AETH up 25% on IBM buyout rumor. CC notes.
Insider buys
2002-03-26 OROS, DAVID S.
Chairman 45,000 Purchase at $4.267 per share.
(Cost of $192,015)
2002-03-26 DAVIS, GEORGE M.
Vice Chairman 5,000 Purchase at $4.29 per share.
(Cost of $21,450)
As of 8-Apr-2002
Shares Short 3.60M
Percent of Float 10.9%
Earnings PR from 2 days ago
Aether Systems Reports First Quarter 2002 Results
Cost Reduction Initiatives Ahead of Schedule
Company Anticipates Q2 Revenue Growth
OWINGS MILLS, Md.--(BUSINESS WIRE)--May 7, 2002--Aether Systems, Inc. (Nasdaq:AETH - news), a leading provider of wireless data products and services, today reported financial results for the first quarter ended March 31, 2002.
Revenues for the first quarter were $23.7 million. The results include recurring services revenue of $12.3 million, engineering services revenue of $1.7 million, software product revenue of $6.0 million, and device sales of $3.7 million.
In Q4 2001, revenues were $25.2 million, with recurring services revenue of $11.0 million, engineering services revenue of $2.1 million, software product revenue of $7.1 million, and device sales of $5.0 million. In Q1 2001, revenues were $30.7 million with recurring services revenue of $10.4 million, engineering services revenue of $2.4 million, software product revenue of $11.8 million, and device sales of $6.1 million.
Aether reported a first quarter 2002 operating loss, excluding certain non-cash and other charges, of ($0.82) per share or a total of ($34.2 million). In the same period last year, Aether reported an operating loss, excluding certain non-cash and other charges, of ($1.16) per share or a total of ($46.8 million).
Non-cash and other charges include a restructuring charge associated with Aether's expense reduction efforts, the amortization of intangibles and other non-cash items primarily 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.
Based on Generally Accepted Accounting Principles (GAAP), net loss, which includes these non-cash charges, was ($1.32) per share or ($55.6 million) in Q1 2002. In Q1 2001, by comparison, the net loss was ($29.67) per share or ($1.2 billion), due largely to the write down of goodwill and other assets associated with fiscal 2000 acquisitions and other investments.
Operating expenses (consisting of research and development, general and administrative, and selling and marketing costs) continued to decrease for the fourth consecutive quarter, improving from $42.6 million in Q4 2001 to $36.2 million this quarter. In Q1 2001, operating expenses were $63.2 million.
Consequently, Aether continues to reduce its operating cash burn and ended the quarter with $477.5 million in cash and short-term investments. Earnings before interest, taxes, depreciation and amortization (EBITDA) also continued to improve for the fourth consecutive quarter. EBITDA loss improved from a loss of $32.2 million in Q4 2001 to a loss of $26.2 million in Q1 2002.
In Q1 2001, EBITDA loss was approximately $52.4 million. These results represent improvements of more than 19 percent sequentially and 50 percent from the same period last year.
As part of Aether's strategy to focus resources on core and near-term revenue opportunities, and its related effort to reduce expenses, the company recognized a restructuring charge of approximately $12.6 million in Q1 2002. This charge relates to a workforce reduction of approximately 225 positions and the reduction of lease space associated with 4 facilities.
"We are encouraged by the first quarter's results and anticipate a return to revenue growth in the second quarter of 2002," said Chairman and CEO Dave Oros. "The positive trends beginning to develop are reason for optimism, albeit cautious amid an economic environment that remains slow to recover. Our focus on core, revenue-generating areas has enabled us to continue to deliver improvements in operating expenses. Operating expenses have declined in each of the last four quarters. This quarter our operating expenses improved by approximately 15 percent sequentially and over 43 percent from the same period last year. We expect an aggregate improvement of approximately 55 percent by the end of the year as compared to Q1 2001. Over much of the past year, Aether focused a great deal of its efforts on cost reductions. Now, the company is in a solid position to focus on revenue growth."
Oros continued, "We continue to back our confident words with strong actions. The company has repurchased more than 10 percent of its original convertible debt at favorable rates, buying an additional $15.0 million face value in the first quarter for $8.4 million. Moreover, insiders bought another 50,000 shares in March. In total, Aether's officers have purchased over one million shares within the past year."
Article
Aether Systems Reports First Quarter 2002 Results
Cost Reduction Initiatives Ahead of Schedule
Company Anticipates Q2 Revenue Growth
OWINGS MILLS, Md.--(BUSINESS WIRE)--May 7, 2002--Aether Systems, Inc. (Nasdaq:AETH - news), a leading provider of wireless data products and services, today reported financial results for the first quarter ended March 31, 2002.
Revenues for the first quarter were $23.7 million. The results include recurring services revenue of $12.3 million, engineering services revenue of $1.7 million, software product revenue of $6.0 million, and device sales of $3.7 million.
In Q4 2001, revenues were $25.2 million, with recurring services revenue of $11.0 million, engineering services revenue of $2.1 million, software product revenue of $7.1 million, and device sales of $5.0 million. In Q1 2001, revenues were $30.7 million with recurring services revenue of $10.4 million, engineering services revenue of $2.4 million, software product revenue of $11.8 million, and device sales of $6.1 million.
Aether reported a first quarter 2002 operating loss, excluding certain non-cash and other charges, of ($0.82) per share or a total of ($34.2 million). In the same period last year, Aether reported an operating loss, excluding certain non-cash and other charges, of ($1.16) per share or a total of ($46.8 million).
Non-cash and other charges include a restructuring charge associated with Aether's expense reduction efforts, the amortization of intangibles and other non-cash items primarily 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.
Based on Generally Accepted Accounting Principles (GAAP), net loss, which includes these non-cash charges, was ($1.32) per share or ($55.6 million) in Q1 2002. In Q1 2001, by comparison, the net loss was ($29.67) per share or ($1.2 billion), due largely to the write down of goodwill and other assets associated with fiscal 2000 acquisitions and other investments.
Operating expenses (consisting of research and development, general and administrative, and selling and marketing costs) continued to decrease for the fourth consecutive quarter, improving from $42.6 million in Q4 2001 to $36.2 million this quarter. In Q1 2001, operating expenses were $63.2 million.
Consequently, Aether continues to reduce its operating cash burn and ended the quarter with $477.5 million in cash and short-term investments. Earnings before interest, taxes, depreciation and amortization (EBITDA) also continued to improve for the fourth consecutive quarter. EBITDA loss improved from a loss of $32.2 million in Q4 2001 to a loss of $26.2 million in Q1 2002.
In Q1 2001, EBITDA loss was approximately $52.4 million. These results represent improvements of more than 19 percent sequentially and 50 percent from the same period last year.
As part of Aether's strategy to focus resources on core and near-term revenue opportunities, and its related effort to reduce expenses, the company recognized a restructuring charge of approximately $12.6 million in Q1 2002. This charge relates to a workforce reduction of approximately 225 positions and the reduction of lease space associated with 4 facilities.
"We are encouraged by the first quarter's results and anticipate a return to revenue growth in the second quarter of 2002," said Chairman and CEO Dave Oros. "The positive trends beginning to develop are reason for optimism, albeit cautious amid an economic environment that remains slow to recover. Our focus on core, revenue-generating areas has enabled us to continue to deliver improvements in operating expenses. Operating expenses have declined in each of the last four quarters. This quarter our operating expenses improved by approximately 15 percent sequentially and over 43 percent from the same period last year. We expect an aggregate improvement of approximately 55 percent by the end of the year as compared to Q1 2001. Over much of the past year, Aether focused a great deal of its efforts on cost reductions. Now, the company is in a solid position to focus on revenue growth."
Oros continued, "We continue to back our confident words with strong actions. The company has repurchased more than 10 percent of its original convertible debt at favorable rates, buying an additional $15.0 million face value in the first quarter for $8.4 million. Moreover, insiders bought another 50,000 shares in March. In total, Aether's officers have purchased over one million shares within the past year."
Daily Volume (3-month avg) 528.2K
Daily Volume (10-day avg) 471.0K
Todays Volume: 10,705,700 !!!!!!
CC notes: Wed, May 8, 2002, 8:30 am Eastern
David Oros
- improved all
- 23.7M up
- GM up
- Oper experse decrease
- cashburn down
- 478M in cash
- 52M cashburn this quarter from 56M
- acct recievable 1.5M decrease
- DSO of 4 days
- acct payable drpped 5M
- 225 people let go
- two def rev accounts from 2 accts of 28M.
- rev 23.7M in rev,
- subs rev 12.3M, engineering 1.7M, 6M on software, 3.7M device rev
- 41.9% GM better
- expect continue rev in all all 3 business sector for next 2 quarters
- GA droppes 2.1M
- Dropped selling and marketing expensives
- 0.82 per share loss
- 529m at end 12/31 - 26M ebitda, 2M in cap, 15M of debt retire, 3M pay to adtrac,
- decrease of 5M in account payable
- one time 24.4M - restructring in reduction in fore, 6.6M in asset write down to AETH cap investment, 4.9M amort of assets other than goodwill
- 75 cent loss in q2.
- we are doing better in managing op expensive
- 356k in R&D
- we have 8q's of lowering op expensive,
- saw uptake in backlog and booking
- mobile govt - saw more booking this q, nice customer, city of toronto, schaumburg IL, texas city
- T& L gruop - order 25 new customer and 11 new customers
- Logistics - staples authorized more contracts, another 1700 vechicle from a trucking com
- Enterprise - blackberry, and others. Sharp and SUNW have million dollar orders. BoA a customer.
- Fusion foundation will leverage this open standard platform.
- Line up sev device messenger and trying make a single email offering
- pipeline are increasing and new products in 3q/4q will drive rev growth.
- SUNW FIA project rolling out this month.
- AOL working with several realtors
- In beta test with Ford and Mercedes Benz
- 50% reduction in headcount last 9 month but rev flat.
Q&A
Scott Sutherland - adtrac in q1
A - 1M in rev, ebitda pos business, provide 28K subs
- total sub count 98K. 48K in ESD gruop
- 670 ees on board
- GM lower in software - some contracts had price pressure. Sees GM up next q.
Erin Atahi - adtrac
- adtrac will contribute 4M in q2 from 1M this q. 5% seq growth.
- rev growth in q2-4. Op ex will decline each q. Ebitda breakeven in 1q 2003. Visibility is increased all three areas.
David Marsh - capex
- 4-5M remainaing this year. Building business systems.
- no sig hiring coming up
- 19M in assest - public and nonpublic companies.
- mobile govt booking will double due to homeland safety. Pilot program at airports and secret service. Hoping opening up of their budgets in 3q/4q. Our est for rev are not heavily reliant on this area.
Mellinda Davies - Adtrac legacy product
- we pick up two trailer track and asset tracking products and legacy product. Transition to AETH mobilemax 2 products. 28K subscibers - looking for 50-80% transition of those subs to mobilemax2.
Jack |
