Adaptive Broadband looks for better times

(Telephony) Adaptive Broadband has been through some pretty 'ugly' times, president/CEO Daniel Scharre admitted during last night's second quarter financial results call. The company's earnings, stemming primarily from the shaky CLEC customers on whom the company depends, were less than anticipated: $8.4 million in revenue and $80 million in cash, with a gross margin of 35% and a net loss from continuing operations of $9.2 million.

Adaptive predicted that earlier in the month, point to the most glaring example of a deferred $13 million shipment to Fuzion Wireless Communications because of a $12.4 million overdue receivable stemming from joint business development and financing issues between the two companies.

"There are a lot of issues that need to be worked out (with Fuzion)," said Scharre. "We're talking to them, but I don't think there's a lot we can talk about publicly."

Adaptive's merger with Western Multiplex was a casualty of the shortfall, which Scharre insists will turn around.

"It may look pretty ugly, but I think we've cleaned up the balance sheet, reset expectations for the business in the near and immediate term," said Scharre.

He promised the company would reveal its future plans Feb. 22. Those plans will probably revolve around an emerging, more stable customer base among the utilities who "typically have more funding" and confidence in the company's time division duplex technology.

"There are a lot of people talking about technology coming that may be more cost-effective or may be more flexible or non-line-of-sight, but I just have to look at what's being deployed in the marketplaces … and I just don't see the competition," Scharre said.

Particularly in the U-NII (Unlicensed National Information Infrastructure) band, Adaptive has the jump on the competition, he insisted.

"We have a head start of several years on anybody else out there in that space," he said flatly.

The Western deal, while terminal, is not stone-cold-dead, he hinted.

Adaptive, he said, remains on "very good terms" with Western Multiplex. "I think both sides would say that strategically they still see the benefit of a deal between the two companies, but it's just not going to happen at this time."