Aether Systems Reports Second Quarter and First Half 2000 Revenue Growth & Strong Operating Results.Business Editors/Hi-Tech Writers OWINGS MILLS, Md.--(BUSINESS WIRE)--July 24, 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 products and services, reported a 24-fold increase in second-quarter revenue to $10.8 million, compared with $447,000 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. services revenue of $6.7 million, engineering services revenue of $1.6 million and software product revenue of $2.4 million. In the same period last year, recurring services (subscriber revenue) accounted for $331,000, engineering services revenue was $116,000 and the company did not have software product revenue. The company reported a second 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 ($0.30) per share compared with ($0.08) per share operating loss in the same period last year. The per share net loss was ($2.36) compared to ($0.15) 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. "The strength of our results continues to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data Aether's business plan and the aggressive nature by which the company is pursuing its strategy. Quick, thoughtful execution is the key to success in this burgeoning industry. Aether is working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to win customers and generate revenue as it extends its leadership position," 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. "The market for wireless data will continue to gain momentum in the short term and truly explode (1) To break down an assembly into its component pieces. Contrast with implode. (2) To decompress data back to its original form. within the next 12-24 months. Aether is preparing for this growth and ensuring that its leadership position is unchallenged through its infrastructure build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. and enhancement of its talent pool." Oros continued, "The second quarter saw some important efforts come to fruition fru·i·tion n. 1. Realization of something desired or worked for; accomplishment: labor finally coming to fruition. 2. Enjoyment derived from use or possession. 3. . After a close collaborative effort with Palm, Aether's ScoutSync is now the default standard for the Palm OS, which has about an 80% market share. In addition, we are now seeing commitments and the first product rollouts relating to our recurring revenue model as well as seeing other revenue streams grow. This is a demonstration of the fact that enterprises are beginning to gear up and utilize wireless data solutions. At the same time, Aether's engineering team is working hard to stay ahead of the curve as it deploys state-of-the-art solutions and works with future-generation technologies to ensure that Aether's tools become standards." SECOND QUARTER HIGHLIGHTS - Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. Pocket PC goes wireless with Aether: Aether's enterprise wireless ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. is unveiled as TD Waterhouse TD Waterhouse is the brand used for both British and Canadian brokerages within the TD Bank Financial Group. The brand originated as a United States brand for discount brokerage when TD purchased Waterhouse Securities. commits to a deployment of 5000 Compaq (Compaq Computer Corporation, Houston, TX, www.compaq.com) Compaq was the leading PC manufacturer when it was acquired by HP in 2002. Founded in 1982 by Rod Canion, Jim Harris and Bill Murto, one year later the company shipped 53,000 PC-compatible COMPAQ Portables, resulting in $111 iPaq handhelds for its wireless trading solution. - Aether forms strategic alliances with Visa and First Data to provide wireless 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. solutions. - Aether and 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. launch Sila SILA Society of Insurance Licensing Administrators (Zionsville, IN) SILA Summons In Lieu of Arrest Communications to provide leading wireless data services in 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). .
- Aether and Research In Motion (RIM) enter into a multi-tiered business and marketing agreement. - Aether teams with Critical Path to provide next generation messaging to wireless devices. - Schwab Schwab is a German name meaning "man from Swabia" and may refer to:
PocketBroker - developed, deployed and supported by Aether. - Aether acquires wireless e-commerce leader, NetSearch. Customers include Lexus Lexus is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. Lexus brand name vehicles are sold in North America, Europe, Asia, the Middle East, Oceania, Africa, and Latin America; in the United States, Lexus is the highest-selling make of luxury cars. , Toyota Toyota (toi-ō`tə, Jap. tōyō`tä), city (1990 pop. 332,336), Aichi prefecture, central Honshu, Japan. It is a major industrial center dominated by the Toyota Motor Company, which produces passenger vehicles and auto parts there. , Nissan Noun 1. Nissan - the seventh month of the civil year; the first month of the ecclesiastic year (in March and April) Nisan Hebrew calendar, Jewish calendar - (Judaism) the calendar used by the Jews; dates from 3761 BC (the assumed date of the Creation of the , and Lincoln-Mercury Lincoln-Mercury is a collective name for the Lincoln and Mercury divisions of the Ford Motor Company, whose vehicles are typically sold side-by-side in a single dealership. See also: Lincoln (car) Mercury (car) . - Aether's ScoutSync becomes the Palm OS standard as Palm launches Palm HotSync Server. Aether also releases ScoutSync 3.5 for Pocket PCs. - Aether and Data Critical form a strategic partnership to include wireless healthcare technology integration and development, and marketing alliance. Aether makes an equity investment in Data Critical. - Aether announces new development and hosting capabilities for XML protocol See XMLP. . - OmniSky files registration statement for proposed IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. of common stock. FIRST HALF RESULTS For the first six months of 2000, the Company reported a 21-fold increase in revenue to $16.2 million, compared with $787,000 for the same period in 1999. The results include recurring services revenue of $9.7 million, engineering services revenue of $3.0 million and software product revenue of $3.4 million. In the same period last year, recurring services (subscriber revenue) accounted for $599,000, engineering services revenue was $188,000, and there was no software product revenue. The company reported a second quarter operating loss, adjusted for the impact of certain non-cash charges, of ($0.59) per share compared with ($0.15) per share operating loss in the same period last year. The per share net loss was ($3.65) compared to ($0.22) per share net loss in the same period last year. 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(TM) family of products, 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 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.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 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. This communication shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy nor shall there be any sale of OmniSky Corporation securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
in thousands except
per share data
Subscriber revenue $ 6,745 $ 331 $ 9,674 $ 599
Engineering services
revenue 1,637 116 3,040 188
Software and related
services 2,373 -- 3,442 --
--------- --------- --------- ---------
Total revenue 10,755 447 16,156 787
Cost of subscriber
revenue 3,737 286 5,469 531
Cost of engineering
services revenue 1,027 84 1,640 120
Cost of software and
related services 863 -- 1,542 --
--------- --------- --------- ---------
Total cost of revenue 5,627 370 8,651 651
--------- --------- --------- ---------
Gross profit 5,128 77 7,505 136
Operating expenses:
Research and
development 4,077 532 5,761 1,002
General and
administrative 9,906 871 15,269 1,583
Selling and
marketing 16,081 299 21,809 555
In process research
and development
related to
acquisition 60 -- 2,160 --
Depreciation and
amortization 67,041 110 84,451 194
Option and warrant
expense 3,605 1,240 6,050 1,263
--------- --------- --------- ---------
100,770 3,052 135,500 4,597
--------- --------- --------- ---------
Operating loss (95,642) (2,975) (127,995) (4,461)
Other income
(expense):
Interest income
(expense), net 14,787 57 16,976 141
Equity in losses
of investment (10,721) -- (13,828) --
Minority Interest 1,662 -- 1,662 --
--------- --------- --------- ---------
Net loss $ (89,914) $ (2,918) $(123,185) $ (4,320)
--------- --------- --------- ---------
Pro forma statement
of operations
data (unaudited):
Loss before income
taxes, as
reported $ (89,914) $ (2,918) $(123,185) $ (4,320)
Pro forma income
tax provision
(benefit) -- -- -- --
--------- --------- --------- ---------
Pro forma net loss $ (89,914) $ (2,918) $(123,185) $ (4,320)
========= ========= ========= =========
Pro forma net loss
per share-basic
and diluted $ (2.36) $ (0.15) $ (3.65) $ (0.22)
========= ========= ========= =========
Pro forma weighted
average shares
outstanding-basic
and diluted (1) 38,031 19,878 33,765 19,878
========= ========= ========= =========
Reconciliation to
net operating loss:
Net loss $ (89,914) $ (2,918) $(123,185) $ (4,320)
Add back non-cash
charges:
Amortization of
intangibles
relating to
acquisitions 65,697 -- 82,681 --
In process research
and development
acquired 60 -- 2,160 --
Proportionate share
of losses in
investee 10,721 -- 13,828 --
Option and warrant
expense 3,605 1,240 6,050 1,263
Minority Interest -
amortization (1,434) -- (1,434) --
--------- --------- --------- ---------
Net operating loss $ (11,265) $ (1,678) $ (19,900) $ (3,057)
========= ========= ========= =========
Pro forma net
operating loss per
share - basic and
diluted $ (0.30) $ (0.08) $ (0.59) $ (0.15)
========= ========= ========= =========
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
June 30, Dec. 31,
2000 1999
---------- ----------
in thousands except share
data
Current assets:
Cash and cash equivalents $1,240,148 $ 78,542
Short-term investments 2,383 2,092
Trade accounts receivable 7,515 1,003
Inventory 2,188 688
Prepaid expenses and other
current assets 10,181 4,995
---------- ----------
Total current assets 1,262,415 87,320
Furniture, computers, and
equipment, net 13,698 2,796
Intangibles and other
assets 1,427,129 12,418
---------- ----------
$2,703,242 $ 102,534
========== ==========
LIABILITIES, MEMBERS'
CAPITAL AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,561 $ 1,426
Accrued expenses 20,740 1,620
Accrued employee
compensation and
benefits 2,629 971
Deferred revenue 2,832 175
Notes payable 18,983 --
---------- ----------
Total current
liabilities 49,745 4,192
Long-term liabilities:
Convertible subordinated
notes payable and other
notes payable 310,500 --
Deferred tax liability 11,221
Minority Interest in Net
Assets of Subsidiary 65,304 --
Stockholders' equity
(deficit) 2,266,472 98,342
Commitments and
contingencies
$2,703,242 $ 102,534
========== ==========
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