Exhibit 99.1
For Further Information Contact:
David Renauld
Vice President, Corporate Affairs
(413) 584-1425
FOR IMMEDIATE RELEASE
TERABEAM ANNOUNCES SECOND QUARTER 2006 FINANCIAL RESULTS
San Jose, CA, August 2, 2006 - 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.
Terabeam Announces Second Quarter 2006 Financial Results
August 2, 2006
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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.
- Financial Tables Follow -
Terabeam Announces Second Quarter 2006 Financial Results
August 2, 2006
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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 Announces Second Quarter 2006 Financial Results
August 2, 2006
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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 | ) |