Wave Systems Corp (WAVXQ) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2014

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Wave Systems Corp
Ticker: WAVXQ CIK: 919013

Wave Reduces 2014 Operating Expenses by 32% and Trims Net Loss by $7M

Lee, MA—March 5, 2015—

Wave Systems Corp. (NASDAQ: WAVX), an enterprise security software provider, today reported fourth quarter (Q4 ’14) and full-year results for the period ended December 31, 2014. Wave will host a live webcast http://www.wave.com/resource-center/webcasts and conference call (212-231-2919) today at 4:30 p.m. ET to review its Q4 and full-year results and progress to date in 2015.

Q4 Financial Highlights

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Wave’s Q4 ’14 total net revenues were $2.9 million for Q4 ’14, a year-over-year decline from $5.6 million in the fourth quarter ended December 31, 2013 (Q4 ’13) and quarter-over-quarter decline from $4.3 million in the third quarter ended September 30, 2014 (Q3 ’14). The decline in year-over-year net revenues from Q4 ’13 included a decrease in licensing and maintenance net revenues of $2.7 million ($2.3 million of which was due to a decrease in OEM software bundling revenue, resulting primarily from a decline in shipments of Wave’s solutions under its OEM bundling relationship with Dell).

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The $1.4 million decline in total quarter-over-quarter net revenues from Q3 ’14 consisted of a decrease in licensing and maintenance net revenues of $1.1 million, consisting of a $0.7 million decrease in OEM software bundling revenue and a $0.4 million decrease in enterprise license and maintenance revenue, and a decrease of $0.3 million in services revenue earned from a service contract with an OEM partner that was completed during Q3 ’14.


•	Q4 ’14 total operating expenses declined to $7.2 million versus $9.2 million in Q4 ’13. Q3 ’14 total operating expenses were $6.4 million. During 2014, Wave instituted further cost cutting measures to align with the current business which resulted in decreases from 2013 expenses.


•	On October 15, 2014, Wave entered into an Asset Purchase Agreement with DocMagic, Inc. to sell eSignSystems, a product line of Wave, to DocMagic, Inc. for $1.2 million. The transaction closed on October 16, 2014 resulting in a gain on the sale of $1.3 million.


•	Wave’s Q4 ‘14 net loss was $3.7 million, or ($0.08) per basic share, compared to a net loss of $3.7 million, or ($0.11) per basic share in Q4 ’13, and a net loss of $2.1 million, or ($0.05) per basic share, in Q3 ‘14.


•	Q4 ’14 total billings declined to $2.9 million quarter-over-quarter versus Q4 ‘13 total billings of $5.4 million. Q3 ’14 total billings were $3.4 million. The year-over-year decline was due to a $0.5 million decrease in licensing and maintenance billings and a $2.0 million decrease in OEM billings, principally due to a decrease in Dell-related OEM bundling activity.


•	The $0.5 million decline in total quarter-over-quarter billings from Q3 ’14 consisted of an increase in licensing and maintenance net revenues of $0.3 million and a decrease of $0.8 million in OEM software bundling revenue.

Full Year 2014 Financial Highlights

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Wave’s total net revenues for 2014 declined to $17.0 million versus $24.4 million in 2013. The decline in total net revenues from 2013 consisted of a $4.5 million decrease from a decline in the Dell OEM software bundling revenue as described above, a $1.5 million decrease as a result of a service contract with the United States Department of Defense that was completed during 2013 and a $0.9 million decline in consulting revenue from one of the world’s leading international oil and gas companies.


•	2014 total operating expenses declined to $30.4 million versus $44.5 million in 2013. 2013 total operating expenses included $4.2 million of impairment charges.


•	Wave’s 2014 net loss was $12.9 million or ($0.30) per basic share, compared to a net loss of $20.3 million, or ($0.68) per basic share in 2013.

The following information was filed by Wave Systems Corp (WAVXQ) on Friday, March 6, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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