WaveRider Communications Inc.
OTC Bulletin Board : WAVR

WaveRider Communications Inc.

August 04, 2005 16:48 ET

Waverider Communications Inc. Reports Q2 2005 Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 4, 2005) -

All values expressed in $U.S.

New product introductions help drive 30% sequential quarterly revenue growth

WaveRider Communications Inc. (OTCBB:WAVR), a leading global provider of fixed wireless Internet access products, today reported revenues of (U.S.) $2,780,581 for its fiscal quarter ended June 30, 2005, compared to revenues of $2,139,563 for first quarter of 2005 and $2,412,516 for the second quarter of 2004. Revenues for the six months ended June 30, 2005 were $4,920,144, compared to revenues of $4,718,737 for the six months ended June 30, 2004.

Net loss for the three months ended June 30, 2005 totaled $827,455, or $0.03 per share, compared to a loss of $726,683, or $0.04 per share for the period ended March 31, 2005 and $2,010,858, or $0.14 per share, for the three months ended June 30, 2004. The net losses for the three months ended June 30, 2005, March 31, 2005 and June 30, 2004 included non-cash financing expenses, resulting from the conversion of debentures to common stock, in the amount of $457,762, $279,023 and $574,159, respectively.

"Significant progress was made this quarter in the evolution and enhancement of our products," said Charles Brown, Chief Executive Officer, WaveRider Communications Inc. "Growing customer acceptance and demand for our EUM3006 integrated outdoor modem and our new 'plug and play' EUM3005 modem, which was introduced in June, fuelled our growth. In addition, we continue to commercialize our new family of non-line-of sight MobileWAN products. Several customers are now supporting our MobileWAN beta-trial efforts and are fully testing the feature sets of our new mobile customer terminal, the MMT9000, scheduled for release in Q3."

"With the introduction of our MobileWAN product family to complement our LMS4000 product family, WaveRider provides even more flexibility for high-speed, non-line-of-sight wireless connections that deliver voice, data and streaming video applications. Our product roster now provides our customers with the capability to establish both fixed and mobile wireless networks, and to offer a mix of indoor and outdoor user self-installed customer premise equipment," added Brown.

"The second quarter of 2005 saw the Company achieve both quarterly and annual revenue growth." said Scott Worthington, Chief Financial Officer, WaveRider Communications Inc. "The growth in demand combined with product introduction issues and increasing lead times for procuring parts did, however, result in a restricted supply of these products at the end of the quarter. We expect these product supply issues may continue through the third quarter."

"As we have discussed in the past, while we have a long-term plan that we believe will allow us to achieve profitability and cash flow positive operations, we continue to believe that we will need to raise additional funds in 2005 to meeting our current and future financial commitments until we reach positive cash flows from operations," added Worthington.



WaveRider Communications Inc.

CONSOLIDATED BALANCE SHEETS
(in U.S. dollars)

June 30, December 31,
2005 2004
(Unaudited) (Audited)
ASSETS

Current assets:
Cash and cash equivalents $ 690,880 $ 1,291,822
Restricted cash 100,000 100,000
Accounts receivable, less allowance
for doubtful accounts 1,402,220 1,056,103
Inventories 474,589 943,644
Prepaid expenses and other assets 157,086 145,805
---------------------------

Current assets 2,824,775 3,537,374

Property, plant and equipment, net 220,425 295,063
---------------------------

$ 3,045,200 $ 3,832,437
---------------------------
---------------------------

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accounts payable and accrued
liabilities $ 2,021,116 $ 2,080,064
Deferred revenue 514,571 407,639
Current portion of obligations
under capital lease 2,213 2,781
---------------------------

Current liabilities 2,537,900 2,490,484

Convertible debentures, net of discount 1,267,082 1,506,322
Obligations under capital lease 500 1,854
---------------------------

Total liabilities 3,805,482 3,998,660
---------------------------

Shareholders' deficit:

Preferred Stock, $0.01 par value per share:
issued and outstanding Nil shares in
2005 and 2004 - -
Common Stock, $0.001 par value per share:
issued and outstanding - 25,425,748
shares at June 30, 2005 and 16,571,732
shares at December 31, 2004 25,425 16,572
Additional paid-in capital 90,767,229 89,582,484
Other equity 4,884,187 5,134,928
Accumulated other comprehensive loss (320,017) (337,239)
Accumulated deficit (96,117,106) (94,562,968)
---------------------------

Total shareholders' deficit (760,282) (166,223)
---------------------------

$ 3,045,200 $ 3,832,437
---------------------------
---------------------------




WaveRider Communications Inc.

CONSOLIDATED STATEMENTS OF LOSS, DEFICIT AND COMPREHENSIVE LOSS
(in U.S. dollars)


Three Months ended Six Months ended
June 30 June 30 June 30 June 30
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------------------------------------------------------
CONSOLIDATED STATEMENT OF LOSS

REVENUE

Product
revenue $ 2,362,598 $ 1,757,040 4,107,447 $ 3,653,567
Service
revenue 417,983 655,476 812,697 1,065,170
--------------------------------------------------------

2,780,581 2,412,516 4,920,144 4,718,737
--------------------------------------------------------


COST OF REVENUE

Product
revenue 1,646,941 1,389,254 2,848,970 2,607,021
Service
revenue 228,872 377,425 449,406 642,528
--------------------------------------------------------

1,875,813 1,766,679 3,298,376 3,249,549
--------------------------------------------------------

GROSS
MARGIN 904,768 645,837 1,621,768 1,469,188
--------------------------------------------------------

EXPENSES

Selling,
general
and
adminis-
tration 1,043,643 1,477,161 2,054,374 2,749,791
Research and
development 149,484 365,750 260,340 854,794
Depreciation and
amortization 50,758 93,493 84,712 188,723
Bad debt
expense 15,763 15,000 18,599 16,740
--------------------------------------------------------

1,259,648 1,951,404 2,418,025 3,810,048
--------------------------------------------------------

LOSS FROM
OPERATIONS (354,880) (1,305,567) (796,257) (2,340,860)
--------------------------------------------------------

NON-OPERATING EXPENSES (INCOME)

Interest
expense 474,894 584,012 754,476 1,101,070
Foreign
exchange loss 672 121,801 9,639 150,097
Interest income (2,991) (522) (6,234) (2,619)
--------------------------------------------------------

472,575 705,291 757,881 1,248,548

NET LOSS $ (827,455) $ (2,010,858) $ (1,554,138) $ (3,589,408)
--------------------------------------------------------
--------------------------------------------------------

BASIC AND FULLY
DILUTED LOSS
PER SHARE $ (0.03) $ (0.14) $ (0.07) $ (0.24)
--------------------------------------------------------
--------------------------------------------------------

Weighted
Average
Number of
Common
Shares 24,651,593 14,740,669 21,265,643 14,670,299
--------------------------------------------------------
--------------------------------------------------------

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CONSOLIDATED STATEMENTS OF DEFICIT

OPENING
DEFICIT (95,289,651) (89,840,849) (94,562,968) (88,262,299)

NET LOSS
FOR THE
PERIOD (827,455) (2,010,858) (1,554,138) (3,589,408)
--------------------------------------------------------

CLOSING
DEFICIT $ (96,117,106) $ (91,851,707) $ (96,117,106) $ (91,851,707)
--------------------------------------------------------
--------------------------------------------------------

---------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

NET LOSS
FOR THE
PERIOD (827,455) (2,010,858) (1,554,138) (3,589,408)

OTHER COMPREHENSIVE INCOME

Cumulative
translation
adjustment 10,758 69,628 17,222 63,449
--------------------------------------------------------

COMPREHENSIVE
LOSS $ (816,697) $ (1,941,230) $ (1,536,916) $ (3,525,959)
--------------------------------------------------------
--------------------------------------------------------


About WaveRider Communications Inc.

WaveRider Communications Inc. (www.waverider.com) is a leader in broadband wireless deployments and technologies. WaveRider's Last Mile Solution® non-line-of-sight 900 MHz and 5.8 GHz networks enable communications providers to establish full-saturation coverage networks, deliver advanced communications services, and generate a rapid return on their investment. WaveRider is committed to the development of standards-based wireless technologies that support advanced applications and address the needs of the North American and International markets. WaveRider is traded on the OTC Bulletin Board, under the symbol WAVR.

Except for the historical statements made herein, this release contains forward-looking statements that involve risks and uncertainties including the risks associated with the effect of changing economic conditions, trends in the development of the Internet as a commercial medium, market acceptance risks, realizing expected revenue, technological development risks, and seasonality. Risk factors also include the company's ability to secure additional financing; the company's ability to commercialize its products; the company's ability to compete successfully in the future against existing or new competitors; the company's ability to protect its intellectual property and the assurance that the rights granted under patents or copyrights that may be issued will provide sufficient protection to its intellectual property rights; the company's success in enhancing existing products and developing new products to keep up with the technological advances in the data communications industry; the continued availability of the license-exempt spectrum which is based on regulation by U.S. and foreign governments; the company's ability to avoid significant product liability exposure; the company's dependence on a limited number of third party manufacturers; the company's ability to execute its business plan and generate an overall profit and other risk factors detailed in the Company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-KSB as amended. Due to these factors, actual results could differ materially from those expressed in forward-looking statements by the company.

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