Exhibit 99.1
For Further Information Contact:
David Renauld
Vice President, Corporate Affairs
(413) 584-1425
FOR IMMEDIATE RELEASE
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TERABEAM ANNOUNCES THIRD QUARTER 2006 FINANCIAL RESULTS
Year to Date Sales Increase 79% from Comparable Period of 2005
San Jose, CA, November 13, 2006 - Terabeam, Inc. (NASDAQ:TRBM), a
global pioneer and leading developer and supplier of Mesh, WiMAX, Wi-Fi and
Millimeter Wave wireless products and solutions, today announced its financial
results for the third quarter ended September 30, 2006.
Revenue for the quarter ended September 30, 2006 was $17.9 million, a
decrease of approximately 14% from the revenue of $20.8 million for the quarter
ended June 30, 2006 and a decrease of approximately 1% from the revenue of $18.1
million for the quarter ended September 30, 2005. Revenue for the nine months
ended September 30, 2006 was $57.1 million, an increase of approximately 79%
from the revenue of $31.9 million for the nine months ended September 30, 2005.
The significant increase in revenue over the prior year's comparable period
resulted primarily from our acquisition of the operations of Proxim Corporation
in the third quarter of 2005. Due to it being a cash acquisition, there was no
equity dilution due to the acquisition.
The net loss for the quarter ended September 30, 2006 was $13.7 million
($0.63 per share-diluted) compared to net loss of $3.0 million ($0.14 per
share-diluted) for the quarter ended June 30, 2006 and net loss of $10.0 million
($0.47 per share-diluted) for the quarter ended September 30, 2005. The third
quarter 2006 net loss included non-cash charges totaling approximately $10.4
million (approximately $0.48 per share-diluted), consisting of an inventory
reserve of approximately $1.5 million and an impairment charge related to
intangible assets of approximately $8.9 million. The third quarter 2005 net loss
included $7.8 million of restructuring provisions and charges (approximately
$0.36 per share-diluted) as a result of our purchase of the operations of Proxim
Corporation.
Robert Fitzgerald, Terabeam's Chief Executive Officer, stated, "We are
seeing customer uptake of our WiMAX and Wi-Fi Mesh products. Although both of
these products are experiencing significant year over year percentage growth for
us, we must strive to make them significant contributors in terms of overall
revenue to realize our growth strategy. We have seen the intended benefits of
the cost reduction plan that we implemented in the second quarter."
Terabeam Announces Third Quarter 2006 Financial Results
November 13, 2006
Page 2
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, November 13, 2006 starting at 5:00 p.m. Eastern Time. The
discussion may include forward-looking information.
To participate in this conference call, please dial 800-474-8920 (or
719-457-2727 for international callers), confirmation code 8883545 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's website at http://www.terabeam.com to access this broadcast. Replays
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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 8883545 for all callers, and over the Internet for
approximately 90 days at Terabeam's website at http://www.terabeam.com.
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About Terabeam
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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
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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'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; adverse impacts from
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, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2006 2005
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Assets (unaudited)
Current assets:
Cash and cash equivalents $ 12,387 $ 14,133
Investment securities - available-for-sale 166 260
Accounts receivable, net 5,214 8,378
Inventory 9,809 10,070
Prepaid expenses 1,715 1,045
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Total current assets 29,291 33,886
Property and equipment, net 3,031 3,924
Other Assets:
Restricted cash 76 5,076
Goodwill 7,922 7,380
Intangible assets, net 12,078 23,817
Deposits and prepaid expenses 263 675
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Total other assets 20,339 36,948
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Total assets $ 52,661 $ 74,758
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 14,006 $ 15,600
Deferred revenue 2,938 2,503
License agreement payable - current maturities 858 981
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Total current liabilities 17,802 19,084
License agreement payable, net of current maturities 2,309 2,956
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Total liabilities 20,111 22,040
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; authorized 4,500,000, none
issued at September 30, 2006 and December 31, 2005 -- --
Common stock, $0.01 par value, 100,000,000 shares authorized,
21,540,865 issued and outstanding at September 30, 2006, and
21,446,217 issued and outstanding at December 31, 2005 215 214
Additional paid-in capital 57,696 56,638
Retained earnings (accumulated deficit) (25,254) (4,122)
Treasury stock -- --
Accumulated other comprehensive income:
Net unrealized gain (loss) on available-for-sale securities (107) (12)
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Total stockholders' equity 32,550 52,718
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Total liabilities and stockholders' equity $ 52,661 $ 74,758
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TERABEAM, 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,
-------------------------------- --------------------------------
2006 2005 2006 2005
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Revenues $ 17,876 $ 18,147 $ 57,162 $ 31,909
Cost of goods sold 9,805 10,503 32,762 17,509
Restructuring provision for excess and
obsolete inventory 1,502 2,143 1,502 2,143
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Gross profit 6,569 5,501 22,898 12,257
Operating expenses:
Selling costs 5,123 3,800 13,419 5,831
Restructuring charges -- 944 116 944
Restructuring charge for impairment of
intangible assets 8,874 4,664 8,874 4,664
General and administrative 3,457 3,342 10,812 8,627
Research and development 2,823 2,788 11,471 4,438
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Total operating expenses 20,277 15,538 44,692 24,504
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Operating income (loss) (13,708) (10,037) (21,794) (12,247)
Other income (expenses):
Interest income 101 122 303 612
Interest expense (50) (4) (151) (140)
Other income (loss) 9 10 552 (106)
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Total other income (expenses) 60 128 704 366
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Income (loss) before income taxes (13,648) (9,909) (21,090) (11,881)
Benefit (provision) for income taxes (16) (3) (42) 11
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Income (loss) before minority interest (13,664) (9,912) (21,132) (11,870)
Minority interest in net income of Merry Fields 0 (101) 0 (101)
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Net income (loss) ($ 13,664) ($ 10,013) ($ 21,132) ($ 11,971)
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Weighted average shares - basic and diluted 21,541 21,163 21,515 21,932
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EPS, basic and diluted ($ 0.63) ($ 0.47) ($ 0.98) ($ 0.55)
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