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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) MARCH 28, 1998
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P-COM, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-25356 77-02893711
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3175 S. WINCHESTER BOULEVARD, CAMPBELL, CALIFORNIA 95008
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 866-3666
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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AMENDMENT #1
The undersigned Registrant hereby amends the following items to its Current
Report on Form 8-K, originally filed with the Securities and Exchange Commission
on April 9, 1998, as set forth in the pages attached hereto:
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
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(a) On March 28, 1998, P-Com, Inc., a Delaware corporation ("P-Com"),
purchased the assets of the Wireless Communications Group (the "Group") of
Cylink Corporation, a California corporation ("Cylink") (the "Asset
Purchase"), pursuant to an Asset Purchase Agreement by and between P-Com and
Cylink, filed as Exhibit 7(c)(2) to P-Com's Form 8-K filed with the Securities
and Exchange Commission on April 9, 1998 and is incorporated by reference as an
exhibit hereto (the "Purchase Agreement"). P-Com filed a Current Report on Form
8-K on April 9, 1998, reporting this transaction. On April 1, 1998, P-Com
purchased as part of the Asset Purchase, the accounts receivable of the Group
from Cylink.
The assets acquired in the Asset Purchase include (1) machinery, equipment,
computer hardware, peripherals, software, quality assurance equipment, furniture
and fixtures; (2) inventory; (3) rights under agreements, commitments,
contracts, licenses, purchase and sales orders, proprietary information and
inventions agreements, nondisclosure agreements, confidentiality agreements,
quotations, and other executory commitments; (4) franchises, licenses, permits,
consents, and authorizations and approvals for foreign, federal or state or
local governments; (5) rights to patents, trademarks, trade names, service
marks, copyrights, trade secret rights and other intellectual property rights
and related applications therefore; (6) accounts receivable; (7) all rights
under warranties; (8) all of the Group's causes of action, judgments, and claims
or demands of whatever kind or description, (9) goodwill; and (10) leasehold
interests. Certain assets have been excluded from the transaction. The Group's
primary facilities are located in Sunnyvale, California. The consideration for
the Asset Purchase equalled Sixty Million Five Hundred Thousand Dollars
($60,500,000) consisting of Forty Six Million Dollars ($46,000,000) in cash and
Fourteen Million Five Hundred Thousand Dollars ($14,500,000) in a short-term,
non interest bearing unsecured subordinated promissory note. The acquisition
will be accounted for using the purchase method of accounting. It is not
currently anticipated that this accounting treatment will have a material
adverse effect on the consolidated financial results of P-Com for the year ended
December 31, 1998. The cash consideration used for the acquisition consisted of
cash generated by operations and from the net proceeds received by P-Com from
the sale of convertible subordinated notes in November 1997. The basis for
determining the amount of consideration paid by P-Com in the Asset Purchase was
negotiated between unrelated parties. The description of the agreements set
forth herein does not purport to be complete and is qualified in its entirety by
reference to the provisions of the definitive agreement, incorporated by
reference as an exhibit hereto.
(b) Prior to the Asset Purchase, the Group was in the business of developing
spread spectrum radio products for voice and data applications in both domestic
and international markets. P-Com intends to continue these operations to
enhance its leadership position in the digital microwave and millimeter wave
radio market.
Item 5. OTHER ITEMS
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On April 16, 1998, P-Com issued a press release announcing the results for
the first quarter of 1998. A copy of the press release is attached as an Exhibit
hereto and is incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(a) Financial Statements of Business Acquired. As of the date of filing of
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this Form 8-K/A, there are no audited financial statements available
relating to the Group that would meet the rules required by this form. Price
Waterhouse LLP, certified public accountants of P-Com, is currently preparing
audited financial statements of the Group for P-Com. These audited financials
will be filed as an additional amendment to this Form 8-K/A as soon as
practicable.
(b) Pro Forma Financial Information. Pro forma financial information is
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currently being prepared and will be filed as an additional amendment to this
Form 8-K/A as soon as practicable.
2.
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(c) Exhibits. The following documents are filed as exhibits to this
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report:
1. Exhibit 7(c)(2) - Asset Purchase Agreement, dated March 13,
1998, by and between P-Com and Cylink (all exhibits and
schedules are immaterial and have been excluded; such
exhibits and schedules will be furnished supplementally
upon request by the Securities and Exchange Commission
(incorporated by reference to Exhibit 7(c)(2) of P-Com's
Form 8-K filed with the Securities and Exchange Commission
on April 9, 1998).
2. Exhibit 7(c)(2.1) - Amendment to the Asset Purchase
Agreement, dated March 13, 1998, by and between P-Com and
Cylink incorporated by reference to Exhibit 7(c)(2.1) of
P-Com's Form 8-K filed with the Securities and Exchange
Commission on April 9, 1998).
3. Exhibit 7(c)(2.2) - Amendment No. 2 to the Asset Purchase
Agreement, dated March 27, 1998, by and between P-Com and
Cylink (incorporated by reference to Exhibit 7(c)(2.1) of
P-Com's Form 8-K filed with the Securities and Exchange
Commission on April 9, 1998).
4. Exhibit 7(c)(99) - Press Release, dated March 13, 1998,
issued by P-Com announcing the signing of the Asset Purchase
Agreement (Incorporated by reference to Exhibit 99.1 of P-
Com's Form 8-K filed with the Securities and Exchange
Commission on March 16, 1998) (incorporated by reference
to Exhibit 7(c)(99) of P-Com's Form 8-K filed with the
Securities and Exchange Commission on April 9, 1998).
5. Exhibit 7(c)(99.1) - Press Release, dated April 1, 1998,
announcing the completion of P-Com's acquisition of the
Wireless Communications Group of Cylink located in
Sunnyvale, California (Incorporated by reference to Exhibit
7(c)(99.1) of P-Com's Form 8-K filed with the Securities and
Exchange Commission on April 9, 1998).
6. Exhibit 7(c) (99.2) - Press Release, dated April 16, 1998,
announcing P-Com's results for first quarter of 1998.
3.
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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 hereunto duly authorized.
P-Com, Inc.
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(Registrant)
Date: April 17, 1998 By: /s/ Michael J. Sophie
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Name: Michael J. Sophie
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit Page No.
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7(c)(99.2) Press release, dated April 16, 1998, announcing E-1
P-Com's results for the first quarter of 1998
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FOR IMMEDIATE RELEASE
COMPANY CONTACT:
<TABLE>
<S> <C>
Karl Spurzem Michael Sophie
Director, Investor Relations Chief Financial Officer
(408) 866-3666 (408) 866-3666
</TABLE>
P-COM, INC. ANNOUNCES RESULTS FOR FIRST QUARTER OF 1998
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CAMPBELL, CA, USA (April 16, 1998) -- P-Com, Inc. (NASDAQ National Market:
PCMS), reported results for its first quarter ended March 31, 1998 with net
sales of $58.6 million, a 33% increase over $44.2 million in net sales for the
comparable quarter of 1997.
The first quarter of 1998 results of operations, without giving effect to a
one time in-process research and development charge associated with an
acquisition, were a fully taxed net income of $5.1 million or diluted earnings
per share of $0.12 with weighted average common and common equivalent shares
of 48.2 million, an increase of 200% over the diluted earnings per share of
$0.04 for the prior year's first quarter which exceeded the consensus of the
analysts expectations.
As previously announced on March 28, 1998, the Company completed the
acquisition of certain of the assets of the Wireless Communications Group of
Cylink Corporation located in Sunnyvale, CA. The acquisition has been
accounted for under the purchase method of accounting. In connection with the
acquisition, the Company incurred a one time in-process research and
development charge of $33.9 million.
This one time charge caused the Company's net loss for the quarter of $17.2
million which compares to net income of $1.7 million for the comparable period
last year. The basic and diluted net loss results of $0.40 per share with
weighted average common shares of 43.0 million in the first quarter of 1998
compares to diluted earnings per share of $0.04 with weighted average common
and common equivalent shares of 43.2 million for the prior year's first
quarter.
P-Com's Chairman and Chief Executive Officer George P. Roberts said, "Our
efforts in the quarter were highlighted by successfully completing the
acquisition of certain of the assets of the Wireless Communications Group from
Cylink Corporation. We believe this transaction will position P-Com well in
important regions of the world where we can leverage our technology, products
and services. Globally, demand remained strong during the quarter for
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P-COM, INC. ANNOUNCES RESULTS FOR FIRST QUARTER OF 1998
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point-to-point and spread spectrum radio products as deregulation trends have
continued to provide opportunities to further grow our business."
P-Com's Chief Financial Officer Michael J. Sophie said, "We believe the
successful operating results for the quarter which included a 33% sales growth
and 200% earnings per share growth as compared to the first quarter of 1997
are indicative that our strategies of customer oriented research and
development and acquisitions which focus on complementary products, increased
marketing channels, and new technology are delivering positive results."
P-Com, Inc. develops manufactures and markets network access systems for the
worldwide wireless telecommunications market. The point-to-point, spread
spectrum, and point-to-multipoint radio links provided by P-Com are designed to
satisfy the network requirements of cellular and personal communications
services, corporate communications, public utilities, local governments, local
exchange carriers and inter-exchange carriers.
Statements in this release that are forward looking involve known and unknown
risks and uncertainties, which may cause the Company's actual results in future
periods to be materially different from any future performance that may be
suggested in this release. Such factors may include, but are not limited to,
reliance upon subcontractors, fluctuations in customer demand and
commitments, both in timing and volume, pricing and competition, the Company's
ability to have available an appropriate amount of production capacity in a
timely manner, the ability of the Company's customers to finance their purchases
of the Company's products and/or services, the timing of new technology and
product introductions and the risk of early obsolescence. Further, the Company
operates in an industry sector where securities values are highly volatile and
may be influenced by economic and other factors beyond the Company's control.
Reference is made to the discussion of risk factors detailed in the Company's
filings with the Securities and Exchange Commission, including its reports on
Form 10-K and 10-Q.
P-Com, Inc., with world headquarters in Campbell, California, USA and offices
in Florida, New Jersey, Virginia, the UK, Italy, France, Germany, Poland,
Mexico, and China, is an ISO 9001 certified company. For additional information,
contact P-Com at:
P-Com, Inc. * 3175 S. Winchester Boulevard * Campbell, CA 95008 * USA
TEL: (408) 866-3666 * FAX: (408) 866-3655
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P-COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, 1998 December 31,
(unaudited) 1997
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 25,922 $ 88,145
Accounts receivable, net 68,667 70,883
Notes receivable 207 205
Inventories 74,848 58,003
Prepaid expenses and other assets 15,514 12,329
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Current assets 185,158 229,565
Property and equipment, net 39,656 32,313
Deferred income taxes 13,117 1,697
Goodwill and other assets 59,340 41,946
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$297,271 $305,521
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,193 $ 38,043
Accrued employee benefits 2,810 3,930
Other accrued liabilities 10,519 6,255
Income taxes payable 9,249 6,409
Notes payable 245 293
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Current liabilities 61,016 54,930
Long term debt 102,255 101,690
Minority interest 705 604
Stockholders' equity:
Common stock 4 4
Additional paid-in capital 134,165 131,735
Retained earnings 1,131 18,380
Cumulative translation adjustment (2,005) (1,822)
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Total stockholders' equity 133,295 148,297
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$297,271 $305,521
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</TABLE>
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P-COM, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
1998 1997
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<S> <C> <C>
Sales $ 58,637 $44,227
Cost of sales 33,512 27,452
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Gross Profit 25,125 16,775
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Operating expenses:
Research and development 7,728 6,774
Selling and marketing 4,225 2,915
General and administrative 3,958 3,437
Goodwill amortization 631 346
Purchase of in-process research and development 33,856 --
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Total operating expenses 50,398 13,472
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Income (loss) from operations (25,273) 3,303
Interest and other income (expense), net (864) (72)
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Income (loss) before income taxes (26,137) 3,231
Provision (benefit) for income taxes (8,888) 1,553
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Net income (loss) $(17,249) $ 1,678
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Net income (loss) per share:
Basic $ (0.40) $ 0.04
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Diluted $ (0.40) $ 0.04
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Shares used in per share computation:
Basic 42,951 41,371
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Diluted 42,951 43,238
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