ADAPTIVE BROADBAND REPORTS RECORD Q4
RESULTS; REVENUE MORE THAN DOUBLES AND
PRODUCTION BEGINS FOR ASIC VERSION OF
AB-ACCESS FIXED WIRELESS BROADBAND PRODUCT
BUSINESS/TECHNOLOGY EDITORS SUNNYVALE,
SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 10, 2000--ADAPTIVE
BROADBAND(TM) CORPORATION (Nasdaq National Market: ADAP.O) reported
today results for its fourth quarter and fiscal year 2000, ended June
30, 2000. The company reported revenue of $17.1 million, up 106% from
the $8.3 million reported for the third quarter. Revenue for the year
totaled $28.7 million. New orders booked for AB-Access(TM) during the
quarter increased 31% from the third quarter and totaled a record
$35.8 million; backlog at June 30 was $66.6 million. On a sequential
basis, AB-Access orders were $12.5 million, $19.7 million and $27.3
million for the first, second and third quarter respectively, or $95.3
for the year. AB-Access has generated over $1 billion of contracted
five-year demand since inception.
For the quarter, the company reported a net loss from continuing
operations, which reflect solely the results of the AB-Access wireless
broadband business, of $6.5 million, or $.17 per share. The loss is
attributable to the company's continuing investments in research and
development, as well as sales and marketing for the AB-Access
technology and product offerings. The company intends to continue its
investments in AB-Access and has introduced multiple frequencies of
the product, now offering U-NII, MMDS, 3.5 GHz and LMDS versions.
Additionally, Adaptive Broadband has made development investments in
two emerging telecommunications technology companies -- one supplies
wireless Local Area Networks and the other is focused on
infrared/laser communications technologies. In the fourth quarter, the
company ceased support of the wireless LAN initiative and wrote off
its investment in that company for a pre-tax loss of $1.8 million, or
$.03 per share. The company expects to recover the loss with an
anticipated pre-tax gain of approximately $7 to $8 million in the
first quarter of fiscal year 2001, realized via sale of its investment
in the infrared/laser communications product development company.
For its fiscal year ended June 30, Adaptive Broadband reported a
net loss from continuing operations of $23.5 million, or $.70 per
share. These results exclude the loss from the wireless LAN investment
and the one-time charges reported in the company's second and third
quarters. In the second quarter, the company paid a premium to convert
$34 million of convertible notes. In the third quarter, it incurred
non-recurring charges related to changes in certain compensation plans
and relocation/recruiting costs for a number of AB-Access employees,
that were driven by the divestitures of the remaining legacy
businesses. Per share numbers for all reporting periods of the fiscal
year have been restated to reflect a 2-for-1 stock split in the form
of a stock dividend distributed March 30, 2000.
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 fourth quarter
of last year. The company incurred a net loss from continuing
operations of $3.8 million, or $.13 per share, for last year's fourth
quarter.
Adaptive Broadband announced in January 2000 its intent to divest
its three remaining legacy businesses in order to focus on the
high-growth wireless broadband access market. In July, the company
completed the sale of EF Data, Microwave Data Systems, and Microwave
Radio Communications. The legacy businesses are included in
discontinued operations in the company's financial statements. An $8.3
million anticipated loss on the sales was recognized in the fourth
quarter. Total cash value from the three transactions, including $6
million in retained assets, totals $129 million. The company expects
to retain substantially all of the cash from the collective
transactions, as previously reported.
ASIC Units a Key to Profitability
Adaptive Broadband successfully completed the development in the
fourth quarter of its custom ASIC (Application Specific Integrated
Circuit) chip for the AB-Access product platform as anticipated. The
ASIC chip replaces four other, high-cost chips, reducing the cost of
the AB-Access product. Shipping of ASIC units in volume commenced in
the September quarter, which has kept the company on track to achieve
profitability in its fiscal year 2001. The company also was successful
in developing dual sources for the chip, which it believes will help
to ensure a secure supply chain for manufacturing of AB-Access.
Fiscal Year 2000: Commitments Made and Kept
"In 12 months, Adaptive Broadband has proven its technology
platform, achieved significant market penetration, forged alliances
with strategic partners, and attracted strong individuals to both the
management team and to our board of directors. We made these promises
a year ago and keeping them has positioned the company for
profitability and continuing growth. Demand continues to be high for
our AB-Access wireless broadband solution, as customers review their
network strategies. We have deployed, trialed or demonstrated products
in all the currently pertinent frequency bands, U-NII, MMDS, 3.5 GHz
and LMDS, offering our customers a full spectrum of solutions to meet
their requirements. AB-Access exceeds customer expectations for a
high-speed, low-cost wireless broadband solution for a market that is
emerging around the world," commented Frederick D. Lawrence, Adaptive
Broadband's chairman and chief executive officer.
Adaptive Broadband's president and chief operating officer, Daniel
L. Scharre, commented, "We have the state-of-the-art technology, we
have operational, fielded units, and we have cost leadership. As a
market leader, we cannot pause in our execution for even a moment if
we are to maintain our position. In my new role, I am dedicated to
converting our contract commitments into revenue by providing world
class service and support to our customers, maintaining our
leading-edge technical team, continually enhancing our product
offerings, expanding distribution channels and managing our supply
chain for cost reductions. I look forward to meeting these challenges
that are so key to achieving profit momentum."
Fiscal Year to Change from June 30 to December 31
At its most recent meeting, Adaptive Broadband's board of
directors approved a resolution to move the company's fiscal year-end
to December 31. "Changing our fiscal year, effective December 31,
2000, will align our reporting periods with more companies in our peer
group, making financial comparisons more readily apparent. As we move
from a concept phase into the implementation and profitable stage of
our growth, we want our shareholders to be able to focus easily on our
financial metrics in the context of our industry," commented Donna S.
Birks, Adaptive Broadband's executive vice president and chief
financial officer.
About AB-Access
The AB-Access fixed wireless broadband platform bridges the last
mile, replacing the local loop for business and residential
subscribers. Combining Quality of Service and Time Division Duplexing,
it offers data transmission at rates up to 25 Mbps -- providing 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. Currently positioned as a fixed
offering, portable versions of AB-Access are planned in 2000.
AB-Access technology spans the frequency range from 2 to 42 GHz.
While the first releases for AB-Access are for applications using the
5 GHz U-NII (Unlicensed National Information Infrastructure), 2.5 GHz
MMDS (Multi-channel, Multipoint Distribution Service) and 3.5GHz
(International WLL) products are also available. Additionally,
Adaptive Broadband recently announced an LMDS (Local Multipoint
Distribution Service) version of AB-Access.
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 platform is a leading commercial choice
for fixed broadband wireless communication.
The foregoing includes forward-looking statements, such as the
company's potential success in achieving profitability, 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
the development of telecommunications and Internet markets and delays
in product enhancements. For a more detailed discussion of these and
other factors, see "Risk Factors" contained in Adaptive Broadband's
Annual Report on Form 10-K for the fiscal year ended June 30, 1999.
Adaptive Broadband's fiscal 2000 year-end conference call will be
available on Thursday, August 10 at 2:30 PM (PDT) at
www.adaptivebroadband.com and at www.streetfusion.com. The call also
will be available on Adaptive Broadband's toll-free shareholder
information line, (888) 225-6789. Replays will be available on the Web
sites and on the information line.
-0-
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ADAPTIVE BROADBAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Fiscal Year Ended
June 30, June 30,
-------------------- --------------------
2000 1999 2000 1999
---------- -------- ---------- --------
Revenue $ 17,100 $ - $ 28,704 $ -
Costs of revenue 14,555 - 26,583 -
---------- -------- ---------- --------
Gross margin 2,545 - 2,121 -
Expenses
Research and
development 5,899 1,687 17,109 4,731
Sales, marketing and
administration 7,083 3,413 24,259 12,157
Amortization of
intangible assets 106 75 361 275
Purchased in-process
research and development - - - 8,210
---------- -------- ---------- --------
Total expenses 13,088 5,175 41,729 25,373
---------- -------- ---------- --------
Operating loss (10,543) (5,175) (39,608) (25,373)
Interest income
(expense), net 336 (689) 748 (4,034)
Premium on conversion
of notes - - (1,093) -
Write-down of investment (1,775) - (1,775) -
---------- -------- ---------- --------
Loss from continuing
operations before
income taxes (11,982) (5,864) (41,728) (29,407)
Benefit from
income taxes (4,314) (2,111) (15,023) (8,613)
---------- -------- ---------- --------
Loss from continuing
operations (7,668) (3,753) (26,705) (20,794)
Discontinued operations
Income (loss) from
discontinued operations,
net of income taxes - 89 4,097 (3,867)
Gain (loss) on disposal,
net of income taxes (8,263) 36,281 (8,263) 36,281
---------- -------- ---------- --------
(8,263) 36,370 $ (4,166) $ 32,414
---------- -------- ---------- --------
Net Income (Loss) $ (15,931) $ 32,617 $ (30,871) $ 11,620
========== ========= ========== ========
Basic and diluted
earnings (loss)
per share
Loss from continuing
operations $ (0.20) $ (0.13) $ (0.80) $ (0.70)
Income (loss) from
discontinued operations (0.22) 1.24 (0.12) 1.09
---------- -------- ---------- --------
Net Income (Loss) $ (0.43) $ 1.11 $ (0.92) $ 0.39
========== ======== ========== ========
Weighted average common
shares used in computing
basic and diluted
earnings (loss)
per share 37,451 29,374 33,424 29,774
ADAPTIVE BROADBAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)
June 30, 2000 June 30, 1999
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 16,486 $ 48,887
Accounts receivable, net 16,312 -
Inventories 14,870 1,116
Deferred income taxes 6,839 14,293
Prepaid expenses and other
current assets 2,124 2,938
Net current assets of
discontinued operations 64,259 42,057
Total current assets 120,890 109,291
Property, plant and
equipment, net 9,994 3,088
Deferred income taxes 14,235 3,805
Intangible assets, net 2,943 2,054
Other assets 3,765 3,017
Net long-termassets of
discontinued operations 47,021 50,078
$ 198,848 $ 171,333
Liabilities and
Shareholders' Equity
Current Liabilities:
Accounts payable $ 9,664 $ 2,132
Accrued liabilites 38,122 25,118
Total current liabilities 47,786 27,250
Long-term Liabilities:
Convertible subordinated notes - 57,500
Other long-term liabilities - 1,590
Shareholders' Equity:
Common stock 3,749 3,326
Capital in excess
of par value 153,060 94,010
Treasury stock - (36,066)
Retained earnings (deficit) (5,747) 23,723
Total shareholders' equity 151,062 84,993
$ 198,848 $ 171,333
ADAPTIVE BROADBAND CORPORATION
SUPPLEMENTAL INFORMATION
Continuing Operations
(Dollars in millions)
Fiscal 2000
Q1 Q2 Q3 Q4 YTD
------------------------------------
BOOKINGS $ 12.5 19.7 27.3 35.8 95.3
BOOKING MIX
International 0% 0% 11% 11% 7%
Domestic 100% 100% 89% 89% 93%
------------------------------------
Total 100% 100% 100% 100% 100%
------------------------------------
BOOK-TO-BILL 1138% 896% 329% 209% 332%
BACKLOG 11.4 28.9 47.9 66.6
REVENUE 1.1 2.2 8.3 17.1 28.7
REVENUE MIX
International 0% 0% 6% 22% 15%
Domestic 100% 100% 94% 78% 85%
----------------------------------
Total 100% 100% 100% 100% 100%
----------------------------------
GROSS MARGIN % -24% -9% 1% 15% 7%
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--30--alx/sf*
CONTACT: Adaptive Broadband Corporation
Stephanie M. Day, 408/743-3429
sday@adaptivebroadband.com
Investor Information Line: 1-888-225-6789
adaptivebroadband.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: NETWORKING TELECOMMUNICATIONS EARNINGS
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