AirNet Announces Third Quarter 2004 Financial Results
AirNet Announces Third Quarter 2004 Financial ResultsMonday November 8, 4:00 pm ET
MELBOURNE, Fla.--(BUSINESS WIRE)--Nov. 8, 2004--AirNet Communications Corporation (NASDAQ:ANCC - News):
Third Quarter Highlights and Recent Events
Net 3Q Revenue was $5.0M representing a 12.5% increase from 3Q 2003 levels
Gross Profit and Margins for 3Q were $1.6M or 31.5% compared to $1.4M or 30.9% in 3Q 2003
Loss from Operations was $4.9M which included $2.3M of non-cash stock option charges compared with our 3Q 2003 loss of $3.2M which included $1.2M of non-cash stock option charges
Net Loss Attributable to Common Stockholders in 3Q was $7.2M or ($0.11) per share and included $2.4M (EPS impact of $0.04) of non-cash interest charges associated with the $16M Senior Secured Convertible Debt financing consummated in August 2003 and the $2.3M (EPS impact of $0.03) of non-cash stock option charges
Net Cash Flow from Operations for the nine months ended September 30, 2004 was ($4.9M) vs. ($6.7M) during the same period in 2003
Received more than $1.7M in new purchase orders for RapidCell(TM) and AirSite® Backhaul Free(TM) base stations for deployment with the National Guard and other customers
SuperCapacity(TM) base stations are now in commercial service with MBO Wireless improving the customer's capacity and throughput
Recently established relationship with fourth major system integrator to evaluate AirNet's RapidCell product solutions, and announced approximately $2.7 million in RapidCell purchase orders for the year to date.
AirNet Communications Corporation (NASDAQ:ANCC - News) today reported financial results for its third quarter ending September 30, 2004.
Financial Results for the Third Quarter
The Company reported net revenue of $5.0 million in the third quarter, compared to $4.5 million in the third quarter of 2003. Gross profit and margin for the third quarter of 2004 was $1.6 million and 31.5%, respectively, compared to year ago amounts of $1.4 million and 30.9%, respectively. Operating expenses for the third quarter were $6.4 million compared to $4.5 million in the third quarter of 2003. The increase was driven primarily by increased non-cash stock option charges and increased Research and Development expenses. The loss from operations was $4.9 million, which included a $2.3 million non-cash stock option charge that resulted from the granting of options to employees following the Senior Secured Convertible Debt transaction, compared to a loss of $3.2 million, which included $1.2 million of non-cash stock option charges in the third quarter 2003. The third quarter 2004 net loss attributable to common stockholders was $7.2 million or ($0.11) per share vs. a $20.2 million loss or ($0.56) per share in 3Q 2003. Net cash used in operating activities for the first nine months of 2004 was $4.9 million, compared to $6.7 million in the first three quarters of 2003. Financing activity for the first nine months of 2004 generated $9.1 million of cash, including $4.0 million received during the period from the $16.0 million Senior Secured Convertible Debt financing completed in August 2003, and $5.1 million of net proceeds from the $5.5 million sale of common stock to certain institutional investors in April 2004. The Company has received $14.0 million in installment payments pursuant to the Convertible Debt financing through November 5, 2004.
Per share amounts for the third quarter of 2004 results were based on weighted average shares of 66 million and excludes approximately 138 million shares issuable upon the conversion of the Senior Secured Convertible Debt and related interest, and shares underlying outstanding options and warrants, because the effect of including those shares would be anti-dilutive. As of September 30, 2004 common stock and common stock equivalents outstanding totaled 226 million shares.
Outlook
Interest by large operators in AirNet's SuperCapacity adaptive array base station and other leading edge products continued to grow during the quarter. MBO Wireless has successfully deployed the SuperCapacity in two of its Oklahoma markets. The RapidCell solution continued to gain traction in government communications markets. Four major system integrators are evaluating the RapidCell for customized applications including improving situational awareness and facilitating incident based communications.
Commenting on the third quarter, Glenn Ehley, President and CEO of AirNet Communications stated, "Visibility to business and market drivers that may define our success in the coming quarters is improving. We are pleased to see such a strong response for the RapidCell product line from system integrators in the homeland security and government communications arena. We continue to receive positive feedback from the ongoing evaluations and are customizing our RapidCell solution for these customers' voice and data applications. Our adaptive array SuperCapacity base station has definitely improved network capacity at MBO Wireless. In order to penetrate the large operator markets with our SuperCapacity product, we must further develop our indirect OEM sales channel. Continued execution on the new product front is vital for AirNet's growth."
Conference Call
AirNet's management will host a conference call at 4:30 p.m. ET today to discuss the results and provide an outlook for the fourth quarter. Those interested in listening to the conference call should dial 785-424-1051, Conference ID: AIRNET. For those who cannot participate in the live conference call, a replay will be available beginning at 8:00 p.m. ET on November 8, 2004 through Midnight on November 19, 2004. The replay number for the conference call is 402-220-1548.
About AirNet
AirNet Communications Corporation is a leader in wireless base stations and other telecommunications equipment that allow service operators to cost-effectively and simultaneously offer high-speed wireless data and voice services to mobile subscribers. AirNet's patented broadband, software-defined AdaptaCell® SuperCapacity(TM) adaptive array base station solution provides a high-capacity base station with a software upgrade path to high-speed data. The Company's AirSite® Backhaul 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. The Company's RapidCell(TM) base station provides government and military communications users with up to 96 voice and data channels in a compact, rapidly deployable design capable of processing multiple GSM protocols simultaneously. AirNet has 69 patents issued or filed and has received the coveted World Award for Best Technical Innovation from the GSM Association, representing over 400 operators around the world. More information about AirNet may be obtained by visiting the AirNet Web site at http://www.airnetcom.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 and Other Applicable Law
Certain statements in this news release may constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 (the Reform Act), Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities and Exchange Act of 1934. These forward-looking statements may relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, market conditions, financial forecasts and other matters. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "anticipate," "prospects," "believe," "estimate," "expect," "intend," "plan" and "objective" and other similar expressions. Readers should not place undue reliance on the forward-looking statements contained in this news release. Such statements are based on management's beliefs and assumptions and on information currently available to management and are subject to risks, uncertainties and changes in condition, significance, value and effect. Such risks or uncertainties include the following: there can be no assurance that the Company will be successful in obtaining new business or that any of the Company's OEM resellers will purchase any further products from the Company; that the Company may not successfully execute to its business plan in the absence of improved telecom market conditions or receipt of new purchase orders, internal execution of product development deadlines and improved competitive capabilities in the face of declining sale prices for GSM networking equipment; that the Company's lenders may foreclose on all assets of the Company (including all intellectual property rights) in the event of a default under the security agreement associated with the senior debt financing; that installment payments on the notes sold in the financing may not be paid when due; and that the Company may not be able to continue to operate as a going concern even after the payment of the remaining installments due to the Company under the financing. These and other risks are detailed in reports and documents filed by the Company with the United States Securities and Exchange Commission. Such risks, uncertainties and changes in condition, significance, value and effect, many of which are beyond the Company's control, could cause the Company's actual results and other future events to differ materially from those anticipated. The Company does not, however, assume any obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements.
AirNet® AdaptaCell®, and AirSite® are registered trademarks with the U.S. Patent and Trademark Office. The stylized AirNet mark, Super Capacity(TM), TripCap(TM), Backhaul Free(TM) and RapidCell(TM) are trademarks of AirNet. Other names are registered trademarks or trademarks of their respective holders.
Financial Schedules
Condensed Statements of Operations
Cash Flow Summary
Condensed Balance Sheets
FINANCIAL STATEMENTS
(all numbers in $000's except per share data and shares outstanding)
(All financial information included is unaudited)
CONDENSED STATEMENTS OF OPERATIONS
For the three months For the nine months
ended Sept. 30, ended Sept. 30,
2004 2003 2004 2003
----------- ----------- ----------- -----------
REVENUES
Equipment
Revenues $ 4,199 $ 2,050 $ 10,413 $ 6,671
Services Revenues 819 2,411 4,052 4,025
----------- ----------- ----------- -----------
Total Net
Revenues 5,018 4,461 14,465 10,696
COST OF REVENUES
Equipment Cost of
Revenues 2,961 1,577 7,916 5,208
Services Cost of
Revenues 478 1,495 2,309 2,603
Write-down of
excess and
obsolete
inventory - 11 200 207
----------- ----------- ----------- -----------
Total Cost of
Revenues 3,439 3,083 10,425 8,018
----------- ----------- ----------- -----------
Gross profit 1,579 1,378 4,040 2,678
OPERATING EXPENSES(1):
Research and
development 3,181 2,170 9,031 6,759
Sales and
marketing 829 514 2,286 1,869
General and
administrative 2,437 1,862 7,207 3,670
----------- ----------- ----------- -----------
Total operating
expenses 6,447 4,546 18,524 12,298
----------- ----------- ----------- -----------
LOSS FROM
OPERATIONS (4,868) (3,168) (14,484) (9,620)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest Income 29 44 69 99
Non-cash debt
conversion
interest charge (2,000) (9,000) (4,000) (9,000)
Interest charged
on convertible
debt (366) (134) (1,044) (134)
Interest expense - (53) (4) (179)
Other, net 3 2 11 4
----------- ----------- ----------- -----------
TOTAL OTHER EXPENSE (2,334) (9,141) (4,968) (9,210)
----------- ----------- ----------- -----------
NET LOSS (7,202) (12,309) (19,452) (18,830)
CONVERSION CHARGE - (7,895) - (7,895)
----------- ----------- ----------- -----------
NET LOSS
ATTRIBUTABLE
TO COMMON
STOCKHOLDERS $ (7,202) $ (20,204) $ (19,452) $ (26,725)
=========== =========== =========== ===========
NET LOSS PER SHARE
ATTRIBUTABLE
TO COMMON
STOCKHOLDERS -
BASIC AND DILUTED $ (0.11) $ (0.56) $ (0.33) $ (0.93)
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING
- USED IN
CALCULATING
BASIC AND DILUTED
LOSS PER SHARE 66,048,248 36,087,523 59,783,304 28,745,715
=========== =========== =========== ===========
(1) Operating expenses include non-cash stock compensation expenses of
$2,233 and $1,203 for the three months ended September 30, 2004
and 2003, respectively and $6,864 and $1,277 for the nine months
ended September 30, 2004 and 2003, respectively.
CASH FLOW SUMMARY
For the three months For the nine months
ended Sept. 30, ended Sept. 30,
2004 2003 2004 2003
----------- ----------- ----------- -----------
NET CASH USED IN
OPERATING
ACTIVITIES $ (1,530) $ (3,648) $ (4,938) $ (6,712)
CASH USED IN
INVESTING
ACTIVITIES (123) (88) (206) (186)
CASH PROVIDED BY
FINANCING
ACTIVITIES 1,987 2,228 9,078 8,196
----------- ----------- ----------- -----------
NET CHANGE IN CASH $ 334 $ (1,508) $ 3,934 $ 1,298
=========== =========== =========== ===========
CONDENSED BALANCE SHEETS
Sept. 30, December 31,
2004 2003
----------- -----------
ASSETS
Cash and cash
equivalents $ 8,994 $ 5,060
Accounts
receivable - net 4,786 3,849
Inventories 9,820 11,687
Notes receivable - 257
Other current
assets 536 1,262
----------- -----------
TOTAL CURRENT
ASSETS 24,136 22,115
Property and
Equipment, net 3,834 5,553
Deposits 71 71
Other long-term
assets 2,348 2,318
----------- -----------
TOTAL ASSETS $ 30,389 $ 30,057
=========== ===========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Accounts payable $ 2,689 $ 2,622
Accrued payroll
and other
expenses 2,930 3,459
Current portion of
capital lease
obligations 6 65
Customer deposits 1,487 2,081
Deferred revenues 374 575
----------- -----------
TOTAL CURRENT
LIABILITIES 7,486 8,802
TOTAL LONG-TERM
LIABILITIES 11,657 10,691
TOTAL STOCKHOLDERS'
EQUITY 11,246 10,564
----------- -----------
TOTAL LIABILITIES
& STOCKHOLDERS'
EQUITY $ 30,389 $ 30,057
=========== ===========
--------------------------------------------------------------------------------
Contact:
AirNet Communications Corporation, Melbourne
Stuart Dawley, 321-953-6783
sdawley@airnetcom.com
--------------------------------------------------------------------------------
Source: AirNet Communications Corporation
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