Eagle Broadband Reports Third Quarter 2005 Results
12 July 2005 - 7:00AM
Business Wire
Company Achieves Sequential Quarterly Revenue Growth of 11%,
Appoints New CEO & Implements Comprehensive Restructuring to
Cut Costs and Renew Focus on Revenue Growth Eagle Broadband, Inc.
(AMEX:EAG), a leading provider of broadband, Internet Protocol (IP)
and communications technology and services, today announced
financial results for its fiscal 2005 third quarter ended May 31,
2005. Total revenues in the third quarter were $2.97 million, a
sequential increase of 11% as compared to $2.68 million in the
second quarter and a decrease of 42% compared to revenues of $5.09
million in the same period a year ago. The decrease in revenues was
primarily attributable to a decrease in product sales offset by an
increase in broadband and managed services. The company posted a
net loss of $3.95 million, an improvement of 58% compared to a net
loss of $9.33 million in the second quarter and an improvement of
10% compared to a net loss of $4.38 million in the same period a
year ago. The net loss was primarily attributable to approximately
$805,000 in depreciation and amortization expenses, $1,787,000 in
professional services fees (including legal, corporate compliance,
consulting, etc.), $1,194,000 in salary and related expenses and
$755,000 in taxes. Dave Micek, President and CEO of Eagle Broadband
said, "When I took over as CEO in mid-April, I quickly moved to
restructure the company to reduce costs, implemented a new
organizational structure to focus resources on the highest growth
market opportunities and hired additional sales talent to
accelerate our revenue growth. Although we are just starting to
realize the benefits of these changes, we achieved sequential
quarterly revenue growth of 11%, reduced our net loss by 58% and
10% on a sequential and year over year basis respectively,
increased gross profits and reduced both operating expenses and
debt." Micek continued, "We also signed some important new
customers including Home Town Cable and, after quarter end, All
Access Technologies. These two customers represent as many as
50,000 potential subscribers for our IPTVComplete service. In
addition, we signed Norfolk Southern Corporation as our first
commercial SatMAX customer validating the value the technology can
bring to the lucrative corporate market. Interest in our MediaPro
set top boxes from leading hospitality systems providers continues
to grow as evidenced by On Command Video Corporation's use of our
high definition MediaPro set top box to demonstrate their newly
announced high definition in-room entertainment system at the
leading hospitality industry technology conference. I intend to
continue to focus our resources on these high growth market and
revenue opportunities, to execute with excellence and drive toward
profitability in order to maximize shareholder value for all Eagle
investors." Summary of financial and operational highlights in the
2005 third quarter include: -- David Micek appointed as the
company's new President and CEO. -- Implemented company-wide
restructuring to reduce costs and accelerate revenue growth. --
Hired Marc Surette as new Vice President, Satellite Communications
Sales and Albert McCabe as Vice President, Set Top Box Sales. --
Achieved 11% sequential quarter-over-quarter revenue growth (Q3 '05
compared to Q2 '05). -- Reduced net loss by $5.4M or 58% on a
sequential basis and $0.4M or 10% on a year-over-year basis to
$3.95 million. -- Increased gross profit to $593K from a negative
$960K in the preceding quarter. -- Reduced operating expenses by
$2.3 million or 29% in Q3 '05 from Q2 '05. -- Reduced debt to $0.6M
from $1.9M in the preceding quarter and $5.6M in the
year-ago-quarter. -- Completed an additional $2 million
equity-based financing round. -- Signed Home Town Cable as an
IPTVComplete customer. -- Subsequent to the close of the quarter,
signed All Access Technologies as an IPTVComplete customer. --
Received order from Norfolk Southern Corporation for the company's
SatMAX satellite communications technology. -- Partnered with On
Command Video Corporation to demonstrate their new, high definition
in-room entertainment system powered by Eagle's high definition
MediaPro IP set top box at HITEC conference. -- Grew the total
number of new security subscribers in Q3 '05 by 18% compared to Q2
'05. -- Managed services team expanded our relationship with
Hewlett Packard and performed structured wiring, cabling and
support services for Toshiba. About Eagle Broadband Eagle Broadband
is a leading provider of broadband, Internet Protocol (IP) and
communications technology and services that create new revenue
opportunities for broadband providers and enhance communications
for government, military and enterprise customers. Eagle leverages
years of proven experience delivering advanced, IP-based broadband
bundled services to provide service provider partners with a way to
deliver next generation entertainment, communications and security
services to their subscribers. The company's product offerings
include IPTVComplete(TM), the fastest, lowest cost way for
broadband providers to deliver the most competitive IP video
services, the MediaPro line of HDTV-ready IP set top boxes that
enable broadband providers and hotel operators to maximize revenues
by delivering state-of-the-art, interactive entertainment services
and the SatMAX(TM) satellite communications system that provides
government, military, homeland security and enterprise customers
with reliable, non-line-of-sight, voice and data communications
from any location on Earth. The company is headquartered in
Houston, Texas. For more information, please visit
www.eaglebroadband.com or call 281-538-6000. (EAGF) Forward-looking
statements in this release regarding Eagle Broadband, Inc., are
made pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that such forward-looking statements involve risks and
uncertainties, including, without limitation, continued acceptance
of the company's products, increased levels of competition, new
products and technological changes, the company's dependence upon
third-party suppliers, intellectual property rights, and other
risks detailed from time to time in the company's periodic reports
filed with the Securities and Exchange Commission.
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