690 24,415 8,966 ---------- ------- -------- -------- Operating loss (3,238) (1,212) (8,086) (2,210) Other income (expenses): Interest income 114 269 202 490 Interest expense (68) (70) (101) (136) Other income (loss) 212 3 543 (116) ---------- ------- -------- -------- Total other income (expenses) 258 202 644 238 ---------- ------- -------- -------- Loss before income taxes (2,980) (1,010) (7,442) (1,972) Benefit (provision) for income taxes (5) 23 (26) 14 ---------- ------- -------- -------- Net loss ($2,985) ($987) ($7,468) ($1,958) ========== ======= ======== ======== Weighted average shares - basic and diluted 21,541 22,009 21,502 22,204 ========== ======= ======== ======== Loss per share, basic and diluted ($0.14) ($0.04) ($0.35) ($0.09) ========== ======= ======== ======== *T