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Wave Systems Reports Q1 Results; Highlights its Progress in Trusted Computing Marketplace
Lee, MA -- May 10, 2005 -- Wave Systems Corp. (NASDAQ: WAVX -- www.wave.com) today reviewed recent corporate progress and reported results for its first quarter (Q1) ended March 31, 2005.
Wave's Q1 2005 net revenue rose to $78,000, compared to Q1 2004 net revenue of $50,000, principally due to an increase in software license revenue. Wave reported a net loss of $4.5 million, or $0.06 per basic share, for the first quarter of 2005, compared to a net loss to common stockholders of $3.4 million, or $0.05 per basic share, in Q1 2004. The year-ago first quarter included the benefit of a gain on sale of marketable securities amounting to $1.2 million. Excluding the gain, Wave would have continued its trend of reduced year-over-year net losses. The weighted average number of basic shares outstanding in the first quarters of 2005 and 2004, was 77,212,000 and 67,338,000, respectively.
As of March 31, 2005, Wave had total current assets of $6.0 million, working capital of $2.8 million and no long-term debt.
Steven Sprague, Wave's president and CEO, said, "The commitment to trusted computing is continuing by a broad range of IT industry players. Most recent are announcements around the expected availability of next-generation Trusted Platform Module ("TPM") v1.2 security chips for trusted personal computers. The launch of this enhanced version TPM by a range of silicon providers and personal computer manufacturers should prove to be an important catalyst in accelerating industry adoption of trusted computing.
"As trusted PCs become more mainstream, Wave believes there will be a significant business opportunity in delivering trusted computing software solutions that address the security challenges facing businesses and governments today - issues like data and identity protection, network management and the strong authentication of users into enterprise networks. We believe that to be broadly adopted, secure solutions must fit into existing infrastructure and reduce costs and customer service.
"Into 2005, Wave continues to make progress. Wave's EMBASSY® Trust Suite ("ETS") secure software ships with certain products of one of the global leaders in PC motherboard sales; our software is available for sale on the web site of one of the global leaders in PC sales; we have contracts to have our products bundled with certain products of two other leading silicon chip suppliers, and our solutions are now available from additional reseller partners."
Summary of 2004 and year-to-date developments:
(for more details, please visit www.wave.com ):
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EMBASSY® Trust Suite 4.3: In April, in conjunction with Microsoft's WinHEC conference, Wave announced summer availability of ETS 4.3, designed to support the next generation security chip hardware, TPM 1.2, which is expected to be available from personal computer original equipment manufacturers also beginning this summer.
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Giesecke & Devrient ("G&D"): In April 2005, Wave formed a strategic alliance with G&D to offer an enhanced security solution to address the trusted computing market. The collaboration will address G&D and Wave's respective joint development activities in the fields of smart card technology and trusted computing software.
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Seagate Technology: In March 2005, at the Intel Developers Forum, Wave and Seagate conducted a technology demonstration showing the data protection benefits of linking the security of a TPM to a Seagate-trusted disc drive.
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Dell: On February 1, 2005, Wave's ETS Enterprise Security Dell Edition 1.0 was made available for purchase on www.Dell.com.
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Sonex ISG: In February 2005, Sonex Infrastructure Solutions Group agreed to distribute Wave's ETS software and infrastructure to enterprises. Sonex's distribution will encompass the Eastern European countries of Lithuania, Latvia and Estonia.
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Microsoft: In January 2005, Wavexpress commenced offering its TVTonic video service to Media Center personal computer users via Microsoft's Online Spotlight. Online Spotlight is a selection of featured services within Microsoft Windows XP Media Center Edition 2005 that offers users a fast, simple way to access compatible services directly from the main navigation screen.
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Operational Research Consultants ("ORC"): In January, 2005, Wave and ORC forged a strategic partnership to jointly market trusted computing and certified credentialing to provide identity management solutions to federal, state and local governments.
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Groupement des Cartes Bancaires ("CB"): In January 2005, Wave announced that CB, the French banking authority for payment systems involving bank cards and terminals, will use Wave's secure software development tools to evaluate the potential of Trusted Computing Group compliant computing solutions.
- Quadra Media LA: In March 2005, Quadra Media licensed TVTonic Direct from Wave's Wavexpress subsidiary for use in the delivery of Spanish language content to Spanish speaking households in the U.S.
About Wave Systems Corp.
Wave provides software to help solve critical enterprise PC security challenges such as strong authentication, data protection, network access control and the management of these enterprise functions. Wave is a pioneer in hardware-based PC security and a founding member of the Trusted Computing Group (TCG), a consortium of nearly 140 PC industry leaders that forged open standards for hardware security. Wave’s EMBASSY® line of client- and server-side software leverages and manages the security functions of the TCG’s industry standard hardware security chip, the Trusted Platform Module (TPM). TPMs are included on tens of millions of PCs and are standard equipment on many enterprise-class PCs shipping today. Using TPMs and Wave software, enterprises can substantially and cost-effectively strengthen their current security solutions. For more information about Wave and its solutions, visit http://www.wave.com.
Safe Harbor for Forward Looking Statements
Under the Private Securities Litigation Reform Act of 1995. This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company's financing plans; (ii) trends affecting the company's financial condition or results of operations; (iii) the company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.
All brands are the property of their respective owners.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities. No securities are being offered at this time.
For more information please contact:
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Wave Investor Relations Contact
David Collins, Richard Land Jaffoni & Collins 212-835-8500 wavx@jcir.com |
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Wave Systems Corp. and Subsidiaries Consolidated Balance Sheets |
|||
|
March 31, 2005 |
December 31, 2004 |
||
| Assets | |||
|
Current Assets: |
|||
|
Cash and cash equivalents |
$ 5,067 |
$ 5,806 |
|
|
Marketable securities |
569 |
722 |
|
|
Prepaid expenses and other receivables |
339 |
272 |
|
|
|
|
|
|
|
Total current assets |
5,975 |
6,800 |
|
|
|
|||
|
Property & equipment, net |
1,241 |
1,435 |
|
|
Other assets |
216 |
219 |
|
|
|
|
|
|
|
Total assets |
7,432 |
8,454 |
|
|
|
|||
|
Liabilities and Stockholders' Equity |
|||
|
Current Liabilities: |
|||
|
Accounts payable and accrued expenses |
2,698 |
2,900 |
|
|
Deferred revenue |
453 |
351 |
|
|
|
|
|
|
|
Total current liabilities |
3,151 |
3,251 |
|
|
|
|||
|
Liability for warrants containing cash settlement provisions |
378 |
493 |
|
|
|
|
|
|
|
Total liabilities |
3,529 |
3,744 |
|
|
|
|||
|
Total stockholders' equity |
3,903 |
4,710 |
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
$ 7,432 |
$ 8,454 |
|
Wave Systems Corp. and Subsidiaries
(a development stage corporation)
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
|
Three Months Ended |
|||
|
March 31, |
|||
|
2005 |
2004 |
||
|
Revenues |
|||
| Product |
-- |
6 |
|
| Services |
7 |
-- |
|
| Licensing and other |
71 |
44 |
|
|
|
|
||
| Total Net Revenues |
78 |
50 |
|
|
Cost of Sales: |
|||
| Product |
-- |
5 |
|
| Services |
9 |
-- |
|
| Licensing and other |
5 |
14 |
|
| Amortization expense |
155 |
8 |
|
|
|
|
||
| Total Cost of Sales |
169 |
27 |
|
| Gross Margin |
(91) |
23 |
|
| Operating Expenses: | |||
| Selling, general and administrative |
2,997 |
3,305 |
|
| Research and development |
1,594 |
1,756 |
|
|
|
|
||
|
4,591 |
5,061 |
||
| Net Interest income |
21 |
7 |
|
| Gain on sale of marketable securities |
-- |
1,175 |
|
|
Unrealized gain on decrease in value of warrant liability |
115 |
447 |
|
|
|
|
||
|
136 |
1,629 |
||
| Net loss |
($4,546) |
($3,409) |
|
| Net loss per share - basic |
($0.06) |
($0.05) |
|
|
Weighted average shares outstanding - basic |
77,212 |
67,338 |
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