Conference Call: Webcast / Replay URL: Dial-in numbers: |
Wednesday, November 7, 2007 at 4:30 P.M. EST Click Here (Windows Media Player required.) 212-896-6169 or 415-537-1841 |
Wave Q3 2007 Revenues Rise to a Record
$1.7 Million Driven by Strength in PC OEM Royalties
Lee, MA -- November 7, 2007 -- Wave Systems Corp. (NASDAQ: WAVX -- www.wave.com) today reported results for the third quarter (Q3) of 2007 and reviewed recent corporate progress and developments. In today's Q3 conference call, management plans to review the progress of enterprise upgrade activity.
Principally reflecting an increase in license revenues in Q3 2007 versus last year, Wave's Q3 2007 net revenues rose to $1,734,000, compared to Q3 2006 net revenues of $846,000. The improvement in license revenues was principally due to increased royalties from shipments of Wave software by Wave's leading OEM partner. Gross profit for Q3 2007 rose to $1,524,000 or 87.9% compared to $643,000 or 76.0% in Q3 2006.
For Q3 2007 Wave reported a net loss of $4,778,000, or $0.10 per basic and diluted share, compared to a Q3 2006 net loss of $4,487,000, or $0.12 per basic and diluted share. The increased net loss reflects increased spending in both research and development and selling, general and administrative expenses, principally reflecting increased headcount largely in sales and customer support and engineering, as well as higher professional fees, stock option expense, rent and travel expenses. Per-share figures are based on a weighted average number of basic shares outstanding in the third quarters of 2007 and 2006 of 49,737,000 and 37,800,000, respectively.
As of September 30, 2007, Wave had total current assets of $9.6 million, including cash and equivalents of $7.8 million, and no long-term debt.
Steven Sprague, Wave's president and CEO, commented, "Our Q3 results reflect continued growth principally as a result of the deployment of our trusted computing solutions via our OEM partners. Year-to-date our EMBASSY Trust Suite software has shipped on over 13 million PCs, bringing our total shipments to over 17 million. As the installed base of Trusted Platform Modules (TPMs) increases and trusted computing becomes more prevalent, we are seeing growing interest in the use of the technology. During Q3 and into Q4, we are seeing a healthy increase in demand for software upgrades.
"With the commercial availability of Seagate's Momentus 5400 (Full Disc Encryption) (FDE) hard drive solutions starting in the third quarter, we have realized a significant uptake in interest in Wave's trusted computing software solutions. While the revenue contribution from this source was minimal in the third quarter, there is strong interest in our product. We have already successfully closed a number of initial enterprise sales in a variety of industries, and our pipeline of opportunities is growing. In addition to the activity around full disc encryption, we have seen a tremendous up-tick in interest in the TPM. Many customers are considering the deployment of both solutions and in particular, they are looking at the authentication capabilities of TPMs and biometrics as well as Wave's software to manage those devices.
"Our company-wide imperative is to focus on our current sales opportunities. At the same time, we have worked to expand the reach of our sales and marketing effort through recently forged sales relationships with Safend, Convergent Computing and Ping Identity. Seeking additional complementary partner relationships remains another important component of our effort to expand awareness of our solutions on both an application-specific and geographic basis."
Summary of recent progress/developments:
(for more details, please visit http://www.wave.com):
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Commercial availability of FDE drives bundled with Wave software via leading PC OEM: During Q3 2007, Wave's leading PC OEM partner launched commercial availability of FDE drives, bundled with Wave's software, for certain of its enterprise laptop PCs.
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Wave Announces Support for Intel Danbury Technology: In September at Intel Developers Forum, Intel announced its plans for its next generation chipsets to incorporate an integrated Trusted Platform Module (TPM) along with a new data encryption technology codenamed "Danbury Technology."
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Expands Sales & Marketing Reach with Convergent Computing: In early October, Wave executed a strategic partnership with Convergent Computing, (CCO), a California-based technology services consulting firm for medium and large businesses. CCO will advise its clients in California, Oregon and Washington on the use and implementation of Wave's EMBASSY line of trusted computing solutions.
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Wave and Safend Team in Sales Referral Agreement: In late October, Wave and Safend, Inc, a leading provider of data leakage prevention solutions entered a sales referral agreement.
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Ping Identity and Wave Provide Strong Authentication for Federated Single Sign-On: In late September, Ping Identity, a market leader in secure Internet single sign-on, and Wave demonstrated how their respective, standards-based products can be integrated to provide strong multifactor authentication of individual identity and then federate that identity from the desktop to any standards-based Web application. The combined solution can allow enterprise customers to achieve stronger user authentication security and single sign-on access to data and services inside and outside the enterprise network.
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Intel Desktop Boards Bundled with EMBASSY Trust Suite Software began Shipping: In late August, Wave announced that its latest edition of EMBASSY Trust Suite software began shipping with the new series of desktop motherboards from Intel Corporation. Intel® Desktop Boards Executive Series is the fifth generation of Intel boards to include Wave's software.
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TVTonic Secures Weather Channel and Next New Networks Content Licenses: In late October, Wavexpress entered content licenses with The Weather Channel and Next New Networks. The licenses will enable TVTonic viewers to access the latest weather reports on demand via 10 new channels that span both national and regional weather, as well as a dozen new channels from Next New Networks' micro-television network. The licenses bring to over 380 the number of channels of online video content available via TVTonic.
About Wave Systems Corp.
Wave is a pioneer in hardware-based PC security that provides software to help solve critical enterprise PC security challenges such as data protection, strong authentication, network access control and the management of these enterprise functions. Wave is a founding member of the Trusted Computing Group (TCG), a consortium of more than 100 companies 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) as well as hard drives that comply with TCG’s “Opal” self-encrypting drive (SED) standard. Self-encrypting drives are a growing segment of the data protection market, offering increased security and better performance than most existing software-based encryption solutions. TPMs are standard equipment on many enterprise-class PCs shipping today and have shipped on an estimated 300 million PCs worldwide. Using TPMs and/or SEDs and Wave software, enterprises can substantially and cost-effectively strengthen their current security solutions. Visit http://www.wave.com for more information.
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.
For more information please contact:
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Wave Investor Relations Contact David Collins, Ratula Roy Jaffoni & Collins 212-835-8500 wavx@jcir.com |
Wave Systems Corp. and Subsidiaries |
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September 30, |
|
December 31, |
|
|
|
|
| Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$7,754 |
|
$ 7,966 |
Accounts receivable, net |
1,353 |
|
636 |
Prepaid expenses |
453 |
|
207 |
Total current assets |
9,560 |
|
8,809 |
|
|
|
|
Property and equipment, net |
605 |
|
420 |
Other assets |
135 |
|
131 |
Total Assets |
10,300 |
|
9,360 |
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
2,818 |
|
3,036 |
Deferred revenue |
478 |
|
404 |
Total current liabilities |
3,296 |
|
3,440 |
|
|
|
|
Total Stockholders' Equity |
7,004 |
|
5,920 |
Total Liabilities and Stockholders' Equity |
$10,300 |
|
$ 9,360 |
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