<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
For the quarterly period ended MARCH 31, 1999 or
Transition report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
For the transition period from ____________ to ____________
Commission file number 0-19903
METRICOM, INC.
(A Delaware Corporation)
I.R.S. Employer Identification #77-0294597
980 University Avenue
Los Gatos, CA 95032-2375
(408) 399-8200
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock outstanding as of April 23, 1999 was
19,032,741.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview 9
Results of Operations 9
Liquidity and Capital Resources 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE PAGE 14
EXHIBIT INDEX
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
METRICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
--------- ----------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 21,842 $ 19,141
Accounts receivable, net.................................. 2,061 1,450
Inventories, net.......................................... 2,304 3,046
Prepaid expenses and other................................ 1,600 1,522
--------- ---------
Total current assets.................................. 27,807 25,159
PROPERTY AND EQUIPMENT, net................................. 6,241 5,555
LONG-TERM INVESTMENTS....................................... 58 58
OTHER ASSETS, net........................................... 3,351 3,694
--------- ---------
Total assets.......................................... $ 37,457 $ 34,466
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 2,871 $ 5,061
Accrued liabilities 9,755 10,662
Note payable 18 40
--------- ---------
Total current liabilities 12,644 15,763
--------- ---------
LONG-TERM DEBT.............................................. 75,378 55,098
OTHER LIABILITIES........................................... 369 680
MINORITY INTEREST........................................... 5,184 5,184
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock.............................................. 19 19
Additional paid-in capital................................ 192,343 191,184
Accumulated deficit....................................... (248,480) (233,462)
--------- ---------
Total stockholders' equity (deficit).................. (56,118) (42,259)
--------- ---------
Total liabilities and stockholders' equity (deficit).. $ 37,457 $ 34,466
========= =========
</TABLE>
The accompanying notes are an integral part
of these condensed consolidated statements.
3
<PAGE> 4
METRICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
MARCH 31, MARCH 31,
1999 1998
-------- --------
<S> <C> <C>
REVENUES:
Service revenues ................................ $ 2,431 $ 1,974
Product revenues ................................ 1,755 1,629
-------- --------
Total revenues .............................. 4,186 3,603
-------- --------
COSTS AND EXPENSES:
Cost of service revenues ........................ 4,433 5,759
Cost of product revenues ........................ 1,326 1,375
Research and development ........................ 8,235 3,456
Selling, general and administrative ............. 4,140 4,261
-------- --------
Total costs and expenses ........................ 18,134 14,851
-------- --------
Loss from operations .......................... (13,948) (11,248)
INTEREST EXPENSE .................................. (1,213) (1,012)
INTEREST INCOME ................................... 143 553
-------- --------
Net loss....................................... $(15,018) $(11,707)
======== ========
BASIC & DILUTED
NET LOSS PER SHARE............................... $ (0.80) $ (0.69)
======== ========
WEIGHTED AVERAGE
SHARES OUTSTANDING .............................. 18,873 16,944
======== ========
</TABLE>
The accompanying notes are an integral part
of these condensed consolidated statements.
4
<PAGE> 5
METRICOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
MARCH 31, MARCH 31,
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss......................................... $ (15,018) $(11,707)
Adjustments to reconcile net loss to net
cash used in operating activities-
Depreciation and amortization................ 942 2,231
Decrease in accounts receivable, prepaid
expenses and other current assets........... (689) (1,330)
(Increase) decrease in inventories.......... 742 (819)
(Decrease) in accounts payable, accrued
liabilities, and other.................... (3,121) (1,424)
-------- --------
Net cash used in operating
activities............................ (17,144) (13,049)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.............. (1,292) (93)
Other............................................ -- (85)
Purchase of investments.......................... -- (111,403)
Proceeds from the sale of investments............ -- 114,214
-------- --------
Net cash provided by investing
activities............................ (1,292) 2,633
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock........... 1,159 54,909
Cash used to retire short-term debt, net......... (22) (5,000)
Additions to long-term debt...................... 20,000 --
Contributions from minority interest............. -- 586
-------- --------
Net cash provided by financing
activities............................. 21,137 50,495
-------- --------
NET INCREASE IN CASH AND EQUIVALENTS............... 2,701 40,079
CASH AND EQUIVALENTS, BEGINNING OF PERIOD.......... 19,141 9,784
-------- --------
CASH AND EQUIVALENTS, END OF PERIOD................ $ 21,842 $ 49,863
======== ========
SUMMARY OF NON-CASH TRANSACTIONS:
Property and equipment acquired under
capital lease................................... $ 280 $ --
</TABLE>
The accompanying notes are an integral part
of these condensed consolidated statements.
5
<PAGE> 6
METRICOM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated financial statements of Metricom, Inc. (the
"Company") presented in this Form 10-Q are unaudited. In the opinion of
management, the accompanying condensed consolidated financial statements reflect
all adjustments (which include only normal recurring adjustments) which are
necessary for a fair presentation of operations for the three month periods
ended March 31, 1999 and March 31, 1998. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission.
These condensed consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K, as amended, for the year
ended December 31, 1998, as filed with the Securities and Exchange Commission.
The Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability to continue
as a going concern. At March 31, 1999, the Company had working capital of $15.2
million. At the Company's current level of operations and rate of negative cash
flow, management anticipates that the Company's cash and cash equivalents will
be adequate to satisfy the Company's operating loss and capital expenditure
requirements through June 1999. The Company is working with an investment
banking firm to identify a strategic partner that will facilitate the deployment
of the Company's high-speed network. The Company is currently in discussions
with various potential partnership candidates. Management anticipates that such
strategic partner will also provide financing for the Company's future
operations. In the event that the Company does not enter into a strategic
partnership by the end of May 1999, management plans to reduce the level of
operations of the Company and consider other financing alternatives that will
enable the Company to continue as a going concern. There can be no assurance
that financing will be available to the Company or that the Company will be able
to successfully negotiate an agreement with a strategic partner.
Certain amounts on the accompanying consolidated financial statements have
been reclassified from the previously reported balances to conform to the 1999
presentation. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting
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period. Actual results could differ from those estimates. The results of
operations for the three-month periods ended March 31, 1999 and March 31, 1998
are not necessarily indicative of the results expected for the full fiscal year
or for any other fiscal period.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market
and include purchased parts, labor and manufacturing overhead. Inventories
consisted of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
-------- -----------
<S> <C> <C>
Raw materials $ 842 $ 680
Work-in-progress 21 3
Finished goods 1,441 2,363
-------- --------
Total $ 2,304 $ 3,046
======== ========
</TABLE>
NOTE 3. COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standard No. 130
"Reporting Comprehensive Income" ("SFAS 130") effective for fiscal years
beginning after December 15, 1997. The adoption of this statement had no effect
on the accompanying statements of operations.
NOTE 4. BASIC AND DILUTED NET LOSS PER SHARE
Basic and diluted net loss per share has been computed using the weighted
average number of shares of common stock outstanding. Potential common
equivalent shares from options and warrants to purchase common stock and from
conversion of the convertible subordinated notes have been excluded from the
calculation of diluted net loss per share as their effect would be
anti-dilutive.
NOTE 5. INVESTMENTS
In February 1996, the Company purchased an option to acquire Overall
Wireless Communications Corporation ("Overall Wireless"), a company that holds a
nationwide, wireless communications license in the 220 to 222 MHz frequency
band. The Company paid $700,000 for the option and agreed to loan Overall
Wireless up to $2.0 million for the construction of a system utilizing the
license, of which approximately $1.8 million had been loaned as of December 31,
1997. In January 1997, the Company paid $500,000 to extend the option from
January 1997 to July 1997. The option was subsequently extended to December 31,
2000 for no additional cash consideration. In June 1997, the Company recorded a
charge of $3.6 million to fully reserve its investment in Overall Wireless due
to uncertainties regarding its realization. In
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January 1998, Overall Wireless canceled the option and the Company paid a
termination fee of $1.8 million through cancellation of the indebtedness of
Overall Wireless.
NOTE 6. SEGMENT REPORTING
The Company adopted SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information", during the fourth quarter 1998. SFAS No.
131 established standards for reporting information about operating segments in
annual financial statements and requires selected information about operating
segments in interim financial reports issued to stockholders. It also
established standards for related disclosures about products and services and
geographic areas. Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated
regularly by chief operating decision makers or decision making groups, in
deciding how to allocate resources and in assessing performance.
The Company's reportable operating segments include Ricochet and Utilinet.
Ricochet designs and manufactures and markets wireless data communications
solutions. Utilinet manufactures and markets customer-owned networks and related
products.
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies. A summary of
operating results by reportable operating segment is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
MARCH 31,
------------------
1999 1998
------ ------
<S> <C> <C>
Ricochet Revenue ..................................... $2,900 $2,644
Utilinet Revenue ..................................... 1,286 959
------ ------
Total ............................................ $4,186 $3,603
====== ======
Cost of Service Ricochet ............................. $4,427 $5,686
Cost of Service Utilinet ............................. 6 73
------ ------
Total ............................................ $4,433 $5,759
====== ======
Cost of Product Ricochet ............................. $ 786 $ 965
Cost of Product Utilinet ............................. 540 410
------ ------
Total ............................................ $1,326 $1,375
====== ======
</TABLE>
NOTE 7. NEW ACCOUNTING STANDARD
In June, 1998, The FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, hedging activities, and exposure
definition. The pronouncement is effective for fiscal years beginning after June
15, 1999. The Company believes the pronouncement will not have a material effect
on its financial statements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
Since inception, the Company has devoted significant resources to the
development, deployment and commercialization of its wireless network products
and services. Historically, a significant portion of the Company's revenues have
been derived primarily from the development contracts and sales of
customer-owned networks and related products, known as UtiliNet, to utility
companies. In recent years, the Company has deployed a commercial wireless data
network known as Ricochet in various metropolitan areas of the United States.
The Company currently provides Ricochet commercial service in the San Francisco
Bay Area, the Seattle and Washington D.C. metropolitan areas, parts of Los
Angeles, and in certain airports and corporate and university campuses.
In 1997, in conjunction with the Company's acquisition of licensed spectrum
in the 2.3 GHz Band in the FCC's WCS auctions, the Company began the development
of a higher speed service known as Ricochet2. Ricochet2, an upgrade to Ricochet,
has demonstrated in Company tests to provide the same service as Ricochet, but
at faster downstream speeds of up to 128 Kbps. In conjunction with development
of Ricochet2, the Company has continued to pursue right-of-way and site
agreements to enable Ricochet2 deployment in various metropolitan areas. The
Company plans to complete development of the Ricochet2 system in 1999 and
subsequently deploy it in various metropolitan areas in the United States.
Except for historical information contained herein, this Management's
Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, the completion of development of the Company's high-speed network
(Ricochet2), uncertainty of market acceptance of the Company's products and
services, availability of sufficient financial, management, technical and
marketing resources, performance and availability of the Company's Ricochet
radios and modems, the ability of the Company to lease or acquire sites for the
location of its network infrastructure and those factors discussed in the
section entitled "Risk Factors" and elsewhere in the Company's Form 10-K, as
amended, for the year ended December 31, 1998, as well as those elsewhere in
this Form 10-Q.
RESULTS OF OPERATIONS
Revenues
Revenues consist of service and product revenues. Service revenues are
derived from subscriber fees and modem rentals for Ricochet and fees for
UtiliNet customer support and are
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recognized ratably over the service period. Product revenues are derived from
the sale of UtiliNet products and Ricochet modems and are recognized upon
shipment.
Total revenues increased to $4.2 million in the first quarter of 1999 from
$3.6 million in the first quarter of 1998 due primarily to an increase in
Ricochet service revenues. Service revenues increased to $2.4 million in 1999
from $2.0 million in 1998. The increase in service revenues is primarily due to
increased Ricochet subscriber fees resulting from a larger Ricochet subscriber
base. There were approximately 27% more Ricochet subscribers at March 31, 1999
than there were at March 31, 1998. Product revenues increased to $1.8 million in
1999 from $1.6 million in 1998. The increase in product revenues was primarily
due to the timing of shipments of UtiliNet products, partially offset by reduced
Ricochet product revenues as a result of a lower average selling price for
Ricochet modems.
Cost of Revenues
Cost of service revenues is primarily costs incurred to operate Ricochet
networks, the cost of providing customer support, certain excess capacity costs
and manufacturing variances associated with manufacturing the Company's network
components. Cost of service revenues also includes the cost to design the
Ricochet networks and maintain site agreements for the Company's infrastructure
in the metropolitan areas where commercial service is currently offered. These
costs are expensed as incurred due to the uncertainties regarding the
realizability of these costs. Cost of service revenues decreased to $4.4 million
in 1999 from $5.8 million in 1998. The decrease is primarily due to reduced
depreciation expense on network equipment resulting from the Company's 1998
write-down of Ricochet network equipment to fair value. In the fourth quarter of
1998, as a result of its plans to replace the Company's current Ricochet
networks with Ricochet2 equipment, the Company recorded a $14.4 million charge
to write down the carrying value of Ricochet network equipment to fair value.
Cost of service revenues is expected to increase significantly as a result of
the continued operation of Ricochet networks and planned future deployment of
Ricochet2 networks. Cost of service revenues is expected to be greater than
service revenues for the foreseeable future.
Cost of product revenues decreased to $1.3 million in 1999 from $1.4
million in 1998. Cost of product revenues as a percentage of product revenues
decreased to 76% for the first quarter of 1999 from 84% in the first quarter of
1998. The decrease was primarily due to a higher percentage of product revenues
in the first quarter of 1999 derived from the sale of higher margin UtiliNet
products versus lower margin Ricochet modems.
Research and Development
Research and development expenses increased to $8.2 million in 1999 from
$3.5 million in 1998. Over one-half of the increase in the first quarter of 1999
was due to an increase in costs incurred to obtain right-of-way and site
agreements in metropolitan areas where the Company currently plans to offer
service. The remainder of the increase is primarily attributable
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to continued development of the high speed Ricochet2 network technology and
subscriber devices. The Company expects research and development expenses to
continue to increase in absolute dollars in future periods as the Company
continues the acquisition of right-of-way and site agreements as well as the
development of Ricochet2.
Selling, General and Administrative
Selling, general and administrative expenses decreased to $4.1 million for
the first quarter of 1999 from $4.3 million for the first quarter of 1998.
Slight decreases in administrative and sales costs were partially offset by a
small increase in marketing costs. Selling, general and administrative expenses
are expected to continue at the current level or increase for the foreseeable
future as Ricochet2 networks are deployed.
Interest Income and Expense
Interest expense increased to $1.2 million in the first quarter of 1999
compared with $1.0 million in the same period of 1998. The increase is primarily
due to interest paid on amounts outstanding against a line of credit with Vulcan
Ventures Incorporated. Interest income decreased to $143,000 for the first
quarter of 1999 from $553,000 for the same period of 1998 due to a lower average
level of cash and cash equivalents in the first quarter of 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability to continue as
a going concern. At March 31, 1999, the Company had working capital of $15.2
million. At the Company's current level of operations and rate of negative cash
flow, management anticipates that the Company's cash and cash equivalents will
be adequate to satisfy the Company's operating loss and capital expenditure
requirements through June 1999. The Company is working with an investment
banking firm to identify a strategic partner that will facilitate the deployment
of the Company's high-speed network. The Company is currently in discussions
with various potential partnership candidates. Management anticipates that such
strategic partner will also provide financing for the Company's future
operations. In the event that the Company does not enter into a strategic
partnership by the end of May 1999, management plans to reduce the level of
operations of the Company and consider other financing alternatives that will
enable the Company to continue as a going concern. There can be no assurance
that financing will be available to the Company or that the Company will be able
to successfully negotiate an agreement with a strategic partner.
The Company has financed its operations and capital expenditures primarily
through the public and private sale of equity and convertible debt securities.
Since inception, the Company has completed (i) private placements of preferred
stock with net proceeds to the Company of approximately $18.9 million, of which
$3.0 million was repurchased and the balance converted to Common Stock at the
time of the Company's initial public offering in 1992, (ii) an initial
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public offering of Common Stock with net proceeds to the Company of
approximately $8.8 million in 1992, (iii) private placements of Common Stock
with net proceeds to the Company of approximately $18.6 million in 1993, (iv)
public and private placements of Common Stock with net proceeds to the Company
of approximately $75.2 million in 1994, (v) a private placement of 8%
Convertible Subordinated Notes due 2003 with net proceeds to the Company of
approximately $43.4 million in 1996 and (vi) a private placement of Common Stock
with Vulcan Ventures, Inc. with net proceeds to the Company of approximately
$53.7 million in 1998. In October 1998, the Company secured a line of credit for
$30 million from Vulcan Ventures, Inc. As of March 31, 1999, the Company had
drawn down $30 million against this line of credit.
Since inception, the Company has devoted significant resources to the
development, deployment and commercialization of wireless network products and
services. As a result, as of March 31, 1999, the Company had incurred $248.5
million of cumulative net losses. The Company's operations have required
substantial capital investments for the purchase of Ricochet network equipment,
Ricochet modems and computer and office equipment. Capital expenditures were
approximately $1.6 million and $93,000 in the first quarter of 1999 and 1998,
respectively. The Company expects to continue to make significant capital
expenditures in connection with the development, deployment and marketing of its
wireless networks. The Company also expects that to the extent the Company's
subscriber base grows, significant capital expenditures will be required to
procure Ricochet and Ricochet2 modems. The amount and timing of expenditures,
however, may vary significantly depending on numerous factors including market
acceptance; availability of radios and modems; availability of sufficient
financial, management, marketing and technical resources, and technological
feasibility.
As of March 31, 1999, the Company had cash and cash equivalents of $21.8
million and working capital of $15.2 million. The Company's accounts receivable
increased to $2.1 million as of March 31, 1999 from $1.5 million at December 31,
1998 due primarily to increased revenues in the first quarter of 1999 versus the
fourth quarter of 1998. Inventories decreased to $2.3 million at March 31, 1999
from $3.0 million at December 31, 1998 due primarily to increased sales of
Utilinet and Ricochet products. The Company believes that both accounts
receivable and inventories will increase in the future in order to support the
planned deployment and commercialization of Ricochet2.
YEAR 2000 COMPLIANCE
Many installed computer systems and software products are coded to accept
only two digit entries in the date code field. As the year 2000 approaches,
these code fields will need to accept four digit entries to distinguish years
beginning with "19" from those beginning with "20" dates. As a result, in the
next year, computer systems and/or software products used by many companies may
need to be upgraded to comply with such year 2000 ("Y2K") requirements.
In the third quarter of 1998, the Company began a plan to remedy the
potential Y2K
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problems. The Company is currently in various stages of assessment, testing and
remediation of Y2K compliance, depending on the particular computer systems or
software involved. The Company's business and financial systems have recently
been upgraded to Oracle 10.7, a current revision which has been certified by the
vendor to be Y2K compliant. The Company is in the process of assessing its
microcellular commercial data networks for Y2K compliance. These networks are
dependent upon third parties for telecommunications services and power. If the
Company's providers of these services are not Y2K compliant, the usability of
the Company's microcellular commercial networks could be impaired, which could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company intends to have its Y2K assessment, testing, remediation
efforts and development of necessary contingency plans complete by the year
2000. To date, costs incurred to address Y2K compliance issues have not been
material. The Company estimates that total costs to address Y2K compliance
issues will be approximately $300,000. The total cost estimate is subject to
change as the Company progresses in the execution of its Y2K plan. Costs related
to Y2K issues continue to be funded through operating cash flows. There can be
no assurance that the Company will be able to complete its Y2K assessment,
testing, remediation efforts and development of necessary contingency plans by
the year 2000. Any failure to complete the Y2K assessment, testing, remediation
efforts and development of necessary contingency plans prior to the year 2000
could have a material adverse effect on the Company's business, financial
condition and results of operations.
The Company has begun communicating with its key suppliers to assess Y2K
compliance. There can be no assurance that the Company's key suppliers have or
will have information technology systems, non-information technology systems and
products that are Y2K compliant. Similarly, there can be no assurance that the
Company's customers have, or will have information technology systems,
non-information technology systems and products that are Y2K compliant. Any Y2K
problem facing the Company, its customers or suppliers could have a material
adverse effect on the Company's business, financial condition and results of
operations. In the event that the Company's planned actions do not resolve the
Y2K issues, the Company is prepared to use backup systems, where possible, that
do not rely on computers. In other critical functions where computer systems are
essential, the Company intends to develop an alternative contingency plan in the
coming months.
PART II. OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits: 27.1 Financial Data Schedule
b. Reports on Form 8-K: None filed by the Company in the first quarter
of 1999
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SIGNATURES
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.
METRICOM, INC.
(Registrant)
Date: May 14, 1999 /s/ TIMOTHY A. DREISBACH
--------------------------------
Timothy A. Dreisbach
President and Chief Executive
Officer
/s/ DAVID J. PANGBURN
---------------------------------
David J. Pangburn
Corporate Controller (Principal
Financial and Accounting Officer)
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EXHIBIT INDEX
<TABLE>
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 21,842
<SECURITIES> 0
<RECEIVABLES> 2,061
<ALLOWANCES> 0
<INVENTORY> 2,304
<CURRENT-ASSETS> 27,807
<PP&E> 43,917
<DEPRECIATION> 37,696
<TOTAL-ASSETS> 37,457
<CURRENT-LIABILITIES> 12,644
<BONDS> 0
0
0
<COMMON> 19
<OTHER-SE> (56,137)
<TOTAL-LIABILITY-AND-EQUITY> 37,457
<SALES> 1,755
<TOTAL-REVENUES> 4,186
<CGS> 1,326
<TOTAL-COSTS> 6,057
<OTHER-EXPENSES> 12,077
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,213
<INCOME-PRETAX> (15,018)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,018)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,018)
<EPS-PRIMARY> (0.80)
<EPS-DILUTED> (0.80)
</TABLE>
