YDIW Ydi Wireless (MM)

Terabeam Wireless, the business name of YDI Wireless, Inc. (NASDAQ:YDIW), a leading developer and supplier of broadband wireless solutions, today announced its financial results for its second quarter ended June 30, 2005. These financial results do not include any impact of Terabeam's acquisition of substantially all the assets of Proxim Corporation, which was completed on July 27, 2005. Revenue for the quarter ended June 30, 2005 was $7.2 million, an increase of approximately 9% from the revenue of $6.6 million for the quarter ended March 31, 2005 and an increase of approximately 51% from the revenue of $4.7 million for the quarter ended June 30, 2004. The significant increase in revenue over the prior year's comparable quarter resulted primarily from three factors: a full quarter of combined operations with the three companies Terabeam Wireless acquired in the later part of the second quarter of 2004; increased demand especially for our point-to-multipoint products, our high frequency radio products, and our component parts business; and increased demand for our software-enhanced product offerings. The net loss for the quarter ended June 30, 2005 was $987,000 ($0.04 per share-diluted) compared to net loss of $970,000 million ($0.04 per share-diluted) for the quarter ended March 31, 2005 and net loss of $1.6 million ($0.10 per share-diluted) for the quarter ended June 30, 2004. As of June 30, 2005, Terabeam Wireless had current assets of approximately $46.0 million, total liabilities of less than $9.0 million, and stockholders' equity of over $62.0 million. Robert Fitzgerald, Terabeam's Chief Executive Officer, stated, "We are pleased to announce our third consecutive quarter of sequential growth as well as growth of over 50% from a year ago. We believe that our second quarter performance provides a solid foundation for the combination of our efforts with those of the recently acquired Proxim assets. Over the last year, we have bought back over 5.7 million shares of our stock. We believe that we are well positioned to execute on the leverage provided by the Proxim acquisition and look forward to the challenge." Conference Call Information Terabeam Wireless will host a conference call to discuss this release, financial results, developments at the company (including the recent acquisition of substantially all of the assets of Proxim Corporation), and other matters of interest to investors and others on August 3, 2005 starting at 8:00 a.m. Eastern Time. The discussion may include forward-looking information. To participate in this conference call, please dial 800-967-7184 (or 719-457-2633 for international callers), confirmation code 6153410 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 Wireless' website at http://www.terabeam.com/corporate/ 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 6153410 for all callers, and over the Internet for approximately 90 days at Terabeam Wireless' website at http://www.terabeam.com/corporate/. About Terabeam Wireless Terabeam Wireless is the business name of YDI Wireless, Inc. Terabeam Wireless is a world leader in providing extended range, license-free wireless data equipment and is a leading designer of turnkey long distance wireless systems ranging from 9600 bps to 1.42 Gbps for applications such as wireless Internet, wireless video, wireless LANs, wireless WANs, wireless MANs, and wireless virtual private networks. Additional information about Terabeam Wireless as well as its complete product line 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 Wireless' 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 the downturn and ongoing uncertainty in the telecommunications industry and larger economy; the intense competition in Terabeam Wireless' industries and resulting impacts on its pricing, gross margins, and general financial performance; difficulties in predicting Terabeam Wireless' future financial performance; difficulties or delays in developing and supplying new products with the contemplated or desired features, performance, cost, price, and other characteristics; risks arising from and relating to Terabeam Wireless' recent acquisition of Proxim Corporation's operations, assets, and relationships; and the impacts and effects of any other strategic transactions we may evaluate or consummate. Further information on these and other factors that could affect Terabeam Wireless' actual results is and will be included in filings made by Terabeam Wireless from time to time with the Securities and Exchange Commission and in its other public statements. -0- *T YDI WIRELESS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) June 30, December 31, 2005 2004 ------------ ------------ (unaudited) Assets Current assets: Cash and cash equivalents $34,038 $35,368 Investment securities - available-for-sale 340 5,369 Accounts receivable, net 3,751 2,972 Refundable income taxes - 151 Inventory 7,471 7,442 Prepaid expenses 393 253 ------------ ------------ Total current assets 45,993 51,555 Property and equipment, net 2,367 2,511 Other Assets: Restricted cash 5,076 5,136 Goodwill 6,013 6,072 Intangible assets, net 11,502 11,919 Deposits 99 91 ------------ ------------ Total other assets 22,690 23,218 ------------ ------------ Total assets $71,050 $77,284 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $4,763 $6,965 Deferred revenue 148 159 Current maturities of notes payable 2,767 2,899 ------------ ------------ Total current liabilities 7,678 10,023 Notes payable, net of current maturities 1,255 1,270 ------------ ------------ Total liabilities 8,933 11,293 Commitments and contingencies Stockholders' Equity Preferred stock, $0.01 par value; authorized 4,500,000, none issued at June 30, 2005 and December 31, 2004 - - Common stock, $0.01 par value, 100,000,000 shares authorized, 21,389,287 issued and outstanding at June 30, 2005 and 22,845,847 issued with 22,345,847 outstanding at December 31, 2004 214 228 Additional paid-in capital 56,518 59,637 Retained earnings 5,319 7,277 Treasury stock - (1,155) Accumulated other comprehensive income: Net unrealized gain (loss) on available- for-sale securities 66 4 ------------ ------------ Total stockholders' equity 62,117 65,991 ------------ ------------ Total liabilities and stockholders' equity $71,050 $77,284 ============ ============ YDI WIRELESS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Revenues $7,165 $4,733 $13,762 $10,750 Cost of goods sold 3,687 3,193 7,006 6,744 ----------- ----------- ----------- ----------- Gross profit 3,478 1,540 6,756 4,006 Operating expenses: Selling costs 1,034 480 2,031 920 General and administrative 2,777 2,180 5,285 3,907 Research and development 879 477 1,650 969 ----------- ----------- ----------- ----------- Total operating expenses 4,690 3,137 8,966 5,796 ----------- ----------- ----------- ----------- Operating income (loss) (1,212) (1,597) (2,210) (1,790) Other income (expenses): Interest income 269 26 490 50 Interest expense (70) (34) (136) (63) Other income (loss) 3 - (115) 503 ----------- ----------- ----------- ----------- Total other income (expenses) 202 (8) 239 490 ----------- ----------- ----------- ----------- Income (loss) before income taxes (1,010) (1,605) (1,971) (1,300) Benefit (provision) for income taxes 23 - 14 (2) ----------- ----------- ----------- ----------- Net income (loss) $(987) $(1,605) $(1,957) $(1,302) =========== =========== =========== =========== Weighted average shares - basic and diluted 22,009,434 15,799,225 22,204,249 15,016,816 =========== =========== =========== =========== EPS, basic and diluted $(0.04) $(0.10) $(0.09) $(0.09) =========== =========== =========== =========== *T