pdvWireless Reports Second Quarter Results

WOODLAND PARK, N.J., Nov. 7, 2018 /PRNewswire/ -- pdvWireless, Inc. PDVW, a communications company focused on developing and offering solutions that leverage its spectrum assets for the deployment of private broadband network solutions designed to meet the needs of critical infrastructure and enterprise customers, reported today its second quarter results for the three and six-month periods ended September 30, 2018.

"We are seeing an increased demand from enterprises, and especially utilities, for private broadband networks to solve critical needs," said Rob Schwartz, President and COO of pdvWireless. "The initial pilots and deployments we are supporting will help us demonstrate to the industry the substantial capabilities of leveraging cost effective foundational 900 MHz broadband spectrum combined with standardized LTE technology to increase the reliability, resilience and security of these mission critical networks," he added. 

While advancing its work to enable private broadband networks for utilities and enterprise customers, the Company continues to make progress in its regulatory proceeding. 

Morgan E. O'Brien, CEO of pdvWireless, commented, "We believe that our success at the FCC will depend on how closely we come to conforming our specific "ask" to the FCC's general policies.  To us, it could not be clearer from numerous FCC actions, and strong statements of policy such as the "FAST Plan," that our proposed 900 MHz reforms conform precisely to the direction of the FCC's policies."

Financial Results

Revenue for the Company's second fiscal quarter ended September 30, 2018 was $1.8 million, compared with $1.5 million in the same period of the prior year.  Revenue for the six months ended September 30, 2018 was $3.7 million compared with $3.0 million for the same period of the prior year. The increases in both the three and six-month periods resulted from growth in the Company's TeamConnect^SM and Diga-Talk product offerings.

The net loss for the Company's second fiscal quarter was ($11.8 million), or ($0.81) per share, versus a net loss of ($8.2 million), or ($0.57) per share, for the similar period of the prior year.   The net loss for the six months ended September 30, 2018 was ($24.1 million), or ($1.66) per share, versus a net loss of ($16.1 million), or ($1.12) per share, for the similar period of the prior year.  The additional losses in both the three and six-month periods were primarily attributable to the restructuring charges taken related to the Company's June 2018 announcements of a restructuring plan to shift the focus and resources to pursue the initiatives at the FCC and prepare for the future deployment of broadband and other advanced technologies and services. 

Cost of revenue for the three months ended September 30, 2018 was $1.8 million, a decrease of 6.0% over the prior fiscal year's comparable period. The improvement resulted from lower headcount costs due to employees reassigned to other areas of the business to support our strategic initiatives as well as lower costs to maintain our 900 MHz network.  For the six months ended September 30, 2018, cost of revenue was $3.9 million, an increase of 9.3%.  The increased cost of revenue for the six-month period in the current fiscal year resulted from higher equipment sales for the TeamConnect business.

Total operating expenses of $12.2 million for the three months ended September 30, 2018 was $4.8 million, or 66.2%, higher than the three months ended September 30, 2017.  The increase was primarily attributable to a $4.1 million increase in restructuring charges and $1.6 million increase in general and administrative expenses, which includes increased costs for existing headcount as well as costs associated with the Company's strategic initiatives. These increases were partially offset by $0.8 million for lower sales and support costs primarily resulting from the June 2018 reduction in force.

Total operating expenses for the six months ended September 30, 2018 were $24.5 million and were $10.1 million, or 69.7%, higher than the six months ended September 30, 2017.  The primary drivers of the increase resulted from $8.1 million in restructuring charges and $0.5 million for the impairment charge taken to reduce the carrying value of the Company's radios for the TeamConnect business, as well as $1.5 million for increased costs related to existing headcount in general and administrative and higher consulting expenses related to the Company's strategic initiatives.

Adjusted EBITDA for the second quarter ended September 30, 2018 was negative ($7.6 million) versus negative ($5.6 million) for the similar period of the prior year.  Adjusted EBITDA for the six months ended September 30, 2018 was negative ($15.8 million) versus negative ($11.2 million) for the same period in the prior year.  The primary reason for the increase in negative EBITDA in both periods resulted from the cash portion of the restructuring charges.

Cash Position    

The Company remains debt free and has a strong cash position, with $85.6 million in available cash as of September 30, 2018, a decrease of $5.3 million from June 30, 2018. The decrease primarily resulted from payroll costs and investments in the pursuit of business and spectrum initiatives.

Conference Call

The Company will host a conference call at 4:45 p.m. EDT today, November 7, 2018, to discuss its second quarter fiscal year 2019 financial results and update investors on its strategic initiatives. Investors in the United States can participate in the earnings call by dialing into the conference line at 888-267-2845 and using the conference code 331964. The earnings call will be available for replay until November 21, 2018 and can be accessed through the pdvWireless Investor Relations website at http://corp.pdvwireless.com/investors/events/.  

About pdvWireless

pdvWireless, Inc. PDVW is focused on developing and offering solutions that leverage its spectrum assets for the deployment of next generation private broadband networks designed to meet the needs of critical infrastructure and enterprise customers.  We are the largest holder of licensed nationwide spectrum in the 900 MHz spectrum band throughout the contiguous United States, plus Hawaii, Alaska and Puerto Rico.  On average, we hold approximately 60% of the channels in the Part 90 portion of the 900 MHz band in the top 20 metropolitan market areas in the United States. We are currently pursuing a regulatory proceeding at the Federal Communications Commission that seeks to modernize and realign a portion of the 900 MHz band to increase its usability and capacity and accommodate the future deployment of broadband technologies and services.  At the same time, we are expecting to enable private broadband network solutions, leveraging our spectrum, that address the growing and unmet needs of our targeted critical infrastructure and enterprise customers. Our Chairman, Brian McAuley, and CEO, Morgan O'Brien, were the co-founders of Nextel Communications and have over 60 years of combined experience in telecom operations and successfully developing regulatory driven spectrum initiatives to address the unmet wireless communications needs of businesses. 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, depreciation – cost of revenue, interest (income) expense-net, other (income) expense-net, income tax expense (benefit) 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 from, 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. This 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 regulatory status, timing and results of the Company's initiatives and related activities involving the FCC, the Company's spectrum and other business initiatives and opportunities, the operating results of the Company's TeamConnect business and its restructuring plan aimed at reducing the future operating costs of its TeamConnect and pdvConnect businesses. 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: (i) the Company's spectrum initiatives, including its FCC proceedings aimed at modernizing and realigning the 900 MHz spectrum band to increase its usability and capacity, which contemplates the utilization of such spectrum for the future deployment of broadband technologies and services, may not be successful on a timely basis or at all, and may continue to require significant time and attention from its senior management team and the expenditure of significant resources; (ii) the Company may not be successful in identifying, developing and commercializing network and mobile communication solutions utilizing its current and future spectrum and commercially available technologies; (iii) the Company has had net losses each year since its inception and may not achieve or maintain profitability in the future; (iv)  the Company's ability to control the costs and to achieve the expected operational benefits and long- term cost savings of its restructuring plan;   (v) the wireless communication industry is highly competitive and the Company may not be able to compete successfully; and (vi) government regulation could adversely affect the Company's business and prospects. These and other factors that may affect the Company's future results of 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/A for the fiscal year ended March 31, 2018, filed with the SEC on August 9, 2018.  Modifications to those factors and/or additional factors are described in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed with the SEC on November 7, 2018. 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

Director of Corporate Communications

pdvWireless, Inc.

973-531-4397

nvecchiarelli@pdvwireless.com

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