WFI Reports Restated Financial Results
SAN DIEGO, Sep 11, 2007 (PrimeNewswire via COMTEX News Network) --
Wireless Facilities, Inc. (WFI) (Nasdaq:WFII), today reported restated financial results in its Annual Report on Form 10-K for the year ended December 31, 2006. The Company also expects to file its outstanding Forms 10-Q shortly.
"Today we announced that we have filed our December 31, 2006 Form 10-K and financial statements, and we expect to file our first and second quarter 2007 Form 10-Qs shortly, at which time we expect we will again be in compliance with Nasdaq," said Eric DeMarco, president and CEO of WFI. "As anyone can appreciate, this has been a very intense time for the Company, and with the recent number of divestitures and certain other activities, we could not file all the financial reports simultaneously. I am confident we will shortly file those reports and regain Nasdaq compliance."
"In the 10-K we filed today, we have detailed the findings of our stock option review and various other operational and financial considerations related to divestitures, consolidation and other non-recurring costs. In today's press release we are not providing a detailed financial summary for 2006, or a comparative analysis of our financials to prior periods. We are a substantially different Company today with a completely new business focus and vastly different financial characteristics, making a summary of 2006 financial performance not necessarily meaningful. However, the detailed financial performance information can be referenced in the 10-K."
The Company also reported that on September 7, 2007 it was notified that the Nasdaq Listing and Hearing Review Council has stayed the Nasdaq Listing Qualifications Panel's prior decision to suspend the Company's securities from trading if it did not file its delinquent Form 10-K and Forms 10-Q by September 10, 2007. The Listing Council has requested that Nasdaq staff submit further information regarding the Company by October 19, 2007, which effectively extends the deadline to make the required filings to that date.
The results reported today include charges in excess of the amount WFI publicly estimated in August. The final aggregate stock-based compensation expense is approximately $55 million, net of applicable income tax and other related taxes. The additional charge arose as the Company examined its accounting for the 2001 option cancel/regrant program, and concluded that the preferred accounting for that program required an additional charge in 2001. This occurred in the past week. The preferred accounting method requires a non-cash charge for all cancelled options, as if they were fully vested on the date of cancellation. The total number of options adjusted did not change materially from the number previously estimated.
DeMarco continued, "Concerning this entire situation, we are currently evaluating the nature and extent of all of our available remedies. Upon completion of our evaluation, we will act vigorously in the best interests of our stockholders, just as we have by aggressively pursuing claims against the Company's former stock option administrator. It is important to point out that WFI today is not the same company it was back in 2003 when the stock option granting practices we have reported came to an end. This Company has a distinctly different management team that is headed in a completely new direction, with the full support of our Board of Directors, to build long-term value for our shareholders."
"Looking beyond the stock option review, and as a result of divestitures of parts of our wireless business in each of the first three quarters of 2007, the costs related to the recently completed stock option grant review, the restructuring earlier this year of our Enterprise business, and the right-sizing of the entire corporate infrastructure we will be executing over the balance of this year, our financial statements for 2007 will be very busy with legacy, non-operating, non-recurring type items and costs. We expect that as we begin 2008, we will have concluded substantially all of these activities and our financial statements will be more reflective of our true operating performance."
"As I have previously stated, our business today is approximately $200 million in annualized revenues and, over the past two months, we have collected an additional $5 million in cash related to receivables we retained from the divestiture of our wireless engineering business, and we expect to collect another $1.8 million this month. Today, we have no net debt, and we are in a positive cash balance sheet position. Looking ahead into 2008, from an operational perspective we expect our company to be both profitable and generating positive cash flow."
"In closing, I am pleased to report that within days we will be announcing the new name of our Company, a new stock ticker symbol, and we will provide more detailed information on our revamped business strategy which focuses on the federal government and security business. At that time, we will provide additional details about our target markets, business strategy, target customers, key areas of differentiation, and other pertinent information," DeMarco concluded.
Headquartered in San Diego, CA, WFI is a leading provider of professional services in the areas of defense, technology, and security solutions. WFI specializes in IT services, Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR), weapon systems operations and maintenance, and security solutions. WFI performs work for a range of federal government agencies, including the U.S. Department of Defense, various state and local agencies, and Fortune 1000 enterprise companies. News and information are available at www.wfinet.com. (code: WFI-mb)
Notice Regarding Forward-Looking Statements
This news release contains certain forward-looking statements including, without limitation, expressed or implied statements concerning the Company's expectations regarding the anticipated filing of its delinquent SEC reports, future financial performance and cash flows and market developments that involve risks and uncertainties. Such statements are only predictions, and the Company's actual results may differ materially. Factors that may cause the Company's results to differ include, but are not limited to: risks that the Form 10-Q filings will not be completed in a timely manner; risks that the recent divestitures and change in business focus will cause disruption of the Company's operations and distraction of its management; risks of adverse regulatory action or litigation; risk that the Company's lender will declare a default under the Company's line of credit; risks associated with debt leverage; risks that the anticipated benefits of the divestitures will not be achieved or will impact changes in the scope or timing of the Company's projects; risks that changes or cutbacks in spending by the U.S. Department of Defense may occur, which could cause delays or cancellations of key government contracts; failure to successfully consummate acquisitions or integrate acquired operations and competition in the marketplace which could reduce revenues and profit margins. The Company undertakes no obligation to update any forward-looking statements. These and other risk factors are more fully discussed in the Company's Annual Report on Form 10-K for the period ended December 31, 2006 and in other filings made with the Securities and Exchange Commission.
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