AirNet Announces Record Year-End and Fourth Quarter Revenues.Business Editors 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)--March 14, 2000 AirNet Communications Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : 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) ) today reported record revenues for the fourth quarter and the year ended December December: see month. 31, 1999. The company reported that fourth-quarter revenues tripled over the same quarter of 1998, while 1999 revenues quadrupled over the previous year. Year End Results AirNet reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $17.8 million for the year, compared with the $4.5 million in 1998. Shipments for the year increased by 300 percent to $26.8 million. "1999 was an outstanding growth year for AirNet," said Lee Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , president 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. of AirNet. "We had record sales, driven by strong demand for our proprietary, award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" AdaptaCell 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 base station, and our AirSite Backhaul Free base station. During the year, we significantly increased sales to new wireless operators, and captured repeat business from our existing customers, as they expanded their service areas." Highlights of fiscal 1999 activities include: Concluded an initial public offering on December 7, raising $89 million. - Raised $30 million in a mezzanine round from private venture capital prior to the IPO. - Secured 13 additional patents protecting the company's core technology. - Increased the portfolio of customers to 17. - Introduced the AdaptaCell base station-- the only base station with a software upgrade path to the wireless Internet. As expected, AirNet's extensive research and development, sales and marketing investments resulted in an 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. for 1999. The company reported an operating loss for 1999 of $17.2 million, compared to $18.9 million in 1998. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, assuming the conversion of all outstanding preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. into common stock at the earlier of the beginning of the year or date of issuance, the net loss per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share before preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) was $1.13 in 1999, as compared to $2.11 in 1998. On a weighted average basis, the net loss before preferred dividends for 1999 improved to $16.6 million, or $8.62 per share, basic and diluted, from the $18.8 million net loss before preferred dividends, or $63.03 per share, basic and diluted, in 1998. Non-cash preferred dividends accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. prior to the automatic conversion of the preferred stock into common stock at 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 the company's initial public offering in December 1999 amounted to $ 9.70 per basic and diluted share in 1999, and $18.85 per basic and diluted share in fiscal 1998. Per share amounts were based on 1.9 million weighted average shares in 1999, compared to 0.3 million weighted average shares in 1998. Fourth Quarter Net sales for the fourth quarter grew to $6.7 million, up 230 percent over the $2.0 million recorded in the same quarter of 1998. The company reported an operating loss of $5.8 million in the fourth quarter compared with $6.5 million in the same period last year. "Late in the fourth quarter, we began to accelerate the investment in our operations, particularly in the area of research and development. This acceleration was driven by increased demand by our larger customers for advanced features, the explosive momentum in the wireless 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 , and our increased visibility as a public company," Mr. Hamilton said. "As a result, our 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 quarter were higher than we originally anticipated. We expect to continue this aggressive investment in 2000 to 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>. the significant opportunities available to AirNet." On a pro forma basis, assuming the conversion of all outstanding preferred stocks into common stock at the earlier of the beginning of the year or date of issuance, the net loss per basic and diluted share, before preferred dividends, was $0.29 in the fourth quarter of 1999, as compared to $0.49 in the fourth quarter of 1998. On a weighted average basis, the company reported a net loss before preferred dividends of $5.3 million for the same quarter, or $0.82 per share, basic and diluted, compared with a $6.4 million loss before preferred dividends, or $18.04 per share, basic and diluted, recorded the previous year. Non-cash preferred dividends accrued prior to the automatic conversion of the preferred stock into common stock at the consummation of the company's initial public offering in December 1999 amounted to $0.29 per basic and diluted share in the fourth quarter of 1999, and $3.69 per basic and diluted share in the fourth quarter of 1998. Per share amounts were based on 6.4 million weighted average shares in the period, compared to 0.4 million weighted average shares in the year-ago quarter. Outlook Mr. Hamilton said, "The 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. industry is moving aggressively toward the wireless Internet. Strong consumer demand and a host of new applications is causing operators to rethink re·think tr. & intr.v. re·thought , re·think·ing, re·thinks To reconsider (something) or to involve oneself in reconsideration. re their strategies and to look for the quickest, most 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. path to provide new wireless Internet services. "AirNet is well positioned to ride this new wireless Internet wave. Our award-winning broadband, software-defined base station is the only base station that allows operators to upgrade to the new, high-speed wireless Internet services by changing software, not hardware. "Also, our growing customer base, the investments we have been making, and our new stature stature /sta·ture/ (stach´ur) the height or tallness of a person standing.stat´ural stat·ure n. The height of a person. stature the height of an animal in the standing position. as a public company, have established us a true player in the wireless infrastructure industry in a very short time. This has created new opportunities for AirNet to target larger operators, the wireless Internet market, and the international market." "We believe the industry trend, our ongoing investments, and our new presence in the industry, positions us for strong growth in the coming year," Mr. Hamilton added. AirNet is a leading provider of broadband, software-defined wireless high-speed data and voice solutions. AirNet's AdaptaCell(TM) base stations support the new, emerging high-speed data Internet services by upgrading software - not hardware. AirNet base stations offer wireless service providers permanent cost advantages - including its industry unique AirSite(R) Backhaul Free Base Station. AirNet products allow operators to quickly build their networks and stay competitive in today's changing wireless environment. AirNet won the 1998 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. World Award for Best Technical Innovation. 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. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the company notes that 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. that relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "intends", "potential", "continue", or the negative of such terms or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including but not limited to, the risks associated with our being unable to develop new products and product features to meet the technical demands of new, emerging standards in the wireless Internet and international market, our potential inability to expand our sales to include larger operators, risks associated with marketing our products in developing international markets, and other risk factors discussed in company filings with the Securities and Exchange Commission. The company cannot assume that it will be able to anticipate or respond timely to any of the factors listed above, which could adversely affect operating results. AirNet(R) and AirSite(R) are registered with the U.S. Patent and Trademark Office. AdaptaCell(TM), Backhaul Free Base Station(TM), and We're Ready for Anything(TM) are trademarks of AirNet Communications Corporation. Other names are registered trademarks or trademarks of their respective companies or organizations.
AirNet Communications Corporation
Condensed Statement of Operations
(In thousands, except per share data)
Unaudited Unaudited Audited Audited
3 months ended 3 months ended year ended year ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
Net revenues $ 6,679 $ 2,021 $ 17,756 $ 4,462
Cost of revenues 4,160 1,104 11,244 2,867
Gross profit 2,519 917 6,512 1,595
Operating
expenses
Research and
development 5,177 4,509 15,753 13,135
Sales and
marketing 1,986 1,091 4,727 2,709
General and
administrative 1,104 1,844 3,006 3,745
Amortization of
deferred stock
compensation 3 8 214 859
Total
operating
expenses 8,270 7,452 23,700 20,448
Loss from
operations (5,751) (6,535) (17,188) (18,853)
Other income
(expense), net 504 119 609 77
Net loss $ (5,247) $ (6,416) $ (16,579) $ (18,776)
Preferred
dividends (1) 1,834 1,311 18,647 5,616
Net loss
attributable to
common
stockholders $ (7,081) $ (7,727) $ (35,226) $ (24,392)
Net loss per
common share -
basic and
diluted $ (0.82) $ (18.04) $ (8.62) $ (63.03)
Net loss per
share
attributable to
common
stockholders -
basic and
diluted $ (1.10) $ (21.73) $ (18.31) $ (81.88)
Weighted average
shares used in
calculating
basic and
diluted loss
per common
share 6,422,460 355,610 1,923,360 297,895
Pro forma net
loss per common
share -basic
and diluted (2) $ (0.29) $ (0.49) $ (1.13) $ (2.11)
Proforma
weighted
average shares
used in
calculating
basic and
diluted net
loss per common
share (2) 18,437,829 12,999,955 14,695,181 8,899,106
(1) All accumulative dividends were cancelled when the company closed
on its initial public offering in Dec. 1999. This is a non-cash
item.
(2) Pro forma assumes the conversion of all outstanding preferred
stocks into common stock at the earlier of the beginning of the
year or date of issuance instead of the initial public offering
in Dec. 1999.
AirNet Communications Corporation
Condensed Balance Sheets
(In thousands)
Audited Audited
Dec. 31 Dec. 31
1999 1998
ASSETS
Cash and cash
equivalents $100,423 $ 7,581
Accounts
receivable, net 10,122 2,914
Inventory 15,978 7,807
Other current
assets 500 333
Total current
assets $127,023 $ 18,635
Property and
equipment, net 3,968 3,259
Other long-term
assets 22 27
Total assets $131,013 $ 21,921
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Accounts payable $ 6,464 $ 2,174
Accrued expenses 2,101 808
Current portion
of long-term
debt 540 348
Customer
deposits 5,234 1,155
Deferred
revenue 8,209 2,898
Total current
liabilities 22,548 7,383
Long-term debt 202 75
Stockholders'
equity 108,263 14,463
Total
liabilities
and
stockholders'
equity $131,013 $ 21,921
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