RESULTS RELEASE FOLLOWS:
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Wave Systems Reports Second Quarter Results
and Highlights Recent Progress
Wave to Initiate Quarterly Corporate Update Conference Calls
LEE, MA--(BUSINESS WIRE)--Aug. 10, 1999-- Wave Systems Corp. (NASDAQ:WAVX;
wave.com), a development stage corporation that provides electronic commerce, content distribution
and security services, today reported results for the second quarter and six months ended June 30, 1999
as well as the following recent highlights:
Completed acquisition of N*Able Technologies, combining the two leading proponents of
distributed programmable hardware security and services. The first products are expected to ship in
third quarter to Compaq Computer Corporation, and the companies have been making excellent
progress in integrating their organizational, marketing and product plans. The integration of the two
product lines has been well received by both companies' customers and prospective customers.
Also, the addition of the N*Able core to Wave's product line will further expand the licensing
options for EMBASSY and help Wave to better serve existing licencees.
Hauppauge Digital, Inc. (Nasdaq:HAUP - news) commenced consumer shipments of ''WinTV
Theater Tuner Board'' peripherals that incorporate Wave's technology and the Wave Direct
interface and software bundle. The product is off to a good start, with positive customer feedback.
Wave is continuing to learn from the installed base of a few hundred users. The distribution of the
product has resulted in a number of excellent opportunities for both Hauppauge and Wave.
Actiontec Electronics agreed to incorporate Wave's EMBASSY chips into a USB device and select
modem and home networking card products, creating a new distribution channel for Wave's
technology and services; the first products are expected to ship in the fourth quarter of 1999.
Wave and theglobe.com have launched MyPublish, a leading community commerce service, with
strong initial response from online users. As of today, there are over 500 users with some posting
revenues in excess of $600 per month.
Wave entered into a partnership with Atmel Corporation to create a chip solution integrating
Wave's EMBASSY e-commerce system with Atmel's secure transaction chip technology. The chip
development process is progressing well. Atmel has provided Wave with EMBASSY development
prototypes, and first production samples will be available by year-end.
Sarnoff Corporation and Wave Systems agreed to form a joint venture to develop data broadcast
products and services, including distribution of over 100 gigabytes of content daily, via digital
television broadcasts. The venture will utilize technology and services provided by The Fantastic
Corporation. The venture has been in the formation stage during this quarter, and the core technical
and marketing teams are being put in place. There has been significant interest in the venture from
the major broadcasters and network companies. Initial demonstration systems are in place in New
Jersey, and over-the-air demonstrations will take place in the next 90 days.
Alan Chaplin, interactive industry veteran and co-founder of Electronic Entertainment Expo (E3),
was appointed Vice President, Entertainment Service. He is responsible for strategic relationships
with interactive entertainment and educational content developers and publishers.
Nolan Bushnell, electronic game pioneer and founder of Atari Corp., was named to Board.
- Wave Systems re-listed on Nasdaq National Market.
As a result of an ongoing acceleration in investments in expanding Wave's sales and marketing efforts,
research and development team and activities and expanding its corporate, back-office and service
personnel and infrastructure, Wave Systems reported a net loss to common stockholders of $4,168,000,
or $0.12 per share, for the second quarter ended June 30, 1999. In the prior year's second quarter the
Company had a net loss of $2,510,000, or $0.09 per share. The weighted average number of basic
shares outstanding in the second quarter of 1999 and 1998 was 35,342,000 and 28,078,000
respectively.
At June 30, 1999, Wave had total current assets of $20,918,000, total current liabilities of
$3,458,000, and working capital of $17,461,000 million.
For the six months ended June 30, 1999, the Company reported a net loss to common stockholders of
$7,847,000, or $0.23 per basic share, compared to a net loss of $4,606,000, or $0.17 per basic
share, during the same period last year. The weighted average number of basic shares outstanding in the
first six months of 1999 and 1998 was 33,709,000 and 27,719,000, respectively.
Steven Sprague, President, commented, ''Wave continues to make significant progress on a variety of
fronts: hardware distribution relationships, content support and the development of new EMBASSY
implementations as well as new potential service offerings. Of greatest significance, during the second
(more) quarter, Wave's technology vision became a consumer reality with the launch of Hauppauge's
tuner product that incorporated our technology and services. We were also successful in making
meaningful increases in our range of hardware deployment relationships, including the completed
acquisition of N*ABLE Technologies. As we progress through 1999 and into 2000, we fully expect to
see growing and clear visibility for expanded deployment of our technology into the consumer market. To
that end, we have decided to commence quarterly conference calls to update shareholders on the
Company's progress. The first of these calls is scheduled for Monday, August 16th at 4:30 p.m. EDT.
Details on the call can be found at our corporate web site, wave.com.''
About Wave Systems Corp:
Founded in 1988, the mission of Wave Systems Corp. is to create the world's best technologies and
services to secure and sell digital information. Wave's core EMBASSY technology is an inexpensive, open
hardware and software-based device that enables secure transaction processing and distributed information
metering in users' devices. Embedded in PC hardware and peripherals, set-top boxes and other devices,
EMBASSY is the foundation for client-based security applications and a new distribution and purchasing
model for content and services. This low-cost, secure ''system within a system'' will enable the personal
computer and consumer appliances to assume an important new role in the evolving digital economy. By
moving secure transactions to the user, Wave provides intrinsic value to the electronic commerce process,
benefiting PC users, application developers, and hardware manufacturers. For more information, please
visit Wave's corporate web site at wave.com.
Safe Harbor for Forward-Looking Statements:
Except for the statements of historical fact, the information presented herein constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include general economic and business conditions, the ability to fund operations, the loss of
market share, changes in consumer buying habits and other factors over which Wave Systems Corp. has
little or no control.
Wave Systems Corp. and Subsidiaries
(a development stage corporation)
Consolidated Balance Sheets
(in thousands)
June 30, 1999 December 31, 1998
Assets (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 19,989 $ 1,057
Prepaid expenses and other
receivables 929 5
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Total current assets 20,918 1,062
Property and equipment, net 1,357 888
Other assets 139 108
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Total Assets 22,414 2,058
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Liabilities and Stockholders' equity (deficiency)
Current liabilities:
Accounts payable and accrued
expenses 2,880 3,029
Deferred license fee -- 1,250
Note payable 577 562
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Total current liabilities 3,458 4,841
Series A Cumulative Redeemable
Preferred Stock,
$0.01 par value 504 493
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Total stockholders' equity
(deficiency) 18,452 (3,276)
Total liabilities and stockholders'
equity (deficiency) $ 22,414 $ 2,058
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Wave Systems Corp. and Subsidiaries
(a development stage corporation)
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1999 1998 1999 1998
---- ---- ---- ----
Revenues $ 2 $ 4 $ 5 $ 13
Operating Expenses:
Selling, general and
administrative 3,447 2,563 5,848 3,984
Research and development 1,563 784 2,649 1,322
----- ------ ----- -----
5,010 3,347 8,497 5,306
License fee 625 1,500 1,250 1,500
Interest income 221 21 237 26
Interest expense (1) (13) (831) (24)
------- ------- ------- -------
845 1,508 656 1,502
Net loss (4,163) (1,835) (7,837) (3,792)
Accrued dividends on preferred
stock (including accretion
of assured incremental yield
on preferred stock of $0 in
1999, $750,000 in 1998) 5 675 11 813
Net loss to common
stockholders (4,168) (2,510) (7,847) (4,606)
Net loss per share - basic ($0.12) ($0.09) ($0.23) ($0.17)
Weighted average shares
outstanding - basic 35,342 28,078 33,709 27,719
Contact:
Aaron Feigin
Wave Systems Corp.
Afeigin@wavesys.com
408/261-9510
or
David Collins, William Lee
Jaffoni & Collins
wavx@jcir.com
212/835-8500
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Steve |
