TRBM Terabeam (MM)

Terabeam, Inc. (NASDAQ:TRBM), a global pioneer and leading developer and supplier of Mesh, WiMAX, Wi-Fi and Millimeter Wave wireless products and�solutions, today reported its unaudited financial results for the fourth quarter and year ended December 31, 2006. Revenue for the quarter ended December 31, 2006 was approximately $18.2 million, a decrease of approximately 33% from the revenue of $27.1 million for the quarter ended December 31, 2005 and an increase of approximately 2% from the revenue of $17.9 million for the quarter ended September 30, 2006. Revenue for the year ended December 31, 2006 was $75.4 million, an increase of approximately 28% from the revenue of $59.0 million for the year ended December 31, 2005. Operating loss for the quarter ended December 31, 2006 was $2.1 million compared to operating income of $657,000 for the quarter ended December 31, 2005 and an operating loss of $13.7 million for the quarter ended September 30, 2006. Net loss for the quarter ended December 31, 2006 was $2.0 million ($0.09 per share-diluted) compared to net income of $810,000 ($0.04 per share-diluted) for the quarter ended December 31, 2005 and net loss of $13.7 million ($0.63 per share-diluted) for the quarter ended September 30, 2006. The third quarter 2006 operating loss and net loss included non-cash charges totaling approximately $10.4 million (approximately $0.48 per share-diluted), consisting of an inventory reserve of approximately $1.5 million and an impairment charge related to intangible assets of approximately $8.9 million. The net loss for the year ended December 31, 2006 was $23.2 million ($1.08 per share-diluted), including the previously discussed non-cash charges in the third quarter 2006, compared to a net loss of $11.2 million ($0.51 per share-diluted), including $7.8 million of restructuring provisions and charges as a result of the purchase of the operations of Proxim Corporation, for the year ended December 31, 2005. Robert Fitzgerald, Terabeam�s Chief Executive Officer, stated, �The fourth quarter of 2006 demonstrates further stabilization of the company. Our product development is on track, and we believe that we have a real winner with the Tsunami 5012 that we introduced in the fourth quarter. The primary challenge going forward is to build from our base and ramp revenue. With the introduction of MeshMax� as well as the success we are seeing with our pre-WiMAX, WiMAX and Mesh products, we believe that we are well positioned to deliver sustainable growth.� Conference Call Information Terabeam will host a conference call to discuss this release, financial results, developments at the company, and other matters of interest to investors and others on February 28, 2007 starting at 5:00 p.m. Eastern Time. The discussion may include forward-looking information. To participate in this conference call, please dial 800-210-9006 (or 719-457-2621 for international callers), confirmation code 3496855 for all callers, at least ten minutes before start 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 719-457-0820 for international callers, confirmation code 3496855 for all callers, and over the Internet for approximately 90 days at Terabeam�s website at http://www.terabeam.com. About Terabeam Terabeam, Inc. has two primary subsidiaries Proxim Wireless Corporation and Ricochet Networks, Inc. Proxim Wireless Corporation is a global leader in providing Wi-Fi and other broadband wireless solutions to meet the performance, scalability, and security requirements of enterprises, government, and service providers. Ricochet Networks, Inc. is a leading portable Wireless Internet Service Provider (WISP) with operational markets in Denver and Aurora, Colorado and San Diego, California. Additional information about the company can be found at the company's website located at http://www.terabeam.com or by contacting the company by telephone at 413-584-1425 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 the ongoing uncertainty in the telecommunications industry and larger economy; 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; the difficulties in predicting Terabeam�s future financial performance; and the impacts and effects of any other strategic transactions Terabeam may evaluate or consummate. 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. TERABEAM, INC. CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2006� 2005� Assets (unaudited) Current assets: Cash and cash equivalents $10,290� $14,133� Investment securities � available-for-sale 168� 260� Accounts receivable, net 5,539� 8,378� Inventory 10,142� 10,070� Prepaid expenses 1,246� 1,045� Total current assets 27,385� 33,886� � Property and equipment, net 2,660� 3,924� Other Assets: Restricted cash 76� 5,076� Goodwill 7,922� 7,380� Intangible assets, net 11,545� 23,817� Deposits and prepaid expenses 287� 675� Total other assets 19,830� 36,948� Total assets $49,875� $74,758� Liabilities and Stockholders� Equity Current liabilities: Accounts payable and accrued expenses $13,887� $15,600� Deferred revenue 2,198� 2,503� License agreement payable - current maturities 868� 981� Current maturities of notes payable - other current liabilities -� -� Total current liabilities 16,953� 19,084� � License agreement payable, net of current maturities 2,088� 2,956� Total liabilities 19,041� 22,040� Commitments and contingencies Stockholders� Equity Preferred stock, $0.01 par value;authorized 4,500,000, none issued atDecember 31, 2006 and December 31, 2005 -� -� Common stock, $0.01 par value, 100,000,000shares authorized, 21,552,572 issued andoutstanding at December 31, 2006 and21,446,217 issued and outstanding at December 31, 2005 216� 214� Additional paid-in capital 57,976� 56,638� Accumulated deficit (27,285) (4,122) Accumulated other comprehensive income: Net unrealized loss on available-for-sale securities (73) (12) Total stockholders� equity 30,834� 52,718� Total liabilities and stockholders� equity $49,875� $74,758� TERABEAM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) � For the Three Months Ended For the Year Ended December 31, December 31, 2006� 2005� 2006� 2005� (unaudited) (unaudited) (unaudited) � Revenues $18,222� $27,073� $75,384� $58,982� Cost of goods sold 9,983� 14,421� 42,745� 31,930� Restructuring provision for excess and obsolete inventory -� -� 1,502� 2,143� Gross profit 8,239� 12,652� 31,137� 24,909� Operating expenses: Selling costs 4,589� 3,958� 18,008� 9,789� Restructuring charges -� -� 116� 944� Restructuring charge for impairment of intangible assets -� -� 8,874� 4,664� Impairment of service reporting unit goodwill -� 200� -� 200� General and administrative 2,681� 4,275� 13,493� 12,902� Research and development 3,049� 3,562� 14,520� 8,000� Total operating expenses 10,319� 11,995� 55,011� 36,499� Operating income (loss) (2,080) 657� (23,874) (11,590) Other income (expenses): Interest income 65� 83� 368� 695� Interest expense (39) (21) (190) (161) Other income (expense) 49� 87� 601� (19) Total other income (expenses) 75� 149� 779� 515� Income (loss) before income taxes (2,005) 806� (23,095) (11,075) Benefit (provision) for income taxes (26) 5� (68) 16� Income (loss) before minority interest (2,031) 811� (23,163) (11,059) Minority interest in net income of Merry Fields -� -� � (101) Net income (loss) ($2,031) $811� ($23,163) ($11,160) � Weighted average shares - basic 21,548� 21,414� 21,523� 21,801� Earnings (loss) per share - basic ($0.09) $0.04� ($1.08) ($0.51) � Weighted average shares -diluted 21,548� 21,589� 21,523� 21,801� Earnings (loss) per share - diluted ($0.09) $0.04� ($1.08) ($0.51)