<PAGE>
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 22, 1999
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P-COM, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-25356 77-0289371
- ------------------------------ ----------- ------------------
(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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None
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
------------
In a press release disseminated on April 22, 1999, the Registrant
issued a press release announcing its earnings for the quarter ended March 31,
1999. A copy of the press release is attached hereto and incorporated herein by
reference.
Statements in this report 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, introduction of new products, commercial acceptance
and viability of new products and expenses associated therewith, cancellations
of orders without penalties, 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, the risk of early obsolescence accounting for adjustments for the
Cylink Acquisition and the pending stockholder class action lawsuits. In
addition, actual 1998 annual and fourth quarter results and previously reported
results for such periods may differ or change materially due to potential prior
period adjustments in such related restatements required by the SEC in response
to its new guidelines or made on the advice of the Company's independent
accountants. Similarly, results for future periods may be impacted by these
potential adjustments and related restatement. 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, such as
announcements by competitors and service providers. 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.
Item 7. Financial Statement and Exhibits.
--------------------------------
A copy of the Registrant's press release announcing its earnings for
the quarter ended March 31, 1999 is attached hereto as an exhibit.
<PAGE>
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.
DATE: April 22, 1999 By: /s/ Michael J. Sophie
-----------------------------------
Name: Michael J. Sophie
Title: Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
99.1 Press Release disseminated April 22, 1999
<PAGE>
EXHIBIT 99.1
[P-COM LETTERHEAD]
P-Com, Inc. Announces Results for First Quarter of 1999 and the Appointment of
Robert E. Collins as CFO
Business Editors & High Tech Writers
CAMPBELL, Calif.--(BUSINESS WIRE)--April 22, 1999--P-Com, Inc.
(Nasdaq/NMS:PCMS - news), reported results for its first quarter ended March 31,
1999 with net sales of $38.0 million, a 35% decrease from $58.6 million in net
sales for the first quarter of 1998.
The Company's net loss was $5.8 million for the first quarter of 1999,
as compared to a net loss of $5.1 million for the comparable period last year,
as restated. The net loss per diluted share was $0.12, in both quarters, with
weighted average common and common equivalent shares of 49.0 million and 43.0
million for the first quarter of 1999 and 1998, respectively.
During the first quarter of 1999, the Company exchanged $25.5 million
principal amount of its 4 1/4% Convertible Subordinated Notes due 2002, for
2,792,257 shares of its Common Stock. This exchange resulted in an extraordinary
gain of $7.3 million, which is included in the results for the first quarter of
1999.
During the first quarter of 1998, the Company incurred an acquired in-
process research and development charge ("IPR&D") of $15.4 million associated
with the acquisition of the Wireless Communications Group of Cylink Corporation
(the "Cylink Wireless Group"), which is included in the net loss for the first
quarter of 1998.
Based on guidelines published by the Securities and Exchange Commission,
the Company re-evaluated its first quarter 1998 IPR&D charge taken in connection
with its acquisition of the Cylink Wireless Group. Although the first quarter of
1998 results, including the original IPR&D charge, were reported in accordance
with then established accounting practice and the valuation provided by the
Company's independent appraiser, the Company evaluated this charge and responded
to new guidance from the Securities and Exchange Commission regarding in-process
research and development charges. As a result, the Company restated its first
quarter 1998 results of operations by decreasing the IPR&D charge which resulted
in a reduction to the loss in the first quarter of 1998 and an increase in
goodwill and other assets and related amortization expense.
P-Com's Chairman and Chief Executive Officer George P. Roberts said,
"We remain optimistic that our new radio products and services have us well
positioned to take advantage of the upturn in the industry."
To strengthen the executive team, the Company has appointed Robert E.
Collins as Chief Financial Officer and Vice President, Finance and
Administration of the Company. Mr. Collins' prior experience includes serving as
Chief Financial Officer at Zilog, Inc., and ChemTrak, Inc., both publicly traded
companies. He has also held several senior financial positions at Syntex
Corporation, including the position of Treasurer.
"We are very pleased to welcome a person with Bob's extensive
<PAGE>
business knowledge and broad financial background to the P-Com team," said
George Roberts, P-Com's Chairman and Chief Executive Officer. "This is a timely
addition and I look forward to working with Bob as we continue to move the
Company forward."
Michael J. Sophie, P-Com's former CFO and Vice President of Finance, is
being assigned to the position of Group President of the recently formed
Wireless Access Group ("WAG"). "Mike's work with P-Com over the last five
years as CFO has fully prepared him for the general management duties and the
P&L responsibilities for the group," stated George Roberts, P-Com's Chairman
and Chief Executive Officer. "It is especially gratifying for me to see Mike
have the opportunity to move into this important operational role."
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. In
addition, P-Com provides comprehensive network services including system and
program planning and management, path design and installation.
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, introduction of new products, commercial acceptance
and viability of new products and expenses associated therewith, cancellations
of orders without penalties, 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, the risk of early obsolescence and the pending stockholder class
action lawsuits. 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, such as announcements by competitors
and service providers. 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, December 31,
1999 1998
ASSETS (unaudited)
---------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 20,884 $ 29,241
Accounts receivable, net 44,712 50,533
Inventory 75,447 79,026
Prepaid expenses and notes
receivable 21,730 21,949
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Total current assets 162,773 180,749
Property and equipment, net 49,153 52,086
Deferred income taxes 8,317 9,678
Goodwill and other assets 70,279 71,845
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$290,522 $314,358
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,568 $ 39,618
Accrued employee benefits 3,779 3,345
Other accrued liabilities 8,188 10,318
Notes payable 46,325 46,360
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Total current liabilities 88,860 99,641
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Long-term debt 68,385 92,769
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Series B Mandatorily Redeemable
Convertible Preferred Stock 13,559 13,559
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Mandatorily Redeemable Common
Stock Warrants 1,839 1,839
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Stockholders' equity:
Common Stock 5 5
Additional paid-in capital 163,488 145,246
Accumulated deficit (44,575) (38,783)
Accumulated other comprehensive
income (1,039) 82
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Total stockholders' equity 117,879 106,550
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$290,522 $314,358
========== ==========
</TABLE>
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P-COM, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
1999 1998
(restated)
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<S> <C> <C>
Sales $ 38,048 $58,637
Cost of sales 26,648 33,512
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Gross profit 11,400 25,125
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Operating expenses:
Research and development 9,640 7,728
Selling and marketing 5,135 4,225
General and administrative 5,701 3,958
Goodwill amortization 2,054 631
Acquired in-process research
and development -- 15,442
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Total operating expenses 22,530 31,984
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Loss from operations (11,130) (6,859)
Interest and other income
(expense), net (1,946) (864)
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Loss before extraordinary item
and income taxes (13,076) (7,723)
Provision (benefit) for income
taxes -- (2,626)
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Loss before extraordinary item (13,076) (5,097)
Extraordinary item: retirement
of Notes 7,284 --
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Net loss $ (5,792) $(5,097)
============ ============
Basic loss per share:
Loss before extraordinary
item $ (0.27) $ (0.12)
Extraordinary item 0.15 --
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Net loss $ (0.12) $ (0.12)
============ ============
Diluted loss per share:
Loss before extraordinary item $ (0.27) $ (0.12)
Extraordinary item 0.15 --
------------ ------------
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Net loss $ (0.12) $ (0.12)
============ ============
Shares used in per share
computations
Basic 48,198 42,951
============ ============
Diluted 48,198 42,951
============ ============
</TABLE>
Contact: P-Com, Inc.
Robert Collins or Michael Sophie, 408/866-3666
