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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) JANUARY 22, 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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ITEM 5. Other Events
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In a press release disseminated on January 22, 1998, the Registrant
publicly announced its earnings for the quarter and fiscal year ended
December 31, 1997. A copy of the press release is attached hereto and
incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
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A copy of the Registrant's press release announcing its earnings for
the quarter and fiscal year ended December 31, 1997 is attached hereto
as an exhibit.
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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: January 22, 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
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99.1 Press Release disseminated January 22, 1998.
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EXHIBIT 99.1
Page 1 of 4
FOR IMMEDIATE RELEASE
COMPANY CONTACT:
Karl Spurzem Michael Sophie
Investor Relations Chief Financial Officer
(408) 866-3666 (408) 866-3666
P-COM, INC. ANNOUNCES RECORD NET SALES AND
NET INCOME FOR FOURTH QUARTER OF 1997 AND FISCAL YEAR
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CAMPBELL, CA, USA (January 22, 1998) -- P-Com, Inc. (NASDAQ National
Market: PCMS), reported results for its fourth quarter ended December 31, 1997
with sales of $64.2 million, a 54% increase over $41.6 million in sales for the
comparable quarter of 1996. For the twelve months ended December 31, 1997, sales
were $220.7 million, a 82% increase over the $121.0 million for the same period
in 1996. The results include the effects of six acquisitions during the year,
including the acquisitions accounted for under the pooling-of-interests method
of accounting for Control Resources Corporation, RT Masts Limited, and
Telematics, Inc. As a result, prior period amounts present the effect of a
pooling-of-interests transaction as if all of the companies had been combined
for all periods presented.
The Company's net income increased 65% to $8.1 million for the fourth
quarter of 1997 compared to net income of $4.9 million for the comparable period
last year. The net income results of $0.18 per share with weighted average
common and common equivalent shares of 46.9 million in the fourth quarter of
1997 increased 64% and compares to a net income per share of $0.11 with weighted
average common and common equivalent shares of 42.7 million for the prior year's
fourth quarter. For the twelve months ended December 31, 1997, the Company's net
income increased 113% to $18.9 million as compared to $8.9 million for the
twelve months ended December 31, 1996. For the twelve month period ended
December 31, 1997, earnings per share increased 95% to $0.43 with weighted
average common and common equivalent shares of 44.6 million, compared to $0.22
with weighted average common and common equivalent shares of 40.6 million for
the comparable period in 1996. All per share amounts are reflected on a diluted
basis. The share information also reflects the two-for-one stock split effected
on September 26, 1997.
P-Com's Chairman and Chief Executive Officer George P. Roberts said,
"Demand for P-Com products and services was very strong for the fourth quarter.
For operations activities, we have added 57,000 square feet of capacity in the
Silicon Valley and dedicated
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Page 2 of 4
P-COM, INC. ANNOUNCES RECORD NET SALES AND
NET INCOME FOR FOURTH QUARTER OF 1997 AND FISCAL YEAR
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approximately 30,000 square feet in Italy. In addition, P-Com continues to spend
heavily in research and development to provide the products and services our
customers desire. These efforts have resulted in increased market penetration,
geographical coverage and a year end backlog of $65.2 million."
Michael J. Sophie, Chief Financial Officer and Vice President, Finance
added, "Our strategy of providing service capabilities to complement our
equipment offering, in response to customer requests, allows P-Com to offer
network solutions and increased value to our customers. We believe this will
continue to strengthen our relationship with our customers."
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 and local governments.
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, 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, political and economic stability, 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, Mexico
and Singapore, 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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Page 3 of 4
P-COM, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
ASSETS
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December 31,
1997 1996
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<S> <C> <C>
Current assets:
Cash and cash equivalents $ 88,145 $ 42,226
Accounts receivable, net 70,883 48,804
Inventory 58,003 32,947
Prepaid expenses and other current assets 12,534 8,274
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Total current assets 229,565 132,251
Property and equipment, net 32,313 20,585
Goodwill and other assets 43,643 2,616
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$ 305,521 $ 155,452
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Accounts payable $ 38,043 $ 27,633
Accrued employee benefits 3,930 1,378
Other accrued liabilities 6,255 7,819
Income taxes payable 6,409 2,494
Notes payable 293 2,116
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Total current liabilities 54,930 41,440
Long-term debt 101,690 914
Minority interest 604 619
Stockholders' equity
Common stock 4 4
Additional paid-in capital 131,735 112,913
Retained earnings (accumulated deficit) 18,380 (511)
Cumulative translation adjustment (1,822) 73
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Total stockholders' equity 148,297 112,479
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$ 306,521 $ 155,452
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</TABLE>
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*The Company acquired Control Resources Corporation on May 29, 1997 and RT Masts
Limited and Telematics, Inc. on November 27, 1997, each in a stock-for-stock
merger. These transactions have been accounted for based on the
pooling-of-interests method of accounting. As a result, prior period amounts
present the effect of a pooling-of-interests transaction as if all of the
companies had been combined for all periods presented. The Company's results
also reflect a two for one stock split paid in the form of a 100% stock dividend
effective September 26, 1997.
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Page 4 of 4
P-COM, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
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Dec. 31, 1997 Dec. 31, 1997 Dec. 31, 1997 Dec. 31, 1997
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<S> <C> <C> <C> <C>
Sales $ 64,228 $ 41,587 $ 220,702 $ 120,953
Cost of Sales 36,334 25,230 129,235 74,058
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Gross profit 27,892 16,357 91,467 46,895
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Operating expenses:
Research and development 8,221 6,306 29,127 20,163
Selling and marketing 4,703 2,512 15,696 7,526
General and administrative 2,604 2,848 14,539 9,986
Goodwill amortization 661 111 2,409 296
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Total operating expenses 16,189 11,777 61,771 37,971
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Income from operations 11,703 4,580 29,696 8,924
Interest and other income, net 517 574 247 906
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Income before income taxes 12,220 5,154 29,943 9,830
Provision for income taxes 4,155 262 11,052 956
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Net income $ 8,065 $ 4,892 $ 18,891 $ 8,874
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Net income per share:
Basic $ 0.19 $ 0.12 $ 0.45 $ 0.23
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Diluted $ 0.18 $ 0.11 $ 0.43 $ 0.22
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Shares used in per share computation:
Basic 42,793 40,811 42,175 38,762
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Diluted 46,899 42,736 44,570 40,607
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</TABLE>
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*The Company acquired Control Resources Corporation on May 29, 1997 and RT Masts
Limited and Telematics, Inc. on November 27, 1997, each in a stock-for-stock
merger. These transactions have been accounted for based on the
pooling-of-interests method of accounting. As a result, prior period amounts
present the effect of a pooling-of-interests transaction as if all of the
companies had been combined for all periods presented. The Company's results
also reflect a two for one stock split paid in the form of a 100% stock dividend
effective September 26, 1997.
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