Airspan Networks Announces Third Quarter 2004 Financial Results; Third Consecutive Quarter of Record Sales.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 third quarter financial results for the period ending October October: see month. 3, 2004. The Company reported revenues for the third quarter of $26.5 million, up 45% from the second quarter of 2004 and up 320% versus the third quarter of 2003. The net loss attributable to common stockholders for the third quarter was $0.09 per share versus a loss of $0.12 in the second quarter of 2004 and $0.19 in the third quarter 2003. Business Highlights --Airspan continued to make substantial deliveries of Proximity products to 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. in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . Axtel revenues were up by more than 50% sequentially quarter over quarter. --We recorded sales to five additional Proximity customers in the quarter, including the first sales in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. since we acquired the business. --Airspan obtained multi-product, multi-phase expansion orders from Dedicado of Uruguay Uruguay, country, South America Uruguay (y  `rəgwā, gwī, Span.  r and Nordic LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. & WAN of Finland Finland, Finnish Suomi (swô`mē), officially Republic of Finland, republic (2005 est. pop. 5,223,000), 130,119 sq mi (337,009 sq km), N Europe. , requiring
deliveries of both current products and next-generation 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
--Sales of our WipLL WipLL Wireless IP Local Loop product line reached their highest quarterly level since we acquired the business in 2002. The product line, which is offered in a range of frequencies unmatched by our competition, continues to enjoy strong acceptance in all geographic regions. In total, 78 customers purchased WipLL in the third quarter, up from 63 in the prior quarter. Financial Highlights --Airspan successfully closed the sale of 73,000 Series A Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. on September September: see month. 13, 2004, raising $29.2 million before expenses. --Cash, including restricted cash, stood at $68.4 million at the end of the third quarter, compared with $47.3 million at the end of the second quarter of 2004 and $36.6 million at the end of the third quarter of 2003. --Days sales outstanding (DSO See CSO. ) in 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 at the end of the third quarter were 40 days, compared with 45 days at the end of the second quarter of 2004, and compared with 169 days at the end of the third quarter of 2003. --Inventory turns were 5.9 at the end of the third quarter of 2004, compared with 2.8 for prior quarter, and 2.0 for the third quarter of 2003. Financial Results Third quarter revenue of $26.5 million was 45% higher than the $18.3 million recorded for the second quarter of 2004 and 320% higher than the $6.3 million in the third quarter of 2003. The Company recorded a gross profit of $7.1 million. Gross profit as a percentage of revenue was 27% after providing $1.1 million for excess and obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. in the third quarter relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our older product lines. This compared to a gross profit of $6.1 million, or 33%, for the second quarter of 2004 and an eleven fold improvement on the gross profit of $0.6 million recorded for the third quarter of 2003. The Company's third quarter 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 $11.1 million were $0.1 million lower than the second quarter. Net loss for the third quarter of 2004 was $3.5 million, or $0.09 per share, compared to a loss of $4.4 million, or $0.12 per share, in the second quarter of 2004 and a loss of $6.8 million, or $0.19, in the third quarter of 2003. The Company's cash balance, including restricted cash, at the end of the third quarter stood at $68.4 million. Total cash grew in the third quarter by $21.1 million, mainly due to the sale of 73,000 shares of Series A 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. for $29.2 million as announced in September. As expected, restricted cash fell by $8.4 million to $16.4 million at the end of the third quarter, reflecting deliveries of equipment that had been prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. .
"I'm delighted that we can report a third consecutive record level of quarterly revenues," said Eric Stonestrom, Airspan's president and chief executive officer. "Our revenue continues to grow as planned with record sales supported by a continued influx of new customers, particularly in our WipLL product line. The sale of Preferred Stock in the third quarter puts us in a good position to be able to continue to invest for ongoing growth. We are excited about our leadership position in WiMAX and the recently-announced relationship with picoChip, which has created a strong upgradeable WiMAX technology platform to meet the evolution of the IEEE (Institute of Electrical and Electronics Engineers, New York, www.ieee.org) A membership organization that includes engineers, scientists and students in electronics and allied fields. 802.16 standard to mobile applications. We have also received the first sample chips from Intel for our customer premise terminals, and we expect to begin commercial WiMAX deployments in the second half of 2005." "Our operational costs remained high as we continue to work towards Sarbanes Oxley compliance and invest in developing our next-generation portfolio of products," said Peter Aronstam, chief financial officer. "These are important factors for our longer term position and cannot be compromised, but we believe both are at their peak currently. We felt pressure on gross margins in the third quarter due to supply chain issues and a provision on older inventory, but we closed the third quarter with inventory levels $4.8 million lower than the previous quarter, reflecting our increased efficiency in total inventory utilization. Cash management continues to be strong, with additional funds coming in and reduced inventory both helping improve our liquidity position, despite the expected reduction in customer advances." Fourth Quarter and Full year Outlook Stonestrom also commented that he expects revenue for the fourth quarter to be in the range of $30 to $32 million, and to exceed $86 million for the full year. "We are still targeting a profitable fourth quarter as previously advised and, based on our assumptions of increased revenues, sustained average 2004 margins and declining operating expenses, we believe this is an achievable objective." 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 1-866-814-1917; international access dial-in number is 1-703-639-1361. 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 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 577149. About Airspan Networks Inc. Airspan Networks provides wireless voice and data systems and solutions, including Voice Over IP (VoIP), to both licensed and unlicensed operators around the world in 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 evolution roadmap that includes offerings compliant with the new 802.16-2004 standard, and with built-in 802.16e capability. Airspan is on the Board and a founder member of the WiMAX Forum. The Company has deployments with more than 200 operators in more than 70 countries. Airspan's systems are based on radio technology that delivers excellent area coverage, high security and resistance to fading fading 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, 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, Mexico, as our largest customer; and (vii) our ability to continue to sell the Proximity inventory 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 December 31, 2003. 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 Statements of Income
(in thousands except for share and per share data)
Three months ended Year to date
Sept. 28, Oct. 3, Sept. 28, Oct. 3,
2003 2004 2003 2004
---- ---- ---- ----
(unaudited) (unaudited)
Revenue $6,293 $26,452 $21,628 $57,124
Cost of revenue (5,656) (18,294) (16,613) (39,169)
Inventory provision - (1,099) (4,398) (1,099)
----------- ----------- ----------- -----------
Gross profit 637 7,059 617 16,856
----------- ----------- ----------- -----------
Operating expenses:
Research and
development 3,413 4,495 10,802 14,284
Sales and marketing 2,269 2,782 7,529 8,094
Bad debt provision - 249 - 549
General and
administration 2,037 3,342 6,675 8,221
Amortization of
intangibles 44 175 131 579
Restructuring provision 46 16 319 413
----------- ----------- ----------- -----------
Total operating
expenses 7,809 11,059 25,456 32,140
----------- ----------- ----------- -----------
Loss from operations (7,172) (4,000) (24,839) (15,284)
Net interest and other
income 385 591 2,062 2,084
----------- ----------- ----------- -----------
Loss before tax (6,787) (3,409) (22,777) (13,200)
----------- ----------- ----------- -----------
Income tax charge - 48 4 50
----------- ----------- ----------- -----------
Net loss $(6,787) $(3,457) $(22,781) $(13,250)
=========== =========== =========== ===========
Net loss per share
- basic and diluted $(0.19) $(0.09) $(0.65) $(0.37)
Weighted average shares
outstanding
- basic and diluted 35,144,080 36,439,662 34,952,376 36,169,249
Airspan Networks Inc.
Consolidated Balance Sheets
(in thousands)
Dec. 31, Oct. 3,
2003 2004
-------- -------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $33,926 $51,936
Restricted cash 1,588 16,430
Accounts receivable 12,509 12,705
Unbilled accounts receivable 54 92
Inventory 18,215 12,462
Prepaid expenses and other current assets 4,570 6,756
--------- -----------
Total Current Assets 70,862 100,381
Property, plant and equipment, net 3,736 4,036
Goodwill, net 3,136 789
Intangible assets, net 4,554 2,421
Long-term accounts receivable - 305
Other non-current assets 984 1,119
--------- -----------
Total Assets $83,272 $109,051
========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $7,751 $14,476
Accrued taxes 449 462
Deferred revenue 989 1,061
Customer Advances 15,070 18,679
Other accrued expenses 10,000 9,424
--------- -----------
Total Current Liabilities 34,259 44,102
--------- -----------
Stockholders' Equity
Preferred Stock - 29,132
Common stock 11 11
Note receivable - stockholder (130) (87)
Additional paid in capital 215,209 216,483
Treasury stock (797) (797)
Other comprehensive income 1,839 576
Accumulated deficit (167,119) (180,369)
--------- -----------
Total Stockholders' Equity 49,013 64,949
--------- -----------
--------- -----------
Total Liabilities and Stockholders'
Equity $83,272 $109,051
========= ===========
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