<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 5, 1999
-------------
STM WIRELESS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 000-19923 95-3758983
------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No)
One Mauchly, Irvine, California 92618
-------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (949) 753-7864
--------------
Not Applicable
--------------
(Former name or former address, if changed since last report)
<PAGE>
ITEMS 1 THROUGH 4 AND 6 THROUGH 8 NOT APPLICABLE.
ITEM 5 OTHER EVENTS.
Reference is made to the press release issued to the public by the
registrant on April 5, 1999, the text of which is attached hereto
as Exhibit 99.1 for a description of the events reported pursuant to
this Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STM WIRELESS, INC.
Date: April 8, 1999 By: /s/ JOSEPH J. WALLACE
-------------------------
Joseph J. Wallace
Vice President, Finance and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
99.1 Press Release dated April 5, 1999
<PAGE>
STM WIRELESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousand, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the three months For the year
ended Dec. 31, ended Dec. 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Products $ 11,145 $ 6,604 $ 39,355 $ 49,824
Services 497 511 2,667 2,324
--------- -------- --------- ---------
Total revenues 11,642 7,115 42,022 52,148
Cost of revenues:
Products 11,519 5,865 32,010 37,084
Services 975 316 2,948 1,315
--------- -------- --------- ---------
Total cost of revenues 12,494 6,181 34,958 38,399
Gross profit (852) 934 7,064 13,749
Operating costs and other operating items:
Selling, general & administrative expenses 3,827 3,596 12,746 9,589
Research & development 1,543 2,063 8,102 6,387
Loss (Gain) on sale of assets - - (9,950) -
Move and relocation charges - - 980 -
--------- -------- --------- ---------
Total 5,370 5,659 11,878 15,976
Operating income (6,222) (4,725) (4,814) (2,227)
Other income (expense) (6) 93 13 42
Interest income 325 186 979 684
Interest expense (377) (270) (1,476) (982)
--------- -------- --------- ---------
Income before income taxes and minority interest (6,280) (4,716) (5,298) (2,483)
Income tax expense (3,377) 616 (3,698) 306
--------- -------- --------- ---------
Income before minority interest (9,657) (4,100) (8,996) (2,177)
Minority interest (150) (28) (410) 126
--------- -------- --------- ---------
Net income $ (9,807) $ (4,128) $ (9,406) $ (2,051)
========= ======== ========= =========
Net income per common share:
Basic $ (1.39) $ (0.64) $ (1.36) $ (0.32)
----- ========= ======== ========= =========
Diluted $ (1.39) $ (0.64) $ (1.36) $ (0.32)
------- ========= ======== ========= =========
Common shares used in computing per share:
Basic 7,042 6,433 6,936 6,384
-----
Diluted 7,042 6,433 6,936 6,384
-------
</TABLE>
<PAGE>
STM WIRELESS, INC
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS
December 31, December 31,
1998 1997
---- ----
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 11,540 $ 4,095
Short-term investments 2,806 4,527
Accounts receivable, net 17,016 10,937
Inventories, net 13,108 11,211
Current portion of long-term receivables 702 592
Deferred income taxes - 3,132
-------- --------
Total current assets 45,172 34,494
Property & equipment, net 11,056 17,025
Long-term receivables 788 1,462
Other assets 6,185 1,436
-------- --------
$ 63,201 $ 54,417
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 10,650 $ 7,900
Current portion of long-term debt 384 328
Accounts payable 9,582 11,442
Accrued liabilities 7,254 2,139
Customer deposits 1,606 130
Deferred Revenue 306 155
Income taxes payable 1,000 425
-------- --------
Total current liabilities 30,782 22,519
Long-term debt 4,306 4,577
Redeemable minority interest 6,355 259
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares
authorized, none issued or outstanding - -
Common stock, $0.001 par value; 20,000,000 shares authorized;
issued and outstanding 7,042,204 shares at December 31,
1998 and 6,448,164 shares at December 31, 1997 7 6
Additional paid in capital 38,138 34,039
Accumulated deficit (16,387) (6,983)
Other comprehensive income - -
-------- --------
Total stockholders' equity 21,758 27,062
-------- --------
$ 63,201 $ 54,417
======== ========
</TABLE>
<PAGE>
EXHIBIT 99.1
For Further Information, Contact:
Investor Relations:
Lippert/Heilshorn & Associates
Keith Lippert
(212) 838-3777
Kris Otridge
(415) 433-3777
Company Communications:
STM Wireless, Inc.
Joseph Wallace
(949) 753-7864
Web Site: www.stmi.com
STM WIRELESS, INC. ANNOUNCES FOURTH QUARTER AND TWELVE-MONTH
RESULTS FOR FISCAL 1998
IRVINE, CALIFORNIA, April 5, 1999 -- STM WIRELESS, INC. (STM), (NASDAQ NM
Symbol: STMI) today announced the results for the fourth quarter and year ended
December 31, 1998.
The company reported revenues of $42.0 million for fiscal 1998, a decrease
of approximately 20% over revenues for 1997, which were $52.1 million. The net
loss for fiscal 1998 was $9.4 million ($1.36 per share), compared with a loss of
$2.1 million ($0.32 per share) for 1997. The net loss for the year ended Dec.
31, 1998 is net of a gain on the sale of assets of TMSI of $10.0 million.
Revenues for the fourth quarter ended Dec. 31, 1998 were $11.6 million
compared to $7.1 million for the corresponding period in 1997. The company
reported a net loss of $9.8 million ($1.39 per share) for the fourth quarter
ended Dec. 31, 1998, compared to a net loss of $4.1 million ($0.64 per share)
for the corresponding period of 1997. The net loss for the quarter includes
approximately $6.3 million of non-cash charges associated primarily with taxes
and inventory reserves. Also, approximately $1.9 million of reserves were
established for foreign taxes and accounts receivable.
The results for the fourth quarter of 1998 violate certain covenants under
the company's line of credit, which expired as of April 1, 1999. The company is
currently in discussions with its bank to obtain a renewal of its line of
credit.
For the first quarter of 1999, the company expects to incur a significant
loss and experience a significant decrease in revenues compared to the revenues
for the first quarter of 1998.
<PAGE>
"1998 was a challenging year for STM," said Emil Youssefzadeh, chief
executive officer of the company. "Global economic conditions, especially in our
core markets of Asia and Latin America, were severe and adversely impacted the
company's equipment business. We are determined to return the company to
profitability on an operating basis in our equipment business as soon as
possible and are in the process of consolidating our operations accordingly. In
addition to returning the company to operating profitability, we have
established several key strategic objectives for the company in 1999.
"First, we will look to build shareholder value by separating our rural
telephony services business from our equipment business. This action will enable
us to articulate and quantify better the value of each of these businesses,
especially the DTPI service business which we feel can become the industry
leader for rural telephony services.
"In addition, we actively will look to recruit top industry talent to
assist us in building each of these businesses. We will continue to build
strategic relationships to generate growth moving forward and reduce our
dependence on developing markets. Finally, the company has retained the services
of an investment bank to assist it in evaluating other alternatives for
maximizing shareholder value."
STM Wireless, Inc., headquartered in Irvine, (Web Site: www.stmi.com), is
an international provider of communication solutions for rural telephony
applications and satellite data networks with equipment installed in over 90
countries. The company operates as two independent, but complementary
businesses: STM Network Systems (STM-NS), which supplies satellite network
systems worldwide and Direc-to-Phone International, Inc. (DTPI) (Web Site:
www.directophone.com), a majority-owned subsidiary, which is a leading provider
of fixed-station telephony services in countries and regions with low telephone
density. DTPI uses products manufactured by STM-NS to enter into long-term
agreements with local partners to provide satellite communications services.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
This release contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, in Section 21E of the Securities
Exchange Act of 1934, as amended, which involve risks and uncertainties that may
cause actual future
<PAGE>
results or results different materially and adversely from those described in
the forward looking statements. For example, there can be no assurance that the
Company will renew its line of credit. In such event, the Company would be
required to obtain potentially dilutive debt or equity financing from other
sources. Additional important factors that may cause a difference between
projected and actual results for the Company include, but are not limited to,
future capital requirements, the long-term cycle involved in completing major
contracts, particularly in foreign markets, political and economic risks
involved in foreign markets and foreign currencies, increasing competitive
pressures, and general economic conditions, technological advances, the timing
of new product introductions, and the timing of operating and other
expenditures, and other factors discussed in the Company's filings from time to
time with the Securities Exchange Commission, including but not limited to the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 and
the Form 10-Q's for the first three quarters of fiscal 1998. The Company
disclaims any obligation to revise or update any forward looking statement that
may be made from time to time by it or on its behalf.
