Revenues of $35.1 million ? exceeding mid-quarter target by $2 million

Non-GAAP net loss of $(0.04) per share ? in line with target

GAAP net loss of $(0.31) per share versus $(0.40) per share net loss in second quarter 2003

Proxim ORiNOCO Wi-Fi portfolio sales growth outpaces third quarter 2003 industry forecasts


SUNNYVALE, Calif., October 21, 2003 -- Proxim Corporation (Nasdaq: PROX), a global leader in wireless networking equipment for Wi-Fi and broadband wireless, today announced financial results for the third quarter and nine months ended September 26, 2003. Total revenue for the third quarter of 2003 was $35.1 million, compared to total revenue of $24.1 million for the third quarter of 2002. Total revenue for the nine months ended September 26, 2003 was $109.9 million, which included license revenues of $6 million, compared to total revenue of $94.7 million for the nine months ended September 27, 2002. The 2002 financial results include: the results of the former Western Multiplex Corporation for the period from January 1, 2002 to September 27, 2002, the results of the former Proxim, Inc. from March 27, 2002 to September 27, 2002, and the results of the former Agere Wireless LAN Systems business from August 6, 2002 to September 27, 2002, in accordance with generally accepted accounting principles (GAAP) for accounting for business combinations.

The net loss attributable to common stockholders computed in accordance with GAAP for the third quarter of 2003 was $(38.2) million, or $(0.31) per share, compared to the GAAP net loss of $(48.7) million, or $(0.40) per share for the second quarter of 2003. The GAAP net loss attributable to common stockholders for the nine months ended September 26, 2003 was $(97.7) million, or $(0.81) per share, compared to the GAAP net loss of $(100.4) million or $(1.00) per share for the nine months ended September 27 2002. The net loss attributable to common stockholders reflects accretion of the redemption value of Series A Preferred Stock issued during the third quarter of 2002.

Excluding certain charges discussed below and the amortization of intangible assets and deferred stock compensation and purchased in-process research and development in the respective periods, the non-GAAP, or pro forma, net loss for the third quarter of 2003 was $(4.8) million, or $(0.04) per share, compared to the non-GAAP net loss of $(10.7) million, or $(0.09) per share for the third quarter of 2002. The non-GAAP net loss for the nine months ended September 26, 2003 was $(12.2) million, or $(0.10) per share, compared to the non-GAAP net loss of $(12.1) million, or $(0.12) per share for the nine months ended September 27, 2002.

During the third quarter of 2003, Proxim recorded a $25.8 million charge, or $(0.21) per share, for royalties ($22.9 million) and interest ($2.9 million) associated with the ongoing litigation with Symbol Technologies. This charge is a preliminary estimate based on the September 14, 2003 jury verdict. The amount and timing of any actual cash settlement will be dependent on the outcome of the ongoing legal proceedings, including a bench trial on Proxim?s equitable defenses. Proxim views the Symbol litigation as an ongoing legal matter. There has been no final judgment entered and Proxim is currently under no financial obligation as a result of the September 14, 2003 initial jury verdict. Proxim has also not been enjoined from continued sales of these products. Proxim will revise this preliminary estimate, if necessary, when more information becomes available.

The non-GAAP results of operations for the third quarter of 2003 exclude the Symbol litigation accrual, a $5.2 million benefit resulting from the revision of an estimate for a prior quarter restructuring charge, amortization of intangible assets of $5.4 million, bad debt charge of $2.3 million arising from restructuring, and accretion of Series A preferred stock redemption obligations of $1.6 million. In addition, the non-GAAP results for the third quarter of 2003 include a benefit for income taxes of $3.4 million, reflecting potential net operating loss carryforwards resulting from an operating loss during the period. The $5.2 million benefit resulting from the revision of estimates in prior quarter restructuring includes a $1.9 million charge related to employee severance, a $12.7 million charge related to facilities closures in the current quarter, and a reversal of $19.8 million of restructuring reserves previously recorded as a result of the settlement of lease obligations related to a building in Sunnyvale, CA.

The non-GAAP results of operations for the third quarter of 2002 exclude a charge of $4.9 million related to the amortization of purchased intangibles and deferred stock compensation, a restructuring charge of $2.3 million related to the closing of certain facilities and severance pay for terminated employees, $10.4 million charged to purchased in-process research and development, Series A preferred stock dividend of $2.7 million, accretion of Series A preferred stock redemption obligations of $0.5 million, and include a benefit for income taxes of $3.6 million.

As of September 26, 2003, cash, including cash equivalents, short-term investments and restricted cash totaled $15.6 million, as compared to $7.9 million as of June 27, 2003.

Also today, Proxim entered into definitive documents with Warburg Pincus and Broadview Capital to amend the terms of its outstanding $30 million secured promissory notes. The terms of the amended financing agreements, as described in the Company?s October 2, 2003 press release, are more fully described in a Form 8-K to be filed by Proxim.

?Proxim is continuing to see tangible results in our plan to return to sustained growth and profitability,? said Frank Plastina, President and CEO, Proxim. ?We were especially pleased with the 17 percent sequential revenue performance for our Proxim ORiNOCO Wi-Fi products, which outpaced industry forecasts of three percent for Wi-Fi access point revenue growth. Based on our performance and industry forecasts, we believe we gained market share during the third quarter.?

Conference Call Information
Today?s call begins at 5:00 PM Eastern/2:00 PM Pacific Time.

Dial-In Information
To listen to the conference call via telephone, dial (913) 981-5507 at least five minutes prior to the scheduled start time.

Webcast Information
To listen to the webcast, go to www.proxim.com, and click on the link titled ?Proxim Announces Third Quarter 2003 Results Call.?

The minimum requirements to listen include sound capabilities on your personal computer and installation of RealPlayer software available at no cost for Windows 95/98, Windows 3.1, Windows NT, Macintosh, and UNIX systems from Real Audio, www.real.com.

The call will be archived immediately following the conference call and will remain available at http://investor.proxim.com. Additionally, the conference call will be available on a recorded telephone archive by calling toll free (888) 203-1112 and entering pass code 327297, beginning Tuesday, October 21, 2003 at 8:00 PM, Eastern Time until midnight Eastern Time on Friday, October 24, 2003. For international callers, the recorded telephone archive is available by calling the following toll number: (719) 457-0820 and entering pass code 327297.

About Proxim
Proxim Corporation is a global leader in wireless networking equipment for Wi-Fi and broadband wireless networks. The company is providing its enterprise and service provider customers with wireless solutions for the mobile enterprise, security and surveillance, last mile access, voice and data backhaul, public hot spots, and metropolitan area networks. This press release and more information about Proxim can be found on the Web at http://www.proxim.com.

For more details and Balance Sheet, visit http://www.proxim.com/about/pressroom/pressrelease/pr2003-10-21.html

Source: Proxim