SAN JOSE, Calif., July 28, 2000 (PRIMEZONE) - Hybrid Networks Inc. (Nasdaq:HYBR), the worldwide leader in MMDS fixed broadband wireless Internet-access systems, today reported its financial results for the second quarter ending June 30, 2000. Gross sales prior to sales discounts for the quarter were $4.8 million, compared to $3.4 million for the same quarter in the prior year. Net sales for the quarter were $2.7 million, compared to $3 million for the same period a year ago. The net loss for the quarter was $10.7 million, or ($0.73) a share, compared to $4.5 million, or ($0.43) a share, for the second quarter of 1999.
During the quarter, Hybrid shipped fixed broadband wireless access systems totaling $7.1 million, more than double the amount of all products it shipped in the second quarter of 1999. The company recognized only $4 million of this amount as revenue in the quarter. Hybrid has not yet recognized revenue for the remaining $3.1 million, which is composed of shipments for which its client Sprint has acceptance criteria, and shipments to distributors.
Hybrid's net loss for the quarter included $3.4 million in non-cash charges relating to the purchase warrants associated with the shipment of products to Sprint, a $1.2 million non-cash charge in connection with the conversion of $18.1 million of debentures into common stock, and a $2 million non-cash charge stemming from the settlement of litigation with Pacific Monolithics. The loss, excluding the non-cash charges, would have been ($0.28) a share for the quarter, compared with ($0.39) a share for the second quarter of 1999.
"We have capitalized on our position as the provider with the most field-proven MMDS fixed wireless broadband systems to significantly increase orders, shipments and deployments in the second quarter," said Michael D. Greenbaum, president and CEO of Hybrid Networks. "Furthermore, we developed a strategic alliance with Andrew Corp., a global supplier of communications systems equipment and services, which will help us continue to increase sales in Latin America and other international markets. In the second quarter, international sales accounted for 22 percent of our total sales."
In the second quarter, Hybrid's two-way fixed broadband wireless system successfully passed Sprint's initial system-acceptance test in Phoenix, Ariz. Phoenix is the first market in which Sprint has launched Sprint Broadband Direct, a service that delivers high-speed Internet access via fixed-wireless technology for business and residential customers.
In addition, Andrew Corp. ordered Hybrid's fixed broadband wireless products for Concord, Calif.-based World Wide Wireless Communications' roll out of high-speed Internet service in Buenos Aires, Argentina. This marked the first of several orders throughout the region and in other international markets.
With respect to the Pacific Monolithics litigation settlement, Hybrid noted the parties entered into a binding stipulation for settlement of the litigation on July 7, 2000. The parties agreed to execute a formal settlement agreement, which must be approved by the bankruptcy court overseeing Pacific Monolithics Chapter 11 proceedings.
About Hybrid Networks
Headquartered in San Jose, Calif., Hybrid Networks Inc. designs, develops, manufactures and markets fixed broadband wireless systems that enable telecommunications companies, wireless systems operators and network providers to offer high-speed Internet access to businesses and residences. Hybrid was first to market with patented two-way wireless products that focus on the MMDS spectrum and WCS spectrum in the United States and similar spectrum abroad. The company's customers include Sprint, WorldCom, Look Communications and Andrew Corp. With systems in place in 51 markets worldwide, Hybrid is part of more fixed broadband wireless deployments than all of its competitors combined.
For more information, call (408) 323-6215 or visit www.hybrid.com.
Some of the statements in this news release are forward-looking statements, and we caution our stockholders and others that these statements involve certain risks and uncertainties. Factors that may cause actual results to differ from expected results include, but are not limited to, the proposed rollouts not proceeding as currently anticipated, our need to raise additional working capital, the effects of competitive products and pricing, economic and political conditions that may impact customers' ability to fund purchases of our products and services, the company's ability to achieve the costs savings anticipated from cost-reduction programs, fluctuations in international exchange rates, the timing of cash payments and receipts, end-use demands for wireless communication services, and other business factors. For information regarding these risks and other related risks, see the "Risk Factors" section of Hybrid's most recent Form 10-K and Form 10-Q on file with the SEC.
HYBRID NETWORKS, INC.
Condensed Statements of Operations
(Amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
------------ ----------- ----------- -----------
Gross sales $ 4,773 $ 3,411 6,574 $ 7,534
Sales discounts 2,026 407 2,150 407
------------ ----------- ----------- -----------
Net sales 2,747 3,004 4,424 7,127
Cost of goods sold 4,305 4,349 6,172 8,612
------------ ----------- ----------- -----------
Gross profit
(loss) (1,558) (1,345) (1,748) (1,485)
------------ ----------- ----------- -----------
Operating expenses:
Research and
development 1,788 932 3,180 2,311
Sales and
marketing 2,115 404 5,121 1,022
General and
administrative 3,533 1,601 6,657 2,513
------------ ----------- ----------- -----------
Total operating
expenses 7,436 2,937 14,958 5,846
------------ ----------- ----------- -----------
Loss from
operations (8,994) (4,282) (16,706) (7,331)
Other, net (1,673) (207) (1,923) (411)
$ $ $ $
Net loss (10,667) (4,489) (18,629) (7,742)
=========== ============ ============ ===========
$ $ $ $
Basic and diluted net
loss per share (0.73) (0.43) (1.30) (0.74)
=========== ============ ============ ===========
Shares used in basic and diluted per
Share calculations 14,602 10,507 14,297 10,492
=========== ============ ============ ===========
HYBRID NETWORKS, INC.
Condensed Balance Sheets
(Amounts in thousands)
Audited
June 30, December 31,
2000 1999
----------------- -----------------
Assets
Cash and cash equivalents $ 5,489 $ 13,394
Short term investments 1,166
Accounts receivable, net 2,465 1,138
Inventories 4,018 3,755
Other current assets 104 234
---------------- -----------------
Total current assets 13,242 18,521
Property and equipment, net 1,932 2,244
Other assets, net 347 387
================= ================
Total assets $ 15,521 $ 21,152
================= ================
Liabilities and shareholders' equity
Convertible debenture $ 5,500 $ 5,500
Other current liabilities 8,192 6,994
Long term liabilities 127 18,478
Shareholders' equity 1,702 (9,820)
================ ================
Total liabilities and
shareholders' equity $ 15,521 $ 21,152
================ ================