WaveRider Communications Inc. NEWS RELEASE
(OTC Bulletin Board: WAVR) *All figures reported in $U.S.
WaveRider Communications Inc. reports Q2 2004 results
Focus on large telecommunications
carriers and channel sales program
results in sequential quarterly
revenue growth of 5%
TORONTO, July 29, 2004 - WaveRider Communications Inc. (OTC BB: WAVR), the
leader in non-line-of-sight wireless broadband technology and deployments, today
reported revenue for the second quarter of 2004 of (U.S.), $2,412,516 compared
to first quarter revenues of $2,306,221 and Q2 2003 revenues of $3,136,154.
The net loss for the quarter totaled $2,586,187 or $0.18 per share compared to a
net loss of $1,578,550, or $0.11 per share in the previous quarter, and a Q2
2003 loss of $118,772, or $0.01 per share. The increase in the net loss was the
result of a number of factors:
o The company incurred non-cash financing expenses of $1,149,488 in the
three months ended June 30, 2004 and $1,656,593 for the six months
ended June 30, 2004, compared to no similar charges in the same periods
in 2003.
o The Company recorded an inventory obsolescence provision in the quarter
ended June 30, 2004 of $253,000, related to an excess supply of
processors for its current products.
o The Company incurred approximately $250,000 in legal, accounting and
other professional fees for the corporate restructuring announced
earlier.
"We believe WaveRider's corporate restructuring that was announced in Q2 will
strengthen the company's ability to enter into the strategic partnerships,
mergers or acquisitions which will aid in the implementation of our global
product and development strategy. WaveRider's plan includes the delivery of
industry-leading technologies that will benefit our existing customers, attract
new customers, expand our market opportunity and enhance shareholder value,"
said Bruce Sinclair, Chief Executive Officer, WaveRider Communications Inc.
"WaveRider's focus on selling to larger telecommunications carriers, coupled
with our channel sales program, should enable the company to continue to improve
revenue levels in the second half of 2004. WaveRider is working closely with our
channel partners to manage inventory levels to reflect end user demand, which
has eliminated the large stocking orders that we experienced last year. At the
same time, we are working with these partners to develop programs that we expect
will help our channel partners to increase sales of WaveRider products," said
Charles Brown, Executive Vice President, WaveRider Communications Inc.
WaveRider's Q2 2004 conference call will be held July 29 at 4:30 p.m. (eastern).
To join the call, dial 416-405-9310 or listen via the Internet at
http://events.onlinebroadcasting.com/waverider/072904/index.php. (requires
Windows Media Player or Real Player).
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2/... WaveRider Communications Inc. reports Q2 2004 results
WaveRider Communications Inc.
CONSOLIDATED BALANCE SHEETS
(in U.S. dollars)
June 30, December 31,
2004 2003
(Unaudited) (Audited)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents .......................................... $ 1,221,282 $ 1,843,135
Restricted cash .................................................... 223,814 232,125
Accounts receivable, less allowance for doubtful accounts .......... 1,167,629 1,921,975
Inventories ........................................................ 1,685,218 966,433
Note receivable .................................................... -- 20,698
Prepaid expenses and other assets .................................. 197,957 92,600
------------ ------------
Current assets ....................................... 4,495,900 5,076,966
Property, plant and equipment, net ..................................... 354,533 407,489
------------ ------------
$ 4,850,433 $ 5,484,455
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities ........................... $ 2,237,601 $ 2,329,938
Deferred revenue ................................................... 381,196 440,190
Current portion of obligation under capital lease .................. 2,494 10,458
------------ ------------
Current liabilities .................................. 2,621,291 2,780,586
Convertible debentures ................................................. 1,557,979 772,920
Obligation under capital lease ......................................... 2,909 4,155
------------ ------------
Total liabilities .................................... 4,182,179 3,557,661
------------ ------------
Commitments and Contingencies
SHAREHOLDERS' EQUITY:
Preferred Stock, $0.01 par value per share:
issued and outstanding Nil shares at June 30, 2004 and Nil shares
at December 31, 2003 ............................................ -- --
Common Stock, $0.001 par value per share:
issued and outstanding - 15,044,788 shares at June 30, 2004
14,429,409 shares at December 31, 2003 .......................... 15,045 14,429
Additional paid-in capital ......................................... 87,653,972 77,725,383
Other equity ....................................................... 5,668,060 12,754,517
Accumulated other comprehensive loss ............................... (241,787) (305,236)
Accumulated deficit ................................................ (92,427,036) (88,262,299)
------------ ------------
Total shareholders' equity ........................... 668,254 1,926,794
------------ ------------
$ 4,850,433 $ 5,484,455
============ ============
WaveRider Communications Inc.
CONSOLIDATED STATEMENTS OF LOSS, DEFICIT AND COMPREHENSIVE LOSS
(in U.S. dollars)
Three Months ended Six Months ended
June 30 June 30 June 30 June 30
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
CONSOLIDATED STATEMENT OF LOSS
REVENUE
Product revenue ............................... $ 1,757,040 $ 2,686,066 $ 3,653,567 $ 5,559,612
Service revenue ............................... 655,476 450,088 1,065,170 754,903
------------ ------------ ------------ ------------
2,412,516 3,136,154 4,718,737 6,314,515
------------ ------------ ------------ ------------
COST OF REVENUE
Product revenue ............................... 1,408,155 1,671,957 2,647,793 3,556,441
Service revenue ............................... 358,524 99,501 601,756 218,304
------------ ------------ ------------ ------------
1,766,679 1,771,458 3,249,549 3,774,745
------------ ------------ ------------ ------------
GROSS MARGIN .................................. 645,837 1,364,696 1,469,188 2,539,770
------------ ------------ ------------ ------------
EXPENSES
Selling, general and administration ........... 1,477,161 1,149,690 2,749,791 2,336,259
Research and development ...................... 365,750 275,992 854,794 432,595
Depreciation and amortization ................. 93,493 117,646 188,723 265,400
Bad debt expense .............................. 15,000 -- 16,740 --
------------ ------------ ------------ ------------
1,951,404 1,543,328 3,810,048 3,034,254
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS .......................... (1,305,567) (178,632) (2,340,860) (494,484)
------------ ------------ ------------ ------------
NON-OPERATING EXPENSES (INCOME)
Interest expense .............................. 1,159,341 22,374 1,676,399 37,653
Foreign exchange loss (gain) .................. 121,801 (80,374) 150,097 (151,197)
Interest income ............................... (522) (1,860) (2,619) (3,675)
------------ ------------ ------------ ------------
1,280,620 (59,860) 1,823,877 (117,219)
------------ ------------ ------------ ------------
NET LOSS ...................................... $ (2,586,187) $ (118,772) $ (4,164,737) $ (377,265)
============ ============ ============ ============
BASIC AND FULLY DILUTED LOSS PER SHARE ........ $ (0.18) $ (0.01) $ (0.28) $ (0.03)
============ ============ ============ ============
Weighted Average Number of Common Shares ...... 14,740,669 12,501,154 14,670,299 12,099,130
============ ============ ============ ============
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CONSOLIDATED STATEMENTS OF DEFICIT
OPENING DEFICIT ............................... (89,840,849) (83,459,485) (88,262,299) (83,200,992)
NET LOSS FOR THE PERIOD ....................... (2,586,187) (118,772) (4,164,737) (377,265)
------------ ------------ ------------ ------------
CLOSING DEFICIT ............................... $(92,427,036) $(83,578,257) $(92,427,036) $(83,578,257)
============ ============ ============ ============
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET LOSS FOR THE PERIOD ....................... (2,586,187) (118,772) (4,164,737) (377,265)
OTHER COMPREHENSIVE INCOME/(LOSS)
Cumulative translation adjustment ......... 69,628 (91,919) 63,449 (141,154)
------------ ------------ ------------ ------------
COMPREHENSIVE LOSS ............................ $ (2,516,559) $ (210,691) $ (4,101,288) $ (518,419)
============ ============ ============ ============
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4/... WaveRider Communications Inc. reports Q2 2004 results
About WaveRider Communications Inc.
WaveRider Communications Inc. (www.waverider.com) is a leader in broadband
wireless deployments and technologies. WaveRider's Last Mile Solution(R)
non-line-of-sight 900 MHz networks enable communications providers to establish
full-saturation coverage networks and generate a rapid return on their
investment. WaveRider is committed to the development of standards-based
wireless technologies that support advanced applications and address the needs
of both the North American and International markets. WaveRider is traded on the
OTC Bulletin Board, under the symbol WAVR.
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Except for the historical statements made herein, this release contains
forward-looking statements that involve risks and uncertainties including the
risks associated with the effect of changing economic conditions, trends in the
development of the Internet as a commercial medium, market acceptance risks,
realizing expected revenue, technological development risks, and seasonality.
Risk factors also include the company's ability to secure additional financing;
the company's ability to commercialize its products; the company's ability to
compete successfully in the future against existing or new competitors; the
company's ability to protect its intellectual property and the assurance that
the rights granted under patents or copyrights that may be issued will provide
sufficient protection to its intellectual property rights; the company's success
in enhancing existing products and developing new products to keep up with the
technological advances in the data communications industry; the continued
availability of the license-exempt spectrum which is based on regulation by U.S.
and foreign governments; the company's ability to avoid significant product
liability exposure; the company's dependence on a limited number of third party
manufacturers; the company's ability to execute its business plan and generate
an overall profit and other risk factors detailed in the Company's filings with
the Securities and Exchange Commission, including the company's annual report on
Form 10-KSB as amended. Due to these factors, actual results could differ
materially from those expressed in forward-looking statements by the company.
For information, contact:
WaveRider Corporate Communications WaveRider Investor Relations
Carolyn Anderson (416) 502-2978 Marcia Newell (416) 502-3265
canderson@waverider.com investors@waverider.com