AirNet Announces First Quarter 2004 Financial Results.Business Editors/High-Tech Writers MELBOURNE Melbourne, city, Australia Melbourne, city (1991 pop. 2,761,995), capital of Victoria, SE Australia, on Port Phillip Bay at the mouth of the Yarra River. Melbourne, Australia's second largest city, is a rail and air hub and financial and commercial center. , Fla.--(BUSINESS WIRE)--May 13, 2004 AirNet Communications Corporation (Nasdaq:ANCC ANCC American Nurses Credentialing Center ANCC Association Nationale des Cardiaques Congénitaux ANCC Army-Navy Country Club (Arlington, VA) ANCC Area Nine Cable Council (state mandated government body in UK) ): First Quarter Highlights -- Net 1Q Revenue was $4.0M representing a 123% increase from 1Q 2003 levels -- Gross Margins for 1Q were $1.1M or 27.5% compared to a margin of $366K or 20.4% in 1Q 2003 -- Loss from Operations was $5.3M which included $2.4M of non-cash stock option charges compared with our 1Q 2003 loss of $4.0M reflecting $71K of non-cash option charges -- Net Loss Attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Common Stock in 1Q was $6.6M or ($0.13) per share and included $1.3M (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. impact of $0.03) of non-cash interest charges associated with the $16M Senior Secured Convertible Debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. in August 2003 and a $2.4M (EPS impact of $0.05) of non-cash stock option charges -- Cash Flow from Operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the quarter was ($1.5M) vs. ($4.2M) in 1Q 2003 -- Shipped our first RapidCell(TM) base station; a highly compact, rapidly deployable base station designed for secure government communications applications; and received additional purchase orders for the second RapidCell base station and AirSite(R) Backhaul (1) The original definition of backhaul was to transmit a telephone call or data beyond its normal destination point and then back again in order to utilize available personnel (operators, agents, etc.) or network equipment that is not located at the destination location. Free(TM) base station from a leading aerospace and defense OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. -- Closed a $5.5M private placement in April 2004 AirNet Communications Corporation (Nasdaq:ANCC) today reported financial results for its first quarter ending March 31, 2004. Financial Results for the First Quarter The Company reported net revenue of $4.0 million in the first quarter, compared to $1.8 million in the first quarter of 2003. Gross margins for the first quarter were $1.1 million or 27.5% compared to year ago margins of $0.4 million or 20.4%. 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. for the first quarter were $6.4 million compared to $4.3 million in the first quarter of 2003 driven primarily by a $2.4 million non-cash stock option charge in 1Q 2004. The loss from operations was $5.3 million which included the $2.4 million non-cash stock option charge that resulted from the granting of options to employees following the Senior Secured Convertible Debt transaction compared to a loss of $4.0 million including $0.07 million of non-cash stock option charges in the first quarter of 2003. The first quarter 2004 net loss attributable to common stock was $6.6 million or ($0.13) per share vs. $4.6 million loss or ($0.19) per share in 1Q 2003. The first quarter 2004 loss included non-cash interest and stock option charges totaling $3.7 million with an EPS impact of ($0.075) per share. Cash Used in Operating Activities for the first quarter of 2004 was $1.5 million, compared to a use of cash of $4.2 million in the first quarter of 2003. Financing activity for the quarter generated $1.0 million of cash primarily from the $16.0 million Senior Secured Convertible Debt financing completed in August 2003. The Company has received $12.0 million in installment payments Installment payments Distribution of plan assets to beneficiaries based upon a regular schedule. pursuant to this debt financing through May 13, 2004. Per share amounts for the first quarter of 2004 results were based on 49.9 million weighted average shares and excludes shares issuable upon the conversion of the Senior Secured Convertible Debt and shares underlying outstanding options because the effect of including those shares would be anti-dilutive. The number of shares issued and outstanding and potentially dilutive totaled approximately 164 million as of March 31, 2004. Outlook For the remainder of fiscal year 2004, the Company intends to focus on the following market opportunities: 1) sales of its AdaptaCell(R) BTS BTS - Bug Tracking System 4000, including the Compact Outdoor base station, and AirSite(R) Backhaul Free(TM) base station into coverage limited markets, 2) sales of its adaptive array, SuperCapacity base station to support high capacity voice and high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data applications, 3) sales of its RapidCell BTS into secure government communications markets 4) sales to AirNet's OEM resellers, and 5) strategically monetizing its intellectual property through licensing opportunities. Recent product introductions and sales, including sales of the RapidCell base station, the SuperCapacity base station and the AdaptaCell compact, outdoor BTS, have been favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. received by our customers. Further revenue growth is required, if the Company is to achieve a 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. positive cash flow and profitability. Recently, the Company closed on a $5.5 million private placement. The proceeds will be used to fund AirNet's operations and the Company now believes it has cash to continue operations into fiscal year 2005. "Successful execution of our business plan and the sale of our new products are the most critical steps in AirNet's recovery and ultimately obtaining our goal of profitability. Over the last 3 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company has successfully executed all of its restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). goals through a variety of strategic programs including expense reductions, converting assets into cash and capital infusion Capital infusion Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. ," said Glenn Ehley, President & 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. for AirNet Communications. "Now, our challenge is to focus on cultivating and harvesting quality sales opportunities and growing revenue." Conference Call AirNet's management will host a conference call at 4:30 p.m. ET today to discuss the results and provide an outlook for the first quarter and 2004. Those interested in listening to the conference call should dial (785) 424-1051, Conference ID: AIRNET. For those who cannot participate in the live conference call, a replay will be available beginning at 6:30 p.m. ET on Thursday Thursday: see week. , March 13, 2004. The replay number for the conference call is (402) 351-0792. About AirNet AirNet Communications Corporation is a leader in wireless base stations and other telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment that allow service operators to cost-effectively and simultaneously offer high-speed wireless data and voice services to mobile subscribers. AirNet's patented broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). , software-defined AdaptaCell(R) SuperCapacity(TM) adaptive array base station solution provides a high-capacity base station with a software upgrade path to high-speed data. The Company's AirSite(R) Backhaul Free(TM) base station carries wireless voice and data signals back to the wireline network, eliminating the need for a physical backhaul link, thus reducing operating costs operating costs npl → gastos mpl operacionales . The Company's RapidCell(TM) base station provides government and military communications Military communications, or Signals, is a field of military activities, tactics and equipment dealing with communications. First of all, military communications are battlefield (combat) communications, including intercommunication with a higher command or country's users with up to 96 voice and data channels in a compact, rapidly deployable design capable of processing multiple GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. protocols simultaneously. AirNet has 69 patents issued or filed and has received the coveted cov·et v. cov·et·ed, cov·et·ing, cov·ets v.tr. 1. To feel blameworthy desire for (that which is another's). See Synonyms at envy. 2. To wish for longingly. See Synonyms at desire. World Award for Best Technical Innovation from the GSM Association (GSM Association, Dublin, Ireland, www.gsmworld.com) A membership association founded in 1987 that promotes the development and evolution of the GSM communications standard worldwide. , representing over 400 operators around the world. More information about AirNet may be obtained by visiting the AirNet Web site at www.airnetcom.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. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and Other Applicable Law Certain statements in this news release may constitute 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 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. Private Securities Litigation Reform Act of 1995 (the Reform Act), Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities and Exchange Act of 1934. These forward-looking statements may relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, market conditions, financial forecasts and other matters. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "anticipate", "prospects", "believe", "estimate", "expect", "intend", "plan" and "objective" and other similar expressions. Readers should not place undue reliance on the forward-looking statements contained in this news release. Such statements are based on management's beliefs and assumptions and on information currently available to management and are subject to risks, uncertainties and changes in condition, significance, value and effect. Such risks or uncertainties include the following: there can be no assurance that the Company will be successful in obtaining new business or that any of the Company's OEM resellers will purchase any further products from the Company; that the Company may not successfully execute to its business plan in the absence of improved telecom market conditions, internal execution of product development deadlines and improved competitive capabilities in the face of declining sale prices for GSM networking equipment, that the Company's lenders may foreclose fore·close v. fore·closed, fore·clos·ing, fore·clos·es v.tr. 1. a. To deprive (a mortgagor) of the right to redeem mortgaged property, as when payments have not been made. b. on all assets of the Company (including all intellectual property rights) in the event of a default under the security agreement associated with the senior debt financing, that installment payments on the notes sold in the financing may not be paid when due; and that the Company may not be able to continue to operate as a going concern even after the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of, and payment of the remaining installments due to the Company under the financing. These and other risks are detailed in reports and documents filed by the Company with the United States Securities and Exchange Commission. Such risks, uncertainties and changes in condition, significance, value and effect, many of which are beyond the Company's control, could cause the Company's actual results and other future events to differ materially from those anticipated. The Company does not, however, assume any obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements. AirNet(R) AdaptaCell(R), and AirSite(R) are registered trademarks with the U.S. Patent and Trademark Office. The stylized styl·ize tr.v. styl·ized, styl·iz·ing, styl·iz·es 1. To restrict or make conform to a particular style. 2. To represent conventionally; conventionalize. AirNet mark, Super Capacity(TM), TripCap(TM), Backhaul Free(TM), TripCap(TM) and RapidCell(TM) are trademarks of AirNet. Other names are registered trademarks or trademarks of their respective holders. Financial Schedules -- Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statements of Operations -- Cash Flow Summary -- Condensed Balance Sheets
FINANCIAL STATEMENTS
(all numbers in $000's except per share data and shares outstanding)
(All financial information included is unaudited.)
CONDENSED STATEMENTS OF OPERATIONS
For the three months ended
March 31,
2004 2003
----------- -----------
REVENUES
Equipment Revenues $2,520 $1,440
Services Revenues 1,485 355
----------- -----------
Total Net Revenues $4,005 $1,795
COST OF REVENUES
Equipment Cost of Revenues 2,030 1,106
Services Cost of Revenues 675 323
Write-down of excess and obsolete inventory 200 -
----------- -----------
Total Cost of Revenues 2,905 1,429
----------- -----------
Gross profit 1,100 366
OPERATING EXPENSES (1)
Research and development 3,207 2,527
Sales and marketing 800 819
General and administrative 2,415 993
----------- -----------
Total costs and expenses 6,422 4,339
----------- -----------
LOSS FROM OPERATIONS (5,322) (3,973)
OTHER (EXPENSE) INCOME
Interest Income 13 28
Non-cash debt conversion interest charge (1,000) -
Interest charged on convertible debt (342) (52)
Other, net 6 1
----------- -----------
TOTAL OTHER (EXPENSE) INCOME (1,323) (23)
----------- -----------
NET LOSS (6,645) (3,996)
PREFERRED DIVIDENDS - (600)
----------- -----------
NET LOSS ATTRIBUTABLE TO COMMON STOCK $(6,645) $(4,596)
=========== ===========
NET LOSS PER SHARE ATTRIBUTABLE TO
COMMON STOCKHOLDERS- BASIC AND DILUTED $(0.13) $(0.19)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - USED
IN CALCULATING BASIC AND DILUTED LOSS
PER SHARE 49,878,636 23,851,177
=========== ===========
(1) Operating expenses include non-cash stock compensation expenses
of $2,386 and $71 for the three months ended March 31, 2004 and 2003,
respectively.
CASH FLOW SUMMARY
For the three months ended
March 31,
2004 2003
----------- -----------
CASH USED IN OPERATING ACTIVITIES $(1,543) $(4,192)
CASH USED BY INVESTING ACTIVITIES (126) (37)
CASH PROVIDED BY FINANCING ACTIVITIES 992 4,772
----------- -----------
NET CHANGE IN CASH $(677) $543
=========== ===========
CONDENSED BALANCE SHEETS
March 31, December 31,
2004 2003
----------- -----------
ASSETS
Cash and cash equivalents $4,383 $5,060
Accounts receivable - net 3,163 3,849
Inventories 11,182 11,687
Notes receivable 0 257
Other current assets 1,029 1,262
----------- -----------
TOTAL CURRENT ASSETS 19,757 22,115
PROPERTY AND EQUIPMENT, NET 4,814 5,553
OTHER LONG-TERM ASSETS 2,311 2,389
----------- -----------
TOTAL ASSETS $26,882 $30,057
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $2,345 $2,622
Accrued expenses 3,121 3,459
Current portion of capital lease obligations 41 65
Customer deposits 1,820 2,081
Deferred revenues 270 575
----------- -----------
TOTAL CURRENT LIABILITIES 7,597 8,802
TOTAL LONG-TERM LIABILITIES 11,962 10,691
TOTAL STOCKHOLDERS' EQUITY 7,323 10,564
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $26,882 $30,057
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