Adaptive Broadband Reports Q4 Results: Record Quarter Bookings of $54 Million Validate New Product Investments; Soft Revenue Results in Loss, as Expected
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 27, 1999--ADAPTIVE
BROADBAND CORPORATION (Nasdaq National Market: ADAP) reported results
today for its fourth quarter and fiscal year ended June 30, 1999. The
company reported a net loss from continuing operations of
$3.7 million, or $.25 per share, on revenue of $40.5 million, compared
to a net loss of $3.8 million, or $.24 per share, on revenue of $45.7
million for the fourth quarter of fiscal 1998. Last year, excluding
the effects of restructuring related, one-time items, net income from
continuing operations in the fourth quarter was $1.0 million, or $.06
per share. New orders booked in the quarter were up 20% over last
year's fourth quarter, to a record $53.8 million. Significant orders
are highlighted later in this release.
The company's net loss from continuing operations for the year,
excluding in-process research and development of $11.8 million,
restructuring and other charges of $3.3 million and excess
manufacturing costs of $3.0 million, totaled $12.2 million, or $.82
per share, on revenue of $157.0 million. Including in-process research
and development charges for the Adaptive Broadband Limited and Crown
acquisitions, restructuring and other charges, and excess
manufacturing costs, the company's net loss from continuing operations
for fiscal 1999 was $26.6 million, or $1.79 per share, on revenue of
$157.0 million, compared to a net loss of $0.2 million, or $.01 per
share, on revenue of $175.3 million for fiscal 1998.
Discontinued Operations and Divestitures
In April 1999, Adaptive Broadband completed the sale of its
Government business to Northrop Grumman for $93 million in cash. The
gain on the sale of the government business is included in income from
discontinued operations of $36.3 million for the fourth quarter of
fiscal 1999. As announced July 22, 1999, Northrop Grumman Corporation
has filed a lawsuit against Adaptive Broadband, alleging that it
failed to disclose relevant events as required by terms of the Asset
Purchase Agreement (APA) signed March 11, 1999, associated with the
potential loss of certain government programs. Adaptive Broadband
believes the claim has no merit and intends to defend any related
action vigorously, and will consider all appropriate counter actions.
Continuing to Invest in R&D, Sales and Marketing
"The wireless broadband access market is here and now, and, due
to our continuing investment in research and development, we are ready
with a very competitive wireless networking solution, AB-Access(TM).
While it's gratifying to have a technologically superior product early
on in an emerging market, we also needed to invest in our sales and
marketing team in order to maintain our leadership position. We have
accomplished that by bolstering our global sales force with
individuals highly skilled in selling networking solutions, who
understand our customers' needs. Our bookings performance signals the
move from a quarter-to-quarter product sales business to a new
generation of systems sales. For the first time, we are receiving
multiple-quarter, firm bookings to match the roll out of new
applications for our products. Unfortunately, our investment in the
future combined with disappointing international sales in the present
is a drag on profitability. However, our backlog of opportunities is
substantially greater than we have ever experienced, and we believe
our efforts will pay off handsomely for the company and its
shareholders," commented Donna S. Birks, Adaptive Broadband's
executive vice president and chief financial officer.
Solidly Positioned to be an Early Leader in Wireless Networking
Solutions
"Adaptive Broadband has kept to its word to become a world-class
leader in our chosen high-growth market areas. And, we have kept the
commitments made to our shareholders when we shared our vision of the
future in our strategic plan in April 1998. In less than two years, we
have shed non-strategic businesses, building a solid financial base
from which to launch new market initiatives; reorganized into one
functional organization; invested in new technologies, through
internal development and acquisitions, necessary for us to address
larger market opportunities; strengthened and expanded the life cycles
of our core product areas with product upgrades and enhancements; and
put in place shareholder-friendly corporate governance guidelines. We
are proud of what we have accomplished, but appreciate the challenges
ahead in executing against our plan. The players are in place, the
products are ready to go; our strategies are sound and our vision is
clear: Adaptive Broadband is solidly positioned to be the leader in
wireless networking solutions," stated Frederick D. Lawrence, chairman
and chief executive officer.
Validating Orders Result from Investments in New Products
Adaptive Broadband saw its investment in new products pay off in
the fourth quarter. The company received initial, validating orders
for products and systems in its new, larger, high-growth markets.
Domestic orders grew 51% over last year's fourth quarter, fueled
primarily by growth in the company's satellite communications and
video broadcast product areas. Geographic mix was 69% domestic/31%
international, with China and Asia at 9%. The company is focusing
first on the U.S. wireless broadband market and believes by shifting
its mix to predominantly domestic business, it will be less vulnerable
to economic shifts in international markets.
Domestic and International Orders for SpectraCast(R) Satellite
Internet Delivery System
During the quarter, the company announced its first domestic
order to supply its new SpectraCast(R) products to OnSat Network
Communications, Inc., for two-way, high speed Internet services via
satellite. SpectraCast is a family of products including multiplexers,
IP gateways, various types of integrated receiver decoders, and
supporting software for network data, audio, and multimedia delivery
over satellite. Park City, Utah-based OnSat is a new Satellite
Internet Services Provider (ISP), whose primary service is a
"scrubbed," or software filtered (pre-screened with x-rated content
deleted) Internet and broadband services for public and private
schools, churches, businesses and other audiences. OnSat can feed up
to 6Mbps IP data over the satellite to the individual receive sites
where land line connections are either much too slow or are impossible
to achieve, due to the rural location of the site. The SpectraCast
system allows OnSat to start with a narrow channel of bandwidth and
expand as their requirements and customer list grows. The initial
order is valued at $1.0 million.
The first international order for SpectraCast was placed by Xin
Hua News Agency, the world's fourth largest, which will rely on
SpectraCast to deliver news, Internet traffic, digital video, and
other multimedia data over satellite. Xin Hua is making concerted
efforts to modernize its telecommunications infrastructure, which
helps it serve 32 domestic provincial bureaus, 50 domestic
sub-bureaus, five international region bureaus, and bureaus located in
over 100 other countries. The contract involves 1,500 receiving sites,
for a value of $2.6 million. The system will consist initially of
three transmit hubs operating with three different satellites. Receive
sites are located worldwide. Adaptive Broadband believes that the Xin
Hua deal will lead to other opportunities in the region. Established
in 1931, Xin Hua News Agency is the state news agency of the People's
Republic of China and the largest news and information gathering and
distribution center in the country.
Ku-band KST-2000A Satellite Transceiver Key to Contract Award
Globecomm Systems selected Adaptive Broadband's EF Data line of
transceivers and modems under a contract valued at $2.8 million. This
initial contract calls for 19 transportable terminals and potential
follow-up orders for up to three times that number over the next eight
months. The terminals will be used as remote earth stations within a
satellite network for operations in the Intelsat coverage area of the
Atlantic Ocean and Indian Ocean regions. An important component of the
contract is the new, versatile KST-2000A, which finds applications in
satellite news gathering, VSATs, flyaway terminals, rural telephony,
and network hub stations, as well as in the remote terminals of the
Globecomm Systems contract. These terminals will be located in very
remote regions, so it is particularly important to the customer that
the equipment meet the highest levels of quality, performance, and
reliability with minimum maintenance requirements. Adaptive
Broadband's continuing program of internal research and development
enables it to constantly upgrade its product lines in anticipation of
its customers' needs, resulting in products such as the KST-2000A.
Globecomm Systems is a global supplier of satellite earth stations and
networks.
Latin American Energy Giant Chooses Adaptive Broadband SCADA
Radios
A leading company of various energy sectors in Argentina and
Latin America issued a blanket purchase order valued at up to $1.3
million for Adaptive Broadband's MDS microwave radios. The company
ordered the radios to (1) extend supervisory control and data
acquisition (SCADA) capabilities to existing and new oil and gas
production sites and (2) link several administrative offices to their
own backbone. Point-to-point radios will be used in this latter
application, while point-to-multipoint radios will handle the SCADA
application. The radios will be used at master control stations and in
conjunction with remote terminal units and data collection units to
expand SCADA capabilities. The new radios will enable this energy
giant to handle its operations more efficiently, resulting in lower
operating costs and, thus, better service to their consumers. In
addition to the performance-related specifications of the MDS radios,
the company found the diagnostic features of Adaptive Broadband's
radios valuable in their overall system maintenance routines.
Raycom Media Signs Exclusive Contract for Twinstream(TM) Digital
Radios
The company has entered into a $2.5 million, three-year exclusive
contract with Raycom Media to supply broadcast products for the
upgrade of all of Raycom Media's studio-to-transmitter links (STL) and
mobile news gathering vehicles nationwide. The products being employed
as digital STLs are the TwinStream(TM) radio systems, which accommodate
both the new digital television DTV programming and the existing
analog NTSC program service within a single 25 MHz microwave STL
channel. The new versions of the TwinStream expand the capabilities,
and include single and dual RF amplifier models and dual RF band
models. The dual band model provides for transmitting the legacy NTSC
signal on the existing 7GHz STL frequency and offers that the new ATSC
HD/SD signal could be transmitted on another band, for example on 13
GHz. By offering single and dual channel options, TwinStream allows
station managers to add digital capability within existing licensed
bandwidth in line with their business needs. Raycom Media television
stations reach nearly 10% of all U.S.
households, plus 1.2 million households in Puerto Rico.
Adaptive Broadband (http://www.adaptivebroadband.com) is a
leading supplier of terrestrial wireless and satellite-based systems
to support ultra-high speed Internet access, broadcast digital TV
transport and worldwide Internet backbones. The company also provides
industry-leading solutions for satellite-based data communications and
terrestrial wireless telemetry networks.
|
