Exhibit 99.1
For Further Information Contact:
David Renauld
Vice President, Corporate Affairs
(413) 584-1425
FOR IMMEDIATE RELEASE
TERABEAM ANNOUNCES
FOURTH QUARTER AND FULL YEAR 2005 FINANCIAL RESULTS
Company Returns to Profitability and Increases Cash approximately $5.4 Million
San Jose, CA, February 28, 2006 - Terabeam, Inc. (NASDAQ:TRBM), a leading developer and supplier of broadband wireless solutions, today reported its unaudited financial results for the fourth quarter and year ended December 31, 2005.
Revenue for the quarter ended December 31, 2005 was slightly more than $27.0 million, an increase of approximately 369% from the revenue of $5.8 million for the quarter ended December 31, 2004 and an increase of approximately 49% from the revenue of $18.1 million for the quarter ended September 30, 2005. Revenue for the year ended December 31, 2005 was $59.0 million, an increase of approximately 158% from the revenue of $22.9 million for the year ended December 31, 2004.
Operating income for the quarter ended December 31, 2005 was $657,000 compared to an operating loss of $1.6 million for the quarter ended December 31, 2004 and an operating loss of $10.0 million for the quarter ended September 30, 2005. Net income for the quarter ended December 31, 2005 was $811,000 ($0.04 per share-diluted) compared to net income of $2.3 million ($0.10 per share-diluted) for the quarter ended December 31, 2004 and net loss of $10.0 million ($0.47 per share-diluted) for the quarter ended September 30, 2005. The net income for the quarter ended December 31, 2004 included a one-time gain of approximately $3.9 million on the sale of the Phazar Corp common stock previously owned by Terabeam. The operating and net losses for the quarter ended September 30, 2005 included substantial restructuring provisions and charges as a result of the purchase of the operations of Proxim Corporation by Terabeam in July 2005.
The net loss for the year ended December 31, 2005 was $11.2 million ($0.51 per share-diluted), including the previously discussed restructuring provisions and charges as a result of the purchase of the operations of Proxim Corporation, compared to a net loss of $1.3 million ($0.07 per share-diluted), including the previously discussed one-time gain of $3.9 million, for the year ended December 31, 2004.
Total assets as of December 31, 2005 were $74.8 million, a decrease of approximately 3% from the total assets of $77.3 million as of December 31, 2004. Total liabilities as of
Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
Page 2
December 31, 2005 were $22.0 million, an increase of approximately 95% from the total liabilities of $11.3 million as of December 31, 2004. Total stockholders’ equity as of December 31, 2005 was $52.7 million, a decrease of approximately 20% from the total stockholders’ equity of $66.0 million as of December 31, 2004.
Shares outstanding as of December 31, 2005 were 21,446,217, a decrease of approximately 4% from 22,345,847 shares outstanding as of December 31, 2004.
Robert Fitzgerald, Terabeam’s Chief Executive Officer, stated, “The fourth quarter 2005 was a great quarter for Terabeam and puts us in a great position for 2006. In addition to stabilizing our internal and external operations, we have moved significant product developments forward and expect to introduce exciting and competitive products in the upcoming months.”
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 on February 28, 2006 starting at 5:00 p.m. Eastern Time. The discussion may include forward-looking information.
To participate in this conference call, please dial 800-967-7140 (or 719-457-2629 for international callers), confirmation code 9334824 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 9334824 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 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 and Aurora, 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; difficulties or delays in developing and supplying new products with the contemplated or desired features, performance, compliances, certifications, cost, price, and other characteristics; the difficulties in predicting Terabeam’s future financial performance; Terabeam’s recent
Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
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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.
- Financial Tables Follow -
Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
Page 4
TERABEAM, INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except per share data) | |||||||
December 31, | December 31, | ||||||
2005 | 2004 | ||||||
Assets | (unaudited | ) | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | 14,133 | $ | 35,368 | |||
Investment securities - available-for-sale | 260 | 5,369 | |||||
Accounts receivable, net | 8,378 | 2,972 | |||||
Refundable income taxes | - | 151 | |||||
Inventory | 10,070 | 7,442 | |||||
Prepaid expenses | 1,322 | 253 | |||||
Total current assets | 34,163 | 51,555 | |||||
Property and equipment, net | 3,924 | 2,511 | |||||
Other Assets: | |||||||
Restricted cash | 5,076 | 5,136 | |||||
Goodwill | 7,380 | 6,072 | |||||
Intangible assets, net | 23,817 | 11,919 | |||||
Deposits | 398 | 91 | |||||
Total other assets | 36,671 | 23,218 | |||||
Total assets | $ | 74,758 | $ | 77,284 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 15,569 | $ | 6,965 | |||
Deferred revenue | 2,503 | 159 | |||||
License agreement payable - current maturities | 981 | - | |||||
Current maturities of notes payable - other current liabilities | 31 | 2,899 | |||||
Total current liabilities | 19,084 | 10,023 | |||||
License agreement payable, net of current maturities | 2,956 | ||||||
Notes payable, net of current maturities | - | 1,270 | |||||
Total liabilities | 22,040 | 11,293 | |||||
Commitments and contingencies | |||||||
Stockholders’ Equity | |||||||
Preferred stock, $0.01 par value; authorized 4,500,000, none issued at December 31, 2005 and December 31, 2004 | - | - | |||||
Common stock, $0.01 par value, 100,000,000 shares authorized, 21,446,217 issued and outstanding at December 31, 2005 and 22,845,847 issued with 22,345,847 outstanding at December 31, 2004 | 214 | 228 | |||||
Additional paid-in capital | 56,638 | 59,637 | |||||
Retained earnings | (4,122 | ) | 7,277 | ||||
Treasury stock | - | (1,155 | ) | ||||
Accumulated other comprehensive income: | |||||||
Net unrealized gain (loss) on available-for-sale securities | (12 | ) | 4 | ||||
Total stockholders’ equity | 52,718 | 65,991 | |||||
Total liabilities and stockholders’ equity | $ | 74,758 | $ | 77,284 |
Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
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TERABEAM, INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
(in thousands, except per share data) | |||||||||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||
2005 (unaudited) | 2004 (unaudited) | 2005 (unaudited) | 2004 | ||||||||||
Revenues | $ | 27,073 | $ | 5,777 | $ | 58,982 | $ | 22,897 | |||||
Cost of goods sold | 14,421 | 2,988 | 31,930 | 13,414 | |||||||||
Restructuring provision for excess and obsolete inventory | - | - | 2,143 | - | |||||||||
Gross profit | 12,652 | 2,789 | 24,909 | 9,483 | |||||||||
Operating expenses: | |||||||||||||
Selling costs | 3,958 | 758 | 9,789 | 2,557 | |||||||||
Restructuring charges | - | - | 944 | - | |||||||||
Restructuring charge for impairment of intangible assets | - | - | 4,664 | - | |||||||||
Impairment of service reporting unit goodwill | 200 | - | 200 | - | |||||||||
General and administrative | 4,275 | 2,688 | 12,902 | 9,976 | |||||||||
Research and development | 3,562 | 911 | 8,000 | 2,949 | |||||||||
Total operating expenses | 11,995 | 4,357 | 36,499 | 15,482 | |||||||||
Operating income (loss) | 657 | (1,568 | ) | (11,590 | ) | (5,999 | ) | ||||||
Other income (expenses): | |||||||||||||
Interest income | 83 | 400 | 695 | 810 | |||||||||
Interest expense | (21 | ) | (70 | ) | (161 | ) | (209 | ) | |||||
Gain on sale of Phazar stock | - | 3,882 | - | 3,882 | |||||||||
Other income (expense) | 87 | (341 | ) | (19 | ) | 168 | |||||||
Total other income (expenses) | 149 | 3,871 | 515 | 4,651 | |||||||||
Income (loss) before income taxes | 806 | 2,303 | (11,075 | ) | (1,348 | ) | |||||||
Benefit (provision) for income taxes | 5 | 4 | 16 | 2 | |||||||||
Income (loss) before minority interest | 811 | 2,307 | (11,059 | ) | (1,346 | ) | |||||||
Minority interest in net income of Merry Fields | - | - | (101 | ) | - | ||||||||
Net income (loss) | $ | 811 | $ | 2,307 | ($11,160 | ) | ($1,346 | ) | |||||
Weighted average shares - basic | 21,414 | 22,784 | 21,801 | 19,792 | |||||||||
Earnings (loss) per share - basic | $ | 0.04 | $ | 0.10 | ($0.51 | ) | ($0.07 | ) | |||||
Weighted average shares - diluted | 21,589 | 23,213 | 21,801 | 19,792 | |||||||||
Earnings (loss) per share - diluted | $ | 0.04 | $ | 0.10 | ($0.51 | ) | ($0.07 | ) |