Adaptive Broadband's Success of AB-Access Wireless Broadband Product Prompts Announcement to Divest Legacy Businesses; Q2 Results Announced.Business Editors/High-Tech Writers SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif.--(BUSINESS WIRE)--Jan. 27, 2000 Board Approves Increase In Authorized Shares Authorized shares Number of shares authorized for issuance by a firm's corporate charter. for 2-for-1 Stock Split; Company Calls for Redemption of 5-1/4% Convertible Notes ADAPTIVE BROADBAND broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). CORPORATION (Nasdaq National Market: ADAP ADAP AIDS Drug Assistance Program ADAP Alcohol and Drug Awareness Program ADAP Agricultural Development in the American Pacific ADAP Autodiscovery/Autopurge ADAP Airport Development Aid Program ADAP Advanced Digital Antenna Production ) reported today that due to the successful early market introduction of its AB-Access product line, the company intends to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. its legacy businesses which are comprised of the satellite, video broadcast and data radio businesses and that marketing activities for the sale of these businesses will begin immediately. The AB-Access business has generated $460 million of contracted five-year demand for the AB-Access product over the last eight months and recorded bookings through December December: see month. 31, 1999, of $32.2 million. Performance for the second quarter of fiscal year 2000 included bookings of $19.7 million and revenue of $2.2 million. For its fiscal 2000 second quarter, the company reported a net loss of $3.1 million, or $.19 per share, compared to a net loss of $3.6 million, or $.24 per share, for the second quarter of fiscal 1999. The quarter's results included a $1.1 million premium paid by the company to convert $33 million of convertible notes. Excluding the premium, the results were a loss of $.15 per share. Last year's results included an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $3.1 million for purchased in-process research and development related to the company's Crown Satellite acquisition. New orders booked in this year's second quarter increased 83% to $69.7 million compared to last year's $38.2 million, primarily driven by the AB-Access fixed wireless broadband High-speed wireless transmission of data. What is "high" speed is always a changing number. Wireless systems are typically slower than land-based, wireline networks. In the past, wireless broadband started at 250 Kbps, whereas land-based broadband was generally considered to start at T1 business. The satellite communications, video broadcast and data radio businesses are included in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in the company's financial statements. The company's continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , which reflect solely the results of its AB-Access business, reported a loss of $6.3 million, or $.40 per share compared to a loss of $3.0 million, or $.20 per share, for the second quarter of fiscal year 1999. The loss is attributable to the company's investments in research and development, as well as sales and marketing of the AB-Access technology and product offerings. Adaptive Broadband commercialized the AB-Access technology and now is launching the product coincident co·in·ci·dent adj. 1. Occupying the same area in space or happening at the same time: a series of coincident events. See Synonyms at contemporary. 2. with the emerging fixed wireless broadband market. The company intends to continue its investments in AB-Access in order to maintain its market lead. Divesting Legacy Businesses Key to Focusing on Wireless Broadband Pure Play Contract signings in its fixed wireless broadband business have exceeded the company's expectations, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Adaptive Broadband's chairman and chief executive officer, Frederick Frederick, city, United States Frederick, city (1990 pop. 40,148), seat of Frederick co., NW Md.; settled 1745, inc. 1817. The processing center of a fertile farm and dairying area, it makes beer, household items, optical and glass products, leather goods, D. Lawrence Lawrence. 1 City (1990 pop. 26,763), Marion co., central Ind., a residential suburb of Indianapolis, on the West Fork of the White River. It has light manufacturing. 2 City (1990 pop. 65,608), seat of Douglas co., NE Kans. . &uot;The wireless broadband market opportunity and our technology lead in that market have been validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. . We have clearly established ourselves as a market leader. To meet the challenges presented by the rapid growth we anticipate in wireless broadband, we need to ensure the intense focus required by divesting our non-AB-Access businesses. Our satellite communications, video broadcast and data radio businesses are all leaders in their markets and we believe will be attractive additions for firms focused on or entering those markets. The sale of these businesses should result in a sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. net gain with the
majority of the proceeds retained by the company due to the availability
of certain tax benefits,&uot; stated Frederick Lawrence. The
investment banking firm of SG Cowen Cowen is the name of:Places:
AB-Access(TM) Contract Signings of $460 million Support Rapid Revenue Growth Adaptive Broadband's January 18, 2000, announcement of a $225 million contract with Telecom Wireless Corp. brings to $460 million the current total under contract for the company's AB-Access products. Adaptive Broadband has been providing working demonstrations and trials of its high speed, fixed wireless broadband products for last mile solutions to telephone companies, carriers, CLECs, RBOCs and ISPs. Early adopters are those CLECs and ISPs who are leveraging the speed-to-market attributes of the unlicensed frequency spectrum. The first major orders for commercial application have been received from Fuzion Technologies, Global Pacific, I3S I3S Integrated Immigration Information System , United Online, and Telecom Wireless Corp. In the first quarter of fiscal year 2000, the company booked $12.5 million in orders and shipped its first million dollars of AB-Access. This quarter, as reported above, Adaptive Broadband shipped $2.2 million and booked $19.7 million in AB-Access product, bringing the backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. to $28.9 million. The company converts contract signings into bookings when the orders received for product will be shipped within 12 months. The company has partnered with Solectron Corporation of Milpitas, CA, to manufacture the AB-Access product line and with Science Applications International Corporation (SAIC SAIC - http://saic.com. ) of San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , CA, to integrate AB-Access into next-generation networks for large commercial clients and government applications around the world. &uot;We have completed the process of transferring volume manufacturing to Solectron and are on track with our cost-reduction program due for completion this Spring. With these two key strategic elements in place, the rate and size of orders coming in and the multi-billion dollar demand for wireless broadband, we look forward to strong revenue growth from AB-Access,&uot; commented Donna S. Birks, Adaptive Broadband's executive vice president and chief financial officer. &uot;In fiscal 2001, we should be able to meet our gross margin goals and move the company into profitability.&uot; 2-for-1 Stock Split: Special Meeting of Stockholders to Approve Increase in Shares Adaptive Broadband's board of directors has approved, subject to stockholder approval, an increase in the company's authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: common stock from approximately 30 million to 250 million shares in order to accommodate flexibility in the company's capital structure. The board also authorized a special meeting of stockholders for the purposes of approving the proposed share increase. The special stockholders' meeting is expected to be held in March 2000. If the stockholders approve the proposed increase in the authorized number of shares, the board intends to implement a 2-for-1 stock split as soon as practicable practicable adj. when something can be done or performed. by declaring a special dividend of one share for each outstanding share. &uot;The investment community has rewarded the success of our AB-Access product with a substantial increase in the price of our shares. As a shareholder friendly company, we hope a stock split will allow even more investors to participate in the exciting potential growth of our company,&uot; stated Frederick Lawrence. Adaptive Broadband's share price has increased from a 52-week low of $9 to a high of $159. March 2, 2000, set as Redemption Date Redemption date The date on which a bond matures or is redeemed. redemption date The date on which a debt security is scheduled to be redeemed by the issuer. The redemption date is the scheduled maturity date or, if applicable, a call date. for 5-1/4% Convertible Notes Due 12/15/2003 Adaptive Broadband has determined that due to the increase in the price of its common stock, it is prudent at this time to call its convertible debt. The company has notified its Trustee, Union Bank of California Union Bank of California is one of the 30 largest commercial banks in the United States. It has 327 branches, the majority of which are in San Diego, Los Angeles and Orange Counties. , to call on January 31, 2000, for the redemption of approximately $17 million principal amount outstanding of the Adaptive Broadband Corporation (formerly California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Microwave, Inc.) 5-1/4% Convertible Subordinated Notes due 12/15/2003 for redemption on March 2, 2000, at the redemption price Redemption price See: Call price redemption price 1. The price at which an open-end investment company will buy back its shares from the owners. In most cases, the redemption price is the net asset value per share. 2. of 102.0% of the principal amount, together with accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. to the redemption date. Of the $57.5 million total face value of the notes that were issued, approximately $40 million already has been converted into approximately 1.4 million shares of common stock to date during fiscal year 2000. Option to Convert Holders have the option to convert their securities at any time on or before the redemption date into common stock of the company. The number of shares of common stock can be calculated by dividing the principal amount of the securities surrendered for conversion by the conversion price of $28.4375. As of March 2, 2000, interest shall cease to accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. on the securities called for redemption. Interest to the date of redemption will be paid separately by the Trustee in the usual manner. Payment of the full principal amount of each security will be made upon presentation and surrender of the securities at the office of the Trustee located at Union Bank of California, N.A., Corporate Trust Department, 120 South San Pedro Street, 4th Floor, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA 90012. About AB-Access The AB-Access fixed wireless broadband product bridges the last mile, replacing the local loop for business and residential subscribers. It offers data transmission at rates up to 25 Mbps, which provides the capability for real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. video conferencing See videoconferencing. (communications) video conferencing - A discussion between two or more groups of people who are in different places but can see and hear each other using electronic communications. , transmission of full streaming video A one-way video transmission over a data network. It is widely used on the Web as well as company networks to play video clips and video broadcasts. Computers in home networks stream video to digital media hubs connected to a home theater. , web surfing Refers to jumping from page to page on the Web. Just as in "TV channel surfing," where one clicks the remote to go from channel to channel, the hyperlink on Web pages makes it easy to jump from one page to another. , and transmission of data files all simultaneously and over one connection. Product bandwidth is planned to expand to 100 Mbps in 2000. AB-Access technology spans the frequency range from 2 to 42 GHz. The first releases for AB-Access are for applications using the 5 GHz U-NII U-NII Unlicensed National Information Infrastructure (bandwith for wireless LAN Networks by FCC 5.15-5.35 GHz and 5.75-5.825 GHz) (Unlicensed National Information Infrastructure) and 2.5 GHz MMDS (Multichannel Multipoint Distribution Service or Microwave Multipoint Distribution Service) A digital wireless transmission system that works in the 2.2-2.4 GHz range. (Multi-channel, Multi-point Distribution Service) frequency bands. Adaptive Broadband plans to introduce an AB-Access product for the 3.5 GHz market in Europe in 2000. Point-to multipoint wireless networks being deployed with AB-Access include transmission hubs that contain six transmitter/receivers, each having 60-degree access points for complete 360-degree coverage. These access points are each serviced by an Asynchronous Transfer Mode See ATM. (communications) Asynchronous Transfer Mode - (ATM, or "fast packet") A method for the dynamic allocation of bandwidth using a fixed-size packet (called a cell). See also ATM Forum, Wideband ATM. ATM acronyms. Indiana acronyms. (ATM)-configured transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. with a 25 Mbps channel, which can be shared by up to 256 active service users because bandwidth is dynamically assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. . This scheduling is made possible by the product's proprietary MAC (media access control) layer, as well as by ATM's small fixed cell length. The technology allows bandwidth to be supplied with cell-by-cell precision, essentially providing packet-on-demand capability. The ultimate result is that bandwidth of up to 25 Mbps is readily available to all users on the network. About Adaptive Broadband Adaptive Broadband (www.adaptivebroadband.com) is a data networking solutions company that is developing leading-edge technology for the deployment of broadband wireless See wireless broadband. communication over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Its AB-Access product is a leading commercial choice for fixed broadband wireless communication. The foregoing includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , such as the company's planned product developments, results of divestitures, gross margin goals and profitable operations that involve risks and uncertainties. Actual events or results may differ materially from those suggested by the forward-looking statement. Factors that could cause actual events or results to differ materially include, but are not limited to, fluctuations in quarterly results, delays in receipt of orders or in the shipment of products, delays in product cost reductions, changes in evolving telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and Internet markets and challenges in implementing the company's plan to divest its legacy businesses. For a more detailed discussion of some of these and other factors, see &uot;Risk Factors&uot; contained in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended June 30, 1999.
ADAPTIVE BROADBAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------------------
1999 1998 1999 1998
-------- ------- ------- -------
Revenue $ 2,198 $ - $ 3,300 $ -
Costs of revenue 2,405 - 3,775 -
-------- ------- ------- -------
Gross margin (207) - (475) -
Expenses:
Research and development 3,636 784 5,727 1,434
Sales, marketing and
administration 5,165 2,706 9,875 5,580
Amortization of
intangible assets 75 75 149 125
Purchased in-process
research and development - - - 8,210
-------- ------- ------- -------
Total expenses 8,876 3,565 15,751 15,349
-------- ------- ------- -------
Operating loss (9,083) (3,565) (16,226) (15,349)
Interest income (expense), net 322 (1,104) 31 (1,977)
Premium on conversion of notes (1,093) - (1,093) -
-------- ------- ------- -------
Loss from continuing
operations before income taxes (9,854) (4,669) (17,288) (17,326)
Benefit from income taxes (3,548) (1,678) (6,224) (4,263)
-------- -------- ------- -------
Loss from continuing operations (6,306) (2,991) (11,064) (13,063)
Discontinued operations:
Income (loss) from discontinued
operations, net of income
taxes 3,202 (645) 4,097 (424)
-------- -------- ------- -------
Net loss $ (3,104) (3,636) $(6,967)$(13,487)
========= ======== ======= =======
Basic and diluted earnings
(loss) per share:
Loss from continuing operations $ (0.40) $ (0.20) $ (0.72) $ (0.87)
Income (loss) from discontinued
operations 0.21 (0.04) 0.27 (0.03)
-------- -------- ------- -------
Net Loss $ (0.19) $ (0.24) $ (0.45) $ (0.90)
========= ======== ======= =======
Weighted average shares used in
computing basic and diluted
earnings (loss) per share 15,947 15,333 14,968 15,041
ADAPTIVE BROADBAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December 31, 1999 June 30, 1999
----------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 30,299 $ 48,887
Accounts receivable, net 2,268 -
Inventories 209 1,116
Deferred income taxes 22,018 14,293
Prepaid expenses and other
current assets 1,337 2,938
Net current assets of
discontinued operations 55,488 42,057
------- -------
Total current assets 111,619 109,291
------- -------
Property, plant and equipment, net 4,439 3,088
Deferred income taxes - noncurrent - 3,805
Intangible assets, net 1,905 2,054
Other assets 3,075 3,017
Net long-term assets of
discontinued operations 49,965 50,078
------- -------
$ 171,003 $ 171,333
========= =========
Liabilities and Shareholders' Equity
Accounts payable and accrued
liabilities 26,631 27,250
Convertible subordinated notes 23,352 57,500
Other long-term liabilities 600 1,590
Shareholders' equity:
Common stock 1,783 1,663
Capital in excess of par value 129,179 95,673
Treasury stock (22,476) (36,066)
Retained earnings 11,934 23,723
------- -------
Total shareholders' equity 120,420 84,993
--------- ---------
$ 171,003 $ 171,333
--------- ---------
ADAPTIVE BROADBAND CORPORATION
SUPPLEMENTAL INFORMATION
(Dollars in millions)
Fiscal 2000 Fiscal 1999
Q1 Q2 6M YTD Q2 6M YTD
--------------------------- --------------
BOOKINGS
Satellite 22.3 29.6 51.9 20.7 38.7
Terrestrial 20.0 20.4 40.4 17.5 36.6
--------------------------- --------------
Discontinued
operations 42.3 50.0 92.3 38.2 75.3
AB Access-
Continuing
operations 12.5 19.7 32.2 0.0 0.0
--------------------------- --------------
Total 54.8 69.7 124.5 38.2 75.3
=========================== ==============
BOOKINGS MIX
International 30% 42% 36% 41% 43%
Domestic 70% 58% 64% 59% 57%
--------------------------- --------------
Total 100% 100% 100% 100% 100%
=========================== ==============
BOOK-TO-BILL
Satellite 99% 126% 113% 89% 98%
Terrestrial 103% 87% 94% 88% 96%
--------------------------- --------------
Discontinued
operations 101% 107% 104% 89% 97%
AB Access-
Continuing
operations 1138% 896% 977% N/A N/A
---------------------------- --------------
Total 128% 142% 135% 89% 97%
============================ ==============
BACKLOG
Satellite 17.2 23.0 12.8
Terrestrial 19.7 16.2 10.9
--------------- ----
Discontinued
operations 36.9 39.2 23.7
AB Access-
Continuing
operations 11.4 28.9 0.0
--------------- ----
Total 48.3 68.1 23.7
=============== ====
REVENUE
Satellite 22.5 23.5 46.0 23.1 39.3
Terrestrial 19.3 23.4 42.7 19.8 38.3
--------------------------- --------------
Discontinued
operations 41.8 46.9 88.7 42.9 77.6
AB Access-
Continuing
operations 1.1 2.2 3.3 0.0 0.0
--------------------------- --------------
Total 42.9 49.1 92.0 42.9 77.6
=========================== ==============
REVENUE MIX
International 35% 36% 36% 45% 45%
Domestic 65% 64% 64% 55% 55%
--------------------------- --------------
Total 100% 100% 100% 100% 100%
=========================== ==============
GROSS MARGIN
PERCENTAGE
Total 38% 41% 39% 37% 36%
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