Straight Path Communications Reports Results for First Quarter Fiscal 2014

GLEN ALLEN, Va.--()--Straight Path Communications Inc. (NYSE MKT: STRP), a technology company that holds an extensive portfolio of 39 and 28 GHz wireless spectrum with coverage across the entire United States as well as a focused intellectual property portfolio, announced today operating results for its first quarter fiscal 2014, for the three months ended October 31, 2013.

Fiscal First Quarter Highlights

  • Total revenues were $127,000
  • Total costs and expenses were $597,000 which include $156,000 in non-cash equity compensation
  • Net loss attributable to STRP was $391,000
  • Cash and cash equivalents at October 31, 2013 was $14.9 million
  • Broadened Spectrum portfolio with 317 additional FCC Licenses in 39 and 28 GHz bands
  • Additional IP enforcement actions initiated, including patent infringement action against Vonage

Management Commentary

Davidi Jonas, Chief Executive Officer of Straight Path, commented: “We continue to execute against our long term operational strategy and are making significant progress to leverage our strategic assets and lean operating structure to allow Straight Path to monetize new opportunities following our spin-off from IDT in August.

“Demand for spectrum is rapidly expanding as consumers spend more time on their mobile devices and utilize wireless data intensive applications. As a result, wireless providers are intensifying their search for cost effective wireless backhaul solutions. With nationwide coverage and control of a majority of active 39 GHz spectrum, we are strongly positioned to capitalize on significant growth in demand for spectrum.

“During the quarter, we strengthened our nationwide coverage by increasing our 39 GHz spectrum position by more than 30% by obtaining 199 additional licenses; in total we now hold 814 FCC licenses in the 39 GHz band. In addition, we obtained 118 28 GHz licenses, bringing our total 28 GHz licenses to 133. Moving forward, we will look to further leverage our spectrum holdings to maximize future revenues.

“In parallel, we continue to actively defend our intellectual property portfolio. In November, we filed a patent infringement action against Vonage. Going forward, we will continue to defend our assets against those that are utilizing our intellectual property without our consent,” concluded Mr. Jonas.

About Straight Path Communications Inc.

Straight Path (NYSE MKT: STRP) holds, leases, and markets its extensive holdings of 39 and 28 GHz fixed wireless spectrum licenses through its Straight Path Spectrum subsidiary. Straight Path holds, licenses, and conducts other business related to certain patents through its Straight Path IP Group subsidiary. Additional information is available on Straight Path’s website: www.spathinc.com

Safe Harbor

In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2013 and our other periodic filings with the SEC (under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"). We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

       
STRAIGHT PATH COMMUNICATIONS INC.
 
COMBINED AND CONSOLIDATED BALANCE SHEETS
 
October 31,
2013
    July 31,
2013
(Unaudited)
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 14,908 $ 15,000
Trade accounts receivable, net of allowance for doubtful accounts of $4 at October 31, 2013 and July 31, 2013 32 60
Other current assets   90         90  
Total current assets 15,030 15,150
Prepaid expenses 220 239
Intangibles   350         350  
Total assets $ 15,600       $ 15,739  
Liabilities and equity
Current liabilities:
Trade accounts payable $ 2 $ 1
Accrued expenses 1,453 1,473
Due to IDT Corporation 159
Deferred revenue 150 145
Income taxes payable   15         15  
Total current liabilities 1,779 1,634
Deferred revenue—long-term portion   227         250  
Total liabilities 2,006 1,884
Commitments and contingencies
Equity:
Straight Path Communications stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—3,000; no shares issued
Class A common stock, $.01 par value; authorized shares—2,000; 787 shares issued and outstanding at October 31, 2013 and July 31, 2013 8 8
Class B common stock, $.01 par value; authorized shares—40,000; 10,975 and 10,693 shares issued and outstanding at October 31, 2013 and July 31, 2013, respectively 110 107
Additional paid-in capital 14,267 14,114
Accumulated deficit   (391 )        
Total Straight Path Communications stockholders’ equity 13,994 14,229
Noncontrolling interests   (400 )       (374 )
Total equity   13,594         13,855  
Total liabilities and equity $ 15,600       $ 15,739  
 
   

STRAIGHT PATH COMMUNICATIONS INC.

 
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three Months Ended
October 31,
2013     2012

(in thousands, except
per share data)

Revenues $ 127     $ 468
Costs and expenses:
Direct cost of revenues 28 306
Selling, general and administrative   569         1,636  
Total costs and expenses   597         1,942  
Loss from operations (470 ) (1,474 )
Interest income 3 3
Income from IDT Corporation payments of liabilities   50          
Loss before income taxes (417 ) (1,471 )
(Provision for) benefit from income taxes            
Net loss (417 ) (1,471 )
Net loss attributable to noncontrolling interests   26         210  
Net loss attributable to Straight Path Communications Inc. $ (391 )     $ (1,261 )
 
Basic and diluted loss per share attributable to Straight Path Communications Inc. stockholders $ (0.04 )     $ (0.11 )
 
Weighted-average number of shares used in calculation of basic and diluted loss per share   10,508         11,417  
 
   
STRAIGHT PATH COMMUNICATIONS INC.
 
COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 

Three Months Ended
October 31,

2013     2012
(in thousands)
Operating activities    
Net loss $ (417 ) $ (1,471 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation 156 1,230
Change in assets and liabilities:
Trade accounts receivable, net 29 (28 )
Other current assets and prepaid expenses, 18 (168 )
Trade accounts payable and accrued expenses (19 ) 81
Due to IDT Corporation 159
Deferred revenue   (18 )       121  
Net cash used in operating activities (92 ) (235 )
Financing activities
Funding provided by IDT Corporation, net of repayments           460  
Net cash provided by financing activities           460  
Net (decrease) increase in cash and cash equivalents (92 ) 225
Cash and cash equivalents at beginning of period   15,000         2,598  
Cash and cash equivalents at end of period $ 14,908       $ 2,823  
Supplemental schedule of non-cash investing and financing activities
Amount due to IDT Corporation contributed to equity $       $ 460  
 

Contacts

Straight Path Communications Inc.
Jonathan Rand
Chief Financial Officer
804-433-1528
jonathan.rand@spathinc.com
or
KCSA Strategic Communications
Jeffrey Goldberger / Rob Fink
212-896-1249 / 212-896-1206
STRP@kcsa.com

Sharing

Contacts

Straight Path Communications Inc.
Jonathan Rand
Chief Financial Officer
804-433-1528
jonathan.rand@spathinc.com
or
KCSA Strategic Communications
Jeffrey Goldberger / Rob Fink
212-896-1249 / 212-896-1206
STRP@kcsa.com