It's Out
Wave Systems Corp. (NASDAQ: WAVX; www.wave.com) today reported
growth in new contract activity and reviewed its results for its third
quarter and nine months ended September 30, 2004.
During the third quarter ended September 30, 2004, Wave completed
license contracts amounting to $340,000, to be recorded as revenue
over future periods. The contracts, which were not reflected in Q3
2004 revenue, are being booked as deferred revenue.
Steven Sprague, Wave's president and CEO, said, "Wave believes the
Trusted Computing marketplace is beginning to engage and that
increased activity is reflected in our Q3 contract activity as well as
the sequential ramp in ETS shipments achieved in the period. Based on
this, we are optimistic about our order activity as we progress
through 2004 into the New Year."
Wave's Q3 2004 net revenue was $44,000, compared to revenue of
$80,000 principally related to development service contracts and
license contracts in the third quarter ended September 30, 2003.
Reflecting ongoing sales, marketing, administrative and R&D expenses,
Wave reported a net loss to common stockholders of $3.8 million, or
$0.05 per basic share, for the third quarter of 2004, compared to a
net loss to common stockholders of $8.3 million, or $0.15 per basic
share, in the third quarter ended September 30, 2003. The year-ago Q3
period included a $1.1 million write-down of inventory and the
accretion of discount as well as preferred dividends paid on preferred
stock amounting to $2.8 million. The weighted average number of basic
shares outstanding in the third quarters of 2004 and 2003, was
69,633,000 and 54,030,000, respectively.
For the nine months ended September 30, 2004, Wave Systems
reported net revenue of $101,000, compared to revenue of $130,000 in
the nine months period ended September 30, 2003. Wave reported a net
loss to common stockholders of $11.5 million, or $0.17 per basic
share, for the first nine months of 2004, compared to a net loss to
common stockholders of $21.0 million, or $0.40 per basic share, in the
first nine months of 2003. The weighted average number of basic shares
outstanding in the first nine months of 2004 and 2003, was 68,117,000
and 52,748,000, respectively.
As of September 30, 2004, Wave had current assets of approximately
$5.1 million and no long-term debt. Wave Systems has a shelf
registration statement in place, which net of an August private
placement, could enable the Company to potentially raise up to $22
million of additional capital in private or public transactions.
Mr. Sprague added, "We believe Wave made important progress in the
third quarter with a revised technology agreement with National
Semiconductor and an agreement for Wave technology to be included with
STMicroelectronics' Trusted Computing security chip solution.
Furthermore, Wave agreed to license its ESIGN digital signing and
storage technology for inclusion in a la mode, inc.'s real estate
industry network offerings. Shipments of Wave's Trusted Computing
technology with mainstream motherboards also showed steady growth from
initial levels.
"Wave believes momentum in such diverse markets as PC OEMs and
their suppliers, real estate and financial services, government, the
military and other enterprises, and our investments in Trusted
Computing over the past few years are now positioning us to take
advantage of this emerging market growth."
Recent Wave Systems developments (for more details, please visit
www.wave.com):
STMicroelectronics - Wave and STMicroelectronics, one of the
world's largest semiconductor vendors, in September announced
licensing its Embassy(R) Security Center and Cryptographic Services
Provider products to ST for use in their TCG 1.2 Solution for trusted
personal computers. The ST19WP18-TPM solution, based on ST's Trusted
Platform Module (TPM), combined with the software stack (BIOS and
Windows(R) drivers, Trusted Computing Group Software Stack, and Wave
EMBASSY(R) Security Center and TCG Cryptographic Service Provider),
delivers an off-the-shelf Trusted Computing Group (TCG)-enabled
security solution for desktop and laptop PCs.
National Semiconductor - Wave concluded a revised agreement in
September to have its technology embedded in National Semiconductor's
Trusted Platform Module products that also include the new trusted
computing integrated solution, the IOKeeper(R) Trusted Platform
Module. As a part of the agreement Wave receives a license fee and a
per unit royalty.
a la mode - In September Wave agreed to license its eSign
Transaction Management Suite to a la mode, inc. and provide related
development services. A la mode will provide Wave's eTMS technology,
which provides a legally-binding and standards-compliant digital
signing capability, to the thousands of real estate professionals -
real estate agents, mortgage brokers and appraisers - that use a la
mode's XSites network. Wave's software will be distributed to the
entire network with the digital signing toolkit and e-signature
included.
Private Placement - In August, Wave completed a $3 million private
placement that included an additional investment right and warrants,
which if exercised would generate approximately $8.7 million of
additional proceeds to Wave.
Key Transfer Manager Enterprise Server AD: In August, Wave
introduced Key Transfer Manager (KTM) Enterprise Server AD, a server
software solution designed to aid in the protection and recovery of
critical enterprise personal computer data. KTM Enterprise Server AD
is designed to address the IT manager's need to control the key
archive and recovery process when implementing an enterprise-wide
security solution using PCs conforming to the TCG standard.
ETS 4.0: In September, Wave launched the next version of its
secure enterprise software, EMBASSY(R) Trust Suite (ETS) 4.0. New or
enhanced features include the ability to set strong security
preferences for authentication and hardened data protection tailored
to business needs. Wave's ETS 4.0 is available in Professional Edition
and Enterprise Edition client packages, or in a client/server package
that includes the EMBASSY Trust Server - Key Transfer Manager
Enterprise Server AD 2.0.
New Distribution Channels: During the third quarter Wave announced
three new distribution partners, including Envoy Data, CSS
Laboratories and SmartAxis SA.
Market Outreach - Wave promoted the Trusted Computing story in a
series of trade show appearances, including the DOIM Conference,
targeting military and national security customers; IBM Partner Summit
2004, targeting IT markets in northern Europe; and the FBI ITEC
conference and the Intel Developer Forum.
In July Wave joined the ARM(R) Connected Community, enabling Wave
to gain access to a full range of resources to help it market
innovative solutions associated with the new ARM TrustZone(TM)
technology that will enable developers to get their ARM Powered(R)
products to market faster.
Todito, a leading Internet portal, ISP and e-commerce site for
North American Spanish-speakers, launched Todito TV Premium, an online
service offering DVD-quality videos that utilizes Wavexpress' platform
and player. In addition, Wavexpress and thePlatform for media, a
leading provider of software for broadcast and broadband rich media
content management, integrated Wavexpress' WX broadband video
technology and thePlatform media publishing system(TM).
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