AirNet Communications Announces Third Quarter Results; Company Reports 5th Consecutive Quarter of Revenue Growth.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)--Nov. 11, 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 third quarter ended September September: see month. 30, 2002. The Company reported net revenue of $7.3 million in the third quarter, compared to $7.2 million in the second quarter of 2002 and $2.1 million in the third quarter of 2001. Gross profit for the quarter was $1.8 million compared to $1.8 million in the second quarter of 2002 and a loss of ($1.5) million in the third 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 third quarter of $3.5 million, compared to a loss of $4.2 million in the second quarter of 2002 and a loss of $10.2 million in the third quarter of 2001. The net loss for the third quarter was $3.8 million, or $0.16 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 $5.2 million, or $0.22 per basic and diluted share, in the second quarter of 2002 and $10.5 million, or $0.44 per basic and diluted share, in the third quarter of 2001. Sequential quarterly improvement in revenue reflects sales to 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 improved material margins on higher revenues and reduced warranty expenses. Cash flow during the first nine months of this year, excluding financing activities of the Company, has improved from a use of cash during the first three quarters of 2001 of $44.3 million to $0.1 million of cash during the same period in 2002. The operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. reduction, reduction in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , revenue from existing inventory and increased customer collections made major contributions to this improvement in cash flow. "In the face of a difficult telecom market, the third quarter was another outstanding quarter in terms of revenue, earnings and 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 AirNet," said Glenn Ehley, President and Chief Executive Officer of AirNet. "During the first nine months, the Company has done a good job managing its financial condition in terms of reducing inventory, increasing sales and collecting on accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . However, it still remains a challenging economic environment for wireless suppliers. We have successfully collected approximately $3.8M in cash during the fourth quarter thus far; however, our immediate requirement is to obtain an additional infusion of cash via near term sales and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. via corporate finance alternatives." Major events in the third quarter and for the first nine months of the year include: -- Increased revenue in the third quarter of 2002, over the same period one year ago, by more than 240% to $7.3 million marking the fifth consecutive quarter of revenue growth. Revenue for the first nine months of 2002 was $21.0 million representing a 102% increase over revenue in the same period one year ago. -- Significantly improved cash flow excluding financing activities from ($44.3) million in the first nine months of 2001 to ($0.1) million in the first three quarters of 2002. This is a $44.2 million improvement in cash outflow. -- Gross margins increased from (72.2%) in the third quarter of last year to 25.3% in the third quarter of 2002 due to improved material margins, increased revenue volume, and reduced inventory write-downs. -- Reduced the EPS loss 64% from ($0.44) in the third quarter of 2001 to ($0.16) for the third quarter of 2002 which is the lowest EPS loss since the Company went public. For the first nine months of 2002 EPS was ($0.59) compared to ($2.23) in the same period one year ago. Per share amounts for the 2002 and 2001 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. Conference Call The Company will hold a conference call today, November November: see month. 11, 2002 at 5:30 p.m. (ET) to discuss the results and provide an outlook for the fourth quarter. Those interested in listening to the conference call should dial 785/832-1077, Conference ID: AIRNET. For those who cannot participate in the live conference call, a replay will be available beginning at 8 p.m. ET on Monday Monday: see week. , November 11, 2002, until midnight ET on November 19, 2002. The replay number for the conference call is 402/220-0872. 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 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. 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 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 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, inability to continue as a going concern and a potential bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filing without sufficient new sales and/or new capital, our limited customer base, including concentration of sales with one customer in particular, may cause cash flow issues, lack of liquidity and potential capital resources, the expectation of future losses and or negative cash flow, competitive pressures may reduce gross margins, ability to renew directors' and officers' liability insurance directors' and officers' liability insurance A type of insurance taken to protect a firm's directors and officers against lawsuits  mainly suits instituted by unhappy shareholders of the firm. at affordable rates, retention and motivation of key personnel,
difficulties in supporting developing wireless standards and protocols,
difficulties in developing new products and features. 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-KA 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 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.)
CONDENSED STATEMENT OF OPERATIONS
For the three months For the nine months
ended ended
September 30, September 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
NET REVENUES $7,305 $2,127 $21,026 $10,407
COST OF REVENUES 5,457 3,246 15,441 13,722
WRITE-DOWN OF EXCESS
AND OBSOLETE INVENTORY - 417 - 7,253
----------- ----------- ----------- -----------
Gross profit 1,848 (1,536) 5,585 (10,568)
OPERATING EXPENSES:
Research and
development 3,046 4,440 9,688 22,760
Sales and marketing 1,391 1,716 4,353 10,541
General and
administrative 912 2,516 3,500 8,838
----------- ----------- ----------- -----------
Total costs and
expenses 5,349 8,672 17,541 42,139
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (3,501) (10,208) (11,956) (52,707)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
TOTAL OTHER INCOME
(EXPENSE) 159 206 352 797
----------- ----------- ----------- -----------
NET LOSS BEFORE
EXTRAORDINARY ITEMS (3,342) (10,002) (11,604) (51,910)
EXTRAORDINARY GAIN ON
VENDOR SETTLEMENTS 673 461 704 461
----------- ----------- ----------- -----------
NET LOSS (2,669) (9,541) (10,900) (51,449)
ACCRETION OF DISCOUNT -
REDEEMABLE PREFERRED
STOCK (511) (407) (1,450) (606)
PREFERRED DIVIDENDS (600) (600) (1,800) (900)
----------- ----------- ----------- -----------
NET LOSS ATTRIBUTABLE
TO COMMON SHAREHOLDERS $(3,780) $(10,548) $(14,150) $(52,955)
=========== =========== =========== ===========
NET LOSS PER SHARE
ATTRIBUTABLE TO
COMMON SHAREHOLDERS -
Basic and diluted $(0.16) $(0.44) $(0.59) $(2.23)
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING - Basic
and diluted 23,833,296 23,791,179 23,815,218 23,783,648
=========== =========== =========== ===========
CASH FLOW SUMMARY
For the three For the nine
months ended months ended
September 30, September 30,
2002 2001 2002 2001
-------- -------- -------- ---------
CASH FLOW
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $(4,035) $(7,733) $(185) $(40,405)
CASH USED BY INVESTING ACTIVITIES 70 23 43 (3,926)
CASH PROVIDED (USED) BY FINANCING
ACTIVITIES (82) (317) (217) 27,300
-------- -------- -------- ---------
NET CHANGE IN CASH $(4,047) $(8,027) $(359) $(17,031)
======== ======== ======== =========
CONDENSED BALANCE SHEET
As of
Sept. 30, Dec. 31,
2002 2001
---------- ---------
ASSETS
Cash and cash equivalents $4,343 $4,702
Accounts receivable - net 3,079 5,796
Inventories 14,997 21,871
Notes receivable 991 775
Other current assets 1,055 1,880
---------- ---------
TOTAL CURRENT ASSETS 24,465 35,024
PROPERTY AND EQUIPMENT, NET 8,440 11,498
OTHER LONG-TERM ASSETS 2,512 3,353
---------- ---------
TOTAL ASSETS $35,417 $49,875
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $3,083 $5,224
Accrued expenses 3,400 2,817
Current portion of capital lease obligations 93 367
Customer deposits 472 548
Deferred revenues 1,562 2,637
---------- ---------
TOTAL CURRENT LIABILITIES 8,610 11,593
TOTAL LONG-TERM LIABILITIES 4,540 3,570
Redeemable convertible preferred stock
(liquidation value of $60,000,000 plus accrued
dividends) 17,794 16,344
TOTAL STOCKHOLDERS' EQUITY 4,473 18,368
---------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $35,417 $49,875
========== =========
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