EX-99.1 2 ex99-1.htm PRESS RELEASE Press Release
Exhibit 99.1

 
For Further Information Contact:
David Renauld
Vice President, Corporate Affairs
(413) 584-1425


FOR IMMEDIATE RELEASE


TERABEAM ANNOUNCES
FOURTH QUARTER AND FULL YEAR 2005 FINANCIAL RESULTS

Company Returns to Profitability and Increases Cash approximately $5.4 Million

San Jose, CA, February 28, 2006 - Terabeam, Inc. (NASDAQ:TRBM), a leading developer and supplier of broadband wireless solutions, today reported its unaudited financial results for the fourth quarter and year ended December 31, 2005.

Revenue for the quarter ended December 31, 2005 was slightly more than $27.0 million, an increase of approximately 369% from the revenue of $5.8 million for the quarter ended December 31, 2004 and an increase of approximately 49% from the revenue of $18.1 million for the quarter ended September 30, 2005. Revenue for the year ended December 31, 2005 was $59.0 million, an increase of approximately 158% from the revenue of $22.9 million for the year ended December 31, 2004.

Operating income for the quarter ended December 31, 2005 was $657,000 compared to an operating loss of $1.6 million for the quarter ended December 31, 2004 and an operating loss of $10.0 million for the quarter ended September 30, 2005. Net income for the quarter ended December 31, 2005 was $811,000 ($0.04 per share-diluted) compared to net income of $2.3 million ($0.10 per share-diluted) for the quarter ended December 31, 2004 and net loss of $10.0 million ($0.47 per share-diluted) for the quarter ended September 30, 2005. The net income for the quarter ended December 31, 2004 included a one-time gain of approximately $3.9 million on the sale of the Phazar Corp common stock previously owned by Terabeam. The operating and net losses for the quarter ended September 30, 2005 included substantial restructuring provisions and charges as a result of the purchase of the operations of Proxim Corporation by Terabeam in July 2005.

The net loss for the year ended December 31, 2005 was $11.2 million ($0.51 per share-diluted), including the previously discussed restructuring provisions and charges as a result of the purchase of the operations of Proxim Corporation, compared to a net loss of $1.3 million ($0.07 per share-diluted), including the previously discussed one-time gain of $3.9 million, for the year ended December 31, 2004.

Total assets as of December 31, 2005 were $74.8 million, a decrease of approximately 3% from the total assets of $77.3 million as of December 31, 2004. Total liabilities as of

Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
Page 2



December 31, 2005 were $22.0 million, an increase of approximately 95% from the total liabilities of $11.3 million as of December 31, 2004. Total stockholders’ equity as of December 31, 2005 was $52.7 million, a decrease of approximately 20% from the total stockholders’ equity of $66.0 million as of December 31, 2004.

Shares outstanding as of December 31, 2005 were 21,446,217, a decrease of approximately 4% from 22,345,847 shares outstanding as of December 31, 2004.

Robert Fitzgerald, Terabeam’s Chief Executive Officer, stated, “The fourth quarter 2005 was a great quarter for Terabeam and puts us in a great position for 2006. In addition to stabilizing our internal and external operations, we have moved significant product developments forward and expect to introduce exciting and competitive products in the upcoming months.”

Conference Call Information

Terabeam will host a conference call to discuss this release, financial results, developments at the company, and other matters of interest to investors and others on February 28, 2006 starting at 5:00 p.m. Eastern Time. The discussion may include forward-looking information.

To participate in this conference call, please dial 800-967-7140 (or 719-457-2629 for international callers), confirmation code 9334824 for all callers, at least ten minutes before start time. The conference call will also be broadcast live over the Internet. Investors and others are invited to visit Terabeam’s website at http://www.terabeam.com to access this broadcast. Replays will be available telephonically for approximately one week by dialing 888-203-1112 for domestic callers and 719-457-0820 for international callers, confirmation code 9334824 for all callers, and over the Internet for approximately 90 days at Terabeam’s website at http://www.terabeam.com.

About Terabeam
Terabeam, Inc. has two primary subsidiaries Proxim Wireless Corporation and Ricochet Networks, Inc. Proxim Wireless Corporation is a global leader in providing Wi-Fi and other broadband wireless solutions to meet the performance, scalability, and security requirements of enterprises, government, and service providers. Ricochet Networks, Inc. is a leading portable Wireless Internet Service Provider (WISP) with operational markets in Denver and Aurora, Colorado and San Diego, California. Additional information about the company can be found at the company's website located at http://www.terabeam.com or by contacting the company by telephone at 413-584-1425 or by email at IR@terabeam.com.

Safe Harbor Statement
Statements in this press release that are not statements of historical facts are forward-looking statements that involve risks, uncertainties, and assumptions. Terabeam’s actual results may differ materially from the results anticipated in these forward-looking statements. The forward-looking statements involve risks and uncertainties that could contribute to such differences including those relating to and arising from the ongoing uncertainty in the telecommunications industry and larger economy; the intense competition in our industries and resulting impacts on our pricing, gross margins, and general financial performance; difficulties or delays in developing and supplying new products with the contemplated or desired features, performance, compliances, certifications, cost, price, and other characteristics; the difficulties in predicting Terabeam’s future financial performance; Terabeam’s recent

Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
Page 3



acquisition of Proxim Corporation’s operations, assets, and relationships; and the impacts and effects of any other strategic transactions Terabeam may evaluate or consummate. Further information on these and other factors that could affect Terabeam’s actual results is and will be included in filings made by Terabeam from time to time with the Securities and Exchange Commission and in its other public statements.

- Financial Tables Follow -


Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
Page 4




TERABEAM, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
  
December 31,
  
December 31,
  
   
2005
  
2004
  
Assets
    
(unaudited
)
      
Current assets:
              
Cash and cash equivalents
 
$
14,133
  
$
35,368
  
Investment securities - available-for-sale
   
260
    
5,369
  
Accounts receivable, net
   
8,378
    
2,972
  
Refundable income taxes
   
-
    
151
  
Inventory
   
10,070
    
7,442
  
Prepaid expenses
   
1,322
   
253
  
Total current assets
   
34,163
    
51,555
  
Property and equipment, net
   
3,924
    
2,511
  
Other Assets:
              
Restricted cash
   
5,076
    
5,136
  
Goodwill
   
7,380
    
6,072
  
Intangible assets, net
   
23,817
    
11,919
  
Deposits
   
398
    
91
  
Total other assets
   
36,671
    
23,218
  
Total assets
 
$
74,758
  
$
77,284
  
Liabilities and Stockholders’ Equity
              
Current liabilities:
              
Accounts payable and accrued expenses
 
$
15,569
  
$
6,965
  
Deferred revenue
   
2,503
    
159
  
License agreement payable - current maturities
    
981
    
-
  
Current maturities of notes payable - other current liabilities
    
31
    
2,899
  
Total current liabilities
   
19,084
    
10,023
  
License agreement payable, net of current maturities
    
2,956
        
Notes payable, net of current maturities
   
-
    
1,270
  
Total liabilities
   
22,040
    
11,293
  
Commitments and contingencies
              
Stockholders’ Equity
              
Preferred stock, $0.01 par value; authorized 4,500,000, none issued at December 31, 2005 and December 31, 2004
   
-
    
-
  
Common stock, $0.01 par value, 100,000,000 shares authorized, 21,446,217 issued and outstanding at December 31, 2005 and 22,845,847 issued with 22,345,847 outstanding at December 31, 2004
   
214
   
228
 
Additional paid-in capital
   
56,638
   
59,637
 
Retained earnings
   
(4,122
)
  
7,277
 
Treasury stock
   
-
    
(1,155
)
Accumulated other comprehensive income:
              
Net unrealized gain (loss) on available-for-sale securities
   
(12
)
  
4
 
Total stockholders’ equity
   
52,718
    
65,991
  
Total liabilities and stockholders’ equity
 
$
74,758
  
$
77,284
  

Terabeam Announces Fourth Quarter and
Full Year 2005 Financial Results
February 28, 2006
Page 5




TERABEAM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
   
   
For the Three Months Ended
December 31, 
  
For the Year Ended
December 31, 
  
   
2005
(unaudited)
  
2004
(unaudited)
  
2005
(unaudited)
  
2004
  
Revenues
 
$
27,073
  
$
5,777
  
$
58,982
  
$
22,897
  
Cost of goods sold
   
14,421
    
2,988
    
31,930
    
13,414
  
Restructuring provision for excess and obsolete inventory
    
-
    
-
    
2,143
    
-
  
Gross profit
   
12,652
    
2,789
    
24,909
    
9,483
  
Operating expenses:
                          
Selling costs
   
3,958
    
758
    
9,789
    
2,557
  
Restructuring charges
    
-
    
-
    
944
    
-
  
Restructuring charge for impairment of intangible assets
    
-
    
-
    
4,664
    
-
  
Impairment of service reporting unit goodwill
    
200
    
-
    
200
    
-
  
General and administrative
   
4,275
    
2,688
    
12,902
    
9,976
  
Research and development
   
3,562
    
911
    
8,000
    
2,949
  
Total operating expenses
   
11,995
    
4,357
    
36,499
    
15,482
  
Operating income (loss)
   
657
   
(1,568
)
  
(11,590
)
  
(5,999
)
Other income (expenses):
                          
Interest income
   
83
   
400
   
695
   
810
 
Interest expense
   
(21
)
  
(70
)
  
(161
)
  
(209
)
Gain on sale of Phazar stock
    
-
   
3,882
   
-
   
3,882
 
Other income (expense)
   
87
   
(341
)
  
(19
)
  
168
 
Total other income (expenses)
   
149
   
3,871
   
515
   
4,651
 
Income (loss) before income taxes
   
806
   
2,303
   
(11,075
)
  
(1,348
)
Benefit (provision) for income taxes
   
5
   
4
   
16
   
2
 
Income (loss) before minority interest
    
811
   
2,307
   
(11,059
)
  
(1,346
)
Minority interest in net income of Merry Fields
    
-
   
-
   
(101
)
  
-
 
Net income (loss)
  
$
811
  
$
2,307
    
($11,160
)
  
($1,346
)
                   
Weighted average shares - basic
   
21,414
    
22,784
    
21,801
    
19,792
  
Earnings (loss) per share - basic
 
$
0.04
  
$
0.10
    
($0.51
)
  
($0.07
)
                           
Weighted average shares - diluted
    
21,589
    
23,213
    
21,801
    
19,792
  
Earnings (loss) per share - diluted
  
$
0.04
  
$
0.10
    
($0.51
)
  
($0.07
)