AirNet Communications Announces First Quarter Results; Revenue Jumps 57% Sequentially With Improved Margins.Business Editors/Technology 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)--April 23, 2002 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) ) today announced financial results for the first quarter ended March 31, 2002. The Company reported net revenue of $6.5 million in the first quarter, compared to $4.1 million in the fourth quarter of 2001 and $6.4 million in the first quarter of 2001. Gross profit for the quarter was $1.9 million compared to $0.3 million in the first quarter of 2001. The Company reported 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 the first quarter of $4.3 million, compared to a loss of $7.4 million in the fourth quarter of 2001 and a loss of $14.7 million in the first quarter of 2001. The net loss for the first quarter was $5.2 million, or $0.22 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, compared to a net loss of $7.2 million or $0.30 per basic and diluted share in the fourth quarter of 2001 and $14.3 million or $0.60 per basic and diluted share in the first quarter of 2001. Per share amounts for the 2001 and 2002 results were based on 23.8 million weighted average shares and exclude shares issuable upon the conversion of the Series B convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and other convertible securities, since their effect is anti-dilutive. Sequential quarterly improvement in revenue reflects sales to domestic customers, an African customer and TECORE Wireless Systems. The change in gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. over the prior year's quarter is attributable to reduced manufacturing labor and support costs and a significant reduction in warranty expenses. The outlook for the second quarter of this year is improved over the second quarter of 2001 due to recently announced purchase orders. Recent adoption of 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. , GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. and EDGE high speed data technology by large operators in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and many of their affiliates could be of long term benefit to the Company. "This was a strong first quarter for AirNet," said Glenn Ehley, president and chief executive officer of AirNet. "Our 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). efforts have paid off tremendously. Our focus will shift toward our goals of increasing sales volume and further reducing the costs in our product. While it still remains a challenging economic environment for wireless suppliers, our "lean and mean" company is poised for growth and providing all GSM operators with solutions to their coverage, capacity 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." Major events in the first quarter include: -- Increased revenue in the first quarter of 2002 to $6.5 million, which was more than the third and fourth quarters of 2001 combined; and marked the third consecutive quarter of revenue growth. -- Announced $13 million in new purchase orders. -- Significantly improved cash flow from ($20.7) million in the first quarter of 2001 to $3.3 million in the first quarter of 2002. This is a $24 million improvement in quarterly cash outflow. -- Increased gross margins from 4.8% to 29.9%. -- Positioned the Company for a strong second quarter in 2002, which will be addressed during the Company's conference call. Conference Call The Company will hold a conference call today, April 23, 2002 at 5:30 p.m. (ET) to discuss the first quarter results and other recent developments. The dial-in number for the conference call is (719) 457-2698. A replay of the conference call will be available beginning today at 8 p.m. (ET) until 12:00 a.m. (ET) on Tuesday Tuesday: see week. , April 30, 2002. The replay number for the conference call is (719) 457-0820, and the pass code is 582166. 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 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 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) base station solution provides a high-capacity base station with a software upgrade path to the wireless Internet. The Company's 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 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 . AirNet has 70 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 calling 321.984.1990, or by visiting the AirNet Web site at http://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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995 The statements contained in this press release that are not historical information are 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, including statements regarding our expectations, beliefs, plans, estimates, intentions or strategies for the future. Forward looking statements include statements regarding the transition and evolution to high-speed data and wireless Internet services, future sales to customers and customer deployment plans. All forward-looking statements included in this release are based upon information available to AirNet Communications Corporation as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and we assume no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause our actual results to differ materially from those projected. Potential risks and uncertainties include, but are not limited to, our historical and future losses, our limited operating history, the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in demand for wireless infrastructure and fluctuations in our quarterly revenues and operating results. These and other risks are discussed in Company filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2001. 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), Backhaul Free(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.
FINANCIAL STATEMENTS
(all numbers in $000's except per share data and shares outstanding)
(All financial information included is unaudited.)
STATEMENT OF OPERATIONS (PROFIT & LOSS STATEMENT)
For the three months ended
March 31,
----------------------------
2002 2001
------------ ------------
NET REVENUES $ 6,510 $ 6,394
COST OF REVENUES 4,564 6,088
------------ ------------
Gross profit 1,946 306
OPERATING EXPENSES:
Research and development 3,390 8,612
Sales and marketing 1,509 4,163
General and administrative 1,262 2,131
Stock-based compensation 63 95
------------ ------------
Total costs and expenses 6,224 15,001
------------ ------------
LOSS FROM OPERATIONS (4,278) (14,695)
OTHER INCOME (EXPENSE) 128 360
------------ ------------
NET LOSS (4,150) (14,335)
ACCRETION OF DISCOUNT - REDEEMABLE
PREFERRED STOCK (456) --
PREFERRED DIVIDENDS (600) --
------------ ------------
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS $ (5,206) $ (14,335)
============ ============
NET LOSS PER SHARE ATTRIBUTABLE TO
COMMON SHAREHOLDERS - BASIC $ (0.22) $ (0.60)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING -
BASIC 23,791,429 23,770,975
============ ============
SUMMARY CASH FLOW STATEMENT
For the three months ended
March 31,
----------------------------
2002 2001
------------ ------------
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ 3,490 $ (17,263)
CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (15) (1,838)
CASH PROVIDED (USED) BY FINANCING
ACTIVITIES (140) (1,612)
------------ ------------
NET CHANGE IN CASH $ 3,335 $ (20,713)
============ ============
BALANCE SHEET
As of As of
March 31, 2002 December 31, 2001
----------------------------------
ASSETS
Cash and cash equivalents $ 8,037 $ 4,702
Accounts receivable - net 5,484 5,796
Inventories 18,921 21,871
Notes receivable - 775
Other current assets 1,498 1,880
------------ ------------
TOTAL CURRENT ASSETS 33,940 35,024
PROPERTY AND EQUIPMENT, NET 10,245 11,498
OTHER LONG-TERM ASSETS 2,769 3,353
------------ ------------
TOTAL ASSETS $ 46,954 $ 49,875
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 4,417 $ 5,224
Accrued expenses 2,761 2,817
Current portion of capital lease
obligations 226 367
Customer deposits 4,288 548
Deferred revenues 1,186 2,637
------------ ------------
TOTAL CURRENT LIABILITIES 12,878 11,593
TOTAL LONG-TERM LIABILITIES 4,050 3,570
Redeemable convertible preferred
stock (liquidation value of
$60,000,000 plus accrued dividends) 16,799 16,344
TOTAL STOCKHOLDERS' EQUITY 13,227 18,368
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $ 46,954 $ 49,875
============ ============
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