YDI Wireless Achieves Record Revenues for Year Ended 2003 and Second Consecutive Profitable Quarter
Contact: David L. Renauld
(Vice President, Corporate Affairs)
Phone: 413-665-8551
Falls Church, Virginia — January 29, 2004: YDI Wireless, Inc. (OTCBB:YDIW), a leading developer and supplier of broadband wireless solutions, today reported its financial results for the fourth quarter and year ended December 31, 2003.
Revenue for the year ended December 31, 2003 was $27.2 million, an increase of 34.2% over the revenue of $20.3 million for the year ended December 31, 2002. Revenue for the quarter ended December 31, 2003 was $5.5 million compared to $5.3 million for the same period of 2002, an increase of 5%.
Gross profit for the year ended December 31, 2003 increased to $11.5 million (42.3% gross profit margin) as compared to $7.9 million (39% gross profit margin) for the year ended December 31, 2002. Gross profit margin for the three months ended December 31, 2003, compared to the same period in the prior year, improved to 53.6% from 49.0%, for a gross profit increase of nearly $400,000.
The net income for the year ended December 31, 2003 was $4.6 million or $0.41 per share, diluted, compared to net income of $1.6 million or $0.42 per share, diluted, for the year ended December 31, 2002. Much of the net income for 2003 resulted from an immediate recognition of the negative goodwill from the Young Design-Telaxis transaction completed on April 1, 2003. This recognition resulted in a one-time gain of $4.7 million. For the fourth quarter ended December 31, 2003, net income was $254,000 giving YDI Wireless its second consecutive quarter of profitability.
"We are extremely happy with our overall results for 2003," states Robert E. Fitzgerald, Chief Executive Officer, who adds, "As previously announced, normal seasonal volume fluctuations and select component parts shortages during the fourth quarter resulted in top line disappointment; however, margins remained surprisingly strong. We continue to believe that margins will not continue to run as high as we have seen over the last two quarters. We are currently undertaking several internal initiatives that we hope will add significant growth to our revenues and profitability. We believe that continued introduction of products that focus on meeting real customer needs with proven technology at reasonable prices and increasing the avenues to market for these products will sustain our organic growth. Additionally, we continue to seek strategic opportunities to further improve results and create shareholder value. We believe our excellent overall results in 2003 reflect an increase in market acceptance of our products combined with a focused management team that is committed to profitability."
YDI Wireless, Inc. is a world leader in providing extended range, license free wireless data equipment. YDI Wireless is a leading designer of turn-key long distance wireless systems ranging from 19.9 kbps to 1 Gbps for applications such as wireless Internet, wireless video, wireless LANs, wireless WANs, wireless MANs and wireless virtual private networks. Additional information about YDI Wireless as well as its complete product line can be found at the company's web site located at http://www.ydi.com or by contacting the company by telephone at 413-665-8551 or by email at IR@ydi.com.
Statements in this press release that are not statements of historical facts are forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from the results anticipated in these forward-looking statements due to risks arising from and relating to the contemplated acquisition of Phazar by YDI, the two companies' ability and desire to consummate that transaction, and our ability to achieve the contemplated benefits of that transaction; the combination of Telaxis Communications and Young Design and our ability to achieve the contemplated benefits of that combination; the downturn and ongoing uncertainty in the telecommunications industry and larger economy; the intense competition in our industry and resulting impacts on our pricing, gross margins, and general financial performance; and the other factors discussed in our filings made from time to time with the Securities and Exchange Commission and in our other public statements.
YDI WIRELESS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
YDI Young
Wireless, Design,
Inc. Inc.
---------- --------
December 31,
-------------------
2003 2002
---------- --------
Assets
Current assets:
Cash and cash equivalents $8,990 $939
Marketable securities 609 -
Accounts receivable, net 2,511 1,686
Refundable income taxes 226 -
Other receivables 10 -
Inventory 3,134 2,386
Investment securities - trading - 4
Deferred tax asset - 142
Deposit - 1
Prepaid expenses 162 451
---------- --------
Total current assets 15,642 5,609
Property and equipment, net 2,493 1,823
Other Assets:
Investment in unconsolidated subsidiaries - 36
Investment securities - available-for-sale 2,008 841
Intangible assets, net 483 9
Deferred tax asset - 245
Deposits 49 9
---------- --------
Total other assets 2,540 1,140
---------- --------
Total assets $20,675 $8,572
========== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $3,023 $2,158
Current maturities of notes payable 213 495
Current deposit - non-refundable - 9
---------- --------
Total current liabilities 3,236 2,662
Notes payable, net of current maturities 1,298 1,402
---------- --------
Total liabilities 4,534 4,064
Commitments and contingencies - -
Stockholders' Equity
Preferred stock, $0.01 par value; authorized
4,500,000, none issued at December 31, 2003;
none authorized, none issued at December 31,
2002 - -
Common stock, $0.01 par value, authorized
100,000,000, issued 14,179,882 at December 31,
2003; $0.01 par value, 30,000,000 shares
authorized, issued 3,750,000 at December 31,
2002 142 37
Additional paid-in capital 6,173 414
Retained earnings 8,629 4,066
Accumulated other comprehensive income:
Net unrealized gain/(loss) on available-for-
sale securities 1,197 (9)
---------- --------
Total stockholders' equity 16,141 4,508
---------- --------
Total liabilities and stockholders' equity $20,675 $8,572
========== ========
YDI WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
YDI Young YDI Young
Wireless, Design, Wireless, Design,
Inc. Inc. Inc. Inc.
----------- ----------- ----------- ----------
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
----------------------- ----------------------
2003 2002 2003 2002
----------- ----------- ----------- ----------
(unaudited) (unaudited)
----------- ----------- ----------- ----------
Revenues $5,547 $5,285 $27,241 $20,304
Cost of goods sold 2,574 2,694 15,714 12,376
----------- ----------- ----------- ----------
Gross profit 2,973 2,591 11,527 7,928
----------- ----------- ----------- ----------
Total operating
expenses 2,744 1,883 11,506 6,430
----------- ----------- ----------- ----------
Operating income (loss) 229 708 21 1,498
Other income (expenses):
Interest income 16 5 128 22
Interest expense (55) (31) (149) (131)
Other income (expenses) 92 930 117 925
Excess of acquired
net assets over cost - - 4,747 -
----------- ----------- ----------- ----------
Total other income
(expenses) 53 904 4,843 816
----------- ----------- ----------- ----------
Income (loss) before
income taxes 282 1,612 4,864 2,314
Provision for income
taxes 28 561 261 752
----------- ----------- ----------- ----------
Net income (loss) $254 $1,051 $4,603 $1,562
=========== =========== =========== ==========
Weighted average shares
- basic 13,637,832 3,750,000 11,274,298 3,750,000
=========== =========== =========== ==========
EPS, basic $0.02 $0.28 $0.42 $0.42
=========== =========== =========== ==========
Weighted average shares
- diluted 14,062,641 3,750,000 11,492,183 3,750,000
=========== =========== =========== ==========
EPS, diluted $0.02 $0.28 $0.41 $0.42
=========== =========== =========== ==========
Contact:
YDI Wireless, Inc.
David L. Renauld, 413-665-8551