ADAP Earnings:
Thursday April 27, 4:20 pm Eastern Time
Company Press Release
Adaptive Broadband Reports Q3 Results
Contract Signings for AB-Access Wireless Broadband Product Exceed $1 Billion
SUNNYVALE, Calif.--(BUSINESS WIRE)--April 27, 2000--Adaptive Broadband(TM) Corporation (Nasdaq National Market: ADAP - news) reported today results for its fiscal year 2000 third quarter, ended March 31, 2000. The company reported revenue of $8.3 million, up 278% from the $2.2 million reported for the second quarter. New orders booked for AB-Access(TM) during the quarter increased 39% from the second quarter and totaled a record $27.3 million; backlog at March 31 was $47.9 million. On a sequential basis, orders were $12.5 million and $19.7 million for the first and second quarters, respectively.
The company reported a loss from continuing operations, which reflects solely the results of the AB-Access wireless broadband business, of $8.0 million, or $.23 per share. The loss per share includes $2.2 million of pre-tax nonrecurring charges relating to realignment of the company's resources driven by the divestiture of the company's legacy businesses. Excluding the nonrecurring charges in connection with changes in certain compensation plans and relocation/recruiting costs for a number of AB-Access employees, necessary due to the reduced total employment levels in the company and expected transfer of certain facilities in the divestiture process, the results were a loss of $.19 per share. The loss is attributable to the company's investments in research and development, as well as sales and marketing of the AB-Access technology and product offerings. The company intends to continue its investments in AB-Access in order to maintain its market leadership position.
For the nine-month period ended March 31, 2000, Adaptive Broadband reported a loss from continuing operations of $19.0 million, or $.59 per share, on revenue of $11.6 million. Per share numbers for the first two quarters of fiscal year 2000 have been restated to reflect a 2-for-1 stock split in the form of a stock dividend distributed March 30, 2000. New orders booked for the period totaled $59.5 million. AB-Access has generated $1.2 billion of contracted five-year demand since inception.
AB-Access commenced shipping during Adaptive Broadband's first quarter of fiscal year 2000 ended September 30, 1999, and as such reported no revenue for comparison purposes during the third quarter of last year. The company incurred a loss from continuing operations of $4.0 million, or $.13 per share, for last year's third quarter.
Adaptive Broadband announced on January 27, 2000, its intent to divest its legacy businesses in order to focus on the high-growth wireless broadband access market. The satellite communications, video broadcast and data radio businesses are included in discontinued operations in the company's financial statements.
Fundamentals Strong; Executing for Profitability in FY2001
``We are on track with the initiatives we have set for the company to generate revenue momentum, meet our gross margin goals and achieve profitability in our fiscal year 2001. Customer demand is high for our AB-Access wireless broadband solution, production continues to ramp and implementation of our product cost-reduction ASIC chip is in process. We expect the ASIC units to commence volume shipping in the September quarter, which is key to our profitability. The businesses we are divesting have drawn significant interest, and we should be able to close transactions this summer, as expected,'' commented Donna S. Birks, Adaptive Broadband's executive vice president and chief financial officer.
AB-Access(TM) Contract Signings of $1.2 billion Validates
Market/Customer Acceptance
``Over a billion dollars in contract demand for AB-Access confirms that our strategic focus is right on, our technology is leading edge, and our product platform is solid. We are exceeding customer expectations for a high-speed, low-cost wireless broadband solution for a robust, emerging market around the world. AB-Access continues to attract customers who recognize the first-to-market advantages to be gained by the deployment of our product and who understand the potential for a fast return on their investment. Businesses relying on e-commerce now or in the future appreciate the two-way ultra high data rates provided by AB-Access, unavailable with other wireless broadband solutions. We will continue to vigorously protect our market share lead with both product enhancements and cost reductions,'' stated Frederick D. Lawrence, Adaptive Broadband's chairman and chief executive officer.
About AB-Access
The AB-Access fixed wireless broadband product bridges the last mile, replacing the local loop for business and residential subscribers. It offers data transmission at rates up to 25 Mbps, which provides the capability for real-time video conferencing, transmission of full streaming video, web surfing, and transmission of data files -- all simultaneously and over one connection. Product bandwidth is planned to expand to 100 Mbps in 2000.
AB-Access technology spans the frequency range from 2 to 42 GHz. The first releases for AB-Access are for applications using the 5 GHz U-NII (Unlicensed National Information Infrastructure) and 2.5 GHz MMDS (Multi-channel, Multi-point Distribution Service) frequency bands. Adaptive Broadband recently announced a 27.5-31.3 GHZ LMDS (Local Multipoint Distribution Service) version of AB-Access(TM). The Company plans to introduce an AB-Access product for the 3.5 GHz market in Europe in 2000.
Point-to multipoint wireless networks being deployed with AB-Access include transmission hubs that contain six transmitter/receivers, each having 60-degree access points for complete 360-degree coverage. These access points are each serviced by an Asynchronous Transfer Mode (ATM)-configured transceiver with a 25 Mbps channel, which can be shared by service users because bandwidth is dynamically assigned. This scheduling is made possible by the product's proprietary MAC (media access control) layer, as well as by ATM's small fixed cell length. The technology allows bandwidth to be supplied with cell-by-cell precision, essentially providing packet-on-demand capability. The ultimate result is that bandwidth of up to 25 Mbps is readily available to all users on the network.
About Adaptive Broadband
Adaptive Broadband (www.adaptivebroadband.com) is a data networking solutions company that is developing leading-edge technology for the deployment of broadband wireless communication over the Internet. Its AB-Access product is a leading commercial choice for fixed broadband wireless communication.
The foregoing includes forward-looking statements, such as the company's planned product developments, results of divestitures, gross margin goals and profitable operations that involve risks and uncertainties. Actual events or results may differ materially from those suggested by the forward-looking statement. Factors that could cause actual events or results to differ materially include, but are not limited to, fluctuations in quarterly results, delays in receipt of orders or in the shipment of products, delays in product cost reductions, changes in evolving telecommunications and Internet markets and challenges in implementing the company's plan to divest its legacy businesses. For a more detailed discussion of some of these and other factors, see ``Risk Factors'' contained in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 1999.
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ADAPTIVE BROADBAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, 2000 March 31, 2000
------------------ ------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenue $ 8,304 $ -- $ 11,604 $ --
Costs of revenue 8,253 -- 12,028 --
-------- -------- -------- --------
Gross margin 51 -- (424) --
Expenses
Research and development 5,483 1,610 11,210 3,044
Sales, marketing and
administration 7,301 3,164 17,176 8,744
Amortization of intangible
assets 106 75 255 200
Purchased in-process
research and development -- -- -- 8,210
-------- -------- -------- --------
Total expenses 12,890 4,849 28,641 20,198
-------- -------- -------- --------
Operating loss (12,839) (4,849) (29,065) (20,198)
Interest income (expense), net 381 (1,368) 412 (3,345)
Premium on conversion of notes -- -- (1,093) --
-------- -------- -------- --------
Loss from continuing operations
before income taxes (12,458) (6,217) (29,746) (23,543)
Benefit from income taxes (4,485) (2,239) (10,709) (6,502)
-------- -------- -------- --------
Loss from continuing operations (7,973) (3,978) (19,037) (17,041)
Discontinued operations
Income (loss) from discontinued
operations, net of income
taxes -- (3,532) 4,097 (3,956)
-------- -------- -------- --------
Net loss $ (7,973) $ (7,510) $(14,940) $(20,997)
======== ======== ======== ========
Basic and diluted earnings
(loss) per share
Loss from continuing
operations $ (0.23) $ (0.13) $ (0.59) $ (0.57)
Income (loss) from
discontinued operations -- (0.12) 0.13 (0.13)
-------- -------- -------- --------
Net Loss $ (0.23) $ (0.25) $ (0.47) $ (0.70)
======== ======== ======== ========
Weighted average common shares
used in computing basic
and diluted earnings (loss)
per share 34,914 29,558 32,082 29,906
ADAPTIVE BROADBAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
March 31, 2000 June 30, 1999
-------------- -------------
Assets
Current assets
Cash and short-term investments $ 50,002 $ 48,887
Accounts receivable, net 5,848 --
Inventories 9,753 1,116
Deferred income taxes 26,503 14,293
Prepaid expenses and other current
assets 3,967 2,938
Net current assets of discontinued
operations 58,113 42,057
--------- ---------
Total current assets 154,186 109,291
--------- ---------
Property, plant and equipment, net 7,437 3,088
Deferred income taxes -- 3,805
Intangible assets, net 3,049 2,054
Other assets 3,613 3,017
Net long-term assets of discontinued
operations 48,950 50,078
--------- ---------
$ 217,235 $ 171,333
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 12,069 $ 2,132
Accrued liabilities 39,388 25,118
--------- ---------
Total current liabilities 51,457 27,250
--------- ---------
Convertible subordinated notes -- 57,500
Other long-term liabilities 350 1,590
Shareholders' equity
Common stock 3,250 1,663
Capital in excess of par value 151,939 95,673
Treasury stock -- (36,066)
Retained earnings 10,239 23,723
--------- ---------
Total shareholders' equity 165,428 84,993
--------- ---------
$ 217,235 $ 171,333
========= =========
ADAPTIVE BROADBAND CORPORATION
SUPPLEMENTAL INFORMATION
Continuing Operations
(Dollars in Millions)
Fiscal 2000 Fiscal 1999
Q1 Q2 Q3 9M YTD Q3 9M YTD
-------------------------- --------------
BOOKINGS $12.5 19.7 27.3 59.5 0.0 0.0
BOOKING MIX
International 0% 0% 11% 6%
Domestic 100% 100% 89% 94%
Total 100% 100% 100% 100%
BOOK-TO-BILL 1138% 896% 329% 513% N/A N/A
BACKLOG 11.4 28.9 47.9 0.0
REVENUE 1.1 2.2 8.3 11.6 0.0 0.0
REVENUE MIX
International 0% 0% 6% 4%
Domestic 100% 100% 94% 96%
Total 100% 100% 100% 100%
GROSS MARGIN % -24% -9% 1% -4% N/A N/A
--------------------------------------------------------------------------------
Contact:
Adaptive Broadband
Stephanie M. Day, 408/743-3429
sday@adaptivebroadband.com
Investor Information Line, 888/225-6789 (Toll-free)
adaptivebroadband.com |
