Exhibit 99.1
For Further Information Contact:
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David Renauld
Vice President, Corporate Affairs
(413) 584-1425
FOR IMMEDIATE RELEASE
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TERABEAM WIRELESS ANNOUNCES THIRD QUARTER 2005
FINANCIAL RESULTS
SAN JOSE, CA, November 3, 2005 - Terabeam Wireless, the business name of
YDI Wireless, Inc. (NASDAQ:YDIW), a leading developer and supplier of broadband
wireless solutions, today announced its financial results for its third quarter
ended September 30, 2005. These financial results include, for the period
beginning on July 27, 2005, results from the operations that Terabeam Wireless
acquired from Proxim Corporation on July 27, 2005.
Revenue for the quarter ended September 30, 2005 was $18.1 million, an
increase of approximately 151% from the revenue of $7.2 million for the quarter
ended June 30, 2005 and an increase of approximately 183% from the revenue of
$6.4 million for the quarter ended September 30, 2004. The significant increase
in revenue over the prior quarter and prior year resulted primarily from the
acquisition of the operations of Proxim Corporation that was completed in the
third quarter 2005.
The net loss attributable to common shareholders computed in accordance
with generally accepted accounting principles (GAAP) for the quarter ended
September 30, 2005 was $10.0 million ($0.47 per share-diluted) compared with a
GAAP net loss of $987,000 ($0.04 per share-diluted) for the quarter ended June
30, 2005 and a GAAP net loss of $2.4 million ($0.09 per share-diluted) for the
quarter ended September 30, 2004.
The third quarter 2005 GAAP net loss attributable to common shareholders
included $7.8 million of restructuring provisions and charges as a result of the
purchase of the operations of Proxim Corporation by Terabeam Wireless. The
non-cash provisions and charges totaled $6.8 million and consisted of (i) $2.1
million for excess and obsolete Terabeam inventory, (ii) $3.6 million for
impairment of our Terabeam trade name, and (iii) approximately $1.1 million for
the write-off of capitalized Terabeam software development. In addition, there
were one time restructuring charges of approximately $944,000 relating to
severance and leased buildings that were vacated.
Pro forma net loss for the third quarter of 2005 was approximately $2.3
million ($0.11 per share-diluted), compared with a pro forma net loss for the
second quarter of 2005 of $987,000 ($0.04 per share-diluted) and a pro forma net
loss for the third quarter of 2004 of $2.4 million ($0.09 per share-diluted).
These pro forma numbers are intended to present what the company's net loss
would have been without the restructuring charges described in the preceding
paragraph. Management believes that presenting a GAAP to pro forma net loss
reconciliation
Terabeam Wireless Announces Third Quarter 2005 Financial Results
November 3, 2005
Page 2
may permit investors to better compare results from period to period and more
accurately assess the company's prospects in a normal operating period. A
detailed and specific reconciliation is included in an accompanying financial
table.
Robert Fitzgerald, Terabeam's Chief Executive Officer, stated, "This
quarter was an extremely exciting and challenging quarter as we acquired and
integrated the assets and operations of Proxim Corporation. We are very pleased
with the loyalty of Proxim's customers and channel partners and the demand for
our products. We are working diligently to balance our cost structure with our
revenue level. We believe that we are positioned to deliver much stronger
results in the fourth quarter."
Corporate Name and Ticker Symbol Changes
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As previously announced, YDI Wireless will be changing its corporate name
to "Terabeam, Inc." and its ticker symbol to "TRBM." These changes will become
effective shortly before markets open on Monday, November 7, 2005.
Conference Call Information
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Terabeam Wireless 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 November 3, 2005 starting at 5:00 p.m. Eastern Time. The
discussion may include forward-looking information.
To participate in this conference call, please dial 800-946-0716 (or
719-457-2644 for international callers), confirmation code 7450401 for all
callers, at least ten minutes before start time. The conference call will also
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be broadcast live over the Internet. Investors and others are invited to visit
Terabeam Wireless' website at http://www.terabeam.com/corporate to access this
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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 7450401 for all callers, and over the Internet for
approximately 90 days at Terabeam Wireless' website at
http://www.terabeam.com/corporate.
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About YDI Wireless / Terabeam
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YDI Wireless, Inc. has been using Terabeam Wireless as a business name and will
soon be renamed Terabeam, Inc. The company's subsidiary 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. The company's subsidiary
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
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company by telephone at 413-584-1425 or by email at IR@terabeam.com.
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Safe Harbor Statement
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Statements in this press release that are not statements of historical facts are
forward-looking statements that involve risks, uncertainties, and assumptions.
Terabeam 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 the downturn and ongoing
Terabeam Wireless Announces Third Quarter 2005 Financial Results
November 3, 2005
Page 3
uncertainty in the telecommunications industry and larger economy; the intense
competition in Terabeam Wireless' industries and resulting impacts on its
pricing, gross margins, and general financial performance; difficulties in
predicting Terabeam Wireless' future financial performance; difficulties or
delays in developing and supplying new products with the contemplated or desired
features, performance, cost, price, and other characteristics; difficulties in
supplying products at the times and in the quantities desired by customers;
risks arising from and relating to Terabeam Wireless' recent acquisition of
Proxim Corporation's operations, assets, and relationships, including without
limitation risks of patent infringement claims and related litigation; and the
impacts and effects of any other strategic transactions Terabeam Wireless may
evaluate or consummate. Further information on these and other factors that
could affect Terabeam Wireless' actual results is and will be included in
filings made by Terabeam Wireless from time to time with the Securities and
Exchange Commission and in its other public statements.
Use of Pro Forma Financial Information
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To supplement our consolidated financial statements presented on a GAAP basis,
Terabeam Wireless has presented non-GAAP, or pro forma, measures of net loss and
loss per share, which are adjusted to exclude certain costs, expenses, gains and
losses that we believe are useful to enhance the overall understanding of our
financial performance. These adjustments to our GAAP results are made with the
intent of providing investors a supplemental understanding of Terabeam Wireless'
underlying operational results and trends. The presentation of this additional
information is not meant to be considered in isolation or as a substitute for
Terabeam Wireless' financial results prepared in accordance with GAAP in the
United States of America.
- Financial Tables follow -
Terabeam Wireless Announces Third Quarter 2005 Financial Results
November 3, 2005
Page 4
YDI WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September 30, December 31,
2005 2004
-------------- --------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 8,743 $ 35,368
Investment securities - available-for-sale 263 5,369
Accounts receivable, net 8,973 2,972
Refundable income taxes 0 151
Inventory 9,252 7,442
Prepaid expenses 1,131 253
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Total current assets 28,362 51,555
Property and equipment, net 4,152 2,511
Other Assets:
Restricted cash 5,076 5,136
Goodwill 6,663 6,072
Intangible assets, net 20,924 11,919
Deposits 388 91
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Total other assets 33,051 23,218
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Total assets $ 65,565 $ 77,284
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 11,810 $ 6,965
Deferred revenue 1,673 159
Current maturities of notes payable 135 2,899
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Total current liabilities 13,618 10,023
Notes payable, net of current maturities 97 1,270
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Total liabilities 13,715 11,293
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; authorized 4,500,000, none
issued at September 30, 2005 and December 31, 2004 -- --
Common stock, $0.01 par value, 100,000,000 shares authorized,
21,408,910 issued and outstanding at September 30, 2005 and
22,845,847 issued with 22,345,847 outstanding at December 31, 2004 214 228
Additional paid-in capital 56,580 59,637
Retained earnings (4,933) 7,277
Treasury stock 0 (1,155)
Accumulated other comprehensive income:
Net unrealized gain (loss) on available-for-sale securities (11) 4
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Total stockholders' equity 51,850 65,991
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Total liabilities and stockholders' equity $ 65,565 $ 77,284
============== ==============
Terabeam Wireless Announces Third Quarter 2005 Financial Results
November 3, 2005
Page 5
YDI WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues $ 18,147 $ 6,370 $ 31,909 $ 17,120
Cost of goods sold 10,503 3,682 17,509 10,426
Restructuring provision for excess and
obsolete inventory 2,143 0 2,143 0
------------ ------------ ------------ ------------
Gross profit 5,501 2,688 12,257 6,694
Operating expenses:
Selling costs 3,800 879 5,831 1,799
Restructuring charges 944 0 944 0
Restructuring charge for impairment of
intangible assets 4,664 0 4,664 0
General and administrative 3,342 3,381 8,627 7,288
Research and development 2,788 1,069 4,438 2,038
------------ ------------ ------------ ------------
Total operating expenses 15,538 5,329 24,504 11,125
------------ ------------ ------------ ------------
Operating income (loss) (10,037) (2,641) (12,247) (4,431)
Other income (expenses):
Interest income 122 360 612 410
Interest expense (4) (76) (140) (139)
Other income (loss) 10 6 (106) 509
------------ ------------ ------------ ------------
Total other income (expenses) 128 290 366 780
------------ ------------ ------------ ------------
Income (loss) before income taxes (9,909) (2,351) (11,881) (3,651)
Benefit (provision) for income taxes (3) 0 11 (2)
------------ ------------ ------------ ------------
Income (loss) before minority interest (9,912) (2,351) (11,870) (3,653)
Minority interest in net income of Merry
Fields (101) 0 (101) 0
------------ ------------ ------------ ------------
Net income (loss) ($10,013) ($2,351) ($11,971) ($3,653)
============ ============ ============ ============
Weighted average shares - basic and diluted 21,163 26,218 21,932 18,788
------------ ------------ ------------ ------------
EPS, basic and diluted ($0.47) ($0.09) ($0.55) ($0.19)
============ ============ ============ ============
Terabeam Wireless Announces Third Quarter 2005 Financial Results
November 3, 2005
Page 6
YDI WIRELESS, INC.
GAAP to Pro Forma Net Loss Reconciliation
(in thousands, except per share data)
(unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
GAAP net income (loss) ($10,013) ($2,351) ($11,971) ($3,653)
Restructuring provision for excess and obsolete
inventory 2,143 0 2,143 0
Restructuring charges relating to operating expenses:
Severance for personnel 279 0 279 0
Lease reserves for unutilized facilities 665 0 665 0
Impairment for Terabeam trade name 3,600 0 3,600 0
Write-off of capitalized software development 1,064 0 1,064 0
------------ ------------ ------------ ------------
Pro forma net income (loss) ($2,262) ($2,351) ($4,220) ($3,653)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average shares - basic and diluted 21,163 26,218 21,932 18,788
------------ ------------ ------------ ------------
Proforma EPS, basic and diluted ($0.11) ($0.09) ($0.19) ($0.19)
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