Aether Systems Reports Continued Strong Revenue Growth.Business Editors/Hi-Tech Writers OWINGS MILLS, Md.--(BUSINESS WIRE)--Feb. 6, 2001 Record Revenue and New Customers Highlight Fourth Quarter Performance; Management's Outlook Includes Increased Revenue Targets and Sooner Than Expected EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Positive Status 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 data products and services, today reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2000. Aether recorded more than a six-fold Adj. 1. six-fold - having six units or components sextuple, sixfold multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple increase in fourth-quarter revenue to $25.8 million, compared with $4.0 million in the same period in 1999. The results include 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 $13.1 million, engineering services revenue of $3.9 million, and software product revenue of $8.8 million. In the same period last year, recurring services revenue accounted for $2.7 million, engineering services revenue was $1.3 million; the company did not yet have software product revenue. Aether's revenues grew 59 percent from the third quarter of 2000, when the company recorded $16.2 million in sales. The company reported a fourth quarter 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. , adjusted for the impact of certain 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. , of ($0.90) per share compared with ($0.18) per share operating loss in the same period last year. Non-cash charges include the amortization 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 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. "Aether's increasing revenue and momentum are reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. , in part, of the growing adoption of wireless services in the mobile enterprise marketplace, which has always been our focus," said Aether 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. "In addition, in the fourth quarter, Aether landed important new customers, demonstrating our breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is across vertical markets. We continued to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on our strategy by completing the acquisition of RTS (Request To Send) An RS-232 signal sent from the transmitting station to the receiving station requesting permission to transmit. Contrast with CTS. 1. (operating system) RTS - run-time system. 2. Wireless and the transportation division of Motient Corp. Both of these acquisitions gave us increased engineering bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz , new products and services, and new clients." Oros continued, "Enterprise customers are accepting Aether's software and solutions as the industry standard to extend information and applications to the mobile and wireless world. Aether remains in a very strong cash position, a factor that continues to grow as a competitive advantage. When enterprise customers invest in wireless technology, they need to feel confident that their provider is here to stay. Aether not only delivers solutions backed by years of enterprise-class experience, we have the funding necessary to operate for the long term." Fiscal Year 2000 Summary For the year, the company reported a nine-fold Adj. 1. nine-fold - having nine units or components ninefold, nonuple multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple increase in revenue to $58.2 million, compared with $6.3 million for the same period in 1999. The results include recurring services revenue of $31.2 million, engineering services revenue of $9.4 million, and software product revenue of $17.6 million. In the same period last year, recurring services revenue accounted for $3.7 million, engineering services revenue was $2.6 million; the company did not yet have software product revenue. The company reported an operating loss for the year, adjusted for the impact of certain non-cash charges, of ($1.94) per share, compared with ($0.40) per share operating loss in the same period last year. Management's Outlook The following statements are forward looking. Actual results may differ materially. Please refer to the 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. Statement at the end of this release. Aether's management believes that the enterprise market is leading the way in the adoption of wireless products and services, and that Aether is well positioned to take advantage of this trend. To reflect this, Aether will increase its revenue targets and the company plans to become EBITDA (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.
To best capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. these opportunities and further extend its leadership position, management has decided to increase internal investment in key strategic areas that include: integration and extension of Aether's software product family, global workforce expansion, and new vertical service areas such as transportation and logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. , among others. Details will be provided on the conference call scheduled for Wednesday Wednesday: see week. , February February: see month. 7, 2001 at 8:30 a.m. Eastern. Interested parties may access the call at www.aethersystems.com or by telephone at 1-800-633-8682, reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 17671133. Replay of this call will be available until 10:30 a.m. Eastern on Wednesday, February 14, 2001, by calling 1-800-633-8284, same reservation number. FOURTH QUARTER HIGHLIGHTS -- E*Trade Group, Inc. - E*TRADE selected Aether to distribute and provide real-time quotes, news, and trading applications for E*TRADE's mobile financial services on the Blackberry(TM) by Aether(TM) solution. -- WebLink Wireless, Inc. - Aether's recent acquisition, RTS Wireless, Inc. will supply WebLink Wireless with its Advantage Gateway(TM), along with installation, training, support and related professional services. These services will enable WebLink Wireless to provide enhanced wireless data services and two-way messaging through the Internet and corporate intranets, and expand these services to a variety of mobile wireless messaging devices. -- Juniper Bank - Aether was selected to provide wireless services for customers of Juniper to use web-enabled phones to retrieve account balances, move money between accounts, pay bills and communicate with customer service. -- USATODAY.com - USATODAY.com selected Aether's AirLoom(TM) service to adapt the online news publisher's content for optimal display on any type of wired and wireless web device, including PC web browsers, web-enabled cellular telephones, personal digital assistants and Internet Appliances. AirLoom is offered in partnership with AlterEgo Networks. -- AutoTrader.com - AutoTrader.com is partnering with Aether to offer a wireless lead tracking and management system to more than 30,000 dealer partners. -- Hewlett-Packard Co. - Aether signed an agreement to provide enterprise customers with wireless access to the Internet on HP Jornada Pocket PCs. The Wireless ISP Services, powered by Aether's wireless data center, offers a single point of purchase plan for enterprise customers and real-time, wireless access to Internet, e-mail, and customized applications. -- MicroStrategy Inc. - Aether and MicroStrategy signed an alliance to develop a new product, MicroStrategy 7M(TM), that will be designed to combine Aether's wireless technology with the functionality and performance of the MicroStrategy 7(TM) platform to deliver personalized, intelligent information services to a full range of wireless devices. -- EuroNet Worldwide - Aether and EuroNet Worldwide announced plans to create and market wireless financial services products featuring anytime, anywhere access, quick deployment, and personalized alerting capabilities in an end-to-end, ASP solution. -- New NOC - Aether is nearing completion of its new world-class network operations center (NOC) in Tempe, Ariz. The new NOC will serve as both a back-up facility to Aether's NOC in Owings Mills, Md., and as a hosting and support facility for applications for current and future Aether clients. -- BlackBerry(TM) by Aether(TM) for Lotus(R) Notes(R) and Domino(TM) - Aether announced that Blackberry by Aether supports Lotus(R) Notes(R) and Domino(TM), dramatically increasing the number of enterprise customers that will now have the ability to stay wirelessly connected to their corporate email. -- ScoutWeb(TM) includes SSL Security - Aether announced availability of ScoutWeb(TM) v.1.1 for featuring 128-byte SSL v.3. -- Widespread adoption of ScoutWare(TM) platform - Aether's ScoutWare platform of mobile device synchronization and management software continues to attract customers with 25 MobileEnterprise partner agreements signed during the fourth quarter with integrators and distributors interested in providing our technology - 96 total. -- RTS Wireless, Inc. - Aether acquired RTS Wireless, a leading developer of software systems connecting the Internet to a broad array of wireless devices. The acquisition fills in key components of Aether's product roadmap to unify and broaden the company's product suite while enhancing Aether's current offerings to the carrier and ISP market. Aether also gained about 100 wireless engineers through the acquisition. -- Motient Transportation Division - Aether acquired the transportation division of Motient Corp., increasing Aether's presence in the transportation industry and providing the company with a significant client base in the long-haul and less-than-truckload market and a leading, multi-mode wireless product that provides vehicle information via both land-based and satellite communications. -- Several additional large companies have engaged Aether to provide wireless services. Due to the confidential nature of these strategic initiatives, Aether is not able to identify them. About Aether Systems, Inc. Aether Systems, Inc., is a leading provider of wireless and mobile data products and services, allowing real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. communications and transactions across a full range of devices and networks. Using its engineering expertise, the ScoutWare family of products including the Aether Intelligent Messaging An earlier messaging system from Banyan Systems that ran on NetWare and VINES servers and incorporated Banyan's popular Streettalk directory service. It included a basic mail program, which could be upgraded to the more advanced BeyondMail system. See ePresence. (AIM) software platform, and its network operations center See NOC. Network Operations Center - (NOC) A location from which the operation of a network or internet is monitored. Additionally, this center usually serves as a clearinghouse for connectivity problems and efforts to resolve those problems. and customer care center, Aether seeks to provide comprehensive, technology-independent wireless and mobile computing Using a computing device while in transit. Mobile computing implies wireless transmission, but wireless transmission does not necessarily imply mobile computing. Fixed wireless applications use satellites, radio systems and lasers to transmit between permanent objects such as buildings solutions. Aether develops and delivers wireless data services across a variety of industries and market segments in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and internationally. For more information, please visit www.aethersytems.com. Safe Harbor Statement This press release includes 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. based on the current expectations of Aether about future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions about Aether that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, market acceptance of the products developed or to be developed by Aether, the ability of Aether to develop new technologies and projects and the success of joint efforts with partner companies. These risks and other risk factors are described under the caption, "Risk Factors" in Aether's filings with the Securities and Exchange Commission. Aether undertakes no obligation to update the forward-looking statements contained in this press release.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
Three months ended Year ended
December 31, December 31,
------------------------------------------
2000 1999 2000 1999
--------------------------------------------
in thousands except
per share data
Subscriber revenue $13,086 $2,722 $31,160 $3,732
Engineering
services revenue 3,889 1,326 9,444 2,594
Software and
related services 8,800 -- 17,550 --
------- -------- -------- --------
Total revenue 25,775 4,048 58,154 6,326
Cost of
subscriber
revenue 8,789 1,222 18,412 2,110
Cost of engineering
services revenue 2,181 820 5,693 1,366
Cost of software
and related
services 2,433 -- 5,911 --
------- -------- -------- --------
Total cost of
revenue 13,403 2,042 30,016 3,476
------- -------- -------- --------
Gross profit 12,372 2,006 28,138 2,850
Operating expenses:
Research and
development 15,807 1,198 30,189 2,614
General and
administrative 20,676 3,085 52,937 5,891
Selling and
marketing 20,789 1,157 54,151 2,095
In process
research and
development
related to
acquisitions 1,800 -- 7,860 --
Depreciation and
amortization 81,319 781 238,074 1,089
Option and
warrant expense 4,274 17,000 14,345 19,198
------- -------- -------- --------
144,665 23,221 397,556 30,887
------- -------- -------- --------
Operating loss (132,293) (21,215) (369,418) (28,037)
Other income
(expense): --
Interest income
(expense), net 10,811 (153) 42,351 (60)
Equity in losses
of investment (16,486) (1,985) (47,886) (2,425)
Realized gain
(loss) on sale
of short-term
investments -- (169) -- (169)
Income taxes 987 -- 1,561 --
Minority Interest 4,727 -- 10,692 --
------- -------- -------- --------
Net loss (132,254) (23,522) (362,700) (30,691)
------- -------- -------- --------
Net loss per
share - basic and
diluted ($3.37) ($9.99)
======= ========
Weighted average
shares outstanding
- basic and diluted 39,283 36,310
======= ========
Pro forma statement
of operations data
(unaudited): (1)
Loss before income
taxes, as reported (23,522) ($30,691)
Pro forma net loss
per share-basic and
diluted ($0.94) ($1.45)
======== ========
Pro forma weighted
average shares
outstanding-basic
and diluted 25,076 21,207
======== ========
Reconciliation to net
operating loss:
Net loss (132,254) (23,522) (362,700) ($30,691)
Add back non-cash
charges:
Amortization of
intangibles
relating to
acquisitions 78,040 -- 230,836 556
In process
research and
development
acquired 1,800 -- 7,860 --
Proportionate
share of losses
in investee 16,486 1,985 47,886 2,425
Option and warrant
expense 4,275 17,000 14,345 19,198
Deferred tax benefit (987) -- (1,595) --
Minority Interest
- amortization (2,537) -- (6,906) --
------- -------- -------- --------
Net operating loss (35,177) (4,537) ($70,274) ($8,512)
======= ======== ======== ========
Pro forma net
operating loss per
share - basic and
diluted ($0.90) ($0.18) ($1.94) ($0.40)
======= ======== ======== ========
1) Prior to the closing of the Company's initial public offering, each
member of Aether Systems, LLC (the "LLC") contributed its membership
units in the LLC to Aether Systems, Inc. in exchange for 2.5 shares of
common stock of Aether Systems, Inc. Following such contribution, the
LLC merged with and into Aether Systems, Inc., as a result of which
all assets and liabilities of the LLC were transferred to Aether
Systems, Inc.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
Dec. 31, Dec. 31,
2000 1999
-------- --------
in thousands except share data
Current assets:
Cash and cash equivalents $ 872,747 $ 78,542
Short-term investments 2,648 2,092
Trade accounts receivable 30,263 1,003
Inventory 19,130 688
Prepaid expenses and other
current assets 17,081 4,995
---------- ----------
Total current assets 941,869 87,320
Furniture, computers, and
equipment, net 53,223 2,796
Intangibles and other assets 1,682,283 12,418
---------- ----------
$2,677,375 $ 102,534
========== ==========
LIABILITIES, MEMBERS' CAPITAL AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,747 $ 1,426
Accrued expenses 66,949 1,620
Accrued employee compensation
and benefits 12,566 971
Deferred revenue 14,170 175
Notes payable 18,813 --
---------- ----------
Total current liabilities 122,245 4,192
Long-term liabilities:
Deferred revenue --
Convertible subordinated notes
payable and other notes payable 321,201 --
Deferred tax liability 10,694 --
Minority interest in net assets of
subsidiary 55,537 --
Stockholders' equity (deficit) 2,167,698 98,342
Commitments and contingencies
$2,677,375 $ 102,534
========== ==========
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