WaveRider Communications Inc.
OTC Bulletin Board : WAVR

WaveRider Communications Inc.

November 03, 2005 16:02 ET

WaveRider Communications Inc. Reports Q3 2005 Results

TORONTO, ONTARIO--(CCNMatthews - Nov. 3, 2005) -

All values expressed in $U.S.

Continued growth pushes quarterly revenue over $3 million

WaveRider Communications Inc. (OTCBB:WAVR), a leading global provider of fixed wireless Internet access products, today reported revenues of (U.S.) $3,009,494 for its fiscal quarter ended September 30, 2005, compared to revenues of $2,780,581 for second quarter of 2005 and $2,669,219 for the third quarter of 2004. Revenues for the nine months ended September 30, 2005 were $7,929,638, compared to revenues of $7,387,956 for the nine months ended September 30, 2004.

Net loss for the three months ended September 30, 2005 totaled $263,828 or $0.01 per share compared to a loss of $827,455, or $0.03 per share for the three months ended June 30, 2005 and $1,989,602, or $0.13 per share, for the three months ended September 30, 2004. The net losses for the three months ended September 30, 2005, June 30, 2005 and September 30, 2004 included non-cash financing expenses, resulting from the conversion of debentures to common stock, in the amount of $149,951, $464,762 and $1,258,744, respectively.

"The third quarter of 2005 saw the Company achieve continued quarterly and annual revenue growth. This growth was principally focused in North America, with revenues increasing by 13.5% sequentially and 17.4% compared to the third quarter of 2004." said Charles Brown, Chief Executive Officer, WaveRider Communications Inc. "With the increased revenues and continued tight cost controls, the Company saw both the quarterly operating loss and the cash used during the quarter declined to just over $100,000, significant improvements over prior quarters."

"The third quarter was also highlighted by the first commercial shipments of our new mobile customer terminal, the MMT9000," added Brown. "With the delivery of the MMT9000, our product roster now provides our customers with the capability to establish both fixed and mobile wireless networks via a mix of indoor and outdoor user self-installed customer premise equipment. Targeting the growing demand for on location, high speed voice, video and data services by the safety and security markets, our MobileWAN product family provides broadband services through a rapidly field deployable, mobile wireless access network."

"The continued growth was especially gratifying in light of the product availability issues, which resulted in long lead times and significant backorders. While we made great progress as we moved through the quarter, product supply continues to be an issue and will likely continue through the fourth quarter." said Scott Worthington, Chief Financial Officer, WaveRider Communications Inc.

"Also, as we have discussed in the past, while operating results have shown strong improvement, we continue to believe that we will need to raise additional funds in 2005 or early 2006 to meet 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)

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

Current assets:
Cash and cash equivalents $ 688,202 $ 1,291,822
Restricted cash - 100,000
Accounts receivable, net 1,607,325 1,056,103
Inventories 561,354 943,644
Prepaid expenses and
other assets 103,184 145,805
--------------- --------------
Current assets 2,960,065 3,537,374

Property, plant and
equipment, net 209,662 295,063
--------------- --------------
$ 3,169,727 $ 3,832,437

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accounts payable and accrued
liabilities $ 2,248,492 $ 2,080,064
Deferred revenue 544,931 407,639
Current portion of convertible
debentures, net of
discounts of $131,870 318,130 -
Current portion of obligations
under capital lease 2,013 2,781
--------------- --------------
Current liabilities 3,113,566 2,490,484
--------------- --------------
--------------- --------------

Convertible debentures, net of
discounts of $260,592 and
$921,454 respectively 931,245 1,506,322
Obligations under capital lease - 1,854
--------------- --------------
Total liabilities 4,044,811 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 -
29,592,443 shares at
September 30, 2005 and
16,571,732 shares at
December 31, 2004 29,592 16,572
Additional paid-in capital 91,125,306 89,582,484
Other equity 4,673,429 5,134,928
Accumulated other
comprehensive loss (322,477) (337,239)
Accumulated deficit (96,380,934) (94,562,968)
--------------- --------------

Total shareholders' deficit (875,084) (166,223)
--------------- --------------

$ 3,169,727 $ 3,832,437
--------------- --------------
--------------- --------------


WaveRider Communications Inc.

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

Three Months ended Nine Months ended
September 30 September 30 September 30 September 30
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------------------------------------------
CONSOLIDATED
STATEMENTS
OF LOSS

REVENUE

Product
revenue $ 2,413,951 $ 2,271,435 $ 6,521,398 $5,925,002
Service
revenue 595,543 397,784 1,408,240 1,462,954
------------------------------------------------------

3,009,494 2,669,219 7,929,638 7,387,956
------------------------------------------------------

COST OF REVENUE

Product
revenue 1,596,489 1,445,226 4,445,459 4,052,247
Service
revenue 340,089 199,177 789,495 841,705
------------------------------------------------------

1,936,578 1,644,403 5,234,954 4,893,952
------------------------------------------------------

GROSS MARGIN 1,072,916 1,024,816 2,694,684 2,494,004
------------------------------------------------------

EXPENSES

Selling,
general and
administration 1,051,346 1,121,693 3,105,720 3,871,484
Research and
development 96,896 521,436 357,236 1,376,230
Depreciation
and amortization 32,386 53,364 117,098 242,087
Bad debt expense - 18,975 18,599 35,715
------------------------------------------------------

1,180,628 1,715,468 3,598,653 5,525,516
------------------------------------------------------

LOSS FROM
OPERATIONS (107,712) (690,652) (903,969) (3,031,512)
------------------------------------------------------

NON-OPERATING
EXPENSES
(INCOME)

Interest expense 156,432 1,267,017 910,908 2,368,087
Foreign exchange
loss 2,738 32,345 12,377 182,442
Interest income (3,054) (412) (9,288) (3,031)
------------------------------------------------------

156,116 1,298,950 913,997 2,547,498
------------------------------------------------------

NET LOSS $ (263,828) $(1,989,602) $ (1,817,966) $(5,579,010)
------------------------------------------------------
------------------------------------------------------

BASIC AND FULLY
DILUTED LOSS
PER SHARE $ (0.01) $ (0.13) $ (0.08) $ (0.38)
------------------------------------------------------
------------------------------------------------------

Weighted Average
Number of
Common Shares 27,967,983 15,165,678 23,524,238 14,836,601
------------------------------------------------------
------------------------------------------------------

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

CONSOLIDATED
STATEMENTS
OF DEFICIT

OPENING DEFICIT (96,117,106) (91,851,707) (94,562,968) (88,262,299)

NET LOSS FOR
THE PERIOD (263,828) (1,989,602) (1,817,966) (5,579,010)
------------------------------------------------------

CLOSING
DEFICIT $ (96,380,934)$(93,841,309) $(96,380,934)$(93,841,309)
------------------------------------------------------
------------------------------------------------------

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

CONSOLIDATED
STATEMENTS
OF
COMPREHENSIVE
LOSS

NET LOSS FOR
THE PERIOD (263,828) (1,989,602) (1,817,966) (5,579,010)

OTHER
COMPREHENSIVE
INCOME

Cumulative
translation
adjustment (2,460) (34,182) 14,762 29,267
------------------------------------------------------

COMPREHENSIVE
LOSS $ (266,288) $(2,023,784) $ (1,803,204) $(5,549,743)
------------------------------------------------------
------------------------------------------------------

See accompanying notes to financial statements.


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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