Terabeam, Inc. (NASDAQ:TRBM), a leader in core-to-client solutions
for broadband municipal wireless networks, today announced its
financial results for the second quarter ended June 30, 2007.
Revenue for the quarter ended June 30, 2007 was $19.0 million, an
increase of 8% from the revenue of $17.7 million for the quarter
ended March 31, 2007 and a decrease of approximately 8% from the
revenue of $20.8 million for the quarter ended June 30, 2006. Gross
margins for the quarter ended June 30, 2007 were 44.4%, compared
with 44.9% in the quarter ended March 31, 2007 and 41.9% in the
quarter ended June 30, 2006. Including the sale of certain patent
assets, the net loss for the quarter ended June 30, 2007 was
$339,000, or $0.02 per share, compared to net loss of $3.0 million,
or $0.14 per share, for the quarter ended March 31, 2007 and net
loss of $3.0 million, $0.14 per share, for the quarter ended June
30, 2006. �We are pleased to report that Terabeam demonstrated
sequential revenue growth during the second quarter of 2007,� said
Robert Fitzgerald, Terabeam�s Chief Executive Officer. �We made
great strides during the second quarter and in recent weeks,
executing a number of activities that improved our focus, cost
structure and balance sheet. We expect these actions will improve
our operating results in coming quarters as we remain focused on
achieving profitability.� Cost Structure Outlook Terabeam expects
that, as a result of its improved focus, its efficiency improvement
programs and its divestiture of Ricochet, the company will realize
approximately $1 million in quarterly cost savings, effective in
the third quarter of 2007. Recent Achievements Highlights of the
company�s recent results include: Quarter-on-quarter revenue growth
of 16% in our broadband wireless access products, consisting of
Wi-Fi mesh, pre-WiMAX and WiMAX products. Completion of the sale of
two patents for $2.5 million in April. Terabeam has more than 120
additional patents remaining, which may provide future
opportunities to monetize the company�s intellectual property.
Completion of a $7.5 million private equity placement in July. Note
that this transaction closed after the end of the second quarter,
therefore its impact is not reflected in the second quarter 2007
financial statements. Completion of the sale of Ricochet Networks�
on-going business to Civitas Wireless Solutions and the shut down
of the Ricochet San Diego network in July. The divestiture of
Ricochet�s ISP operations represents an important milestone as
Terabeam can now focus on Proxim�s core-to-client broadband
wireless equipment business. As with the private placement, this
transaction closed after the end of the second quarter, therefore
its impact is not reflected in the second quarter 2007 financial
statements. Restructuring of engineering operations to shift
additional research and development activities to Hyderabad, India.
Execution of programs to reduce freight, warehousing and other
manufacturing costs. Conference Call Information Terabeam will host
a conference call to discuss the release, financial results, and
related developments at the company today, Monday, August 13, 2007,
starting at 5:00 P.M., Eastern Daylight Time. The discussion may
include forward-looking information. To participate in this
conference call, please dial 800-500-0177 (or +1-719-457-2698 for
international callers), confirmation code 4602302 for all callers,
at least ten minutes before the starting 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 +1-719-457-0820 for international callers, confirmation
code 4602302 for all callers, and over the Internet for
approximately 90 days at Terabeam�s website at
http://www.terabeam.com. About Terabeam Terabeam, Inc. is a leader
in core-to-client solutions for broadband municipal wireless
networks. The company�s business is conducted primarily through its
Proxim Wireless Corporation subsidiary. Our systems enable a
variety of wireless applications including security and
surveillance systems, mobile workforce automation and
machine-to-machine communications. We have shipped more than 1.5
million wireless devices to more than 200,000 customers worldwide.
Additional information about the company can be found at the
company�s website located at www.terabeam.com or by contacting the
company by telephone at 408-731-2610 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 uncertainties about our ability to realize the
cost savings contemplated in this release; the possibility that any
cost savings may be reduced by increased spending in other areas;
the possibilities that the transactions described in this release
could result in increased liabilities and other adverse
consequences; difficulties in predicting Terabeam�s future
financial performance; 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, which difficulties may be exacerbated by our
recent cost savings initiatives; and the reactions, positive or
negative, of customers, investors, employees, competitors, and
others to the cost savings initiatives described in this press
release and their ramifications. 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, INC. CONSOLIDATED
BALANCE SHEETS (in thousands) June 30, December 31, 2007 2006
Assets (unaudited) Current assets: Cash and cash equivalents $6,175
$10,290 Investment securities � available-for-sale 233 168 Accounts
receivable, net 8,165 5,539 Inventory 9,272 10,142 Prepaid expenses
1,431 1,246 Total current assets 25,276 27,385 � Property and
equipment, net 2,548 2,660 Other Assets: Restricted cash 76 76
Goodwill 7,922 7,922 Intangible assets, net 10,440 11,545 Deposits
and prepaid expenses 298 287 Total other assets 18,736 19,830 Total
assets $46,560 $49,875 Liabilities and Stockholders� Equity Current
liabilities: Accounts payable and accrued expenses $13,065 $13,887
Deferred revenue 2,293 2,198 License agreement payable - current
maturities 942 868 Total current liabilities 16,300 16,953 License
agreement payable, net of current maturities 1,585 2,088 Total
liabilities 17,885 19,041 Commitments and contingencies
Stockholders� Equity Preferred stock, $0.01 par value; authorized
4,500,000, none issued at June 30, 2007 and December 31, 2006 - -
Common stock, $0.01 par value, 100,000,000 shares authorized,
21,554,369 issued and outstanding at June 30, 2007, and 21,552,572
issued and outstanding at December 31, 2006 216 216 Additional
paid-in capital 59,076 57,976 Retained earnings (accumulated
deficit) (30,610) (27,285) Accumulated other comprehensive income:
Net unrealized gain (loss) on available-for-sale securities (7)
(73) Total stockholders� equity 28,675 30,834 Total liabilities and
stockholders� equity $46,560 $49,875 TERABEAM, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share data)
(unaudited) � � Three Months Ended Six Months Ended June 30, June
30, 2007 2006 2007 2006 Revenues $19,012 $20,750 $36,670 $39,286
Cost of goods sold 10,573 12,062 20,305 22,957 Gross profit 8,439
8,688 16,365 16,329 Operating expenses: Selling costs 5,212 4,027
9,957 8,296 Restructuring Charges 91 116 91 116 General and
administrative 3,272 4,021 6,681 7,355 Research and development
2,733 3,762 5,543 8,648 Total operating expenses 11,308 11.926
22,272 24,415 Operating loss (2,869) (3,238) (5,907) (8,086) Other
income (expenses): Interest income 28 114 72 202 Interest expense
(34) (68) (68) (101) Other income (loss) 2,580 212 2,646 543 Total
other income (expenses) 2,574 258 2,650 644 Loss before income
taxes (295) (2,980) (3,257) (7,442) Benefit (provision) for income
taxes (44) (5) (68) (26) Net loss ($339) ($2,985) ($3,325) ($7,468)
� Weighted average shares - basic and diluted 21,554 21,541 21,554
21,502 Loss per share, basic and diluted ($0.02) ($0.14) ($0.15)
($0.35)
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