BreezeCOM Ltd. Reports Second Quarter 2001 Results.Business Editors TEL AVIV Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. & CARLSBAD Carlsbad, cities, United States Carlsbad (kärlz`băd). 1 City (1990 pop. 63,126), San Diego co., S Calif., on the Pacific coast; settled in the 1880s, inc. 1952. , Calif.--(BUSINESS WIRE)--July 26, 2001 BreezeCOM (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BRZE), a leading provider of high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. wireless access solutions, today announced financial results for the second quarter ended June June: see month. 30, 2001. Revenues for the second quarter ended June 30, 2001 were $22.4 million, a decrease of 8.5 percent compared with revenues of $24.5 million for the second quarter ended June 30, 2000. Excluding the inventory write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. described below, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the second quarter was $(1.6) million, or $(0.06) per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $2.6 million, or $0.08 per diluted share, for the second quarter ended June 30, 2000. Revenues for the six months ended June 30, 2001 were $46.3 million, an increase of 16 percent over revenues for the same period last year of $40.1 million. Pro forma basic and diluted loss per share for the six months ended June 30, 2001 was $(0.05), compared with diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.08 for the same period last year. Pro forma net loss for the second quarter of 2001 excludes an inventory charge of $16.4 million for the write-off of excess inventory and an additional $3.0 million provision for inventory purchase commitments. Including these charges, net loss for the quarter was $21.0 million, or $(0.72) basic and diluted loss per share. As previously announced, on June 2001 Breezecom listed its shares on the Tel Aviv Stock Exchange Tel Aviv Stock Exchange Israel's only stock exchange. (TASE TASE Tel Aviv Stock Exchange TASE The All Seeing Eye TASE Tactical Air Support Element TASE Thrust Assessment Support Environment TASE Telecontrol Application Service Elements (IEC communications protocol) ), BreezeCOM's shares began trading today. Zvi Slonimsky Slonimsky is a Russian, Belarusian, Polish and Jewish surname meaning a person from Belarusian town of Slonim. Slonimsky may stand for the following people:
tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our strategy and underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the leading position Breezecom has established in the fixed broadband wireless See wireless broadband. market. While many telecom and datacom equipment vendors have continued to report significant declines in both sequential and year-over-year revenues, we have been able to keep our revenue base relatively stable. We have built BreezeCOM's business on a solid foundation consisting of a diversified diversified (di·verˑ·s group of customers, both in terms of geography as well as type of operator. This diversity once again proved its worth in the second quarter as we drew upon customers throughout the world -in North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Europe and Asia - in order to achieve our sales levels. In addition, the fact that a significant portion of our shipments was generated by repeat orders underscores the viability of our market." Mr. Slonimsky added, "In light of our lower revenues and current market conditions, we are implementing cost-cutting measures with the goal of reducing our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , including the layoff Layoff 1. When a company eliminates jobs regardless of how good the employees' performance. 2. A risk reduction, made by investment bankers, that minimizes the potential downside associated with a commitment to purchase and sell a stock issue unsubscribed by stockholders holding of 15% of our workforce. These savings will begin to impact our results as early as the third quarter, and their full effect will be felt during the fourth quarter of 2001." Mr. Slonimsky also announced that Mr. Amir Rosenzweig was nominated nom·i·nate tr.v. nom·i·nat·ed, nom·i·nat·ing, nom·i·nates 1. To propose by name as a candidate, especially for election. 2. To designate or appoint to an office, responsibility, or honor. as President of BreezeCOM's U.S. subsidiary. Mr. Rosenzweig, served for the last two years as President and Chief Executive Officer of MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. Inc. Amir brings with him significant experience in management and marketing that will assist him in taking our U.S. operations to the next step. Mr. Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. Herscovich, is leaving BreezeCOM Inc. to pursue other interests. Mr. Slonimsky said, "I would like to take this opportunity to thank Bernard for his major contribution in building BreezeCOM as a leading BWA (Broadband Wireless Access) High-speed wireless access. Typically refers to wireless last mile access to the Internet. See WiMAX and broadband. player in the U.S." Mr. Slonimsky concluded, "The pending merger with Floware will create a leading global provider of point-to-multipoint broadband wireless access equipment. I am happy to report that our joint efforts to plan the integration of BreezeCOM and Floware are progressing well and 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. our timetable. With over $200 million in cash and cash equivalents, the combined company will be an extremely strong market contender. Managements of both companies are very excited and confident that they are forming a leading broadband wireless access equipment supplier in the market." BREEZECOM REPORTS/3 Floware and BreezeCOM will hold a joint conference call today, July 26, 2001, at 9:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To participate in the call, please dial (877) 715-5317 from inside the U.S., or (973) 628-9554 from outside the U.S., ten minutes prior to the scheduled start time. A replay of the conference call will be available from approximately 11:00 a.m. (EDT) on July 26th until 11:59 p.m. EDT on July 28th. To access the replay, please dial (877) 519-4471 (inside the U.S.), or (973) 341-3080 (outside the U.S.) and enter authorization code An identification number or password that is used to gain access to a local or remote computer system. See authorization. 2725996. This call will be available as a Webcast on www.breezecom.com and www.streetevents.com. In addition, a transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of this call will be available following the call on www.breezecom.com. About BreezeCOM BreezeCOM (NASDAQ: BRZE) is a leading provider of Broadband Wireless Access (BWA) solutions used by service providers and enterprises. Its products provide a wireless alternative to wired access solutions, such as DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary and cable modems cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. , and facilitate indoor and outdoor, as well as fixed and mobile wireless LAN A local area network that transmits over the air typically in the 2.4 GHz or 5 GHz unlicensed frequency band. It does not require line of sight between sender and receiver. Wireless base stations (access points) are wired to an Ethernet network and transmit a radio frequency over an area connectivity. BreezeCOM products are based on a packet switching A network technology that breaks up a message into small packets for transmission. Unlike circuit switching, which requires the establishment of a dedicated point-to-point connection, each packet in a packet-switched network contains a destination address. point-to-multipoint wireless platform, optimized for high-speed Internet See broadband. and intranet access. Core technologies include spread spectrum radio, digital signal processing See DSP. Digital Signal Processing - (DSP) Computer manipulation of analog signals (commonly sound or image) which have been converted to digital form (sampled). , modems, networking protocols and VLSI VLSI: see integrated circuit. (1) (Very Large Scale Integration) Between 100,000 and one million transistors on a chip. See SSI, MSI, LSI and ULSI. (2) (VLSI Technology, Inc., Tempe, AZ, www.semiconductors. . For more information on BreezeCOM, please visit www.breezecom.com. BreezeACCESS is a trademark of BreezeCOM, Inc. All other trade names are the properties of their respective owners. This press release contains 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. that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in demand for products, the timing and cancellation of orders and other risks detailed from time to time in BreezeCOM's filing with the Securities and Exchange Commission, including BreezeCOM's Form 20-F filed with the SEC on June 22,2001. You may register to receive BreezeCOM's future press releases or to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. a complete Digital Investor Kit(TM) including press releases, regulatory filings and corporate materials by clicking on the "Digital Investor Kit(TM)" icon at www.kcsa.com.
BREEZECOM LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2001 2000
---------------------------
---------------------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash & cash equivalents,short term
deposits and marketable securities $ 117,370 $ 125,286
Trade receivables 16,977 19,129
Other accounts receivable 7,066 8,411
Inventory 41,192 44,254
----------- ---------------
----------- ---------------
Total current assets 182,605 197,080
-----
----------- ---------------
----------- ---------------
LONG TERM INVESTMENTS :
Long term deposits & marketable
securities 30,736 44,801
Other long-term investment 3,500 3,500
Severance pay fund 1,601 1,334
----------- ---------------
----------- ---------------
Total long-term investments 35,837 49,635
-----
PROPERTY AND EQUIPMENT, NET 7,984 6,122
----------- ---------------
----------- ---------------
Total assets $ 226,426 $ 252,837
-----
=========== ===============
=========== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 10,722 $ 21,395
Other accounts payable and accrued
expenses 18,501 15,892
----------- ---------------
----------- ---------------
Total current liabilities 29,223 37,287
-----
----------- ---------------
----------- ---------------
ACCRUED SEVERANCE PAY 3,782 3,055
----------- ---------------
----------- ---------------
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 0.01
par value:
Authorized: 85,080,000 shares as of
June 30,2001 and December 31,2000;
Issued and oustanding: 29,105,113
shares as of June 30, 2001 and
28,130,320 as of December 31, 2000 85 78
Additional paid-in capital 219,617 217,984
Accumulated other comprehensive income 236 -
Accumulated deficit (26,517) (5,567)
----------- ---------------
----------- ---------------
Total shareholders' equity 193,421 212,495
-----
----------- ---------------
----------- ---------------
Total liabilities and shareholders'
equity $ 226,426 $ 252,837
-----
=========== ===============
=========== ===============
BREEZECOM LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Three Months Six Months
ended June 30, Ended June 30,
-----------------------------------------
-----------------------------------------
2001 2000 2001 2000
-----------------------------------------
-----------------------------------------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Sales $ 22,412 $ 24,504 $ 46,303 $ 40,095
Cost of sales 13,399 13,086 27,126 21,341
Write-off excess inventory
and provision for inventory
purchase commitments 19,405 - 19,405 -
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Gross profit (loss) (10,392) 11,418 (228) 18,754
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Operating expenses:
Research and development, net 4,039 3,082 8,218 5,339
Selling and marketing 7,155 6,493 14,287 11,163
General and administrative 1,449 1,036 2,757 1,859
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Total operating expenses 12,643 10,611 25,262 18,361
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Operating income (loss) (23,035) 807 (25,490) 393
Financial income, net 2,022 1,790 4,540 1,948
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Net income (loss) for the
period $(21,013) $ 2,597 $ (20,950) $ 2,341
========= ========= ========== ==========
========= ========= ========== ==========
Basic earnings (loss) per
share $ (0.72) $ 0.10 $ (0.73) $ 0.10
========= ========= ========== ==========
========= ========= ========== ==========
Weighted average number of
shares used in computing
basic earnings (loss) per
share 28,991 25,250 28,661 22,353
========= ========= ========== ==========
========= ========= ========== ==========
Diluted earnings (loss) per
share $ (0.72) $ 0.08 $ (0.73) $ 0.08
========= ========= ========== ==========
========= ========= ========== ==========
Weighted average number of
shares used in computing
diluted earnings (loss) per
share 28,991 31,925 28,661 28,814
========= ========= ========== ==========
========= ========= ========== ==========
BREEZECOM LTD.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Three Months Six Months
ended June 30, Ended June 30,
-----------------------------------------
-----------------------------------------
2001 2000 2001 2000
-----------------------------------------
-----------------------------------------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Sales $ 22,412 $ 24,504 $ 46,303 $40,095
Cost of sales 13,399 13,086 27,126 21,341
-----------------------------------------
-----------------------------------------
Gross profit (loss) 9,013 11,418 19,177 18,754
-----------------------------------------
-----------------------------------------
Operating expenses:
Research and development, net 4,039 3,082 8,218 5,339
Selling and marketing 7,155 6,493 14,287 11,163
General and administrative 1,449 1,036 2,757 1,859
-----------------------------------------
-----------------------------------------
Total operating expenses 12,643 10,611 25,262 18,361
-----------------------------------------
-----------------------------------------
Operating income (loss) (3,630) 807 (6,085) 393
Financial income, net 2,022 1,790 4,540 1,948
-----------------------------------------
-----------------------------------------
Net income (loss) for the
period (1,608) $ 2,597 $ (1,545) $ 2,341
=========================================
=========================================
Basic earnings (loss) per
share (0.06) $ 0.10 $ (0.05) $ 0.10
=========================================
=========================================
Weighted average number of
shares used in computing
basic earnings (loss) per
share 28,991 25,250 28,661 22,353
=========================================
=========================================
Diluted earnings (loss) per
share $ (0.06) $ 0.08 $ (0.05) $ 0.08
=========================================
=========================================
Weighted average number of
shares used in computing
diluted earnings (loss) per
share 28,991 31,925 28,661 28,814
=========================================
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