Gigabeam Corporation (fka GGBMQ)

[ssti2008]

2nd Quarter report not bad - wait for 3rd Quarter ...


Press Release Source: GigaBeam Corporation

GigaBeam Reports Record Sales for Calendar Q2, 2007
Friday August 31, 6:34 pm ET
Continued Growth Punctuated by Year-to-Date Net Loss Narrowing by 46%

DURHAM, N.C.--(BUSINESS WIRE)--GigaBeam Corporation (NASDAQ:GGBM - News), deploying WiFiber® "wireless fiber optics" technology to economic centers across the globe, today reported record financial results for its fiscal quarter ended June 30, 2007.

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Sales for the second quarter of 2007 increased 196% to $2,068,353 as compared to $696,657 in the second quarter of 2006 primarily as a result of a 221% increase in product sales and a 36% increase in average selling prices, partially offset by a decrease in parts sales.

Gross profit for the second quarter of 2007 decreased 16% to $358,866 as compared to $429,101 resulting in gross margin for the second quarter of 2007 of 17% compared to 62% for the prior year's comparable quarter primarily due to a charge of $763,524 for inventory obsolescence and a higher commission rate on one of the Company's larger sales.

Operating expenses for the second quarter of 2007 decreased 56% to $2,449,199 as compared to $5,539,353 in the second quarter of 2006 resulting from the cost cutting efforts initiated in the first quarter of 2006 including a 50% reduction in staff levels, the discontinuance of the company's after-sales support office and management salary reductions.

The net loss for the second quarter of 2007 decreased 56% to ($2,314,787) or ($0.46) per diluted share as compared to ($5,342,938) or ($0.99) per diluted share for the second quarter of 2006, resulting primarily from cost reduction efforts initiated by the company in the first quarter of 2007. Year to date the net loss has decreased by 46% to ($5,425,841) or ($1.09) per diluted share as compared to ($10,123,802) or ($1.98) per diluted share for the comparable period in 2006.

"These results demonstrate our commitment to operating the business efficiently and we believe that our bottom line is trending towards achieving profitability," said Louis Slaughter, Chairman and Chief Executive Officer of GigaBeam. "The revenue for the quarter was a record for the Company since its IPO and we witnessed a significant decrease in our net operating loss for the quarter. We believe we are continuing to make progress towards achieving strong fundamentals and on our overriding mission to build long-term shareholder value."

Slaughter added, "We continue to finance our operations through investor financing and customer receipts. To that end, as previously disclosed, we closed a Series D preferred stock offering in August. Our auditors have nearly completed their work on our Form 10-QSB and we expect to file it shortly as they complete their procedures. We will promptly notify the public should their procedures result in any adjustment to our financial results."

GigaBeam's WiFiber technology is similar to terrestrial fiber in terms of speed and reliability. WiFiber has a substantial advantage over terrestrial fiber because it can be rapidly deployed and costs significantly less to deploy than terrestrial fiber. Terrestrial fiber can take months to deploy and also require significant regulatory and environmental approvals prior to installation.

GigaBeam WiFiber products operate in the 71-76 GHz and 81-86 GHz upper millimeter wave spectrum bands. The Federal Communications Commission and the European Conference of Postal and Telecommunications Administrations (CEPT) and certain other countries have authorized this portion of the spectrum for licensed wireless commercial use.

About GigaBeam Corporation

GigaBeam's WiFiber® product ushers in a new era of communications by allowing customers to bypass the restrictive telecom oligopoly and connect directly to any city's fiber optics hub or Point-of-Presence (POP). The disruptive impact of an easily deployable, low cost alternative to fiber optics cables is difficult to overestimate, especially since WiFiber's point-to-point high-speed units transmit data via the highest approved radio frequency at speeds equal to 641 T1 lines or 1000 DSL lines.

Current GigaBeam partners, customers, and end-users include Google, Sprint, The Department of Defense, as well as several cities and universities such as San Francisco and Boston University. The Company has implemented a strategy to expand into major metropolitan areas around the world.

GigaBeam's management team, which pioneered rule making in the 70GHz and 80GHz spectrum, is fully committed to augmenting current revenues through a network of authorized dealers and resellers across North America, South America, Europe, Africa, the Middle East, India and Asia that have local expertise and established contacts. GigaBeam is a company with market disruptive wireless technology, a pioneering management team and a worldwide network dedicated to penetrating major metropolitan markets around the globe.

To learn more about GigaBeam's revolutionary wireless technology, please visit www.gigabeam.com/.

For investor-specific information and resources, visit http://www.trilogy-capital.com/tcp/gigabeam.

To view current stock quotes and news, visit http://www.trilogy-capital.com/tcp/gigabeam/quote.html.

To view an investor fact sheet about the company, visit http://www.trilogy-capital.com/tcp/gigabeam/factsheet.html.

Safe Harbor Statement

Statements in this press release regarding GigaBeam's products, services, capabilities, performance, opportunities, development and business outlook that are forward-looking involve and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond GigaBeam's control and difficult to predict, and could cause actual results to differ materially from these anticipated, expressed or forecasted in the forward-looking statements. Such risks and uncertainties may include, but are not limited to: limited capital resources and continued dependence of our operations on additional financing, limited operating history, difficulties in distinguishing GigaBeam's products and services, ability to manufacture and deploy GigaBeam's products, lack of or delay in market acceptance and fluctuations in customer demand, dependence on a limited number of significant customers, reliance on third party vendors and strategic partners, availability of raw materials, subassemblies and components, ability to meet future capital requirements on acceptable terms, continuing uncertainty in the telecommunications industry and the global economy, intense competition in the telecommunications equipment industry and resulting impact on pricing and general financial performance, compliance with federal and state regulatory requirements, timing, availability and success of new technology and product introductions and the other factors discussed in GigaBeam's filings with the Securities and Exchange Commission. GigaBeam does not intend to update the forward-looking statements except as required by law.

GigaBeam Corporation
Condensed Consolidated Balance Sheets
(Unaudited)


June 30, December 31,
2007 2006
------------ -------------
ASSETS
-------------------------------------------
Current assets:
Cash and cash equivalents $ 53,084 $ 653,734
Accounts receivable, net of allowance of
$580,852 and $533,766 at June 30, 2007 and
December 31, 2006, respectively 1,189,826 807,500
Inventories, net 4,230,506 7,621,574
Prepaid expenses and other current assets 219,035 568,711
----------- -----------
Total current assets 5,692,451 9,651,519

Inventories - non current, net 1,999,983 --
Property and equipment, net 1,643,440 1,986,735
Other assets 455,347 445,630
Debt issuance costs 52,556 181,976
----------- -----------
Total assets $ 9,843,777 $ 12,265,860
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------
Current liabilities:
Accounts payable $ 2,856,150 $ 1,891,077
Accrued liabilities 1,267,587 1,416,716
Current portion of capital lease
obligations 28,899 29,125
Convertible notes payable, net of discount 218,636 --
Notes payable, other current 651,866 --
Note payable, related party 65,000 --
----------- -----------
Total current liabilities 5,088,138 3,336,918

Capital lease obligations, non-current 26,996 41,159
Convertible notes payable, net of discount -- 1,051,036
----------- -----------
Total liabilities 5,115,134 4,429,113

Stockholders' equity:

Series A redeemable preferred stock, $0.001
par value, 20,000 shares authorized;
11,277 shares issued and outstanding at
June 30, 2007 and December 31, 2006 11 11

Series B convertible preferred stock,
$0.001 par value; 20,000 shares
authorized; 15,100 shares issued and
outstanding at June 30, 2007 and December
31, 2006 15 15

Series C convertible preferred stock,
$0.001 par value; 10,000 shares
authorized; 10,000 shares issued and
outstanding at June 30, 2007 and December
31, 2006 10 10

Common stock, $0.001 par value, 40,000,000
shares authorized; 6,680,540 and 6,099,279
shares issued and outstanding at June 30,
2007 and December 31, 2006, respectively 6,681 6,099

Additional paid-in capital 53,193,686 50,876,530
Accumulated deficit (48,471,760) (43,045,918)
----------- -----------
Total stockholders' equity 4,728,643 7,836,747
----------- -----------
Total liabilities and stockholders' equity $ 9,843,777 $ 12,265,860
=========== ===========

GigaBeam Corporation
Condensed Consolidated Statements of Operations
(Unaudited)


Three Months Ended Six Months Ended
------------------------- --------------------------
June 30, June 30,
------------------------- --------------------------
2007 2006 2007 2006
------------------------- --------------------------

Net Sales $ 2,068,563 $ 696,657 $ 2,352,705 $ 2,355,198
Cost of sales 1,709,697 267,556 1,871,789 1,753,190
------------------------- --------------------------

Gross margin 358,866 429,101 480,916 602,008
------------------------- --------------------------

Operating
expenses:
Research and
development 850,557 1,290,675 1,506,438 2,632,357
General and
administrative 894,338 2,009,840 2,109,671 3,543,383
Selling and
marketing 395,625 1,361,636 918,365 2,536,456
Service, install
and link
operations 308,679 877,202 676,113 1,545,395
------------------------- --------------------------

Total operating
expenses 2,449,199 5,539,353 5,210,587 10,257,591
------------------------- --------------------------

Operating loss (2,090,333) (5,110,252) (4,729,671) (9,655,583)

Other income
(expense):
Interest income 1,512 55,950 2,043 149,783
Interest expense (225,966) (288,636) (661,516) (618,002)
Loss on Asset
Disposal -- -- (36,698) --
------------------------- --------------------------

Loss before
provision for
income taxes (2,314,787) (5,342,938) (5,425,842) (10,123,802)

Provision for
income taxes -- -- -- --
------------------------- --------------------------

Net loss $(2,314,787) $(5,342,938) $(5,425,842) $(10,123,802)
------------------------- --------------------------

Series B
convertible
preferred stock
dividend (306,000) (371,311) (604,000) (602,345)
Series C
convertible
preferred stock
dividend (216,000) -- (400,000) --
Increasing rate
preferred stock
non-cash
dividend (176,384) -- (529,152) --
------------------------- --------------------------

Net loss
allocated to
common
shareholders $(3,013,171) $(5,714,249) $(6,958,994) $(10,726,147)
========================= ==========================

Basic and diluted
loss per share $ (0.46) $ (0.99) $ (1.09) $ (1.98)
========================= ==========================
Basic and diluted
weighted average
shares
outstanding 6,480,280 5,749,024 6,381,597 5,419,978
========================= ==========================


Contact:

GigaBeam Corporation
Investor Contact:
Mark Hahn, 919-313-3992
[e-mail]
or
Company Contact:
Marijke McCandless
Director, Marketing Communications and Investor Relations
919-599-6210
[e-mail]

Source: GigaBeam Corporation