<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) August 10, 1999
-----------------------------
P-COM, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-25356 77-0289371
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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
------------------------------
None
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
------------
In two press releases disseminated on August 10, 1999 the Registrant
issued press releases announcing its earnings for the quarter ended June 30,
1999 and announcing the execution of an agreement and the receipt of an order
for point-to-multipoint equipment with Siemens. Copies of both press releases
are 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 Registrant'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
Registrant's ability to have available an appropriate amount of production
capacity in a timely manner, the ability of the Registrant's customers to
finance their purchases of the Registrant'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. Further, the Registrant operates in an
industry sector where securities values are highly volatile and may be
influenced by economic and other factors beyond the Registrant'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.
--------------------------------
Copies of the Registrant's press releases announcing its earnings for
the quarter ended June 30, 1999 and the execution of an agreement and the
receipt of an order for point-to-multipoint equipment with Siemens are attached
hereto as exhibits.
<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: August 10, 1999 By /s/ Robert E. Collins
------------------------------
Name: Robert E. Collins
Title: Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
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99.1 Press Release disseminated August 10, 1999
99.2 Press Release disseminated August 10, 1999
<PAGE>
EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Page 1 of 5
COMPANY CONTACT:
Robert E. Collins
Chief Financial Officer
(408) 866-3666
P-COM, INC. ANNOUNCES RESULTS FOR SECOND QUARTER OF 1999
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CAMPBELL, CA, USA (August 10, 1999) -- P-Com, Inc. (NASDAQ National Market:
PCMS) reported results for its second quarter ended June 30, 1999 with sales of
$36.0 million compared to sales of $63.5 million for the same period in 1998, a
decline of 43%.
For the six months ended June 30, 1999, sales were $74.1 million, compared
to sales of $122.1 million for the same period in 1998, a decrease of 39%.
The Company's net loss applicable to holders of Common Stock was $66.8
million for the second quarter of 1999, which includes one-time charges
aggregating $36.5 million, and a charge of $12.2 million associated with the
June 1999 exchange of the Series B Convertible Preferred Stock into Common
Stock, compared to a net loss of $0.2 million for the comparable period last
year. The net loss of $1.29 per dilutive share with weighted average common and
common equivalent shares of 51.9 million in the second quarter of 1999 compares
to a net loss per dilutive share of $0.00 with weighted average common and
common equivalent shares of 44.3 million for the second quarter of 1998.
During the second quarter the Company reviewed its current run rates and
based on the significant downturn in its business recorded one-time charges
aggregating $36.5 million which included an $11.8 million allowance for doubtful
accounts receivable and $21.4 million in inventory write-downs and other related
charges. Excluding the reduction of equity due to the June 1999 exchange of the
Series B Convertible Preferred Stock into shares of the Company's Common Stock,
and the $36.5 million loss on the one-time charges, the Company's net loss would
have been $18.1 million and the net loss for the second quarter of 1999 would
have been $0.35 per dilutive share.
<PAGE>
Page 2 of 5
For the six months ended June 30, 1999, the Company's net loss applicable
to holders of Common Stock was $72.6 million, which includes the one-time
charges aggregating $36.5 million, and the $12.2 million charge associated with
the exchange of the Series B Convertible Preferred Stock described above. This
compares to net loss of $5.3 million for the comparable six-month period last
year, which includes a $15.4 million in-process research and development charge
taken in the first quarter of 1998 associated with the acquisition of the Cylink
Wireless Group. The diluted net loss of $1.49 per share with weighted average
common shares of 48.6 million in the first six months of 1999 compares to
diluted net loss per share of $0.12 with weighted average common and common
equivalent shares of 43.1 million for the prior year's first six months.
The results of operations for the first six months of 1999, without giving
effect to the reduction of equity due to the exchange of the Series B
Convertible Preferred Stock and one-time charges aggregating $36.5 million in
the second quarter, would have been a net loss of $23.9 million or a net loss of
$0.49 per dilutive share with weighted average common and common equivalent
shares of 48.6 million.
The Company also announced today that it is seeking and evaluating various
alternatives, including a possible sale for two of its business units, Control
Resources Corporation and Technosystem S. p. A., which the Company believes are
not part of its long-term strategy.
P-Com's Chief Financial Officer, Robert E. Collins, commented "During the
second quarter, we strengthened our balance sheet with proceeds of $40.0 million
from the sale of 10.1 million newly issued shares of Common Stock, and also
eliminated all of our outstanding Series B Convertible Preferred Stock by
exchanging it for newly issued Common Stock. The capital infusion enabled us to
meet our debt obligations to date and provide working capital for ongoing point-
to-multipoint development efforts." Referring to the inventory writedowns, Mr.
Collins observed, "Inventories are now better in line with our current run rates
and we are continuing our efforts to reduce operating expenses without
jeopardizing development efforts or our ability to meet our customers' needs."
P-Com's Chairman and Chief Executive Officer, George P. Roberts, said
"While the current period has proven difficult for P-Com, we are encouraged by
the results of our point-to-multipoint product development efforts, the
strengthening in our core businesses and our ability to penetrate key new
business accounts. Streamlining the Company and concentrating on our core
businesses will allow us to focus our management and engineering resources on
new product development and improved financial performance."
<PAGE>
Page 3 of 5
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. P-Com also
provides cost efficient network performance monitoring devices.
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, and China, is an ISO 9001 certified company. For additional
information, contact P-Com at:
P-Com, Inc.
3175 Winchester Boulevard
Campbell, CA 95008
USA
TEL: (408) 866-3666
FAX: (408) 866-3655
www.p-com.com
<PAGE>
Page 4 of 5
P-COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(unaudited) 1998
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 47,601 $ 29,241
Accounts receivable, net of allowance for doubtful account of $7,495 35,339 50,533
Inventory 60,609 79,026
Prepaid expenses and notes receivable 17,756 21,949
-------- --------
Total current assets 161,305 180,749
Property and equipment, net 45,382 52,086
Deferred income taxes 9,678 9,678
Goodwill and other assets 66,682 71,845
-------- --------
$283,047 $314,358
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,865 $ 39,618
Accrued employee benefits 3,986 3,345
Other accrued liabilities 14,724 10,318
Notes payable 49,800 46,360
-------- --------
Total current liabilities 99,375 99,641
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Long-term debt 68,632 92,769
-------- --------
Series B Mandatorily Redeemable Convertible Preferred Stock -- 13,559
-------- --------
Mandatorily Redeemable Common Stock Warrants 3,839 1,839
-------- --------
Stockholders' equity:
Series A Preferred Stock --
Common Stock 6 5
Additional paid-in capital 213,403 145,246
Accumulated deficit (99,190) (38,783)
Accumulated other comprehensive income (3,018) 82
-------- --------
Total stockholders' equity 111,201 106,550
-------- --------
$283,047 $314,358
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Page 5 of 5
P-COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1999 1998 1999 1998
-------- -------- -------- --------
(restated) (restated)
<S> <C> <C> <C> <C>
Sales:
Product $ 27,088 $54,549 $ 54,722 $105,970
Service 8,954 8,910 19,368 16,126
-------- ------- -------- --------
Total sales 36,042 63,459 74,090 122,096
-------- ------- -------- --------
Cost of sales:
Product 43,252 32,788 62,327 61,635
Service 5,825 5,952 13,398 10,617
-------- ------- -------- --------
Total cost of sales 49,077 38,740 75,725 72,252
-------- ------- -------- --------
Gross profit (loss) (13,035) 24,719 (1,635) 49,844
-------- ------- -------- --------
Operating expenses:
Research and development 9,579 10,192 19,219 17,920
Selling and marketing 5,745 6,438 10,880 10,663
General and administrative 21,576 4,871 27,277 8,762
Goodwill amortization 2,054 2,094 4,108 2,792
Acquired in-process research and development -- -- -- 15,442
-------- ------- -------- --------
Total operating expenses 38,954 23,595 61,484 55,579
-------- ------- -------- --------
Income (loss) from operations (51,989) 1,124 (63,119) (5,735)
Interest expense (2,425) (1,833) (4,743) (3,599)
Interest income 180 346 401 1,228
Other income (expense), net (129) 45 22 65
-------- ------- -------- --------
Loss before extraordinary item and income taxes (54,363) (318) (67,439) (8,041)
Provision (benefit) for income taxes 252 (108) 252 (2,734)
-------- ------- -------- --------
Loss before extraordinary item (54,615) (210) (67,691) (5,307)
Extraordinary item: gain on retirement of Notes -- -- 7,284 --
-------- ------- -------- --------
Net loss (54,615) $ (210) $(60,407) $ (5,307)
Charge related to conversion of Preferred Stock to Common Stock (12,190) -- (12,190) --
-------- ------- -------- --------
Net loss applicable to holders of Common Stock (66,805) $ (210) $(72,597) $ (5,307)
======== ======= ======== ========
Basic loss per share:
Loss before extraordinary item $ (1.29) $ (0.00) $ (1.64) $ (0.12)
Extraordinary item -- -- 0.15 --
-------- ------- -------- --------
Net loss $ (1.29) $ (0.00) $ (1.49) $ (0.12)
======== ======= ======== ========
Diluted loss per share:
Loss before extraordinary item $ (1.29) $ (0.00) $ (1.64) $ (0.12)
Extraordinary item -- -- 0.15 --
-------- ------- -------- --------
Net loss $ (1.29) $ (0.00) $ (1.49) $ (0.12)
======== ======= ======== ========
Shares used in per share computation:
Basic 51,872 43,201 48,584 43,077
======== ======= ======== ========
Diluted 51,872 44,253 48,584 43,077
======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
EXHIBIT 99.2
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FOR IMMEDIATE RELEASE
Page 1 of 2
COMPANY CONTACTS:
Robert E. Collins
Chief Financial Officer
(408) 866-3666
P-COM, INC. ANNOUNCES AGREEMENT AND INITIAL ORDER
FOR POINT-TO-MULTIPOINT EQUIPMENT WITH SIEMENS
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CAMPBELL, CA -- (August 10, 1999) -- P-Com, Inc. (NASDAQ National Market:
PCMS) announced today the execution of an agreement and the receipt of an order
for point-to-multipoint equipment with Siemens Information and Communication
Networks, Inc. ("Siemens"), a subsidiary of Siemens SAG in Munich. This
agreement is an addendum to the OEM Agreement executed between Siemens SAG and
P-Com in June of 1998.
The agreement requires Siemens to place a minimum level purchase orders
with P-Com by June 30, 2000 to continue to qualify for the pricing level as
detailed in the OEM Agreement. None of such purchases are guaranteed. However,
Siemens has placed the initial order that is scheduled for delivery in
September. Terms of the agreement were not disclosed.
In addition, P-Com plans to execute a manufacturing services agreement
with Siemens to use its Florida manufacturing facility as a turn-key
manufacturing partner for point-to-multipoint equipment.
George Roberts, P-Com's CEO and Chairman said, "We are pleased that our
association with Siemens continues to move forward. This agreement and order are
indications that P-Com has the point-to-multipoint equipment customers want. And
we look forward to strengthening our partnership with Siemens by winning
additional business."
Fred Fromm, President and CEO of Siemens' Information Communications
Network said, "P-Com continues to demonstrate the leadership position in point-
to-multipoint technology that we anticipated when we selected them as our
partners. The
--more--
<PAGE>
P-COM, INC. ANNOUNCES FRAME AGREEMENT AND INITIAL ORDER
FOR POINT-TO-MULTIPOINT EQUIPMENT WITH SIEMENS
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Page 2 of 2
partnership is working well and should provide long term benefits to the
companies and to 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. In
addition, P-Com provides comprehensive network services including system
planning, 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, Dubai 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
www.p-com.com
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