Airspan Networks Announces Results for the First Quarter of 2005; 79% Increase in Revenue Versus Year Ago, WiMAX Portfolio Unveiled and WiMAX Partnerships Announced.BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla. -- Airspan Airspan (NASDAQ:AIRN) is a [WIMAX] equipment manufacturer founded in 1998 with an R&D facility in the UK. The first product, AS4020 platform, was based on CDMA radio technology adapted for fixed wireless access and was a market success especially in developing markets. Networks Inc. (Nasdaq:AIRN) today announced first quarter financial results for the period ending April 3, 2005. The Company reported revenues for the first quarter of $22.2 million, up 79% versus the first quarter of 2004. The net loss attributable to common stockholders for the first quarter was $(0.08) per share versus a loss of $(0.15) per share in the first quarter 2004.
Business Highlights
-- WiMAX
-- The AS.MAX product family unveiled in March at CeBIT
-- First live demonstration of self installable WiMAX
customer premises equipment
-- New OEM partnerships announced - with Marconi and Fujitsu
-- Announced first commercial WiMAX contract to deploy
Tokyo-wide network for Yozan, Inc
-- VoIP over WiMAX Leadership
-- Purchase agreement signed to acquire ArelNet, a pioneer in
VoIP network infrastructure equipment and solutions,
including soft switches and gateways supporting all major
VoIP standards. Closing expected in the second quarter
-- Proximity
-- Continued growth of Axtel's network in Mexico, as Axtel
nears its 500,000th subscriber
-- WipLL
-- Sales, both direct and through our network of value-added
resellers, continued to grow as new deals were signed in
all geographic regions. U.S., Latin America and Eastern
Europe markets very robust
-- Added Dynavar, mmwave Technologies and CHR Solutions as
system integrators in North America
-- WipLL at 700MHz became eligible for funding from the US
Department of Agriculture, opening a new market with
operators funded by the US Government
Financial Results First quarter revenue of $22.2 million was 79% higher than the $12.4 million in the first quarter of 2004, and in line with the guidance provided earlier in the year. The Company recorded a gross profit of $6.9 million in the quarter, and gross profit as a percentage of revenue (the "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. ") was 31%. This compared to a gross profit of $10.5 million and a gross profit margin 28%, for the fourth quarter of 2004, and a gross profit of $3.7 million, and a gross profit margin of 30% recorded for the first quarter of 2004. The Company's first quarter 2005 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. of $10.4 million were up $0.5 million from the first quarter 2004 and unchanged from the prior quarter's operating expenses. Net loss for the first quarter of 2005 was $(2.9) million, or $(0.08) per share, compared to a net loss of ($5.4) million, or $(0.15) per share, in the first quarter of 2004. The Company's cash balance, including restricted cash, at the end of the first quarter stood at $53.3 million. Cash fell in the quarter from $68.0 million at the end of December December: see month. 2004, due primarily to a reduction of the accounts payable associated with the very large volume of inventory shipments made in the fourth quarter of 2004. "We are pleased to have exceeded our stated earnings objectives and forecasts," said Eric ERIC Educational Research Information Clearinghouse ERIC Educational Resources Information Center ERIC ERISA Industry Committee ERIC Epidemiologic Research and Information Center (Durham, NC) Stonestrom, Airspan's president and chief executive officer. "While one of our primary objectives at this time is to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... the development and interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. testing of our WiMAX (World Interoperability for Microwave Access, Inc., www.wimaxforum.org) An organization founded in 2001 that promotes the IEEE 802.16 wireless broadband standard and provides certification for devices for compliant devices. products and to complete the infrastructure to support them, we continue to show good progress with sales of our existing product and services. Buying remains robust despite the impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. arrival of our new 802.16-based technologies. The quarter's results reflect a solid performance that provides a good base for the rest of the year." "The drop in revenue from the prior quarter was built into our guidance, reflecting the large volumes delivered at the end of last year to meet unusually high demand," said Peter Aronstam, chief financial officer. "However, the revenues for the first quarter of 2005 are still significantly higher than the same period a year ago. Margin levels are holding up and the net loss was a little better than anticipated due to savings in operational costs and a continued focus on cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold . It should also be noted that our recent restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of our 2004 results did not affect our cash position. We feel comfortable that our strong balance sheet and cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. are sufficient to fund our foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. operational expenditures." Outlook Mr. Stonestrom also re-iterated previous guidance that the Company expects revenues for the first half of 2005 to be approximately 50% higher than revenue from the similar period in 2004. "We now expect a smaller than anticipated contribution from the Arelnet product line in the second quarter due to a late closing date. However, an improved outlook in the other product lines should enable us to meet our goals, particularly as we are sitting today on a healthy order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. for Proximity deliveries through the rest of 2005. Our 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 second quarter of 2005 is expected to be similar to the one recorded in the first quarter of 2005. At this time, we are waiting until the second half of 2005 to see the full impact of WiMAX on our business, as we are working on several sales and partnership opportunities that need further development before we know their exact revenue timing. It is therefore still premature to give precise guidance for the full year, but we are encouraged by early WiMAX market acceptance." Investor Conference The Company has scheduled an investor conference call for 5 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. today. The dial-in numbers for the live conference call are as follows: US toll-free number is 866-814-1933; international access dial-in number is 1-703-639-1365. Reference the Airspan Networks quarterly conference call. There will be a live webcast of the conference call available on the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Airspan Web site at http://www.airspan.com. The webcast will also be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at http://www.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network such as America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Online's Personal Finance Channel, Fidelity Investments Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co. (R) (http://www.fidelity.com) and others. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via CCBN's password protected event management site, StreetEvents (http://www.streetevents.com). For those who cannot listen to the live broadcast, an audio replay of the call will be available on the Airspan Web site for 30 days. The US toll-free number for the replay is 1-888-266-2081; international access number for the replay is 1-703-925-2533. Please use access code 687687. About Airspan Networks Inc. Airspan Networks provides wireless voice and data systems and solutions, including Voice Over IP (VoIP), to operators around the world in both licensed and unlicensed frequency bands between 700 MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. and 6 GHz, including both 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. and 3.5GHz international bands. Airspan has a strong product roadmap A roadmap may refer to:
fading skin coloring. See Arabian fading syndrome (below). Declining in body condition, general health, activity and productivity. Arabian fading syndrome general health is unimpaired. . Airspan's systems can be deployed rapidly and cost effectively, providing an attractive alternative to traditional wired communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. . Airspan also offers radio planning, network installation, integration, training and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services to facilitate the deployment and operation of its systems. Airspan is headquartered in Boca Raton, Florida Boca Raton ("bōkə rə-tōn") is a city in Palm Beach County, Florida incorporated in May 1925. As of the 2000 census, the city had a total population of 74,764; the 2006 population recorded by the U.S. Census Bureau was 86,396. with its main operations center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. in Uxbridge Uxbridge, England: see Hillingdon. , United Kingdom. More information on Airspan can be found at http://www.airspan.com 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. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, including statements regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives of management, may be deemed to be forward-looking statements. The words "targets", "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions or negative variations thereof are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Investors and others are therefore cautioned that a variety of factors, including certain risks, may affect our business and cause actual results to differ materially from those set forth in the forward-looking statements. These risk factors include, without limitation, (i) a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of expenditures by communication service providers; (ii) increased competition from alternative communication systems; (iii) the failure of our existing or prospective customers to purchase products as projected; (iv) our inability to successfully implement cost reduction or containment containment Strategic U.S. foreign policy of the late 1940s and early 1950s intended to check the expansionist designs of the Soviet Union through economic, military, diplomatic, and political means. It was conceived by George Kennan soon after World War II. programs; (v) a loss of any of our key customers; (vi) our ability to retain Axtel Axtel S.A.B. de C.V. (BMV: AXTEL), is a Mexican telecommunications company, headquartered in Monterrey, that provides telecommunication products and services in Mexico. It is the main competitor of Telmex, who was a monopoly until very recently. , Mexico, as our largest customer; and (vii) our ability to continue to sell the Proximity products on terms and conditions comparable to those currently utilized. The Company is also subject to the risks and uncertainties described in its 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 31 December, 2004. You should read those factors as being applicable to all related forward-looking statements wherever they appear in this press release. We do not assume any obligation to update any forward-looking statements.
Airspan Networks Inc
Consolidated Balance Sheets
(in thousands)
December 31, 2004 April 3, 2005
----------------- --------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $66,296 $51,424
Restricted cash 1,687 1,881
Accounts receivable 20,947 14,807
Unbilled accounts receivable 43 178
Inventory 12,834 13,474
Prepaid expenses and other current assets 5,702 6,937
--------- ---------
Total Current Assets 107,509 88,701
Property, plant and equipment, net 3,707 3,546
Goodwill, net 789 789
Intangible assets, net 1,672 1,545
Long-term accounts receivable 305 297
Other non-current assets 1,216 1,265
--------- ---------
Total Assets $115,198 $96,143
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $24,615 $13,657
Accrued taxes 653 562
Deferred revenue 627 644
Customer Advances 4,789 1,495
Other accrued expenses 11,349 9,397
--------- ---------
Total Current Liabilities 42,033 25,755
--------- ---------
Stockholders' Equity
Preferred Stock - -
Common stock 11 11
Note receivable - stockholder (87) (87)
Additional paid in capital 260,356 260,906
Other comprehensive income 418 -
Accumulated deficit (187,533) (190,442)
--------- ---------
Total Stockholders' Equity 73,165 70,388
--------- ---------
--------- ---------
Total Liabilities and
Stockholders' Equity $115,198 $96,143
--------- ---------
Airspan Networks Inc
Consolidated Statements of Income
(in thousands except for share and per share data)
Three months ended
April 4, 2004 April 3, 2005
------------- -------------
(unaudited)
Revenue $12,420 $22,218
Cost of revenue (8,693) (15,362)
------------- -------------
Gross profit 3,727 6,856
------------- -------------
Operating expenses:
Research and development 5,046 4,598
Sales and marketing 2,560 2,572
Bad debt provision - 316
General and administration 2,051 2,827
Amortization of intangibles 246 128
------------- -------------
Total operating expenses 9,903 10,441
------------- -------------
Loss from operations (6,176) (3,585)
Net interest and other income 807 676
------------- -------------
Loss before tax (5,369) (2,909)
------------- -------------
Income tax charge 16 -
------------- -------------
Net loss $(5,385) $(2,909)
============= =============
Net loss per share - basic $(0.15) $(0.08)
Weighted average shares
outstanding - basic 35,893,740 37,880,759
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