Aether Systems Reports First Quarter 2000 Revenue Growth & Strong Operating Results.Business Editors/Hi-Tech Writers OWINGS MILLS, Md.--(BUSINESS WIRE)--April 26, 2000 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 systems and services, reported a 16-fold increase in first-quarter revenue to $5.4 million, compared with $340,000 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. service revenue of $2.9 million, engineering service revenue of $1.4 million and software product revenue of $1.1 million. This is the first quarter in which Aether recognized software product revenue. In the same period last year, recurring services accounted for $268,000 and engineering services revenue was $72,000. The company reported a first 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 ($0.29) per share compared with ($0.07) per share operating loss in the same period last year. The per share net loss was ($1.13) compared to ($0.07) per share net loss in the same period last year. Non-cash charges 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. "These better than expected revenue and operating results for our first quarter show that Aether's strategy and business model are working. As more opportunities for Aether to enter new markets emerge, we see continued aggressive growth in revenues," 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 said. "We continue to be the leader in wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. as we execute aggressively on our business plan by entering new vertical markets through mergers, acquisitions and partnerships, while extending our lead in existing markets. The Aether model was built for integration. We will continue to broaden the services and products we provide." Oros continued, "In the first quarter, Aether took giant steps toward distancing itself from the competition. The acquisition of Riverbed Technologies Riverbed is a corporation providing wide area data services (WDS). Riverbed Technology's world headquarters is located in San Francisco, California. , Inc., now Aether Software, followed by our successful secondary offering where we raised $1.4 billion, highlight a quarter packed with growth activity. Aether is now in a unique position with significant capital resources to take advantage of the many opportunities coming our way." FIRST QUARTER HIGHLIGHTS -- Completed a $1.4 billion secondary offering and concurrent convertible debt offering -- Acquired Riverbed Technologies, Inc. (now Aether Software). -- Entered into a joint venture with Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. to create Sila SILA Society of Insurance Licensing Administrators (Zionsville, IN) SILA Summons In Lieu of Arrest Communications, which will apply the Aether model to Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and beyond. -- Launched a $15 million national advertising campaign including television spots on prime time & cable TV and print ads in national magazines and newspapers. -- Released ScoutSync 3.5, extending our technology leadership in mobile data access and mobile systems management. -- Released ScoutWeb, our wireless Internet access See how to access the Internet. technology. -- Formed an alliance with Nextel (Nextel Communications, Inc., Reston, VA, www.nextel.com) A wireless communications carrier founded in New Jersey in 1987 as Fleet Call, a two-way radio service. Throughout the late 1980s and 1990s, the company acquired a large number of SMR (Specialized Mobile Radio) operators and turned to develop wireless data and wireless web solutions. -- Acquired a 27.5 percent interest in Inciscent, a new company formed with Metrocall and PSINet to provide wireless data services to the small office/home office See SOHO. markets. -- Entered the electronic bill presentment and payment See EBPP. market through a partnership with Cyberbills. -- Acquired LocusOne Communications, Inc. (now Aether Logistics). RECENT HIGHLIGHTS -- Acquired IFX IFX - ["Type Reconstruction with First-Class Polymorphic Values", J. O'Toole et al, SIGPLAN Notices 24(7):207-217 (Jul 1989)]. , Europe's Largest Provider of Mobile Financial Information, as the first component of Sila Communications. -- Acquired e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. leader NetSearch, a Scottsdale Scottsdale, city (1990 pop. 130,069), Maricopa co., central Ariz.; settled in 1895 by Winfield Scott, inc. 1951. It is a resort and retirement center in the Phoenix metropolitan area. , Ariz.-based company that provides wireless solutions for companies selling products and services via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . -- Joined forces with Tibco Software Tibco Software Inc. is a software company, with headquarters in Palo Alto, California. Tibco sells business process management and business integration software. History Vivek Ranadive founded the company as Teknekron Software Systems (TSS) in 1985. to create the wireless active enterprise, which will allow Aether to deploy wireless data systems more quickly and with lower cost of integration to its clients. -- Entered into a multi-tiered business and marketing agreement with Research In Motion (RIM), which will provide for cross-channel promotion and product co-development. -- Aether Software's ScoutWare suite of data synchronization Keeping data in two or more computers up-to-date so that each repository contains the identical information. Data in handheld devices and laptops often require synchronization with the data in a desktop machine or server. and management solutions adopted by Icras, Inc., a leader in software and hardware industrial-strength mobile applications. About Aether Systems, Inc. Aether Systems, Inc. is a leading provider of wireless and mobile data 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 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, the ScoutWare family of products (resulting from the acquisition of Riverbed Technologies, Inc.) and its network operations and customer service center, Aether Systems 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. Aether is a joint principal owner, along with 3Com Corp., of OmniSky, Inc., a wireless Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. based in Palo Alto Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif. Aether headquarters are located at 11460 Cronridge Dr., Owings Mills, MD 21117. For more information, visit http://www.aethersystems.com. 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 projections 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 any obligation to update the forward-looking statements contained in this press release.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
March 31,
---------------------
2000 1999
-------- --------
in thousands except per share data
Subscriber revenue $ 2,929 $ 268
Engineering services revenue 1,403 72
Software and related services 1,069 --
-------- --------
Total revenue 5,401 340
Cost of subscriber revenue 1,732 245
Cost of engineering services revenue 614 36
Cost of software and related services 678 --
-------- --------
Total cost of revenue 3,024 281
-------- --------
Gross profit 2,377 59
Operating expenses:
Research and development (exclusive
of non-cash compensation expense
of $998) 1,684 470
General and administrative (exclusive
of non-cash compensation expense
of $1108) 5,362 711
Selling and marketing (exclusive of
non-cash compensation expense of $ 339) 5,728 257
In process research and development
related to acquisition 2,100 --
Depreciation and amortization 17,410 83
Option and warrant expense 2,445 23
-------- --------
34,729 1,544
-------- --------
Operating loss (32,352) (1,485)
Other income (expense):
Interest income (expense), net 2,189 83
Equity in losses of investment (3,107) --
-------- --------
Net loss $(33,270) $ (1,402)
-------- --------
Pro forma net loss per share-basic
and diluted $ (1.13) $ (0.07)
======== ========
Pro forma weighted average shares
outstanding-basic and diluted(1) 29,451 19,878
======== ========
Reconciliation to net operating loss:
Net loss $(33,270) $ (1,402)
Add back non-cash charges:
Amortization of intangibles relating
to acquisitions 16,984 --
In process research and development
acquired 2,100 --
Proportionate share of losses in investee 3,107 --
Option and warrant expense 2,445 23
-------- --------
Net operating loss $ (8,634) $ (1,379)
======== ========
Pro forma net operating loss per
share - basic and diluted $ (0.29) $ (0.07)
======== ========
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
March 31, Dec. 31,
2000 1999
---------- ----------
in thousands except share data
Current assets:
Cash and cash equivalents $1,366,043 $ 78,542
Short-term investments 3,592 2,092
Trade accounts receivable, net 4,005 1,003
Inventory, net 493 688
Prepaid expenses and other current assets 12,629 4,995
---------- ----------
Total current assets 1,386,762 87,320
Furniture, computers, and equipment, net 5,858 2,796
Intangibles and other assets 1,263,792 12,418
---------- ----------
$2,656,412 $ 102,534
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,519 $ 1,425
Accrued expenses 3,770 1,620
Accrued employee compensation and
benefits 640 971
Deferred revenue 2,580 175
Notes payable 13,600 --
---------- ----------
Total current liabilities 22,109 4,192
Long-term liabilities:
Convertible subordinated notes
payable and other notes payable 310,721 --
Stockholders' equity 2,323,582 98,342
Commitments and contingencies $2,656,412 $ 102,534
========== ==========
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