Aether Systems Reports Third-quarter Revenue Growth
OWINGS MILLS, Md., Nov 17, 1999 (BUSINESS WIRE) -- Aether Systems,
Inc., (Nasdaq: AETH), a leading provider of wireless data services,
reported a 152-percent increase in third-quarter revenue to $1.5
million, compared with $592,276 in the 1998 period. The results include
revenue from subscriptions of wireless financial data services, which
grew to $411,002 from $184,576 during the same period last year.
Engineering services revenue rose to $1.1 million from $407,700 in the
same period of 1998.
The company reported a third quarter operating loss, adjusted for the
impact of certain non-cash charges, of $0.07 a share compared with
$0.07 a share operating loss in the year ago period. The per share net
loss was $0.14 compared to $0.07 in the same period a year ago.
Revenue from third quarter results include two days of operations of
Mobeo Inc., which Aether acquired on September 28, 1999.
"We are pleased with these results, which reflect our successful
progression to a subscriber based enterprise wireless data services
company, while continuing to build the facilities and technology
capabilities that are necessary for us to be the leading provider in
our industry," President and Chief Executive Officer David Oros said.
For the nine-month period, Aether reported a 98-percent increase in
revenue to $2.3 million from $1.2 million a year earlier. Subscriber
revenue increased to $1.0 million from $309,152 a year ago, while
engineering service revenue rose to $1.3 million from $843,790 in the
first nine months of 1998. The company reported an operating loss,
adjusted for the impact of certain non-cash charges, of $0.23 a share
for the nine months ended September 30, 1999, compared with an
operating loss of $0.22 a share in the comparable 1998 period. The per
share net loss was $0.36 compared to $0.22 in the comparable 1998
period.
Aether also completed its IPO in October, raising net proceeds of
$102.7 million. A portion of that was used to fund the acquisition of
Mobeo, a provider to foreign exchange traders of real-time quotes and
news on wireless handheld devices.
"Aether's goal is to be the premier provider of wireless data services,
and with the successful completion of our IPO we are extremely
well-positioned to provide wireless solutions to new customers in a
broad range of industries. We will expand our spectrum of services,
widen our capabilities with the expansion of our network operations
center and enhance our marketing and sales efforts," Oros said.
THIRD QUARTER HIGHLIGHTS
- Agreement with Charles Schwab, the leading online broker, to
provide a wireless trading platform for its customers. Trial
phase is underway.
- Launch of TradeRunner service, which allows customers of Morgan
Stanley Dean Witter Online to trade stocks and get financial
information using Palm connected organizers and other wireless
handheld devices.
- Formation of OmniSky (formerly OpenSky), a venture between Aether
and 3Com Corp. that will mass-market wireless Internet access and
e-mail through handheld devices. OmniSky unveiled its first
service offering with AT&T Wireless Services on November 15.
- Strategic alliance with Ericsson Wireless Internet Solutions to
co-market and develop innovative wireless data services.
Aether Systems Inc. is a leading provider of wireless data services
and systems that enable the use of wireless handheld devices for
real-time data communications and transactions. Aether offers a broad
range of wireless data services, including real-time stock quotes and
financial data, stock trading, Internet access and e-mail.
Headquartered in Owings Mills, Md., Aether also has offices in New
York, Illinois and Florida. Visit Aether's web site at
aethersystems.com.
This press release includes forward-looking statements based on our
current expectations and projections about future events. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions about Aether that could cause actual
results to differ materially from those in such forward-looking
statements. Potential risks and uncertainties include, but are not
limited to, Aether's limited operating history with subscriber based
services, Aether's historical losses and potential larger future
losses, the infancy of the wireless data industry where there is no
established market for our products and services, Aether's ability to
adapt to rapid technological change, Aether's dependence on wireless
networks owned and controlled by others and Aether's reliance on a
small number of customers. These risks and other risk factors are
described in Aether's Form prospectus under the caption, "Risk Factors"
filed pursuant to Rule 424(b) with the Securities and Exchange
Commission. Aether undertakes no obligation to update the forward
looking statements contained in this press release.
Aether Systems, LLC
Consolidated Statements of Operations
(unaudited)
Quarter Quarter Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998
------------ ------------ ------------ ------------
Subscriber revenue $ 411,002 $ 184,576 $ 1,009,812 $ 309,152
Engineering service
revenue 1,079,963 407,700 1,268,237 843,790
------------ ------------ ------------ ------------
Total revenue 1,490,965 592,276 2,278,049 1,152,942
------------ ------------ ------------ ------------
Cost of subscriber
revenue 357,040 211,627 887,863 411,186
Cost of engineering
revenue 425,997 88,299 545,826 259,111
------------ ------------ ------------ ------------
Total cost of
revenue 783,037 299,926 1,433,689 670,297
------------ ------------ ------------ ------------
Gross profit 707,928 292,350 844,360 482,645
------------ ------------ ------------ ------------
Operating expenses:
Research and
development 414,106 322,461 1,416,213 911,609
General and
administrative 1,224,229 699,296 2,806,829 1,972,485
Selling and
marketing 382,266 312,829 937,694 626,604
Depreciation and
amortization 114,509 67,064 308,032 190,884
Unit option and
warrant expense 935,280 8,145 2,198,430 24,435
------------ ------------ ------------ ------------
3,070,390 1,409,795 7,667,198 3,726,017
------------ ------------ ------------ ------------
Operating loss (2,362,462) (1,117,445) (6,822,838) (3,243,372)
------------ ------------ ------------ ------------
Other income (expense):
Interest income
(expense), net (47,909) (32,263) 92,844 (25,228)
Proportionate share
of losses in
investee (440,000) - (440,000) -
------------ ------------ ------------ ------------
Net loss $ (2,850,371)$ (1,149,708)$ (7,169,994) $ (3,268,600)
============ ============ ============ ============
Pro forma net
loss per share -
basic and
diluted(1) $ (0.14) $ (0.07) $ (0.36) $ (0.22)
============ ============ ============ ============
Pro forma weighted
average shares
outstanding -
basic and
diluted(1) 19,953,675 16,013,364 19,903,406 14,857,883
============ ============ ============ ============
Reconciliation to net
operating loss:
Net loss $ (2,850,371)$ (1,149,708)$ (7,169,994) $ (3,268,600)
Add back non-cash charges:
Unit option and
warrant expense 935,280 8,145 2,198,430 24,435
Proportionate share
of losses in
investee 440,000 - 440,000 -
------------ ------------ ------------ ------------
Adjusted operating
loss $ (1,475,091)$ (1,141,563)$ (4,531,564) $ (3,244,165)
============ ============ ============ ============
Pro forma net
operating loss
per share -
basic and
diluted $ (0.07) $ (0.07) $ (0.23) $ (0.22)
============ ============ ============ ============
Note:
(1) Prior to the closing of the Company's initial public offering,
each member of the Company contributed its membership units in the
Company to Aether Systems, Inc. in exchange for 2.5 shares of common
stock of Aether Systems, Inc. Following such contribution, the Company
merged with and into Aether Systems, Inc., as a result of which all
assets and liabilities of the Company were transferred to Aether
Systems, Inc.
Copyright (C) 1999 Business Wire. All rights reserved.
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CONTACT: PR21
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Media inquiries:
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WEB PAGE: businesswire.com
GEOGRAPHY: MARYLAND
INDUSTRY CODE: COMPUTERS/ELECTRONICS
TELECOMMUNICATIONS
INTERNET
HARDWARE
EARNINGS
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