STM Wireless Announces Second Quarter Results for Fiscal 2002; Revenue Shortfall Leads to Cost Reductions.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers IRVINE, Calif.--(BUSINESS WIRE)--Aug. 7, 2002 STM (Scanning Tunneling Microscope) A microscope that can image down to the atomic level. An STM uses a piezoelectric tube with a tiny sharp tip at the end that is moved within nanometers of the object being sampled. Wireless, Inc. (STM) (Nasdaq:STMI STMI Synchronous Transport Module I (also seen as STM-I) STMI Spectro-Temporal Modulation Index STMI Statute Mile STMI Single Table with Multiple Index Access ), a worldwide supplier of VSAT (Very Small Aperture satellite Terminal) A small earth station for satellite transmission that handles up to 56 Kbits/sec of digital transmission. VSATs that handle the T1 data rate (up to 1.544 Mbits/sec) are called "TSATs. networking equipment, today announced financial results for the second quarter ended June 30, 2002. Revenues for the second quarter of fiscal 2002 were $4.0 million compared to $7.1 million for the second quarter of 2001. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the second quarter of 2002 was $3.1 million compared to an operating loss of $379,000 for the second quarter of 2001 and the net loss was $3.2 million or ($0.45) per 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 for the second quarter of 2002 compared to net income of $1.9 million or $0.27 per diluted share in the second quarter of 2001. Net income for the second quarter of 2001 benefited from a non-operating gain of $2.5 million associated with the sale of shares in a former affiliate. For the six months ended June 30, 2002, revenues were $9.7 million, the operating loss was $5.1 million, the net loss was $5.4 million and the net loss per diluted share was ($0.75). For the six months ended June 30, 2001 revenues were $13.3 million, the operating loss was $1.0 million, net income was $1.2 million and net income per diluted share was $0.16. Net income for the six months ended June 30, 2001 benefited from the non-operating gain of $2.5 million associated with the sale of shares in a former affiliate. "The decline in the telecoms sector, in general, as well as the oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies in the VSAT industry, created difficult business conditions in the second quarter," said Emil Youssefzadeh, STM's Chief Executive Officer. "In response, we have implemented further cost reductions and sales strategies that should enable us to stabilize stabilize See peg. the business in the second half of the year. We believe these efforts will allow us to match 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. with our near term revenue targets." Mr. Youssefzadeh continued, "On a more positive note, in the second quarter of 2002, the Company commenced deliveries under its previously announced $8.5 million contract for the supply of a VSAT network in the Kingdom of Nepal and introduced the multi-channel version of its Solante family of products. The roll-out of this network will continue into the second half of the year." The Company's management has scheduled a conference call today, starting at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the results for the second quarter of 2002 and its outlook for the second half of 2002. The call is being webcast by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and can be accessed at STM's Web Site at http://www.stmi.com. About STM Wireless, Inc. STM Wireless, Inc., headquartered in Irvine, California Irvine is an incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28 1971, the 69.7 square mile (180.5 km²) city has a population of 202,079 (as of 2007). (Web Site: www.stmi.com), is a VSAT network system provider for IP-based networking, telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. and bandwidth on demand data applications. STM has a local and regional sales presence in France, Thailand, Indonesia, China, India, 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. and sub-Saharan Africa, which support an expanding number of in-country sales representatives throughout the world. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995: This document 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. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, from time to time, STM Wireless, Inc. or its representatives have made or may make forward-looking statements, orally or in writing. The words "estimate," "project," "potential," "intend," "expect," "hope," "believe" and similar expressions or words are intended to identify forward-looking statements. Such forward-looking statements may be included in, but are not limited to, various filings made by the Company with the Securities and Exchange Commission, press releases or oral statements made with the approval of an 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: executive officer of the Company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions. As discussed 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 year ended December 31, 2001 and its Form 10-Q Form 10-Q See 10-Q. for the first quarter of 2002, the Company's future operating results are uncertain and may be impacted by the following factors, among others: the uncertainty of acceptance of the Company's products, particularly those targeting the 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). market; the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. cycle involved in completing major contracts, particularly in foreign markets; increasing competitive pressures; general economic conditions; technological advances; financing risks; the timing of new product introductions; political and economic risks involved in foreign markets and foreign currencies; and the timing of operating and other expenditures.
STM WIRELESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousand, except per share data)
(unaudited)
For the For the
three months six months
ended June 30, ended June 30,
2002 2001 2002 2001
Revenues:
Products $ 3,365 $ 6,485 $ 8,290 $ 12,050
Services 649 626 1,376 1,295
Total revenues 4,014 7,111 9,666 13,345
Cost of revenues:
Products 3,379 4,191 7,190 7,780
Services 525 542 1,147 1,186
Total cost of
revenues 3,904 4,733 8,337 8,966
Gross profit 110 2,378 1,329 4,379
Operating costs:
Selling, general &
administrative
expenses 1,808 1,436 3,519 2,651
Research &
development
costs 1,428 1,321 2,938 2,696
Total 3,236 2,757 6,457 5,347
Operating loss (3,126) (379) (5,128) (968)
Foreign currency gains
(losses) 22 (6) 21 (6)
Gain on disposal of
affiliate -- 2,510 -- 2,510
Interest income 13 84 37 181
Interest expense (158) (262) (335) (534)
Income (loss) before
taxes and minority
interest (3,249) 1,947 (5,405) 1,183
Income tax expense -- -- -- --
Net income (loss) $ (3,249) $ 1,947 $ (5,405) $ 1,183
Net income (loss) per
common share:
Basic $ (0.45) $ 0.27 $ (0.75) $ 0.16
Diluted $ (0.45) $ 0.27 $ (0.75) $ 0.16
Common shares used in computing
per share amounts:
Basic 7,248 7,248 7,248 7,248
Diluted 7,248 7,248 7,248 7,250
STM WIRELESS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
ASSETS
June 30, Dec. 31,
2002 2001
Current assets:
Cash and cash equivalents $ 1,179 $ 4,806
Restricted cash and short term investments 11 3,350
Accounts receivable, net 7,950 6,788
Inventories, net 7,625 7,516
Prepaid expenses and other current assets 415 499
Total current assets 17,180 22,959
Property & equipment, net 7,521 7,556
Other assets 35 46
$ 24,736 $ 30,561
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 1,550 $ 3,464
Current portion of long-term debt 85 85
Accounts payable 7,204 6,008
Accrued liabilities 2,329 2,067
Customer deposits 943 857
Income taxes payable 526 533
Total current liabilities 12,637 13,014
Long-term debt 6,720 6,763
Other long-term liabilities 32 32
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $0.001 par value; 20,000,000
shares authorized; issued and outstanding
7,248,325 shares at June 30, 2002 and
December 31, 2001 7 7
Additional paid in capital 39,289 39,289
Accumulated deficit (33,649) (28,244)
Receivable from stockholder (300) (300)
Total stockholders' equity 5,347 10,752
$ 24,736 $ 30,561
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