Press Release: pdvWireless Reports First Quarter Results

Press Release: pdvWireless Reports First Quarter Results

pdvWireless Reports First Quarter Results

PR Newswire

WOODLAND PARK, N.J., Aug. 9, 2016

WOODLAND PARK, N.J., Aug. 9, 2016 /PRNewswire/ — pdvWireless, Inc., (NASDAQ: PDVW) (the “Company” or “pdvWireless”), a private wireless communications carrier and provider of mobile workforce management solutions, reported today its first fiscal quarter results for the period ended June 30, 2016.

“During the first quarter, we remained focused on our primary business initiatives, including actively promoting our DispatchPlus business, pursuing our rulemaking petition at the FCC and advancing our longer-term strategic initiatives,” said John C. Pescatore, President and CEO of pdvWireless. “We continue to receive positive feedback from our initial customers within the business verticals we are targeting.”

The Company also made progress with its Joint Petition for Rulemaking. Over the last several months, the pdvWireless team, along with representatives of the Enterprise Wireless Alliance, held productive meetings with the FCC Chairman’s office, as well as with the offices of the other four FCC Commissioners, and with representatives of the FCC’s Wireless Telecommunications Bureau and the Office of Engineering and Technology. At these meetings, the team discussed the merits of the Petition, which seeks realignment of the 900 MHz band to allow the deployment of broadband technologies. The Company also continued to participate in discussions with several licensees in the band to address their questions and provide solutions.

As announced previously, pdvWireless, together with its consortium partners, submitted a proposal to the FirstNet RFP and continues to work through the official bidding process. “We are excited to participate in the FirstNet RFP process and work with the experienced partners we have in our consortium, who have demonstrated expertise in the critical areas needed to build and operate a nationwide public-safety broadband network, ” added Mr. Pescatore. “There are numerous benefits to participating in this FirstNet process, and our company is strengthened as a result.”

Financial Results

Revenue for the Company’s first fiscal quarter ended June 30, 2016 was $1.0 million compared with $0.8 million for the quarter ended June 30, 2015. For the first quarter of this year, the Company reported a net loss of ($10.1 million), or ($0.70) per share, compared with a net loss of ($4.4 million), or ($0.32) per share, for the same quarter in the previous year.

Due to the early phase of its DispatchPlus business, the Company’s revenues for the three months ended June 30, 2016 continued to principally represent its historical software as-a-service (“SaaS”) business, although the increases in revenues for the quarter were primarily from the recently launched DispatchPlus business.

The operating results for the three months ended June 30, 2016 also include costs and expenses related to developing the Company’s broadband spectrum strategies, including the FirstNet bid, and operating, selling and marketing costs of implementing and deploying its DispatchPlus business.

Cost of revenue for the three months ended June 30, 2016 increased by 322.1% to $1.6 million from $0.4 million for the three months ended June 30, 2015. The increase primarily reflects the costs to maintain and operate the Company’s push-to-talk networks for its DispatchPlus business.

Operating expenses for the three months ended June 30, 2016 increased by $4.7 million, or 97%, to $9.5 million from $4.8 million for the three months ended June 30, 2015. The increase for the first quarter was principally driven by:

   -- General and administrative expenses increased by $4.0 million, or 108%, 
      to $7.7 million from $3.7 million. The increase largely resulted from 
      $3.3 million for consulting services related to the Company's strategic 
      initiatives, including the FirstNet RFP process, and $0.5 million for 
      increased headcount and related costs. 
   -- Sales and support increased by $0.4 million, or 50%, to $1.2 million for 
      the three months ended June 30, 2016 from $0.8 million for the three 
      months ended June 30, 2015. The increase is due primarily to a $0.2 
      million increase in headcount and related costs along with $0.1 million 
      for indirect commissions provided to the Company's third-party sales 
      representatives to support its DispatchPlus business. 
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Adjusted EBITDA for this year’s first quarter was a negative ($8.2 million) as compared with a negative ($3.0 million) for the same quarter in the prior year. The decrease in Adjusted EBITDA in the first quarter resulted from higher cost of revenue, selling and general and administrative costs as the Company increased its spending and headcount to support and implement its business initiatives.

Strong Cash Position

The Company has a strong cash position, with $143.2 million in available cash as of June 30, 2016, a decrease of $10.3 million from March 31, 2016 as the Company invested in the pursuit and development of its spectrum strategies.

Conference Call

The Company will host a conference call at 4:45 p.m. EDT today, August 9, 2016, to discuss its first quarter fiscal 2017 financial results and update investors on its other strategic initiatives. Investors in the United States can participate in the earnings call by dialing into the conference line at 888-267-2845 or 973-528-0008 and using the conference code 692207. The earnings call will also be available for replay until August 23, 2016 and can be accessed by dialing into the conference lines at 800-332-6854 or 973-528-0005 and using the conference code 692207. The replay will also be posted on the Company’s website at

About pdvWireless

pdvWireless, Inc. is a private wireless communications carrier and provider of mobile workforce management solutions that increase the productivity of field-based workers and the efficiency of their dispatch and call center operations. pdvWireless has commenced launching private push-to-talk networks in major markets throughout the United States. Its patented and industry-validated SaaS technology improves team communication and field documentation across a wide array of industries, including transportation, distribution, construction, hospitality, waste management and field service.

pdvWireless’ Chairman, Brian McAuley and Vice Chairman, Morgan O’Brien, were the co-founders of Nextel Communications and have over 60 years of combined experience in two-way radio operations and FCC regulatory matters. pdvWireless is headquartered in Woodland Park, New Jersey.

Non-GAAP Financial Information

This press release and the information contained herein present a non-GAAP financial measure, Adjusted EBITDA, which excludes certain amounts. The Company defines Adjusted EBITDA as net income (loss) with adjustments for depreciation and amortization, interest income (expense)-net, other income (expense)-net, income taxes and stock-based compensation. The Company has included below a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA. The Company’s management uses Adjusted EBITDA to evaluate the Company’s performance and provides this financial measure to investors as a supplement to the Company’s reported results because management believes this information provides additional insight into the Company’s operating performance by disregarding certain nonrecurring or non-cash items or items that are not reflective of the day-to-day offering of its services. Adjusted EBITDA should not be considered in isolation, as a substitute for, or as superior to, financial measures calculated in accordance with GAAP, and the Company’s financial results calculated in accordance with GAAP and any reconciliation to those financial statements should be carefully evaluated. The non-GAAP financial measure used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Forward-Looking Statements

Any statements contained in this press release that do not describe historical facts are forward-looking statements as defined under the Federal securities laws. These forward-looking statements include statements regarding the Company’s DispatchPlus business and its sales and marketing initiatives, the regulatory status and timing of the Company’s Joint Petition for Rulemaking and the Company’s spectrum and other initiatives and opportunities. Any forward-looking statements contained herein are based on the Company’s current expectations, but are subject to a number of risks and uncertainties that could cause its actual future results to differ materially from its current expectations or those implied by the forward-looking statements. These risks and uncertainties include, but are not limited to: the Company has a limited operating history with respect to its recently launched DispatchPlus business; the Company has had net losses each year since its inception and may not achieve or maintain profitability in the future; the Company’s indirect sales model may not be successful; customers may not adopt the Company’s technology or service offerings as quickly as anticipated or in sufficient numbers; the Company’s spectrum and other initiatives and opportunities, including its Joint Petition for Rulemaking and its FirstNet bid proposal, may not be successful on a timely basis or at all, may cost more than anticipated, and may continue to require significant time and attention from its senior management team and the expenditure of significant resources; the wireless communication industry is highly competitive and the Company may not be able to compete successfully; and government regulation could adversely affect the Company’s business and prospects. These and other factors that may affect the Company’s future results or operations are identified and described in more detail in its filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for

Press Release: pdvWireless Reports First Quarter -2-

the fiscal year ended March 31, 2016, filed with the SEC on June 13, 2016 and its quarterly report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on August 9, 2016. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

Investor relations contacts: 
Natasha Vecchiarelli            Joele Frank, Wilkinson Brimmer Katcher 
Investor Relations Manager 
pdvWireless, Inc.               Joe Millsap 
973-531-4397                    415-869-3958 
ir[a]              jmillsap[a] 
                                Adam Pollack 
pdvWireless, Inc. 
Consolidated Statements of Operations 
                                         Three months ended 
                                         June 30, 
                                         2016           2015 
Operating revenues                        (Unaudited)    (Unaudited) 
Service revenue                          $765,305       $648,662 
Spectrum lease revenue                    182,186        182,186 
Other revenue                             98,291         10,012 
Total operating revenues                  1,045,782      840,860 
Cost of revenue 
Sales and service                         1,583,780      375,174 
Gross profit (loss)                       (537,998)      465,686 
Operating expenses 
General and administrative                7,746,001      3,722,406 
Sales and support                         1,216,241      811,675 
Product development                       572,921        304,897 
Total operating expenses                  9,535,163      4,838,978 
Loss from operations                      (10,073,161)   (4,373,292) 
Interest expense                          (1,364)        -- 
Interest income                           22,529         22,220 
Net loss                                 $(10,051,996)  $(4,351,072) 
Net loss per common share basic and 
 diluted                                 $(0.70)        $(0.32) 
Weighted-average common shares used to 
 compute basic and diluted net loss per 
 share                                    14,375,466     13,492,560 

The table below reconciles Adjusted EBITDA to the Company’s GAAP disclosure of net loss.

                                         Three months ended 
                                         June 30, 
                                         2016           2015 
                                          (Unaudited)    (Unaudited) 
Adjusted EBITDA: 
Net loss                                 $(10,051,996)  $(4,351,072) 
Interest income (expense) - net           (21,165)       (22,220) 
Depreciation - Cost of revenue            443,547        32,950 
Depreciation and amortization - 
 Operating expenses                       43,159         16,140 
Stock-based compensation expense          1,365,582      1,349,634 
Adjusted EBITDA                          $(8,220,873)   $(2,974,568) 
pdvWireless, Inc. 
Consolidated Balance Sheets 
                                          June 30,       March 31, 
                                          2016           2016 
Current Assets 
Cash and cash equivalents                 $143,181,931   $153,462,865 
Accounts receivable, net of allowance 
 for doubtful accounts                     590,594        528,283 
Inventory                                  55,750         93,203 
Prepaid expenses and other current 
 assets                                    785,296        906,952 
Total current assets                       144,613,571    154,991,303 
Property and equipment                     14,970,448     15,119,766 
Intangible assets                          104,225,744    103,655,459 
Capitalized patent costs, net              220,297        222,359 
Other assets                               332,683        60,073 
Total assets                              $264,362,743   $274,048,960 
Current liabilities 
Accounts payable and accrued expenses     $2,632,261     $3,780,697 
Accounts payable - officers                19,532         44,159 
Current portion of note payable            494,545        494,545 
Deferred revenue                           798,630        744,605 
Total current liabilities                  3,944,968      5,064,006 
Noncurrent liabilities 
Long-term portion of note payable          497,265        497,265 
Deferred revenue                           5,616,666      5,647,773 
Other liabilities                          804,878        654,536 
Total liabilities                          10,863,777     11,863,580 
Commitments and contingencies 
Stockholders' equity 
Preferred stock, $0.0001 par value per 
share, 10,000,000 shares authorized and 
no shares outstanding at June 30, 2016 
and March 31, 2016                         --             -- 
Common stock, $0.0001 par value per 
 share, 100,000,000 shares authorized 
 and 14,300,790 shares issued and 
 outstanding at June 30, 2016 and March 
 31, 2016                                  1,438          1,438 
Additional paid-in capital                 327,034,670    325,669,088 
Accumulated deficit                        (73,537,142)   (63,485,146) 
Total stockholders' equity                 253,498,966    262,185,380 
Total liabilities and stockholders' 
 equity                                   $264,362,743   $274,048,960 
pdvWireless, Inc. 
Consolidated Statement of Cash Flows 
                                          For the three months ended 
                                          June 30, 
                                          2016              2015 
Net loss                                  $   (10,051,996)  $(4,351,072) 
Adjustments to reconcile net loss to 
net cash used by operating activities 
Depreciation and amortization                 486,706        49,090 
Non-cash compensation expense 
 attributable to stock awards                 1,365,582      1,349,634 
Changes in operating assets and 
Accounts receivable                           (62,311)       (8,462) 
Inventory                                     37,453         -- 
Prepaid expenses and other assets             (150,954)      (103,255) 
Accounts payable and accrued expenses         (1,148,436)    (4,205,582) 
Accounts payable - officers                   (24,627)       (24,940) 
Deferred revenue                              (190,557)      (181,866) 
Other liabilities                             136,687        62,493 
Net cash used by operating activities         (9,602,453)    (7,413,960) 
Purchases of intangible assets                (302,314)      -- 
Purchases of equipment                        (375,106)      (1,398,746) 
Payments for patent costs                     (1,061)        (1,744) 
Net cash used by investing activities         (678,481)      (1,400,490) 
Net proceeds from follow-on offering          --             64,792,220 
Net cash provided from financing 
 activities                                   --             64,792,220 
Net change in cash and cash equivalents       (10,280,934)   55,977,770 
Beginning of the period                       153,462,865    119,873,668 
End of the period                         $   143,181,931   $175,851,438 

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