5/26...AETH...Aether Systems Reports First Quarter 2000
Revenue Growth & Strong Operating Results
OWINGS MILLS, Md.--(BUSINESS WIRE)--April 26, 2000--Aether Systems, Inc. (Nasdaq:AETH - news), a leading provider of wireless data systems and services, reported a 16-fold increase in first-quarter revenue to $5.4 million, compared with $340,000 in the same period in 1999.
The results include recurring service revenue of $2.9 million, engineering service revenue of $1.4 million and software product revenue of $1.1 million. This is the first quarter in which Aether recognized software product revenue. In the same period last year, recurring services accounted for $268,000 and engineering services revenue was $72,000.
The company reported a first quarter operating loss, adjusted for the impact of certain non-cash charges, of ($0.29) per share compared with ($0.07) per share operating loss in the same period last year. The per share net loss was ($1.13) compared to ($0.07) 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.
``These better than expected revenue and operating results for our first quarter show that Aether's strategy and business model are working. As more opportunities for Aether to enter new markets emerge, we see continued aggressive growth in revenues,'' Aether Chairman and CEO Dave Oros said. ``We continue to be the leader in wireless communications as we execute aggressively on our business plan by entering new vertical markets through mergers, acquisitions and partnerships, while extending our lead in existing markets. The Aether model was built for integration. We will continue to broaden the services and products we provide.''
Oros continued, ``In the first quarter, Aether took giant steps toward distancing itself from the competition. The acquisition of Riverbed Technologies, Inc., now Aether Software, followed by our successful secondary offering where we raised $1.4 billion, highlight a quarter packed with growth activity. Aether is now in a unique position with significant capital resources to take advantage of the many opportunities coming our way.''
FIRST QUARTER HIGHLIGHTS
Completed a $1.4 billion secondary offering and concurrent
convertible debt offering
Acquired Riverbed Technologies, Inc. (now Aether Software).
Entered into a joint venture with Reuters to create Sila
Communications, which will apply the Aether model to Europe
and beyond.
Launched a $15 million national advertising campaign including
television spots on prime time & cable TV and print ads in
national magazines and newspapers.
Released ScoutSync 3.5, extending our technology leadership in
mobile data access and mobile systems management.
Released ScoutWeb, our wireless Internet access technology.
Formed an alliance with Nextel to develop wireless data and
wireless web solutions.
Acquired a 27.5 percent interest in Inciscent, a new company
formed with Metrocall and PSINet to provide wireless data
services to the small office/home office markets.
Entered the electronic bill presentment and payment market
through a partnership with Cyberbills.
Acquired LocusOne Communications, Inc. (now Aether Logistics).
RECENT HIGHLIGHTS
Acquired IFX, Europe's Largest Provider of Mobile Financial
Information, as the first component of Sila Communications.
Acquired e-commerce leader NetSearch, a Scottsdale,
Ariz.-based company that provides wireless solutions for
companies selling products and services via the Internet.
Joined forces with Tibco Software to create the wireless
active enterprise, which will allow Aether to deploy wireless
data systems more quickly and with lower cost of integration
to its clients.
Entered into a multi-tiered business and marketing agreement
with Research In Motion (RIM), which will provide for
cross-channel promotion and product co-development.
Aether Software's ScoutWare suite of data synchronization and
management solutions adopted by Icras, Inc., a leader in
software and hardware industrial-strength mobile applications.
About Aether Systems, Inc.
Aether Systems, Inc. is a leading provider of wireless and mobile data services allowing real-time communications and transactions across a full range of devices and networks. Using its engineering expertise, the Aether Intelligent Messaging (AIM) software platform, the ScoutWare family of products (resulting from the acquisition of Riverbed Technologies, Inc.) and its network operations and customer service center, Aether Systems 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. Aether is a joint principal owner, along with 3Com Corp., of OmniSky, Inc., a wireless Internet service provider based in Palo Alto, Calif. Aether headquarters are located at 11460 Cronridge Dr., Owings Mills, MD 21117. For more information, visit aethersystems.com.
This press release includes forward-looking statements based on the current expectations of Aether 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, 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 any obligation to update the forward-looking statements contained in this press release.
AETHER SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
March 31,
---------------------
2000 1999
-------- --------
in thousands except per share data
Subscriber revenue $ 2,929 $ 268
Engineering services revenue 1,403 72
Software and related services 1,069 --
-------- --------
Total revenue 5,401 340
Cost of subscriber revenue 1,732 245
Cost of engineering services revenue 614 36
Cost of software and related services 678 --
-------- --------
Total cost of revenue 3,024 281
-------- --------
Gross profit 2,377 59
Operating expenses:
Research and development (exclusive
of non-cash compensation expense
of $998) 1,684 470
General and administrative (exclusive
of non-cash compensation expense
of $1108) 5,362 711
Selling and marketing (exclusive of
non-cash compensation expense of $ 339) 5,728 257
In process research and development
related to acquisition 2,100 --
Depreciation and amortization 17,410 83
Option and warrant expense 2,445 23
-------- --------
34,729 1,544
-------- --------
Operating loss (32,352) (1,485)
Other income (expense):
Interest income (expense), net 2,189 83
Equity in losses of investment (3,107) --
-------- --------
Net loss $(33,270) $ (1,402)
-------- --------
Pro forma net loss per share-basic
and diluted $ (1.13) $ (0.07)
======== ========
Pro forma weighted average shares
outstanding-basic and diluted(1) 29,451 19,878
======== ========
Reconciliation to net operating loss:
Net loss $(33,270) $ (1,402)
Add back non-cash charges:
Amortization of intangibles relating
to acquisitions 16,984 --
In process research and development
acquired 2,100 --
Proportionate share of losses in investee 3,107 --
Option and warrant expense 2,445 23
-------- --------
Net operating loss $ (8,634) $ (1,379)
======== ========
Pro forma net operating loss per
share - basic and diluted $ (0.29) $ (0.07)
======== ========
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
March 31, Dec. 31,
2000 1999
---------- ----------
in thousands except share data
Current assets:
Cash and cash equivalents $1,366,043 $ 78,542
Short-term investments 3,592 2,092
Trade accounts receivable, net 4,005 1,003
Inventory, net 493 688
Prepaid expenses and other current assets 12,629 4,995
---------- ----------
Total current assets 1,386,762 87,320
Furniture, computers, and equipment, net 5,858 2,796
Intangibles and other assets 1,263,792 12,418
---------- ----------
$2,656,412 $ 102,534
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,519 $ 1,425
Accrued expenses 3,770 1,620
Accrued employee compensation and
benefits 640 971
Deferred revenue 2,580 175
Notes payable 13,600 --
---------- ----------
Total current liabilities 22,109 4,192
Long-term liabilities:
Convertible subordinated notes
payable and other notes payable 310,721 --
Stockholders' equity 2,323,582 98,342
Commitments and contingencies $2,656,412 $ 102,534
========== ==========
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Contact:
Aether Systems
Press Contacts:
Greg Abel, 410/654-6400 x189
gabel@aethersystems.com
or
Investor Relations Contact:
Gregg Lampf, 410/654-6400 x165
glampf@aethersystems.com |
