Five and Under

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Bought PCOM. Earning sjust out and things are improving. Should gap

Thursday April 25, 3:30 pm Eastern Time
Press Release
SOURCE: P-Com
P-Com Reports First Quarter Results
Conference Call Scheduled at 5 p.m. EST
CAMPBELL, Calif.--(BUSINESS WIRE)--April 25, 2002--

First quarter sales rise to $8.3 million, up 12 percent from Q4 2001
Operating expense reduction trend continues
Debt restructuring initiatives are on track
P-Com, Inc. (Nasdaq:PCOM - news), a worldwide provider of wireless telecom products and services, reported today that net sales increased to $8.3 million for the quarter ended March 31, 2002, compared to $7.4 million for the fourth quarter of 2001 and $59.2 million compared to a year ago.

The net sales increase between the fourth quarter of 2001 and the first quarter of 2002 was the result of stronger sales resulting from the introduction of new products and growing sales to emerging markets, such as the Asia-Pacific Region.

Net loss for the quarter before the cumulative effect of accounting change for the implementation of Financial Accounting Standard (``FAS'') 142, was $9.7 million, or $.11 per share, compared to a net loss of $10.2 million, or $.13 per share, for the same period in 2001, and a net loss of $17.9 million, or $.21 per share in the fourth quarter of 2001. FAS 142, which the Company adopted on January 1, 2002, requires companies to assess goodwill recorded from previous acquisitions, and as necessary, record a one-time valuation charge that does not affect cash or the Company's operations.

Including the non-cash impact of $5.5 million recorded in the quarter for the effect of implementing FAS 142, P-Com recorded a net loss for the first quarter 2002 of $15.2 million, or $0.18 per share. The net loss for the first quarter ended March 31, 2001 included a receivable valuation charge of $11.6 million, inventory related charges of $10 million relating to the bankruptcy of a major customer Winstar, and a gain on sale of subsidiary of $9.8 million.

Operating expenses for the quarter were $10.6 million, compared to $11.7 million (excluding goodwill amortization) in the fourth quarter of 2001, and $14.6 million (excluding goodwill amortization and the receivable valuation charge) for the same period in 2001.

``P-Com's first quarter results are encouraging and build on the steady progress we've been making to improve sales, reduce expenses and debt, and penetrate emerging markets to diversify our customer base,'' said P-Com Chairman George Roberts. ``We believe the restructuring program we announced in January 2002 is clearly working.''

Conference Call

Management will hold a conference call on April 25, 2002, at 2:00 p.m. Pacific, 5:00 p.m. Eastern time. To listen to the call by phone, dial 1-888-273-9889 for U.S. calls or 1-612-338-9017 for international calls. To listen to a live broadcast over the Internet, go to www.p-com.com and click on the Investor Relations page, or go to StreetEvents at www.streetevents.com. A replay of the call will be available at both sites for 90 days.

About P-Com, Inc.

P-Com, Inc. develops, manufactures, and markets complete lines of point-to-multipoint, point-to-point, spread spectrum wireless access systems to the worldwide telecommunications market, and through its wholly owned subsidiary, P-Com Network Services, provides related installation support, engineering, program management and maintenance support services to the telecommunications industry in the United States. P-Com broadband wireless access systems are designed to satisfy the high-speed, integrated network requirements of Internet access associated with Business to Business and E-Commerce business processes. Cellular and personal communications service (PCS) providers utilize P-Com point-to-point systems to provide backhaul between base stations and mobile switching centers. Government, utility, and business entities use P-Com systems in public and private network applications. For more information visit www.p-com.com or call [phone].

Safe Harbor Statement

Statements in this release that are forward looking involve known and unknown risks and uncertainties, which may cause P-Com'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, working capital constraints, 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, reliance upon subcontractors, P-Com's ability to have available an appropriate amount of production capacity in a timely manner, the ability of P-Com's customers to finance their purchases of P-Com's products and/or services, the timing of new technology and product introductions, the risk of early obsolescence, P-Com's ability to raise equity and repay short liabilities, including subordinated notes, and a severe worldwide slowdown in the telecommunications equipment and services sector. Further, P-Com operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond P-Com's control, such as announcements by competitors and service providers. Reference is made to the discussion of risk factors detailed in P-Com's filings with the Securities and Exchange Commission, including its reports on Form 10-K and 10-Q.


- Tables Follow -


P-COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)


Three months ended March 31,
2002 2001
-------- --------
Sales:
Product $ 7,832 $ 43,610
Service 508 15,564
-------- --------
Total sales 8,340 59,174
-------- --------
Cost of sales:
Product 7,047 40,403
Service 480 11,851
-------- --------
Total cost of sales 7,527 52,254
-------- --------

Gross profit 813 6,920
Gross margin 10% 12%

Operating expenses:
Research and development 4,131 5,302
Selling and marketing 1,855 2,346
General and administrative 4,599 6,931
Receivable valuation charge -- 11,600
Goodwill Amortization -- 711
-------- --------
Total operating expenses 10,585 26,890
-------- --------

Operating expenses as a percentage of sales 127% 45%

Loss from continuing operations (9,772) (19,970)

Interest expense (346) (648)
Gain on sale of subsidiary -- 9,814
Other income, net 443 851
-------- --------

Loss from continuing operations before
income taxes and cumulative effect of
change in accounting principle (9,675) (9,953)
Provision for income taxes -- 234
-------- --------
Loss from continuing operations before
cumulative effect of change in
accounting principle (9,675) (10,187)
Cumulative effect of change in
accounting principle (5,500) --
-------- --------
Net loss $(15,175) $(10,187)
======== ========

Basic and diluted loss per share:
Loss from continuing operations $ (0.11) $ (0.13)
Cumulative effect of change in
accounting principle $ (0.07) $ --
-------- --------
Basic and diluted loss per share
applicable to Common Stockholders $ (0.18) $ (0.13)
======== ========
Shares used in basic and diluted
per share computation 84,997 80,703
======== ========

P-COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)

March 31, December 31,
2002 2001
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 5,152 $ 7,103
Restricted cash -- 2,911
Accounts receivable, net 5,293 7,926
Inventory 27,730 31,946
Prepaid expenses and other assets 5,872 7,138
--------- ---------
Total current assets 44,047 57,024

Property and equipment, net 15,945 17,627
Goodwill and other assets 11,964 17,583
--------- ---------
Total assets $ 71,956 $ 92,234
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,859 $ 8,143
Other accrued liabilities 23,508 29,767
Convertible subordinated notes 29,299 29,299
--------- ---------
Total current liabilities 60,666 67,209
--------- ---------

Other long-term liabilities 2,164 769
--------- ---------
Total liabilities 62,830 67,978
--------- ---------

Stockholders' equity:
Common Stock 8 8
Additional paid-in capital 320,029 319,994
Accumulated deficit (309,635) (294,460)
Accumulated other comprehensive loss (1,276) (1,286)
--------- ---------
Total stockholders' equity 9,126 24,256
--------- ---------
Total liabilities and stockholders' equity $ 71,956 $ 92,234
========= =========




--------------------------------------------------------------------------------
Contact:
P-Com, Inc.
Leighton Stephenson, 408/866-3666 (Investor)
[e-mail]
or
Blue Marlin Partners
Greg Berardi, 415/239-7826 (Media)
[e-mail]


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