EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Wegener Corporation Reports Results for Third Quarter of Fiscal 2005
(June 29, 2005) - DULUTH, Georgia - Wegener Corporation (Nasdaq: WGNR) a leading
provider of television, audio and data distribution networks worldwide, today
announced financial results for the third quarter ended June 3, 2005.
Third quarter revenues were $4.3 million with a net loss of $620,000 or $(0.05)
per share. Revenues for the third quarter of fiscal 2004 were $4.8 million, with
a net loss of $357,000, or $(0.03) per share. Wegener Corporation's eighteen
month backlog on June 3, 2005 was $12.8 million. Total backlog at quarter-end
was $26.4 million.
Revenues for the first nine months of fiscal 2005 were $17.0 million, with a net
loss of $380,000 or ($0.03) per share compared to revenues of $14.2 million and
a net loss of $1.5 million or $(0.12) per share for the first nine months of
fiscal 2004.
"We are obviously disappointed with the third quarter results," stated Ned
Mountain, President and COO of WEGENER. "Slow sales in the private network
market have caused us to reevaluate our organization and product focus. We have
made major changes in our sales force and have expanded our development efforts
toward iPump Solutions for additional markets. We expect to book orders in the
fourth quarter that will start driving higher revenues in fiscal 2006. We do not
believe, however, that these new markets will generate adequate revenue in the
near term to result in a profitable fourth quarter or fiscal 2005 as previously
anticipated.
"Although we did not expect significant revenues from our new settop product in
the fourth quarter of this fiscal year, we had hoped for some early deliveries
of High Definition (HD) MPEG-4 / h.264 video solutions to customers before the
end of our fiscal 2005. However, due to delays in development of the latest
generation chips, we do not anticipate being able to deliver products in this
fiscal year. MPEG-4 remains a key focus for next generation video distribution
network architectures in satellite, telecom and cable markets. We continue
active development on the IP settop for the telecom market and are well poised
to begin product acceptance with strategic partners and potential customers when
production chips are available. The development of the IP settop has been
another shift in product focus that we undertook late in 2004 to provide more
diversification in our potential markets and customer base," concluded Mr.
Mountain.
"We are excited by additional prospects that we see for the IP settop in cable
and private networks, as well as the additional prospects that we see for the
iPump Solution," stated Bob Placek, CEO and Chairman of Wegener. "These new
market spaces expand the potential penetration of our products. Our enthusiasm
is tempered by the understanding that the shifts in product and sales focus that
we have undertaken may not be enough, and we recognize that we may need to make
additional hard choices to ensure that we meet our investors' expectations and
return Wegener Corporation to profitability in fiscal 2006."
ABOUT WEGENER
WEGENER (Wegener Communications, Inc.), a wholly-owned subsidiary of Wegener
Corporation (Nasdaq: WGNR), is an international provider of digital solutions
for IP data, video and audio networks. Applications include IP data delivery,
broadcast television, cable television, radio networks, business television,
distance education, business music and financial information distribution.
COMPEL, WEGENER's patented network control system provides networks with
unparalleled ability to regionalize programming and commercials. COMPEL network
control capability is integrated into WEGENER digital satellite receivers.
WEGENER can be reached at +1.770.814.4000 or on the World Wide Web at
www.wegener.com.
COMPEL, MEDIAPLAN, ENVOY, UNITY, and iPUMP are trademarks of Wegener
Communications, Inc. All Rights Reserved.
This news release may contain forward-looking statements within the meaning of
applicable securities laws, including the Private Securities Litigation Reform
Act of 1995, and the Company intends that such forward-looking statements are
subject to the safe harbors created thereby. Forward-looking statements may be
identified by words such as "believes," "expects," "projects," "plans,"
"anticipates," and similar expressions, and include, for example, statements
relating to expectations regarding future sales, income and cash flows.
Forward-looking statements are based upon the Company's current expectations and
assumptions, which are subject to a number of risks and uncertainties including,
but not limited to: customer acceptance and effectiveness of recently introduced
products, development of additional business for the Company's digital video and
audio transmission product lines, effectiveness of the sales organization, the
successful development and introduction of new products in the future, delays in
the conversion by private and broadcast networks to next generation digital
broadcast equipment, acceptance by various networks of standards for digital
broadcasting, general market conditions which may not improve during fiscal year
2005 and beyond, and success of the Company's research and development efforts
aimed at developing new products. Discussion of these and other risks and
uncertainties are provided in detail in the Company's periodic filings with the
SEC, including the Company's most recent Form 10-K. Since these statements
involve risks and uncertainties and are subject to change at any time, the
Company's actual results could differ materially from expected results.
Forward-looking statements speak only as of the date the statement was made. The
Company does not undertake and specifically disclaims any obligation to update
any forward-looking statements.
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CONTACT:
C. Troy Woodbury, Jr.
Treasurer and Chief Financial Officer
Wegener Corporation
(770) 814-4000
FAX (770) 623-9648
info@wegener.com
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WEGENER CORPORATION AND SUBSIDIARIES
Summarized Operations Data
(in $000's except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
June 3, May 28, June 3, May 28,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenue $ 4,253 $ 4,777 $ 16,996 $ 14,241
============ ============ ============ ============
Loss before income taxes (968) (558) (594) (2,129)
Income tax benefit 348 201 214 668
------------ ------------ ------------ ------------
Net loss $ (620) $ (357) $ (380) $ (1,461)
============ ============ ============ ============
Net loss per share
Basic $ (0.05) $ (0.03) $ (0.03) $ (0.12)
Diluted $ (0.05) $ (0.03) $ (0.03) $ (0.12)
============ ============ ============ ============
Shares used in per share calculation
Basic 12,574 12,483 12,557 12,432
Diluted 12,574 12,483 12,557 12,432
============ ============ ============ ============
WEGENER CORPORATION AND SUBISIDIARIES
CONSOLIDATED BALANCE SHEETS
(in $000's except share data)
June 3, September 3,
2005 2004
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Assets (Unaudited)
Current assets
Cash and cash equivalents $ 1,671 $ 1,521
Accounts receivable 2,388 2,480
Inventories 3,705 3,840
Deferred income taxes 2,135 2,199
Other 323 283
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Total current assets 10,222 10,323
Property and equipment, net 2,627 2,699
Capitalized software costs, net 1,812 1,668
Deferred income taxes 2,248 1,970
Other assets 837 836
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$ 17,746 $ 17,496
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Liabilities and Shareholder's Equity
Current liabilities
Accounts payable $ 1,187 $ 1,294
Accrued expenses 2,048 1,719
Customer deposits 1,298 960
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Total current liabilities 4,533 3,973
Shareholders' equity
Common stock, $.01 par value; 20,000,000 shares
authorized; 12,575,051 and 12,526,051 shares
respectively, issued and outstanding 126 125
Additional paid-in capital 19,889 19,820
Deficit (6,802) (6,422)
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Total shareholders' equity 13,213 13,523
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$ 17,746 $ 17,496
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