AirNet Reports Record Third-Quarter Revenues; Announces International Expansion With Successes In Africa And China.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)--Oct. 23, 2000 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 reported record revenues for the third quarter and nine-month period ending September September: see month. 30, 2000, and announced several major new global opportunities in Africa and China. Third Quarter and Nine-Month Results Net revenues for the third quarter grew 103 percent to $13.6 million, compared with $6.7 million in the third quarter of fiscal 1999. As expected, 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. due to continued investment in product development and sales and marketing as the company continued to penetrate new markets. The company's operating loss was $6.6 million, versus $2.7 million in the prior year's third quarter. The third quarter net loss attributable to common shareholders was $5.2 million, or $0.22 per fully 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 with $16.1 million, or $36.27 per fully diluted share, during the same period last year. Per share amounts were based on 23.7 million weighted average shares in this year's third quarter, compared to 0.4 million weighted shares in the 1999 third quarter. Net revenues for the nine-month period ending September 30, 2000 grew 160 percent to $28.9 million, from $11.1 during the first nine months of fiscal 1999. The operating loss for the nine-month period was $21.3 million, compared to $11.4 million for the same period last year. The net loss attributable to common shareholders for the nine-month period was $17.4 million, or $0.74 per fully diluted share, versus $28.1 million or $70.95 per fully diluted share. Per share amounts were based on 23.5 million weighted average shares for the nine months ended September 30, 2000, compared to 0.4 million weighted shares in the same period last year. Commenting on the results, 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 chief executive officer, stated, "AirNet's products continued to gain momentum both internationally as well as domestically. This is evident by our growing customer base and recent penetration into key 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. markets." AirNet Continues To Gain Global Momentum In addition to its third quarter results, AirNet announced several major new global opportunities, including; a marketing and distribution agreement with a large Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. manufacturer; a $32.5 million order from a wireless operator in Africa; and its first demonstration agreement in the fast growing Middle East market. AirNet Enters Chinese Markets AirNet announced a marketing and distribution agreement with Great Dragon dragon, mythical beast usually represented as a huge, winged, fire-breathing reptile. For centuries the dragon has been prominent in the folklore of many peoples; thus, its physical characteristics vary greatly and include combinations of numerous animals. Telecom/Snow City of Beijing Beijing (bā-jĭng) or Peking (pē-kĭng, pā–), city (1994 est. urban pop. 6,093,300; 1994 est. total pop. 7,240,700), capital of the People's Republic of China. It is in central Hebei prov. to market and distribute AirNet's products in China. GDT GDT Global Descriptor Table GDT Geographic Data Technology Inc. GDT Gas Discharge Tube (energy, electrotechinical and electronics) GDT Getting Things Done GDT Geometric Dimensioning & Tolerancing GDT Ground Data Terminal is a government-owned operation with annual sales of more than US$500 million. Snow City is GDT's private distribution arm. GDT/Snow City will assist AirNet in obtaining a network entry license to market under AirNet's brand name, and then begin marketing and distributing the products. This agreement gives AirNet access and distribution in China and, since the product will be distributed under the AirNet name, helps build AirNet's brand awareness in this large market. China is the world's largest user of GSM technology, with more than 50 million subscribers. With more than 1.3 billion people, it is also generally acknowledged as the largest GSM market opportunity, with demand for wireless service constantly increasing faster than systems can be built. "We are especially pleased to announce this strategic partnership with GDT/Snow City. This agreement gives us immediate market access and distribution capability in China, and marks a key milestone in our growth progress," said Mr. Hamilton. "As our products are distributed throughout China under the AirNet brand, this agreement will create an opportunity for us to grow awareness of our award winning technology, and at the same time, increase brand awareness in a rapidly growing GSM market." Mid East Demonstration AirNet announced it will also conduct its first system demonstration in the rapidly growing Middle East market. The demonstration represents the company's first opportunity to show that its products interoperate See interoperable. with the widely deployed Siemen's switch. The demonstration, being conducted with an existing GSM operator in the Middle East, is scheduled to begin later this year, and be completed in early 2001. The operator in the region has licenses throughout the region with over 300,000 subscribers and high growth potential. The demonstration will include its 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 BTSs, the 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 Base Stations(TM) and associated common equipment. One of the major advantages for the operator is AirNet's ability to deploy a network using its AirSite products, which carry wireless voice and data signals back to the wireline network without a physical communications link - usually a digital T1/E1 phone line. This greatly reduces the time and cost involved in installing and operating the network. "The Middle East is a significant growth opportunity for AirNet. Moreover, it has geographical issues, like other emerging markets, that make landlines and traditional wireless base stations impractical im·prac·ti·cal adj. 1. Unwise to implement or maintain in practice: Refloating the sunken ship proved impractical because of the great expense. 2. ," added Mr. Hamilton. "This demonstration opens up the Middle East market for AirNet products, and highlights our lowest cost of coverage solution to operators trying to build out their networks. "Additionally, connecting to a Siemens switch adds to our list of major, third-party equipment that our base stations can be bolted onto - opening up new opportunities with other customers with these popular switches," he added. Further Expansion on the African Continent AirNet has also announced today that it has been awarded new orders valued at $32.5 million from a major wireless operator in Africa. The contract, for which AirNet will facilitate financing, will provide the operator with AirNet's full suite of software upgradable products, enabling new services and broader coverage. AirNet expects shipments to this operator to take place beginning in the fourth quarter of 2000 and continue through the second quarter of 2001. "This customer chose AirNet because our broadband, software-defined base stations provide them with the solution to provide a wide range of services now, and a software path to 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 ," Mr. Hamilton explained. Legal Action Against Lucent Technologies After successfully completing the deployment of the Carolina Carolina (kärōlē`nä), city (1990 pop. 177,806), Puerto Rico. Located 7 mi (11 km) SE of San Juan, it is a residential suburb of the capital, as well as a commercial and industrial center. PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. Phase I contract earlier this year, Carolina PCS rewarded AirNet with approximately $10M in Phase II purchase orders that were to be deployed in the second and third quarter of 2000. Despite properly performing under the contract, Lucent Technologies, with full awareness of the existence of the contract and purchase orders, has induced induced /in·duced/ (in-dldbomacst´) 1. produced artificially. 2. produced by induction. induced, adj artificially caused to occur. induced induction. Carolina PCS to purportedly pur·port·ed adj. Assumed to be such; supposed: the purported author of the story. pur·port cancel all Phase II purchase orders for AirNet products. Consistent with the company's rights in the purchase agreement, AirNet has disputed Carolina's right to cancel these purchase orders. AirNet has filed a lawsuit lawsuit: see procedure; tort. against Lucent alleging Lucent tortuously interfered with AirNet's purchase contracts and is seeking injunctive relief injunctive relief n. a court-ordered act or prohibition against an act or condition which has been requested, and sometimes granted, in a petition to the court for an injunction. and damages. Despite the loss of revenue associated with the cancellation of the Phase II purchase orders, AirNet has exceeded its goal for the third quarter. The company continues to broaden its customer base, as evidenced by recent announcements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc domestic and international opportunities. About AirNet Communications Corporation AirNet Communications Corporation provides wireless base stations and other telecommunications equipment designed to allow service operators to cost-effectively offer simultaneous wireless high-speed Internet See broadband. and voice services to mobile subscribers. The Company's AdaptaCell(TM) base station incorporates a patented radio architecture that is designed to enable operators to offer these services by upgrading base station software rather than deploying new base station hardware. The Company's AirSite Backhaul Free Base Station carries wireless voice and data signals back to the wireline network without a physical communications link - usually a digital T1 phone line. As a result, an operator's fixed network operating costs operating costs npl → gastos mpl operacionales may decrease substantially. AirNet Communications Corporation's award winning wireless base station products, based on over 60 patents either issued or filed, provide a cost effective, future proof solution for wireless operators as they deploy and expand their networks. AirNet's patented broadband, software-defined AdaptaCell base station provides a high capacity base station with a software upgrade path to the wireless Internet. The patented technology of the AdaptaCell product means no more time consuming and expensive hardware upgrades - the wireless Internet is only a software upgrade away. And, with software control, AirNet lets operators support multiple protocols simultaneously avoiding costly overlays. The AirSite Backhaul Free Base Station has award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" architecture that eliminates the need for a physical backhaul link, thus reducing operating costs. AirNet base station products won the prestigious "GSM World Award" for technical innovation for AdaptaCell software upgrade to the wireless Internet and for AirSite's revolutionary wireless backhaul capability. AirNet is a wireless base station technology leader. AirNet can be contacted in the U.S. at 321-984-1990 or visit us 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 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 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 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, 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 31, 1999. AirNet(R) and AirSite(R) are registered trademarks 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 STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
2000 1999 2000 1999
(UNAUDITED)(UNAUDITED) (UNAUDITED)
Net revenues $ 13,597 $ 6,704 $ 28,850 $ 11,077
Cost of revenues 8,639 4,172 18,520 7,084
Gross profit 4,958 2,532 10,330 3,993
Operating expenses:
Research and
development 7,395 3,382 20,388 10,576
Sales and marketing 2,666 985 7,230 2,741
General and
administrative 1,367 761 3,654 1,903
Stock-based
compensation 109 91 327 211
Total costs
and expenses 11,537 5,219 31,599 15,431
Loss from operations (6,579) (2,687) (21,269) (11,438)
Other income, net 1,363 11 3,826 105
Net loss $ (5,216) $ (2,676) $ (17,443) $ (11,333)
Preferred
dividends (1) - 1,699 - 5,097
Series G Preferred
Deemed Dividend (1) 11,716 11,716
Net loss attri-
butable to common
stockholder $ (5,216) $ (16,091) $ (17,443) $ (28,146)
Net loss per share
attributable to
common stockholders
-basic and diluted $ (0.22) $ (36.27) $ (0.74) $ (70.95)
Weighted average
shares used in
calculating basic
and diluted loss
per common share 23,669,169 443,622 23,528,820 396,719
(1) All accumulated dividends were cancelled when the Company
closed on its initial public offering in December 1999. This is a
non-cash item.
AirNet Communications Corporation
CONDENSED BALANCE SHEETS
(In thousands)
UNAUDITED AUDITED
SEPTEMBER 30, 2000 DECEMBER 31, 1999
Assets
Cash and cash equivalents $ 52,695 $ 100,423
Accounts receivable, net 13,732 10,122
Notes receivable 9,015 -
Inventories 29,967 15,978
Other 1,543 500
Total current assets 106,952 127,023
Property and equipment, net 7,297 3,968
Notes receivable 1,712 -
Other long-term assets 400 22
Total assets $ 116,361 $ 131,013
Liabilities and Stockholders' Equity
Accounts payable $ 11,012 $ 6,464
Accrued expenses 3,301 2,101
Current portion of capital lease
obligations 144 540
Customer deposits 2,127 5,234
Deferred revenues 7,635 8,209
Total current liabilities 24,219 22,548
Capital lease obligations 430 202
Stockholders' equity 91,712 108,263
Total liabilities and
stockholders' equity $ 116,361 $ 131,013
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