SAN DIEGO, Nov. 14 /PRNewswire-FirstCall/ -- Path 1 Network
Technologies (AMEX:PNO), a leading provider of video networking
products that enable the transmission of broadcast-quality video
over IP networks, today announced its financial results for the
three and nine months ended September 30, 2005. Three and Nine
Month Results For the third quarter of 2005, the Company reported
revenue of $404,000 compared to revenue of $756,000 for the same
quarter a year ago. For the nine months ended September 30, 2005,
the Company reported revenue of $2,409,000 compared to revenue of
$2,654,000 for the same period a year ago. The third quarter
revenue in 2005 was impacted heavily by decreased sales of long
haul products compared to the same period in 2004, partially offset
by increased revenue from cable products. Gross profit for the
third quarter of 2005 totaled $35,000, or 9% of total revenues,
compared to gross profit of $516,000, or 68% of total revenues, in
the same quarter a year ago. Gross profit for the nine-months ended
September 30, 2005 totaled $1,267,000, or 53% of total revenues,
compared to gross profit of $819,000, or 31% of total revenues, in
the same period a year ago. Gross profit in the third quarter ended
September 30, 2005 reflected decreased sales of the Company's long
haul products combined with higher sales of lower margin cable
products and the impact of a reallocation of corporate expenses
that in prior periods were classified as general and administrative
expenses. The increase in margin for the first nine months of 2005
as compared to the same period in 2004, was attributable to sales
of the Company's long haul products, including the Company's new
Vx8000 gateway. Net loss for the third quarter of 2005 was
$3,104,000, or $0.45 per share, compared to a net loss of
$1,006,000 or $0.15 per share for the same period in 2004. Net loss
for the nine-months ended September 30, 2005 was $7,320,000, or
$1.06 per share, compared to a net loss of $5,787,000, or $0.86 per
share, for the same period in 2004. Net loss for the third quarter
and first nine months of 2005 included a non-cash stock-based
compensation charge of $234,000 and $1,126,000, respectively. On a
non-GAAP basis, excluding the effect of these charges, the
Company's net loss for the third quarter and first nine months of
2005 was $2,870,000, or $0.41 per share, and $6,194,000, or $0.90
per share, respectively, compared to a net loss of $1,006,000, or
$0.15 per share, and $5,515,000, or $0.82 per share, respectively,
for the same periods in 2004. Conference Call and Webcast As
previously announced, Path 1's third quarter 2005 conference call
will be held on Monday, November 14, 2005 at 4:30 p.m. Pacific
(7:30 p.m. Eastern). The conference call can be accessed by dialing
1-800-218-0530 (domestic) or 1-303-262-2125 (international). A
listen-only broadcast of the call may be accessed on the Company's
website at: http://www.path1.com/. A replay of the call will be
available by dialing 1-800-405-2236 (domestic) or 1-303-590-3000
(international) through November 21, 2005; the pass code for the
replay is 11044535. About Path 1 Network Technologies Inc. Path 1
Network Technologies Inc. is the pioneer and leading provider of
video gateway products that enable the conversion and distribution
of real- time, broadcast-quality video over Internet Protocol (IP)
through both public and private networks. From the delivery of live
MPEG-2, MPEG-4, and VC-1 standard definition and high definition
(HD) broadcasts to Video on Demand (VOD), Path 1's video
infrastructure platforms allow broadcasters, cable, telco,
satellite and mobile operators to transmit high-quality
point-to-point, multipoint and multiplexed video across town or
around the world. To find out more about Path 1 Network
Technologies Inc., visit our website at http://www.path1.com/ or
call 877/ONE-PATH (663-7284). This news release contains
"forward-looking statements" that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. "Forward-looking statements" describe future expectations,
plans, results or strategies and are generally preceded by words
such as "future," "plan" or "planned," "will" or "should,"
"expected," "anticipates," "draft," "eventually" or "projected."
You are cautioned that such statements are subject to a multitude
of risks and uncertainties that could cause future circumstances,
events or results to differ materially from those projected in the
forward-looking statements, including the risks that Path 1 may or
will require additional financing, that uncertainties inherent in
our executive leadership transition might hinder our progress, that
our products might not achieve customer or market acceptance, that
our products might not perform as expected, that customer trials
might not lead to future sales, that our sales and gross profits
might fluctuate between reporting periods, and other risks
identified in our annual report on Form 10-K and other filings with
the SEC. You should consider these factors in evaluating the
forward-looking statements included herein and not place undue
reliance on such statements. The forward-looking statements are
made as of the date hereof, and Path 1 undertakes no obligation to
update such statements. For Further Information: MEDIA: Alice Borda
Sterling Communications (408) 395-5500 AT FINANCIAL RELATIONS
BOARD: Lasse Glassen General Information (310) 854-8313 Amy
Cozamanis Investor/Analyst Information (310) 854-8314 PATH 1
NETWORK TECHNOLOGIES INC. CONSOLIDATED BALANCE SHEETS (in
thousands, except share data) September 30, December 31, 2005 2004
(Unaudited) ASSETS Current assets: Cash and cash equivalents $1,362
$929 Accounts receivables, net 704 810 Inventory 536 541 Other
current assets 186 469 Total current assets 2,788 2,749 Property
and equipment, net 284 352 Issuance costs for
mandatorily-redeemable preferred stock, net 500 4 Other assets 121
59 Total assets $3,693 $3,164 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Accounts payable and accrued liabilities
$1,261 $752 Accrued compensation and benefits 412 176 Deferred
revenue 179 256 Current portion of leases payable 6 21 Current
portion of notes payable, net -- 78 Total current liabilities 1,858
1,283 Mandatorily-redeemable preferred shares, net (note 11) 2,297
-- Total liabilities 4,155 1,283 Shareholders' equity (deficit):
Common stock, $0.001 par value; 40,000,000 shares authorized;
6,956,604 and 6,820,606 shares issued and outstanding at September
30, 2005 and December 31, 2004, respectively; 2,777 shares held in
treasury at September 30, 2005, and December 31, 2004 7 7
Additional paid in capital 52,708 48,743 Deferred compensation
(346) (1,357) Accumulated deficit (52,830) (45,512) Total
shareholders' equity (deficit) (462) 1,881 Total liabilities and
shareholders' equity (deficit) $3,693 $3,164 PATH 1 NETWORK
TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except share amounts) (Unaudited) For the For the three
months ended nine months ended September 30, September 30, 2005
2004 2005 2004 Revenues: Product revenue $384 $734 $2,352 $2,593
License revenue -- -- -- 20 Contract revenue -- 20 16 21 Royalty
revenue -- -- 6 -- Services revenue 20 -- 22 -- Other revenue -- 2
13 20 Total revenues 404 756 2,409 2,654 Cost of revenues: Cost of
product sales 369 233 1,142 1,828 Cost of contract services -- 7 --
7 Total cost of revenues 369 240 1,142 1,835 Gross profit 35 516
1,267 819 Operating expenses: Engineering research and development
1,106 466 3,112 1,472 Sales and marketing 880 398 2,324 2,242
General and administrative 615 636 1,369 2,545 Stock-based
compensation 234 -- 1,126 272 Total operating expenses 2,835 1,500
7,931 6,531 Operating loss (2,800) (984) (6,664) (5,712) Other
income (expense) Interest expense, net (217) (22) (471) (72) Other
income (expense) 7 -- 3 (3) Total other expense (210) (22) (468)
(75) Net loss (3,010) (1,006) (7,132) (5,787) Accumulated preferred
dividends (94) -- (188) -- Net loss available to common
shareholders $(3,104) $(1,006) $(7,320) $(5,787) Net loss per
common share $(0.45) $(0.15) $(1.06) $(0.86) Weighted average
shares used in loss per common share calculation 6,941 6,764 6,890
6,711 PATH 1 NETWORK TECHNOLOGIES INC. Reconciliation of GAAP to
Non-GAAP Net Loss (In thousands, except share amounts) (Unaudited)
For the For the three months ended nine months ended September 30,
September 30, 2005 2004 2005 2004 GAAP Net Loss $(3,104) $(1,006)
$(7,320) $(5,787) Less: Items charged to Operating Expense
Stock-Based Compensation 234 -- 1,126 272 Non-GAAP Net Loss
$(2,870) $(1,006) $(6,194) $(5,515) Net Loss per common share GAAP
$(0.45) $(0.15) $(1.06) $(0.86) Non-GAAP $(0.41) $(0.15) $(0.90)
$(0.82) DATASOURCE: Path 1 Network Technologies CONTACT: Alice
Borda of Sterling Communications, +1-408-395-5500, , for Path 1
Network Technologies Inc.; or Lasse Glassen, General Information,
+1-310-854-8313, , or Amy Cozamanis, Investor/Analyst Information,
+1-310-854-8314, , both of Financial Relations Board, for Path 1
Network Technologies Inc. Web site: http://www.path1.com/
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