-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HAUCZSibrSJkIy7ZzTklTFs5PcngLU6oOm/RAtnTyDfrE/2l/64l/70yllug7SlA XoeZoAb+9AUSZAqCzY06qg== 0001012870-99-000250.txt : 19990201 0001012870-99-000250.hdr.sgml : 19990201 ACCESSION NUMBER: 0001012870-99-000250 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990128 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: P COM INC CENTRAL INDEX KEY: 0000935493 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 770289371 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25356 FILM NUMBER: 99515943 BUSINESS ADDRESS: STREET 1: 3175 S WINCHESTER BLVD CITY: CAMPBELL STATE: CA ZIP: 95008 BUSINESS PHONE: 4088663666 MAIL ADDRESS: STREET 1: 3175 S WINCHESTER BLVD STREET 2: P-COM INC CITY: CAMPBELL STATE: CA ZIP: 95008 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 28, 1999 ---------------- P-COM, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 0-25356 77-0289371 - ------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3175 S. Winchester Boulevard, Campbell, California 95008 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (408) 866-3666 -------------- None - ------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events. ------------ In a press release disseminated on January 28, 1999, the Registrant publicly announced its earnings for the fourth quarter and twelve months ended December 31, 1998. A copy of the press release is attached hereto and incorporated herein by reference. Statements in this report that are forward looking involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this release. Such factors may include, but are not limited to, reliance upon subcontractors, fluctuations in customer demand and commitments, both in timing and volume, introduction of new products, commercial acceptance and viability of new products and expenses associated therewith, cancellations of orders without penalties, pricing and competition, the Company's ability to have available an appropriate amount of production capacity in a timely manner, the ability of the Company's customers to finance their purchases of the Company's products and/or services, the timing of new technology and product introductions, the risk of early obsolescence, accounting for adjustments for the Cylink Acquisition and the pending stockholder class action lawsuits. In addition, actual 1998 annual and fourth quarter results and previously reported results for such prior periods may differ or change materially due to potential prior period adjustments and such related restatements required by the SEC in response to its new guidelines or made on the advice of the Company's independent accountants. Similarly, results for future periods may be impacted by these potential adjustments and related restatement. Further, the Company operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond the Company's control, such as announcements by competitors and service providers. Reference is made to the discussion of risk factors detailed in the Company's filings with the Securities and Exchange Commission, including its reports on Form 10-K and 10-Q. Item 7. Financial Statement and Exhibits. -------------------------------- A copy of the Registrant's press release announcing its earnings for the fourth quarter and twelve months ended December 31, 1998 is attached hereto as an exhibit. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. P-COM, INC. DATE: January 28, 1999 By: /s/ Michael J. Sophie ------------------------------------- Name: Michael J. Sophie Title: Chief Financial Officer EXHIBIT INDEX Exhibit - ------- 99.1 Press Release disseminated January 28, 1999 EX-99.1 2 PRESS RELEASE DISSEMINATED JANUARY 28, 1999 Exhibit 99.1 FOR IMMEDIATE RELEASE Page 1 of 5 COMPANY CONTACT: Michael Sophie Chief Financial Officer (408) 866-3666 P-COM, INC. ANNOUNCES PRELIMINARY NET SALES AND NET LOSS FOR FOURTH QUARTER OF 1998 AND FISCAL YEAR ________________________________________________________________________________ CAMPBELL, CA, USA (January 28, 1999) -- P-Com, Inc. (NASDAQ National Market: PCMS), reported preliminary results for its fourth quarter ended December 31, 1998 with net sales of $42.6 million, an increase of 41% over net sales of $30.2 for the third quarter of 1998, compared to a 34% decrease from $64.2 million in net sales for the fourth quarter of 1997. For the twelve months ended December 31, 1998, net sales were $194.9 million, a 12% decrease over the $220.7 million in net sales for the same period in 1997. Based on guidelines recently published by the Securities and Exchange Commission, the Company is in the process of re-evaluating its first quarter 1998 in-process research and development ("IPR&D") charge taken in connection with its acquisition of Cylink Corporation's Wireless Communications Group. Although the first quarter results, including an IPR&D charge, were reported in accordance with then established accounting practice and the valuation provided by the Company's independent appraiser, the Company is evaluating this charge and responding to new guidance from the Securities and Exchange Commission regarding in-process research and development changes. As a result, the Company will restate its first quarter 1998 results of operations by decreasing the IPR&D charge which would result in an increase to earnings in the first quarter and fiscal year of 1998 and an increase in goodwill which the Company expects to amortize over ten years. Before giving effect to any revisions to such IPR&D charge that the Company is currently evaluating, the Company's net loss was $6.8 million for the fourth quarter of 1998 compared to net income of $8.1 million for the comparable period last year. Prior to any such revision, the net loss applicable to holders of common stock was $8.6 million or $0.20 diluted per share with weighted average common and common equivalent shares of 43.5 million in the fourth quarter of 1998 compared to a diluted net income per share of $0.18 with weighted average common and common equivalent shares of 46.9 million for the prior year's fourth quarter. --more-- Page 2 of 5 P-COM, INC. ANNOUNCES NET SALES AND NET LOSS FOR FOURTH QUARTER OF 1998 AND FISCAL YEAR ________________________________________________________________________________ Before giving effect to any revisions to such IPR&D charge that the Company is currently evaluating, the Company's net loss was $65.8 million and the net loss applicable to holders of common stock was $67.6 million for the year ended December 31, 1998. These losses included the original $33.9 million IPR&D charge taken in the first quarter of 1998 associated with the acquisition of Cylink Corporation's Wireless Communications Group and the restructuring and other charges of $26.6 million taken in the third quarter of 1998 and are net of an extraordinary after tax gain from the extinguishment of certain long-term debt of $4.3 million. This compares to net income of $18.9 million for the comparable twelve-month period last year. Prior to any such revision, the basic and diluted net loss attributable to holders common stock of $1.56 per share with weighted average common shares of 43.3 million in the year ended December 31, 1998 compares to diluted net income per share of $0.43 with weighted average common and common equivalent shares of 44.6 million for the prior year. Separately, during the quarter, the Company raised $15 million from three investors through the issuance of preferred stock and warrants. In addition, in the fourth quarter, the Company exchanged $14.4 million principal amount of its Convertible Subordinated Notes for 2,467,000 shares of Common Stock. This exchange resulted in an extraordinary after tax gain of $4.3 million, which is included in the preliminary results referred to above. P-Com's Chairman and Chief Executive Officer George P. Roberts said, "Significant progress was made during the quarter with our new product development as evidenced by the successful trial of our point-to-multipoint equipment with Siemens and WinStar. In addition to our progress in new products, our sales efforts with existing customers and in new geographic areas has resulted in a year-end backlog of approximately $75.2 million." Michael J. Sophie, Chief Financial Officer and Vice President, Finance added, "We are pleased with our progress in increasing revenues, reducing expenses and strengthening of the balance sheet as compared with our third quarter." Once the Company has finalized its revisions to such IPR&D charge, the Company will publish its net sales and net income for the fourth quarter of 1998 and fiscal year and restate its first quarter 1998 operating results. --more-- Page 3 of 5 P-COM, INC. ANNOUNCES NET SALES AND NET LOSS FOR FOURTH QUARTER OF 1998 AND FISCAL YEAR ________________________________________________________________________________ P-Com, Inc. develops, manufactures and markets network access systems for the worldwide wireless telecommunications market. The point-to-point, spread spectrum, and point-to-multipoint radio links provided by P-Com are designed to satisfy the network requirements of cellular and personal communications services, corporate communications, public utilities and local governments. In addition, P-Com provides comprehensive network services, including system and program planning and management, path design and installation. Statements in this release that are forward looking involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this release. Such factors may include, but are not limited to, reliance upon subcontractors, fluctuations in customer demand and commitments, both in timing and volume, introduction of new products, commercial acceptance and viability of new products and expenses associated therewith, cancellations of orders without penalties, pricing and competition, the Company's ability to have available an appropriate amount of production capacity in a timely manner, the ability of the Company's customers to finance their purchases of the Company's products and/or services, the timing of new technology and product introductions, the risk of early obsolescence, accounting for adjustments for the Cylink Acquisition and the pending stockholder class action lawsuits. In addition, actual 1998 annual and fourth quarter results and previously reported results for such prior periods may differ or change materially due to potential prior period adjustments and such related restatements required by the SEC in response to its new guidelines or made on the advice of the Company's independent accountants. Similarly, results for future periods may be impacted by these potential adjustments and related restatement. Further, the Company operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond the Company's control, such as announcements by competitors and service providers. Reference is made to the discussion of risk factors detailed in the Company's filings with the Securities and Exchange Commission, including its reports on Form 10-K and 10-Q. P-Com, Inc., with world headquarters in Campbell, California, USA and offices in Florida, New Jersey, Virginia, the UK, Italy, France, Germany, Poland, Mexico, and China, is an ISO 9001 certified company. For additional information, contact P-Com at: P-Com, Inc. . 3175 S. Winchester Boulevard . Campbell, CA 95008 . USA TEL: (408) 866-3666 . FAX: (408) 866-3655 --more-- Page 4 of 5 P-COM, INC. CONDENSED PRELIMINARY CONSOLIDATED BALANCE SHEETS (In thousands, unaudited)
December 31, 1998 1997 ---------------- ---------------- ASSETS Current assets: Cash and cash equivalents $ 29,241 $ 88,145 Accounts receivable, net 50,533 70,883 Notes receivable 264 205 Inventories 79,026 58,003 Prepaid expenses and other assets 19,545 12,329 ---------------- ---------------- Total currents assets 178,609 229,565 Property and equipment, net 52,086 32,313 Deferred income taxes 17,224 1,697 Goodwill and other assets 55,954 41,946 ---------------- ---------------- $ 303,873 $ 305,521 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 39,618 $ 38,043 Accrued employee benefits 3,345 3,930 Other accrued liabilities 10,318 6,255 Income taxes payable -- 6,409 Notes payable 46,360 293 ---------------- ---------------- Total current liabilities 99,641 54,930 ---------------- ---------------- Long-term debt 92,769 101,690 ---------------- ---------------- Minority interest -- 604 ---------------- ---------------- Mandatorily redeemable preferred stock 13,559 -- ---------------- ---------------- Mandatorily redeemable common stock warrants 1,839 -- ---------------- ---------------- Stockholders' equity: Common stock 5 4 Additional paid-in capital 145,246 131,735 Retained earnings (deficit) (49,268) 18,380 Cumulative translation adjustment 82 (1,822) ---------------- ---------------- Total stockholders' equity 96,065 148,297 ---------------- ---------------- $ 303,873 $ 305,521 ================ ================
--more-- Page 5 of 5 P-COM, INC. CONDENSED PRELIMINARY CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data, unaudited)
Three Months Ended Year Ended ---------------------------------- ---------------------------------- Dec 31, 1998 Dec 31, 1997 Dec 31, 1998 Dec 31, 1997 ---------------- ---------------- ---------------- ---------------- Sales $ 42,608 $ 64,226 $ 194,944 $ 220,702 Cost of Sales 30,322 36,334 144,275 129,235 ---------------- ---------------- ---------------- ---------------- Gross profit 12,286 27,892 50,669 91,467 ---------------- ---------------- ---------------- ---------------- Operating expenses: Research and development 11,548 8,221 41,473 29,127 Selling and marketing 5,069 4,703 22,020 15,696 General and administrative 5,295 2,604 24,965 14,539 Goodwill amortization 1,242 661 4,169 2,409 Restructuring and other one-time charges -- -- 4,332 -- Acquired in-process research and development expenses -- -- 33,856 -- ---------------- ---------------- ---------------- ---------------- Total operating expenses 23,154 16,189 130,815 61,771 ---------------- ---------------- ---------------- ---------------- Income (loss) from operations (10,868) 11,703 (80,146) 29,696 Interest and other income (expense), net (2,945) 517 (7,903) 247 ---------------- ---------------- ---------------- ---------------- Income (loss) before extraordinary item and income taxes (13,813) 12,220 (88,049) 29,943 Provision (benefit) for income taxes (2,763) 4,155 (17,974) 11,052 ---------------- ---------------- ---------------- ---------------- Income (loss) before extraordinary item (11,050) 8,065 (70,075) 18,891 ---------------- ---------------- ---------------- ---------------- Extraordinary item, net of income taxes 4,266 -- 4,266 -- ---------------- ---------------- ---------------- ---------------- Net income (loss) (6,784) 8,065 (65,809) 18,891 ---------------- ---------------- ---------------- ---------------- Charge related to preferred stock discount (1,839) -- (1,839) -- ---------------- ---------------- ---------------- ---------------- Net loss applicable to common stock holders $ (8,623) $ 8,065 $ (67,648) $ 18,891 ================ ================ ================ ================ Net income (loss) per share: Basic $ (0.20) $ 0.19 $ (1.56) $ 0.45 ================ ================ ================ ================ Diluted $ (0.20) $ 0.18 $ (1.56) $ 0.43 ================ ================ ================ ================ Shares used in per share computation: Basic 43,465 42,793 43,254 42,175 ================ ================ ================ ================ Diluted 43,465 46,889 43,254 44,570 ================ ================ ================ ================
### -----END PRIVACY-ENHANCED MESSAGE-----