Metawave shutting its doors, expects to seek bankruptcy
The publicly traded company, which makes antennas that help wireless companies handle more calls on their networks, said its customers were spending less than Metawave had originally projected.
Metawave laid off the majority of its 80 employees and said it would sell off most of its assets.
Gary Flood, who took over as chief executive officer in October amid a 30 percent reduction in staff, said his team had a different view of the company's opportunities even three months ago.
"Between now and then, we saw business continue to deteriorate on a variety of fronts," he said. "We have been unable to achieve the objectives that we set and find ourselves in the position we're in today."
The company suffered through a rocky year, even by telecom standards. Last January, it raised $20 million in private funding, which it said would fund operations through the end of the year. But in its annual report, filed in April, the company's independent auditor voiced doubts about its ability to continue as a going concern.
In March, the company restated its $7.1 million in sales for 2001 after the discovery of unauthorized commitments made to Asian customers. The same month, the company discontinued its SpotLight GSM product line in Asia because of a lack of demand.
Metawave shut down offices there and laid off 100 employees. Several class-action lawsuits were filed against the company.
The company was subsequently moved to the Nasdaq SmallCap, which has lower listing requirements. In October, the company received a 180-day extension to regain compliance with the exchange's listing requirements, namely that its stock trade above $1.
The company's shares have traded below $1 since March 14.
Metawave was scheduled to report its fourth-quarter financial results on Feb. 4 but canceled the call in light of the announcement.
For the three months ended Sept. 30 — the last quarter for which financials were available — the company reported a net loss of $3.2 million, or 6 cents per share, compared with a net loss of $15.3 million, or 31 cents per share, a year ago.
While the company said it spent the past year working to trim its operating expenses and become more efficient, it was unable to generate the volume of business it had expected.
Third-quarter sales fell 24 percent vs. a year ago to $3.9 million. Metawave had $3.9 million cash at the end of the quarter.
Given the benefit of hindsight, Flood, the CEO, said he couldn't say what the company should have done differently.
"I think it's really hard to look at that one and say we'd be in a lot different shape," he said. "Today's position for the company is due to a combination of a whole host of issues for us and this whole industry."
The company's stock fell 19 percent to close at 17 cents on the Nasdaq SmallCap Market. In after-hours trading, its shares slid to a nickel.
Monica Soto: 206-515-5632 or msoto@seattletimes.com.