|By Marketwired .||
|November 9, 2012 04:02 PM EST||
LEE, MA -- (Marketwire) -- 11/09/12 -- Wave Systems Corp. (NASDAQ: WAVX) today reported financial results for its third quarter ended September 30, 2012 (Q3 '12) and highlighted recent progress and new product launches.
Wave reported total net revenues of $7.0 million for Q3 '12, including $1.5 million in licensing revenues from its Safend subsidiary, and services revenue of $40,000 from the final billing of a government contract. Wave's Q3 '11 total net revenues were $9.5 million, including $156,000 in revenues from Safend, which was acquired in late September 2011, and $274,000 in services revenue related to a government contract. The year-ago third quarter also benefitted from approximately $2 million in additional revenue related to two "large" enterprise-customer upgrade sales recorded ratably during 2011. Total net revenues in Q2 '12 were $7.8 million.
Wave's Q3 '12 and year-to-date results reflect lower levels of OEM bundling revenue resulting from both lower PC shipment volumes as well as revisions to the Company's royalty rates starting in November 2011 which, on a blended basis, have reduced per-unit revenues. In aggregate, Q3 '12 was impacted by a $1.6 million decrease in OEM royalties versus the prior year period, and since the beginning of 2012 Wave's OEM bundling revenue has declined by $3.2 million versus a year ago, providing another headwind in year-over-year comparisons.
Total billings declined to $6.1 million in Q3 '12, compared to $6.4 million in Q3 '11 and $6.9 million in Q2 '12. Total billings for Q3 '12, Q3 '11 and Q2 '12 included $1.3 million, $143,000 and $1.4 million, respectively, from Safend.
Wave's Q3 '12 combined SG&A and R&D expenses declined to $12.6 compared to $13.7 million in Q2 '12 but rose over Q3 '11 expenses of $10.9 million. The year-over-year increase in SG&A and R&D expenses reflects expanded staffing in engineering, sales & marketing and administration, principally due to the addition of approximately 60 team members and related overhead resulting from the Safend acquisition. The increased staffing & expenses support a broader base of OEM relationships, growth in the prospective customer base and pipeline of order opportunities on a global basis and investments in the development of new products and product capabilities.
Wave recorded a Q3 '12 net loss of $6.1 million, or $0.06 per basic and diluted share, as compared to a Q2 '12 net loss of $6.5 million, or $0.07 per basic and diluted share and its Q3 '11 net loss of $1.8 million, or $0.02 per basic and diluted share. Per share figures are based on a weighted average number of basic shares outstanding during Q3 '12, Q3 '11 and Q2 '12 of 98.0 million, 83.7 million and 92.5 million, respectively.
In order to highlight its operational performance on a cash-flow basis, Wave reports EBITDAS, a non-GAAP measure defined as earnings before interest income (expense), income taxes, depreciation and amortization and stock-based compensation expense. Wave recorded negative EBITDAS of $4.2 million in Q3 '12, compared with negative EBITDAS of $0.3 million in Q3 '11 and negative EBITDAS of $4.6 million in Q2 '12.
As of September 30, 2012, Wave's total current assets were $6.5 million and total current liabilities, including the current portion of deferred revenue of $4.5 million, were $12.6 million. Cash and cash equivalents were $2.2 million at September 30, 2012, as compared to $1.6 million at June 30, 2012.
Wave continues to utilize a variety of approaches to fund its operations, including active working capital management methods, a receivables financing relationship to monetize its largest receivables and common stock sales. During Q3'12, Wave completed the sale of 2.6 million shares of Class A common stock at $0.6425 per share, yielding net proceeds of approximately $1.5 million. Purchasers also received warrants to purchase up to 1.3 million shares of Class A common stock at $0.58 which expire in August 2017. In October (Q4 '12), Wave raised approximately an additional $3.1 million in net proceeds through the sale of 3.3 million shares of Class A common stock at $1.0025 per share. Purchasers also received warrants to purchase up to 1.7 million shares of Class A common stock at $0.94 which expire in October 2017. Both of these private placements were pursuant to Wave's effective shelf registration statement.
Also during Q3 '12, Wave raised net proceeds of approximately $3.6 million through the issuance of approximately 4.0 million shares of its Class A common stock at an average price of $0.93 per share through its At The Market (ATM) structure. Since the end of Q3 '12, shares sales through the ATM raised additional net proceeds of approximately $0.3 million at an average price of $0.99. Since the ATM's inception in January 2012, Wave has raised total net proceeds of $9.1 million through the issuance of 7.9 million shares of Class A common stock at an average price of $1.18 per share. The share sales are completed at market prices, with a 3% commission and without any warrant issuance.
"During the third quarter, sales fell short of expectations due to challenges in completing enterprise deals, as well as a lower level of OEM bundling revenues. Our performance has prompted a 'redoubling' of efforts to bring sales in the pipeline to fruition in the current quarter as well as expanded efforts at developing new opportunities," commented Wave CEO Steven Sprague. "In light of our sales results, we've also taken a closer look at ways to curtail expenses, realizing a $1.2 million reduction in operating expenses in Q3 versus Q2 and a $2.2 million reduction versus Q1 of this year.
"Nonetheless, we remain optimistic about the future and our prospects in this growing market. As anticipated, Wave released several new products and product enhancements during the third quarter, including Wave Cloud, a SaaS (software as a service) offering that provides central management for hardware-based endpoint encryption, and Wave Endpoint Monitor, a first-of-its-kind solution that detects malware threats in the 'pre-boot' mode. We believe these new capabilities extend our leadership position in the Trusted Computing space at a time when Trusted Computing capabilities are receiving global visibility through the launch of the Windows 8 operating system across PCs, tablets and mobile devices.
"We view Windows 8, which utilizes industry standard hardware to deliver a range of convenient and secure new features, as a validation of the benefits of Trusted Computing and Wave's solutions. Wave is uniquely positioned to support Windows 8 deployments via server-based or cloud management solutions, as well as to deliver a range of Windows 8 capabilities to enterprise customers running Windows 7 and earlier versions. Though Trusted Computing is based on industry-standard hardware used to protect your identity, the powerful user benefits are ease of use, ease of connection, and ease of access to the critical data that you need to do your job; it just works. Further, by building these capabilities on top of Trusted Computing hardware now being deployed across PCs, tablets and mobile devices via Windows 8, governments, enterprises, and even individuals, are able to benefit and manage all of their devices using one solution."
"As the mobile security space continues to expand -- especially with the rising use of consumer smartphones in the enterprise, in mobile commerce and for sensitive applications -- Wave has taken a leadership role in promoting the adoption of hardware-based industry standards for greater security. Last quarter, Wave announced its inclusion in the influential ARM TrustZone Ready Program, whose partners have pledged to help chipset vendors design and integrate Trusted Computing hardware features in the chipsets they are building today.
"We are making great progress with scrambls to address security issues posed by the rising use of Cloud storage services in the enterprise as well as the evolution of social media into a tool increasingly used by businesses for the dissemination of critical information. We see strong interest within the corporate environment for solutions that enable the safe sharing of files and communications over the Internet and social media."
Recent News and Developments
- Wave launched several significant products in Q3, including Wave Cloud, which provides central management for hardware-based endpoint encryption, and Wave Endpoint Monitor, the first-ever solution using industry standard hardware to detect malware and other threats at the BIOS level.
- Wave outlined unique Trusted Platform Module (TPM) management capabilities within its upcoming version of EMBASSY Remote Administration Server (ERAS), including the ability to secure credentials in hardware for DirectAccess deployments and to use a TPM as a Virtual Smartcard.
- Gartner, the world's leading IT research and advisory firm, elevated Wave to the "Visionary" section of its Mobile Data Quadrant.
- SC Magazine awarded Wave's flagship server, ERAS, a four and 1/4 star rating in its group endpoint encryption review.
- Wave received broad media coverage discussing the Trusted Computing capabilities and significance of the Windows 8 launch across PCs, tablets and mobile devices: Forbes, eWeek, PC Magazine, ComputerWeekly, Redmond Magazine.
- Wave joined the ARM TrustZone Ready Enablement Program to provide support and infrastructure for implementing enterprise security capabilities in mobile devices.
About Wave Systems
Wave Systems Corp. reduces the complexity, cost and uncertainty of data protection by starting inside the device. Unlike other vendors who try to secure information by adding layers of software for security, Wave leverages the security capabilities built directly into endpoint computing platforms themselves. Wave has been a leading expert in this growing trend, leading the way with first-to-market solutions and helping shape standards through its work as a board member for the Trusted Computing Group.
Safe Harbor for Forward-Looking Statements
This press release may contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995 and 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. Wave assumes no duty to and does not undertake to update forward-looking statements.
All brands are the property of their respective owners.
WAVE SYSTEMS CORP. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, September 30, September 30, 2012 2011 2012 2011 ------------- ------------- ------------- ------------- Net revenues: Licensing $ 6,930,724 $ 9,259,722 $ 20,950,093 $ 24,617,967 Services 39,539 274,416 763,781 486,533 ------------- ------------- ------------- ------------- Total net revenues 6,970,263 9,534,138 21,713,874 25,104,500 ------------- ------------- ------------- ------------- Operating expenses: Licensing - cost of net revenues 395,188 459,002 1,317,055 1,139,943 Services - cost of net revenues 7,521 28,122 144,111 102,169 Selling, general, and administrative 7,847,873 7,021,658 26,246,347 19,304,601 Research and development 4,793,453 3,869,833 14,861,557 10,717,346 ------------- ------------- ------------- ------------- Total operating expenses 13,044,035 11,378,615 42,569,070 31,264,059 ------------- ------------- ------------- ------------- Operating loss (6,073,772) (1,844,477) (20,855,196) (6,159,559) ------------- ------------- ------------- ------------- Other income (expense): Net currency transaction gain (loss) 1,965 - 11,753 231,368 Net interest expense (36,685) (1,074) (99,294) (3,128) ------------- ------------- ------------- ------------- Total other income (expense) (34,720) (1,074) (87,541) 228,240 ------------- ------------- ------------- ------------- Net loss $ (6,108,492) $ (1,845,551) $ (20,942,737) $ (5,931,319) ============= ============= ============= ============= Loss per common share - basic and diluted $ (0.06) $ (0.02) $ (0.22) $ (0.07) Weighted average number of common shares outstanding during the period 97,987,172 83,680,753 93,585,723 82,929,284 WAVE SYSTEMS CORP. AND SUBSIDIARIES Consolidated Supplemental Schedules (Unaudited) Three months ended Nine months ended September 30, September 30, September 30, September 30, 2012 2011 2012 2011 ------------- ------------- ------------- ------------- Total net revenues $ 6,970,263 $ 9,534,138 $ 21,713,874 $ 25,104,500 Increase (decrease) in deferred revenue (884,795) (3,182,659) (1,900,663) (3,823,218) ------------- ------------- ------------- ------------- Total billings (Non-GAAP) $ 6,085,468 $ 6,351,479 $ 19,813,211 $ 21,281,282 ============= ============= ============= ============= Net loss as reported $ (6,108,492) $ (1,845,551) $ (20,942,737) $ (5,931,319) Net interest expense 36,685 1,074 99,294 3,128 Depreciation and amortization 539,001 177,933 1,611,521 438,794 Stock-based compensation expense 1,343,510 1,355,100 3,987,588 3,938,605 ------------- ------------- ------------- ------------- EBITDAS (Non- GAAP) $ (4,189,296) $ (311,444) $ (15,244,334) $ (1,550,792) ============= ============= ============= =============
Non-GAAP Financial Measures:
As supplemental information, we provide the non-GAAP performance measures that we refer to as total billings and EBITDAS. Total billings is provided in addition to, but not as a substitute for, GAAP total net revenues. Total billings means the sum of total net revenues determined in accordance with GAAP, plus the increase or minus the decrease in deferred revenue. We consider total billings an important measure of our financial performance, as we believe it best represents the continued increase in our software license upgrades. Total billings is not a measure of financial performance under GAAP and, as calculated by us, may not be consistent with computations of total billings by other companies. EBITDAS is defined as net income (loss) before interest income (expense), income taxes, depreciation and amortization and stock-based compensation. EBITDAS should not be construed as a substitute for net income (loss) or net cash provided by (used in) operating activities (all as determined in accordance with GAAP) for the purpose of analyzing our operating performance, financial position and cash flows, as EBITDAS is not defined by GAAP. However, we regard EBITDAS as a complement to net income (loss) and other GAAP financial performance measures, including an indirect measure of operating cash flow.
WAVE SYSTEMS CORP. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) September 30, December 31, 2012 2011 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 2,163,046 $ 3,385,035 Accounts receivable, net of allowance for doubtful accounts of $-0- September 30, 2012 and December 31, 2011 2,640,528 7,198,645 Collateralized receivables 795,416 - Prepaid expenses 886,919 823,761 ------------- ------------- Total current assets 6,485,909 11,407,441 Property and equipment, net 983,920 1,236,844 Amortizable intangible assets, net 9,711,906 10,925,306 Goodwill 6,216,059 6,216,059 Other assets 325,393 336,607 ------------- ------------- Total Assets 23,723,187 30,122,257 ============= ============= Liabilities and Stockholders' Equity Current liabilities: Secured borrowings 672,107 - Accounts payable and accrued expenses 7,366,079 6,701,026 Current portion of capital lease payable 63,197 72,074 Deferred revenue 4,484,362 6,619,257 ------------- ------------- Total current liabilities 12,585,745 13,392,357 Long-term portion of capital lease payable - 44,659 Other long-term liabilities 93,969 66,283 Royalty liability 4,116,656 4,043,163 Long-term deferred revenue 1,194,152 1,035,220 ------------- ------------- Total liabilities 17,990,522 18,581,682 ------------- ------------- Stockholders' Equity: Common stock, $.01 par value. Authorized 150,000,000 shares as Class A; 100,999,248 shares issued and outstanding in 2012 and 89,574,385 in 2011 1,009,992 895,744 Common stock, $.01 par value. Authorized 13,000,000 shares as Class B; 35,556 shares issued and outstanding in 2012 and 2011 355 355 Capital in excess of par value 388,618,723 373,598,144 Accumulated deficit (383,896,405) (362,953,668) ------------- ------------- Total Stockholders' Equity 5,732,665 11,540,575 ------------- ------------- Total Liabilities and Stockholders' Equity $ 23,723,187 $ 30,122,257 ============= ============= Conference call: Today, November 9, 2012 at 4:30 p.m. ET Webcast / Replay URL: www.wave.com/news/webcasts Dial-in numbers: 415-226-5355 or 212-231-2902
Wave Systems Corp.
Gerard T. Feeney
David Collins, Eric Lentini
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
May. 25, 2016 07:15 AM EDT Reads: 1,119
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
May. 25, 2016 04:45 AM EDT Reads: 2,432
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
May. 25, 2016 04:45 AM EDT Reads: 842
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
May. 25, 2016 04:15 AM EDT Reads: 3,038
Korean Broadcasting System (KBS) will feature the upcoming 18th Cloud Expo | @ThingsExpo in a New York news documentary about the "New IT for the Future." The documentary will cover how big companies are transmitting or adopting the new IT for the future and will be filmed on the expo floor between June 7-June 9, 2016, at the Javits Center in New York City, New York. KBS has long been a leader in the development of the broadcasting culture of Korea. As the key public service broadcaster of Korea...
May. 25, 2016 04:00 AM EDT Reads: 1,701
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
May. 25, 2016 04:00 AM EDT Reads: 1,067
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
May. 25, 2016 02:00 AM EDT Reads: 1,135
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
May. 24, 2016 11:45 PM EDT Reads: 837
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
May. 24, 2016 06:00 PM EDT Reads: 4,669
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit y...
May. 24, 2016 05:00 PM EDT Reads: 1,859
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
May. 24, 2016 04:00 PM EDT Reads: 1,694
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will discuss the vast to...
May. 24, 2016 04:00 PM EDT Reads: 2,367
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
May. 24, 2016 02:15 PM EDT Reads: 2,092
SYS-CON Events announced today the How to Create Angular 2 Clients for the Cloud Workshop, being held June 7, 2016, in conjunction with 18th Cloud Expo | @ThingsExpo, at the Javits Center in New York, NY. Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified. Now it’s a component-based well-performing framework. The immersive one-day workshop led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and...
May. 24, 2016 02:00 PM EDT Reads: 3,868
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
May. 24, 2016 01:45 PM EDT Reads: 1,390
IoT generates lots of temporal data. But how do you unlock its value? How do you coordinate the diverse moving parts that must come together when developing your IoT product? What are the key challenges addressed by Data as a Service? How does cloud computing underlie and connect the notions of Digital and DevOps What is the impact of the API economy? What is the business imperative for Cognitive Computing? Get all these questions and hundreds more like them answered at the 18th Cloud Expo...
May. 24, 2016 01:45 PM EDT Reads: 2,081
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
May. 24, 2016 01:30 PM EDT Reads: 1,778
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
May. 24, 2016 10:30 AM EDT Reads: 783
SYS-CON Events announced today that 24Notion has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. 24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to con...
May. 24, 2016 09:30 AM EDT Reads: 1,691
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
May. 24, 2016 09:00 AM EDT Reads: 1,981