Western Multiplex Corporation Reports Revenue Up 121% Quarter Over Quarter

Growth Accelerates in Domestic Enterprise and Service Provider Markets



Apr 26, 2001, 01:00 ET from Western Multiplex Corporation

    SUNNYVALE, Calif., April 26 /PRNewswire/ --
 Western Multiplex Corporation (Nasdaq:   WMUX) today reported first quarter
 revenue of $37.6 million for the first quarter ended March 30, 2001, an
 increase of 121% over revenue of $17.0 million for the corresponding quarter
 ended March 31, 2000.
     Net income before nonrecurring and acquisition related costs for the
 first quarter of 2001 was $1.8 million or $.03 per share compared to
 $763,000 or $.02 per share in the first quarter of 2000. The company did not
 report any nonrecurring costs in the first quarter of 2000.
     Earnings before interest, income taxes and amortization (EBITA) before
 nonrecurring costs of $5.5 million was $4.6 million for the first quarter of
 2001, an increase of 24.3% over EBITA of $3.7 million for the corresponding
 quarter of 2000. EBITA per share before nonrecurring costs for the
 first quarter of 2001 and EBITA for the corresponding quarter of 2000 was
 $.08.
     In the current quarter, the company announced its acquisition of
 WirelessHome Corporation, a privately held developer of point-to-multipoint
 systems that will enable businesses and other enterprises to cost-effectively
 connect multiple facilities within their private networks. As WirelessHome is
 replacing Ubiquity in the development of its point-to-multipoint systems, the
 company closed its Ubiquity operations and consequently recorded an impairment
 of the Ubiquity goodwill and a restructuring reserve associated with closing
 those operations. Nonrecurring and acquisition-related costs in the current
 quarter include an impairment of goodwill of $4.3 million, restructuring costs
 of $1.1 million, amortization of deferred stock compensation of $1.1 million,
 WirelessHome expenses of $166,000 and WirelessHome goodwill of $100,000.
     Net loss including nonrecurring and acquisition-related costs was
 $4.5 million for the first quarter 2001 compared to net income of $763,000 for
 the corresponding quarter of 2000. Basic and diluted loss per share was
 $(.08) for the current quarter compared to basic and diluted earnings
 per share of $.02 for the corresponding quarter of 2000.
     Reviewing the quarter-end, Jonathan Zakin, Western Multiplex Chairman and
 CEO said, "I am very pleased that at a time when many other companies in our
 industry have under-performed, we met our overall revenue target for the
 quarter. Our growth rate was 121 percent quarter over quarter, showing
 outstanding momentum for our business. We exceeded our expectations
 domestically but are disappointed with the weakness of our international
 business. This had less to do with the market than with our sales focus and
 priorities last quarter-building our domestic sales organization, reducing
 customer concentration and growing our campus/enterprise business. We have a
 new international sales team in place with extensive experience selling
 wireless to our key IT markets, which gives us added depth that will improve
 the international sales pipeline and visibility going forward."
     During the quarter, the enterprise market showed acceleration as well as
 diversity in vertical markets, with the company adding hospitals,
 universities, Fortune 500 businesses and the Federal Government as customers.
 The company also showed excellent traction with its reseller base, as it
 outpaced its expectations for new channel partners, expanding its channel base
 to 285 partners from 200 in the first quarter.
     Looking ahead, the company expects continuing success in its domestic
 business and increasing international business. The company anticipates that
 revenues will be flat in the second quarter of 2001, but expects to meet this
 years' revenue growth target of 70 to 80 percent.
     The company will bring final assembly and test back in house on May 1.
 Nancy Huber, Western Multiplex Vice President, Finance and CFO commented, "Our
 gross margins are at 50 percent, which had been our target. We began
 outsourcing final assembly and test in the third quarter of 2000 with the
 expectation of margin improvement, and those expectations were not met. We
 have made this move in manufacturing anticipating that we will show a three to
 four percent improvement in gross margin in the third quarter and beyond.
 Since the transition to in-house manufacturing is beginning in May, we also
 believe this will have a small impact on second quarter margins."
     The company increased its spending in sales and marketing, as it built the
 framework for its GoConnect channel loyalty program. These were one-time
 start-up costs, and going forward, the company expects that expenses for this
 program will grow proportional to its business. There were also one-time costs
 associated with filling sales positions key to executing the company's
 long-term international strategy. Toward the end of the quarter, the company
 reduced headcount by 4.2% in an effort to stay aligned with its business
 model.
 
     Today's Conference Call To Be Broadcast Live Over the Internet
     The Western Multiplex conference call will be broadcast live over the
 Internet today, Thursday, April 26, 2001 at 2:00 p.m. Pacific Daylight Time,
 5:00 p.m. Eastern Daylight Time.
     To listen to the webcast, login to the Western Multiplex homepage,
 www.wmux.com.
     Direct your browser to Investor Relations and click on the link titled
 "Conference Calls."
     The minimum requirements to listen include sound capabilities on your
 personal computer and installation of RealPlayer software available at no cost
 for Windows 95/98, Windows 3.1, Windows NT, Macintosh, and UNIX systems from
 Real Audio, www.real.com.
     The webcast will be archived immediately following the conference call and
 will remain available at the Western Multiplex home page, www.wmux.com.
 Additionally, the conference call will be available on a recorded telephone
 archive by calling toll free 888-203-1112 and entering pass code 725852,
 beginning April 26 at 8:00 p.m., Eastern Daylight Time until the end of
 business on Monday, April 30. For international callers, the recorded
 telephone archive is available by calling the following number, 719-457-0820,
 to which tolls apply.
 
     About Western Multiplex Corporation
     Western Multiplex Corporation is a leader in high-capacity, point-to-point
 fixed-wireless communication systems used by leading Internet Service
 Providers, telecommunications carriers and corporations worldwide. The
 company's fixed-wireless telco and IP based systems address the growing need
 of service providers and end-users to rapidly and cost-effectively deploy
 high-speed communication networks for mobile communication backhaul, fiber
 extension, multi-tenant/multi-dwelling unit Internet access, enterprise,
 government and education campus connectivity and enable last mile access. The
 company's website is:  www.wmux.com. Western Multiplex Investor Information
 Service:  877-9WMUX-IR (877-996-8947)
 
     Safe Harbor
     This press release contains statements representing Western Multiplex's
 expectations or beliefs concerning future events that are forward-looking
 statements within the meaning of Section 21E of the Securities Exchange Act of
 1934, which provides a safe-harbor for such statements. The forward-looking
 statements contained in this press release include statements related to
 increases in the demand for Western Multiplex's products and future growth
 plans. The company's actual results could differ materially from management's
 expectations for a variety of factors, including due to an unexpected decline
 in demand for Western Multiplex's products, lower overall demand for wireless
 infrastructure devices, competition from existing or new competitors or
 increased costs and expenses. Western Multiplex cautions that these statements
 are further qualified by other important factors, including, but not limited
 to, the factors set forth in Western Multiplex's filings with the Securities
 and Exchange commission, including Western Multiplex's Registration Statement
 on Form S-4 filed on December 1, 2000, Western Multiplex's final Prospectus
 from its initial public offering dated July 31, 2000 and its Quarterly Report
 on Form 10-Q for the quarter ended September 29, 2000, and its annual report
 on Form 10-K for the year ended December 31, 2000. Western Multiplex does not
 undertake any obligation to update this information and you should recognize
 that this information is only accurate as of today's date.
 
                           WESTERN MULTIPLEX CORPORATION
 
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
 
                                                  March 30,        December 31,
                                                     2001              2000
                                                  (unaudited)
                    ASSETS
     Current assets:
        Cash and short-term investments             $37,848           $51,727
        Accounts receivable, net                     37,488            34,292
        Inventory                                    18,650            10,949
        Prepaid expenses and other                    2,469             4,970
        Deferred tax assets                           1,573             1,573
          Total current assets                       98,028           103,511
     Long-term investments and other                  7,137             3,014
     Equipment and leasehold improvements, net        8,067             5,381
     Deferred tax assets                              3,455             3,565
     Other long-term assets                           2,550             2,500
     Goodwill and other intangible assets, net       42,355            22,906
          Total assets                             $161,592          $140,877
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
        Long-term debt-current portion               $1,000               $--
        Accounts payable                             16,189            10,208
        Accrued liabilities                          11,074             8,582
        Payable to parent company                        35                35
          Total current liabilities                  28,298            18,825
     Long-term debt                                       2                28
          Total liabilities                          28,300            18,853
 
     Stockholders' equity:
        Common stock                                    976               975
        Paid-in capital                             153,411           141,341
        Treasury stock                              (21,000)          (21,000)
        Deferred stock compensation                    (942)           (4,310)
        Other comprehensive income                      181                12
        Retained earnings (deficit)                   1,728             6,068
        Less: Employee stock subscription
              receivable                             (1,062)           (1,062)
          Total stockholders' equity                133,292           122,024
          Total liabilities and
           stockholders' equity                    $161,592          $140,877
 
 
                         WESTERN MULTIPLEX CORPORATION
 
                      CONDENSED CONSOLIDATED INCOME STATEMENTS
                                    (Unaudited)
                      (In thousands, except per share amounts)
 
                                                         Three Months Ended
                                                     March 30,        March 31,
                                                       2001              2000
     Revenue                                         $37,585           $17,020
     Cost of revenue                                  18,899             7,725
        Gross profit                                  18,686             9,295
     Operating expenses before
      amortization:
        Research and development                       4,077             1,941
        Sales and marketing                            7,079             2,549
        General and administrative                     2,910             1,089
        Impairment of goodwill                         4,331                --
        Restructuring costs                            1,108                --
        Merger costs                                      30                --
                                                      19,535             5,579
           Earnings (loss) before interest,
            income taxes
              and amortization                          (849)            3,716
     Amortization:
        Amortization of goodwill                         822               187
        Amortization of deferred stock
         compensation                                  1,941               886
                                                       2,763             1,073
           Income (loss) from operations              (3,612)            2,643
     Interest income (expense), net                      472              (597)
           Income (loss) before taxes                 (3,140)            2,046
     Income tax provision                              1,346             1,283
     Net income (loss)                               $(4,486)             $763
     Basic earnings (loss) per share                  $(0.08)            $0.02
     Diluted earnings (loss) per share                $(0.08)            $0.02
     Shares used to compute basic earnings
      (loss) per share                            55,999,230        39,134,150
     Shares used to compute diluted
      earnings (loss) per share                   55,999,230        46,208,628
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X86117914
 
 

SOURCE Western Multiplex Corporation
    SUNNYVALE, Calif., April 26 /PRNewswire/ --
 Western Multiplex Corporation (Nasdaq:   WMUX) today reported first quarter
 revenue of $37.6 million for the first quarter ended March 30, 2001, an
 increase of 121% over revenue of $17.0 million for the corresponding quarter
 ended March 31, 2000.
     Net income before nonrecurring and acquisition related costs for the
 first quarter of 2001 was $1.8 million or $.03 per share compared to
 $763,000 or $.02 per share in the first quarter of 2000. The company did not
 report any nonrecurring costs in the first quarter of 2000.
     Earnings before interest, income taxes and amortization (EBITA) before
 nonrecurring costs of $5.5 million was $4.6 million for the first quarter of
 2001, an increase of 24.3% over EBITA of $3.7 million for the corresponding
 quarter of 2000. EBITA per share before nonrecurring costs for the
 first quarter of 2001 and EBITA for the corresponding quarter of 2000 was
 $.08.
     In the current quarter, the company announced its acquisition of
 WirelessHome Corporation, a privately held developer of point-to-multipoint
 systems that will enable businesses and other enterprises to cost-effectively
 connect multiple facilities within their private networks. As WirelessHome is
 replacing Ubiquity in the development of its point-to-multipoint systems, the
 company closed its Ubiquity operations and consequently recorded an impairment
 of the Ubiquity goodwill and a restructuring reserve associated with closing
 those operations. Nonrecurring and acquisition-related costs in the current
 quarter include an impairment of goodwill of $4.3 million, restructuring costs
 of $1.1 million, amortization of deferred stock compensation of $1.1 million,
 WirelessHome expenses of $166,000 and WirelessHome goodwill of $100,000.
     Net loss including nonrecurring and acquisition-related costs was
 $4.5 million for the first quarter 2001 compared to net income of $763,000 for
 the corresponding quarter of 2000. Basic and diluted loss per share was
 $(.08) for the current quarter compared to basic and diluted earnings
 per share of $.02 for the corresponding quarter of 2000.
     Reviewing the quarter-end, Jonathan Zakin, Western Multiplex Chairman and
 CEO said, "I am very pleased that at a time when many other companies in our
 industry have under-performed, we met our overall revenue target for the
 quarter. Our growth rate was 121 percent quarter over quarter, showing
 outstanding momentum for our business. We exceeded our expectations
 domestically but are disappointed with the weakness of our international
 business. This had less to do with the market than with our sales focus and
 priorities last quarter-building our domestic sales organization, reducing
 customer concentration and growing our campus/enterprise business. We have a
 new international sales team in place with extensive experience selling
 wireless to our key IT markets, which gives us added depth that will improve
 the international sales pipeline and visibility going forward."
     During the quarter, the enterprise market showed acceleration as well as
 diversity in vertical markets, with the company adding hospitals,
 universities, Fortune 500 businesses and the Federal Government as customers.
 The company also showed excellent traction with its reseller base, as it
 outpaced its expectations for new channel partners, expanding its channel base
 to 285 partners from 200 in the first quarter.
     Looking ahead, the company expects continuing success in its domestic
 business and increasing international business. The company anticipates that
 revenues will be flat in the second quarter of 2001, but expects to meet this
 years' revenue growth target of 70 to 80 percent.
     The company will bring final assembly and test back in house on May 1.
 Nancy Huber, Western Multiplex Vice President, Finance and CFO commented, "Our
 gross margins are at 50 percent, which had been our target. We began
 outsourcing final assembly and test in the third quarter of 2000 with the
 expectation of margin improvement, and those expectations were not met. We
 have made this move in manufacturing anticipating that we will show a three to
 four percent improvement in gross margin in the third quarter and beyond.
 Since the transition to in-house manufacturing is beginning in May, we also
 believe this will have a small impact on second quarter margins."
     The company increased its spending in sales and marketing, as it built the
 framework for its GoConnect channel loyalty program. These were one-time
 start-up costs, and going forward, the company expects that expenses for this
 program will grow proportional to its business. There were also one-time costs
 associated with filling sales positions key to executing the company's
 long-term international strategy. Toward the end of the quarter, the company
 reduced headcount by 4.2% in an effort to stay aligned with its business
 model.
 
     Today's Conference Call To Be Broadcast Live Over the Internet
     The Western Multiplex conference call will be broadcast live over the
 Internet today, Thursday, April 26, 2001 at 2:00 p.m. Pacific Daylight Time,
 5:00 p.m. Eastern Daylight Time.
     To listen to the webcast, login to the Western Multiplex homepage,
 www.wmux.com.
     Direct your browser to Investor Relations and click on the link titled
 "Conference Calls."
     The minimum requirements to listen include sound capabilities on your
 personal computer and installation of RealPlayer software available at no cost
 for Windows 95/98, Windows 3.1, Windows NT, Macintosh, and UNIX systems from
 Real Audio, www.real.com.
     The webcast will be archived immediately following the conference call and
 will remain available at the Western Multiplex home page, www.wmux.com.
 Additionally, the conference call will be available on a recorded telephone
 archive by calling toll free 888-203-1112 and entering pass code 725852,
 beginning April 26 at 8:00 p.m., Eastern Daylight Time until the end of
 business on Monday, April 30. For international callers, the recorded
 telephone archive is available by calling the following number, 719-457-0820,
 to which tolls apply.
 
     About Western Multiplex Corporation
     Western Multiplex Corporation is a leader in high-capacity, point-to-point
 fixed-wireless communication systems used by leading Internet Service
 Providers, telecommunications carriers and corporations worldwide. The
 company's fixed-wireless telco and IP based systems address the growing need
 of service providers and end-users to rapidly and cost-effectively deploy
 high-speed communication networks for mobile communication backhaul, fiber
 extension, multi-tenant/multi-dwelling unit Internet access, enterprise,
 government and education campus connectivity and enable last mile access. The
 company's website is:  www.wmux.com. Western Multiplex Investor Information
 Service:  877-9WMUX-IR (877-996-8947)
 
     Safe Harbor
     This press release contains statements representing Western Multiplex's
 expectations or beliefs concerning future events that are forward-looking
 statements within the meaning of Section 21E of the Securities Exchange Act of
 1934, which provides a safe-harbor for such statements. The forward-looking
 statements contained in this press release include statements related to
 increases in the demand for Western Multiplex's products and future growth
 plans. The company's actual results could differ materially from management's
 expectations for a variety of factors, including due to an unexpected decline
 in demand for Western Multiplex's products, lower overall demand for wireless
 infrastructure devices, competition from existing or new competitors or
 increased costs and expenses. Western Multiplex cautions that these statements
 are further qualified by other important factors, including, but not limited
 to, the factors set forth in Western Multiplex's filings with the Securities
 and Exchange commission, including Western Multiplex's Registration Statement
 on Form S-4 filed on December 1, 2000, Western Multiplex's final Prospectus
 from its initial public offering dated July 31, 2000 and its Quarterly Report
 on Form 10-Q for the quarter ended September 29, 2000, and its annual report
 on Form 10-K for the year ended December 31, 2000. Western Multiplex does not
 undertake any obligation to update this information and you should recognize
 that this information is only accurate as of today's date.
 
                           WESTERN MULTIPLEX CORPORATION
 
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
 
                                                  March 30,        December 31,
                                                     2001              2000
                                                  (unaudited)
                    ASSETS
     Current assets:
        Cash and short-term investments             $37,848           $51,727
        Accounts receivable, net                     37,488            34,292
        Inventory                                    18,650            10,949
        Prepaid expenses and other                    2,469             4,970
        Deferred tax assets                           1,573             1,573
          Total current assets                       98,028           103,511
     Long-term investments and other                  7,137             3,014
     Equipment and leasehold improvements, net        8,067             5,381
     Deferred tax assets                              3,455             3,565
     Other long-term assets                           2,550             2,500
     Goodwill and other intangible assets, net       42,355            22,906
          Total assets                             $161,592          $140,877
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
        Long-term debt-current portion               $1,000               $--
        Accounts payable                             16,189            10,208
        Accrued liabilities                          11,074             8,582
        Payable to parent company                        35                35
          Total current liabilities                  28,298            18,825
     Long-term debt                                       2                28
          Total liabilities                          28,300            18,853
 
     Stockholders' equity:
        Common stock                                    976               975
        Paid-in capital                             153,411           141,341
        Treasury stock                              (21,000)          (21,000)
        Deferred stock compensation                    (942)           (4,310)
        Other comprehensive income                      181                12
        Retained earnings (deficit)                   1,728             6,068
        Less: Employee stock subscription
              receivable                             (1,062)           (1,062)
          Total stockholders' equity                133,292           122,024
          Total liabilities and
           stockholders' equity                    $161,592          $140,877
 
 
                         WESTERN MULTIPLEX CORPORATION
 
                      CONDENSED CONSOLIDATED INCOME STATEMENTS
                                    (Unaudited)
                      (In thousands, except per share amounts)
 
                                                         Three Months Ended
                                                     March 30,        March 31,
                                                       2001              2000
     Revenue                                         $37,585           $17,020
     Cost of revenue                                  18,899             7,725
        Gross profit                                  18,686             9,295
     Operating expenses before
      amortization:
        Research and development                       4,077             1,941
        Sales and marketing                            7,079             2,549
        General and administrative                     2,910             1,089
        Impairment of goodwill                         4,331                --
        Restructuring costs                            1,108                --
        Merger costs                                      30                --
                                                      19,535             5,579
           Earnings (loss) before interest,
            income taxes
              and amortization                          (849)            3,716
     Amortization:
        Amortization of goodwill                         822               187
        Amortization of deferred stock
         compensation                                  1,941               886
                                                       2,763             1,073
           Income (loss) from operations              (3,612)            2,643
     Interest income (expense), net                      472              (597)
           Income (loss) before taxes                 (3,140)            2,046
     Income tax provision                              1,346             1,283
     Net income (loss)                               $(4,486)             $763
     Basic earnings (loss) per share                  $(0.08)            $0.02
     Diluted earnings (loss) per share                $(0.08)            $0.02
     Shares used to compute basic earnings
      (loss) per share                            55,999,230        39,134,150
     Shares used to compute diluted
      earnings (loss) per share                   55,999,230        46,208,628
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X86117914
 
 SOURCE  Western Multiplex Corporation