7/24...AETH Reports Second Quarter and First Half 2000 Revenue Growth & Strong Operating Results
OWINGS MILLS, Md.--(BUSINESS WIRE)--July 24, 2000--Aether Systems, Inc. (Nasdaq:AETH - news), a leading provider of wireless data products and services, reported a 24-fold increase in second-quarter revenue to $10.8 million, compared with $447,000 in the same period in 1999. The results include recurring services revenue of $6.7 million, engineering services revenue of $1.6 million and software product revenue of $2.4 million. In the same period last year, recurring services (subscriber revenue) accounted for $331,000, engineering services revenue was $116,000 and the company did not have software product revenue.
The company reported a second quarter operating loss, adjusted for the impact of certain non-cash charges, of ($0.30) per share compared with ($0.08) per share operating loss in the same period last year. The per share net loss was ($2.36) compared to ($0.15) per share net loss in the same period last year. Non-cash charges include the amortization of intangibles and other non-cash items relating to acquisitions, the company's share of losses in joint ventures under equity method accounting and non-cash expenses relating to options and warrants.
``The strength of our results continues to validate Aether's business plan and the aggressive nature by which the company is pursuing its strategy. Quick, thoughtful execution is the key to success in this burgeoning industry. Aether is working diligently to win customers and generate revenue as it extends its leadership position,'' Aether Chairman and CEO Dave Oros said. ``The market for wireless data will continue to gain momentum in the short term and truly explode within the next 12-24 months. Aether is preparing for this growth and ensuring that its leadership position is unchallenged through its infrastructure build-out and enhancement of its talent pool.''
Oros continued, ``The second quarter saw some important efforts come to fruition. After a close collaborative effort with Palm, Aether's ScoutSync is now the default standard for the Palm OS, which has about an 80% market share. In addition, we are now seeing commitments and the first product rollouts relating to our recurring revenue model as well as seeing other revenue streams grow. This is a demonstration of the fact that enterprises are beginning to gear up and utilize wireless data solutions. At the same time, Aether's engineering team is working hard to stay ahead of the curve as it deploys state-of-the-art solutions and works with future-generation technologies to ensure that Aether's tools become standards.''
SECOND QUARTER HIGHLIGHTS
Microsoft Pocket PC goes wireless with Aether: Aether's enterprise wireless ISP is unveiled as TD Waterhouse commits to a deployment of 5000 Compaq iPaq handhelds for its wireless trading solution.
Aether forms strategic alliances with Visa and First Data to provide wireless e-commerce solutions.
Aether and Reuters launch Sila Communications to provide leading wireless data services in Europe.
Aether and Research In Motion (RIM) enter into a multi-tiered business and marketing agreement.
Aether teams with Critical Path to provide next generation messaging to wireless devices.
Schwab launches its wireless investing service, PocketBroker - developed, deployed and supported by Aether.
Aether acquires wireless e-commerce leader, NetSearch. Customers include Lexus, Toyota, Nissan, and Lincoln-Mercury.
Aether's ScoutSync becomes the Palm OS standard as Palm launches Palm HotSync Server. Aether also releases ScoutSync 3.5 for Pocket PCs.
Aether and Data Critical form a strategic partnership to include wireless healthcare technology integration and development, and marketing alliance. Aether makes an equity investment in Data Critical.
Aether announces new development and hosting capabilities for XML protocol.
OmniSky files registration statement for proposed IPO of common stock.
FIRST HALF RESULTS
For the first six months of 2000, the Company reported a 21-fold increase in revenue to $16.2 million, compared with $787,000 for the same period in 1999. The results include recurring services revenue of $9.7 million, engineering services revenue of $3.0 million and software product revenue of $3.4 million. In the same period last year, recurring services (subscriber revenue) accounted for $599,000, engineering services revenue was $188,000, and there was no software product revenue.
The company reported a first half operating loss, adjusted for the impact of certain non-cash charges, of ($0.59) per share compared with ($0.15) per share operating loss in the same period last year. The per share net loss was ($3.65) compared to ($0.22) per share net loss in the same period last year.
About Aether Systems, Inc.
Aether Systems, Inc. is a leading provider of wireless and mobile data products and services allowing real-time communications and transactions across a full range of devices and networks. Using its engineering expertise, the ScoutWare(TM) family of products, the Aether Intelligent Messaging (AIM) software platform, and its network operations and customer care center, Aether seeks to provide comprehensive, technology-independent wireless and mobile computing solutions. Aether develops and delivers wireless data services across a variety of industries and market segments in the United States and internationally. For more information, please visit www.aethersystems.com.
This press release includes forward-looking statements based on the current expectations of Aether 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, market acceptance of the products developed or to be developed by Aether, the ability of Aether to develop new technologies and projects and the success of joint efforts with partner companies. These risks and other risk factors are described under the caption, ``Risk Factors'' in Aether's filings with the Securities and Exchange Commission. Aether undertakes no obligation to update the forward-looking statements contained in this press release.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of OmniSky Corporation securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
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AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
in thousands except
per share data
Subscriber revenue $ 6,745 $ 331 $ 9,674 $ 599
Engineering services
revenue 1,637 116 3,040 188
Software and related
services 2,373 -- 3,442 --
--------- --------- --------- ---------
Total revenue 10,755 447 16,156 787
Cost of subscriber
revenue 3,737 286 5,469 531
Cost of engineering
services revenue 1,027 84 1,640 120
Cost of software and
related services 863 -- 1,542 --
--------- --------- --------- ---------
Total cost of revenue 5,627 370 8,651 651
--------- --------- --------- ---------
Gross profit 5,128 77 7,505 136
Operating expenses:
Research and
development 4,077 532 5,761 1,002
General and
administrative 9,906 871 15,269 1,583
Selling and
marketing 16,081 299 21,809 555
In process research
and development
related to
acquisition 60 -- 2,160 --
Depreciation and
amortization 67,041 110 84,451 194
Option and warrant
expense 3,605 1,240 6,050 1,263
--------- --------- --------- ---------
100,770 3,052 135,500 4,597
--------- --------- --------- ---------
Operating loss (95,642) (2,975) (127,995) (4,461)
Other income
(expense):
Interest income
(expense), net 14,787 57 16,976 141
Equity in losses
of investment (10,721) -- (13,828) --
Minority Interest 1,662 -- 1,662 --
--------- --------- --------- ---------
Net loss $ (89,914) $ (2,918) $(123,185) $ (4,320)
--------- --------- --------- ---------
Pro forma statement
of operations
data (unaudited):
Loss before income
taxes, as
reported $ (89,914) $ (2,918) $(123,185) $ (4,320)
Pro forma income
tax provision
(benefit) -- -- -- --
--------- --------- --------- ---------
Pro forma net loss $ (89,914) $ (2,918) $(123,185) $ (4,320)
========= ========= ========= =========
Pro forma net loss
per share-basic
and diluted $ (2.36) $ (0.15) $ (3.65) $ (0.22)
========= ========= ========= =========
Pro forma weighted
average shares
outstanding-basic
and diluted (1) 38,031 19,878 33,765 19,878
========= ========= ========= =========
Reconciliation to
net operating loss:
Net loss $ (89,914) $ (2,918) $(123,185) $ (4,320)
Add back non-cash
charges:
Amortization of
intangibles
relating to
acquisitions 65,697 -- 82,681 --
In process research
and development
acquired 60 -- 2,160 --
Proportionate share
of losses in
investee 10,721 -- 13,828 --
Option and warrant
expense 3,605 1,240 6,050 1,263
Minority Interest -
amortization (1,434) -- (1,434) --
--------- --------- --------- ---------
Net operating loss $ (11,265) $ (1,678) $ (19,900) $ (3,057)
========= ========= ========= =========
Pro forma net
operating loss per
share - basic and
diluted $ (0.30) $ (0.08) $ (0.59) $ (0.15)
========= ========= ========= =========
1) Prior to the closing of the Company's initial public offering,
each member of Aether Systems, LLC (the "LLC") contributed its
membership units in the LLC to Aether Systems, Inc. in exchange for
2.5 shares of common stock of Aether Systems, Inc. Following such
contribution, the LLC merged with and into Aether Systems, Inc., as a
result of which all assets and liabilities of the LLC were transferred
to Aether Systems, Inc.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, Dec. 31,
2000 1999
---------- ----------
in thousands except share
data
Current assets:
Cash and cash equivalents $1,240,148 $ 78,542
Short-term investments 2,383 2,092
Trade accounts receivable 7,515 1,003
Inventory 2,188 688
Prepaid expenses and other
current assets 10,181 4,995
---------- ----------
Total current assets 1,262,415 87,320
Furniture, computers, and
equipment, net 13,698 2,796
Intangibles and other
assets 1,427,129 12,418
---------- ----------
$2,703,242 $ 102,534
========== ==========
LIABILITIES, MEMBERS'
CAPITAL AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,561 $ 1,426
Accrued expenses 20,740 1,620
Accrued employee
compensation and
benefits 2,629 971
Deferred revenue 2,832 175
Notes payable 18,983 --
---------- ----------
Total current
liabilities 49,745 4,192
Long-term liabilities:
Convertible subordinated
notes payable and other
notes payable 310,500 --
Deferred tax liability 11,221
Minority Interest in Net
Assets of Subsidiary 65,304 --
Stockholders' equity
(deficit) 2,266,472 98,342
Commitments and
contingencies
$2,703,242 $ 102,534
========== ==========
--------------------------------------------------------------------------------
Contact:
Aether Systems
PRESS CONTACT
Greg Abel, 410/654-6400 x5189
gabel@aethersystems.com
or
INVESTOR RELATIONS CONTACT
Gregg Lampf, 410/654-6400 x5165
glampf@aethersystems.com |
