Aether Systems Announces Year End and Fourth Quarter 2002 Results; Continued Improvements in Operating Expenses Result in an EBITDA Loss Decrease to Single Digits.Business Editors/High-Tech Writers OWINGS MILLS, Md.--(BUSINESS WIRE)--Feb. 5, 2003 Aether aether: see ether, in physics and astronomy. Aether god of whole atmosphere. [Gk. Myth.: Jobes, 42] See : Air Systems, Inc. (Nasdaq:AETH), a leading provider of wireless and mobile data solutions, today reported financial results for the fiscal year and fourth quarter ended Dec. 31, 2002. Revenue for 2002 increased to $116.5 million, from $112.9 million in 2001. Revenue for the fourth quarter was $29.5 million, compared to $25.2 million in Q4 2001. In Q4 2002, Aether's revenues were $29.5 million, and included recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. services revenue of $18.6 million, engineering services revenue of $0.2 million, software product revenue of $6.6 million, and device sales of $4.1 million. In Q4 2001, Aether's revenues were $25.2 million, with recurring services revenue of $11.0 million, engineering services revenue of $2.1 million, software product revenue of $7.1 million, and device sales of $5.0 million. For the year, Aether's total revenue of $116.5 million included recurring services revenue of $69.6 million, engineering services revenue of $3.2 million, software product revenue of $24.4 million, and device sales of $19.3 million. In 2001, by comparison, Aether reported total revenue of $112.9 million, with recurring services revenue of $44.0 million, engineering services revenue of $7.9 million, software product revenue of $37.0 million and devices sales of $24.0 million. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (which include research and development, general and administrative, and sales and marketing expenses) continued to decrease for the seventh sequential One after the other in some consecutive order such as by name or number. quarter, improving from $25.9 million in Q3 2002 to $21.2 million this quarter, an 18 percent reduction. In Q4 2001, operating expenses were $42.6 million. Aether has reduced operating expenses by more than 65 percent from its height of $63.2 million in Q1 2001, and over 40 percent from the beginning of 2002, when operating expenses were $36.2 million. Operating expenses for 2002 were $114.7 million as compared to $221.6 million in 2001, representing an improvement approaching 50 percent. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and 73 percent as compared to the same period last year. Based on Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), operating expenses (which include research and development expenses, general and administrative expenses, selling and marketing expenses, depreciation and amortization, option and warrant expense, impairments of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. , and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. ) were $47.4 million in Q4 2002. By comparison, the operating expenses were $108.4 million in Q3 2002 and $113.1 million in Q4 2001. Operating expenses for the year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. GAAP, were $267.8 million in 2002 as compared to $1.6 billion in 2001. Aether reported a Q4 2002 operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , excluding certain non-cash and other charges, of ($0.35) per share or a total of ($14.6 million). In the same period last year, Aether reported an operating loss, excluding certain non-cash and other charges, of ($0.96) per share or a total of ($39.6 million). Non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. include the amortization of intangibles and other non-cash items relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc acquisitions, the company's share of losses in joint ventures under equity method accounting, and non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) relating to options and warrants. Based on GAAP, the Company's net loss, which includes the non-cash charges mentioned above and other charges, was ($0.57) per share or ($24.1 million) in Q4 2002. In Q3 2002, by comparison, the net loss was ($5.37) per share or ($226.2 million). For the same period last year, the net loss was ($2.59) per share or ($106.8 million). For the year, the net loss was ($7.73) per share or ($325.4 million). For 2001, the net loss was ($40.61) per share or ($1.7 billion). "In 2002, Aether successfully controlled costs and streamlined operations while maintaining our revenue base in what continued to be a challenging economy. And while we have performed this streamlining, we have seen an improvement in the sustainability of our revenue base due in part to the increased length of customer contracts across the business," said Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Dave Oros. "We completed a thorough examination of our business and industry this year, resulting in a strategic plan focused on a return to growth. Aether has adopted a targeted market focus on industries and application segments that have growth potential based on proven ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). from wireless and mobile solutions. These areas include transportation, logistics, mobile office, field service, government and Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States . Acting on our strategic plan has also led to meaningful relationships with EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. and Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , global technology leaders who have endorsed our technology and solutions. EDS and Sun both believe strongly in the future of wireless data and provide Aether with global, trusted channels for our solutions that we will leverage as we transition from a strategy of controlling costs to revenue growth." Oros continued, "Recent product releases addressing Aether's market focus include Aether Attache ATTACHE. Connected with, attached to. This word is used to signify those persons who are attached to a foreign legation. An attache is a public minister within the meaning of the Act of April 30, 1790, s. 37, 1 Story's L. U. S. , a true mobile office solution that leverages the Aether Fusion platform to provide device- and network-independent access to corporate e-mail and groupware Software that supports multiple users working on related tasks in local and remote networks. Also called "collaborative software," groupware is an evolving concept that is more than just multiuser software which allows access to the same data. , and Aether 20/20V, which provides a simple and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. nationwide solution for vehicle location and management. We believe many opportunities exist for our asset and delivery tracking products in transportation, Homeland Security, and within organizations that have large field forces requiring more effective tracking and a more efficient means of doing business. Aether's recent launch of GeoLogic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. (TM), a low cost trailer tracking The term trailer tracking refers to the concept of tracking the position of an articulated vehicle’s trailer unit. This position is determined through a tracking device fitted to the trailer. application, is representative of this strategy and opportunity, and has been immediately bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by the deployment by U.S. Xpress See QuarkXPress. to its entire fleet of more than 12,000 trailers." Management Guidance For the first quarter, Aether expects revenues to remain approximately even as the strategic plan we have implemented and the associated relationships we have recently announced begin to gain traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. . The Company expects operating expenses to remain in the low $20 million range as we have optimized the overhead component of the business. Aether will host a conference call on Thursday Thursday: see week. , February February: see month. 6, 2003 at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Interested parties may access the call at www.aethersystems.com or by telephone at 1-800-441-0022. Please ask for the Aether Systems call. Replay of this call will be available until 5 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Thursday, February 13, 2003, by calling 800/839-0860, access code 1239. About Aether Systems, Inc. Aether Systems delivers wireless and mobile workforce automation solutions that make people more productive and their organizations more profitable. Aether's products and services are built on Aether Fusion, the company's standards-based platform that allows for secure, reliable extension of critical information to virtually any wireless or mobile environment. Return on investment in Aether solutions comes from a unique combination of strengths - quick access to multiple back-end (programming) back-end - Any software performing either the final stage in a process, or a task not apparent to the user. A common usage is in a compiler. A compiler's back-end generates machine language and performs optimisations specific to the machine's architecture. information sources, workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. that is optimized for specific industries, and turnkey See turnkey system. deployment services and professional support. Backed by years of in-market expertise, Aether is making it possible for thousands of government agencies and businesses to unleash the power of the mobile workforce. For more information, please visit www.aethersystems.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used herein, the words anticipate, believe, estimate, intend, may, will, and expect and similar expressions as they relate to Aether Systems, Inc. (Aether or Company) or its management are intended to identify such forward-looking statements. The Company's actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include the factors discussed in our filings with the Securities and Exchange Commission. Aether undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results could differ materially for a variety of reasons and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
Three months ended Year Ended
December 31, December 31,
------------------ ---------------------
2002 2001 2002 2001
-------- --------- --------- -----------
in thousands except per share
data
Subscriber revenue $18,626 $11,044 $69,582 $44,031
Engineering services revenue 153 2,074 3,192 7,860
Software and related services 6,572 7,108 24,412 36,982
Device sales 4,180 4,962 19,345 24,007
-------- --------- --------- -----------
Total revenue 29,531 25,188 116,531 112,880
Cost of subscriber revenue 11,402 7,510 40,115 27,167
Cost of engineering services
revenue 136 545 1,533 3,644
Cost of software and related
services 1,461 2,076 8,086 11,625
Cost of device sales 3,871 4,619 17,486 38,318
-------- --------- --------- -----------
Total cost of
revenue 16,870 14,750 67,220 80,754
-------- --------- --------- -----------
Gross profit (loss) 12,661 10,438 49,311 32,126
Operating expenses:
Research and development 5,031 11,891 26,306 63,937
General and administrative 12,700 19,454 59,666 90,893
Selling and marketing 3,501 11,250 28,767 66,757
-------- --------- --------- -----------
Total operating expenses 21,232 42,595 114,739 221,587
-------- --------- --------- -----------
EBITDA(a) (8,571) (32,157) (65,428) (189,461)
Depreciation and
amortization 6,971 27,413 39,255 180,724
Option and warrant expense 833 1,958 6,542 14,408
Impairment of intangibles
and fixed assets 4,660 30,220 69,534 1,121,001
Restructuring charge 13,719 10,917 37,744 45,006
-------- --------- --------- -----------
Operating loss (34,754) (102,665) (218,503) (1,550,600)
Other income (expense):
Interest income (expense),
net (662) (2,002) (3,990) 8,659
Equity in losses of
investment (72) (9,238) (4,744) (57,523)
Investment loss, including
impairments, net (618) (1,829) (14,412) (143,382)
Income tax benefit 535 691 535 10,694
Minority interest - 8,268 (39) 63,809
Other income - escrow
settlement - - 2,272 -
-------- --------- --------- -----------
Net loss before
cumulative effect
of change in
accounting
principle and
extraordinary
item (35,571) (106,775) (238,881) (1,668,343)
Cumulative effect of change
in accounting principle:
Adoption of SFAS
133, Accounting for
Derivatives - - - 6,564
Adoption of FASB
141/142, Accounting
for Goodwill - - (129,306) -
-------- --------- --------- -----------
Net loss before
extraordinary item (35,571) (106,775) (368,187) (1,661,779)
Extraordinary item (early
extinguishment of debt) 11,450 - 42,765 7,684
-------- --------- --------- -----------
Net loss after extraordinary
item (24,121) (106,775) (325,422) (1,654,095)
Net loss per share - basic and
diluted before extraordinary
item and cumulative effect of
change in accounting
principle ($0.84) ($2.59) ($5.67) ($40.96)
Extraordinary item - related
to early extinguishment of
debt $0.27 - $1.01 $0.19
Cumulative effect of change
in accounting principle:
Adoption of SFAS 133,
Accounting for
Derivatives - - - $0.16
Adoption of FASB 142,
Accounting for
Goodwill - - ($3.07) -
-------- --------- --------- -----------
Net loss per share - basic and
diluted ($0.57) ($2.59) ($7.73) ($40.61)
======== ========= ========= ===========
Weighted average shares
outstanding - basic
and diluted 42,220 41,241 42,117 40,732
======== ========= ========= ===========
Reconciliation to net
operating loss:
Net loss (24,121) (106,775) (325,422) (1,654,095)
Add back non-cash and other
charges:
Other adjustments
(impairment of goodwill,
write-down of
investments, inventory
obsolescence) 5,278 32,049 83,946 1,278,754
Amortization of
intangibles 1,567 21,037 15,248 162,105
Proportionate share of
losses in investee 72 9,238 4,744 57,523
Option and warrant expense 833 1,958 6,542 14,408
Charges from adoption of
SFAS 133 - - - (6,564)
Charges from adoption of
FASB 142 - - 129,306 -
Other income - escrow
settlement - - (2,272) -
Restructuring charge 13,719 10,917 37,744 45,006
Extraordinary item (11,450) - (42,765) (7,684)
Deferred tax benefit (535) (691) (535) (10,694)
Minority interest -
amortization - (7,299) (94) (58,459)
-------- --------- --------- -----------
Net operating loss (14,637) (39,566) (93,558) (179,700)
======== ========= ========= ===========
Net operating loss per
share -
basic and diluted ($0.35) ($0.96) ($2.22) ($4.41)
======== ========= ========= ===========
(a) EBITDA is a non-GAAP measure.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
December 31 December 31
2002 2001
------------ -----------
in thousands
Current assets:
Cash and cash equivalents $68,593 $527,430
Short-term investments 255,825 2,490
Trade accounts receivable 22,514 24,802
Inventory 19,664 27,178
Assets held for sale 5,250 -
Leased equipment receivable 1,656 -
Prepaid expenses and other current assets 16,276 19,521
------------ -----------
Total current assets 389,778 601,421
Furniture, computers, and equipment, net 19,301 61,304
Intangibles and other assets 64,330 286,695
------------ -----------
$473,409 $949,420
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $4 $15,493
Accounts payable 1,902 8,560
Accrued expenses 22,492 32,915
Restructuring reserve 8,651 15,452
Accrued employee compensation and benefits 7,336 9,983
Deferred revenue 14,234 15,145
------------ -----------
Total current liabilities 54,619 97,548
Long-term liabilities:
Convertible subordinated notes payable and
other notes payable 154,942 290,645
Deferred revenue 11,789 6,380
Restructuring reserve 23,801 12,365
Deferred rent 858 -
Minority interest in net assets of subsidiary - (45)
Stockholders' equity 227,400 542,527
Commitments and contingencies
------------ -----------
$473,409 $949,420
============ ===========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion