EXHIBIT 99.1
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Press Contact: Investor Contact:
Jim Burke Ed Bisno
Edelman Worldwide Edelman Worldwide
+1 407-251-1883 +1 212 704-8212
[email protected] [email protected]
Company Contact:
Gary Pacilio
+1 321-953-6609
[email protected]
For Immediate Release
October 23, 2000
AirNet Reports Record Third-Quarter Revenues
- Announces International Expansion With Successes In Africa And China -
MELBOURNE, Florida - AirNet Communications Corporation (NASDAQ: ANCC) today
reported record revenues for the third quarter and nine-month period ending
September 30, 2000, and announced several major new global opportunities in
Africa and China.
Third Quarter and Nine-Month Results
Net revenues for the third quarter grew 103 percent to $13.6 million,
compared with $6.7 million in the third quarter of fiscal 1999. As expected, the
company reported an operating loss due to continued investment in product
development and sales and marketing as the company continued to penetrate new
markets. The company's operating loss was $6.6 million, versus $2.7 million in
the prior year's third quarter.
The third quarter net loss attributable to common shareholders was $5.2
million, or $0.22 per fully diluted share, compared with $16.1 million, or
$36.27 per fully diluted share, during the same period last year. Per share
amounts were based on 23.7 million weighted average shares in this year's third
quarter, compared to 0.4 million weighted shares in the 1999 third quarter.
Net revenues for the nine-month period ending September 30, 2000 grew 160
percent to $28.9 million, from $11.1 during the first nine months of fiscal
1999. The operating loss for the nine-month period was $21.3 million, compared
to $11.4 million for the same period last year. The net loss attributable to
common shareholders for the nine-month period was $17.4 million, or $0.74 per
fully diluted share, versus $28.1 million or $70.95 per fully diluted share. Per
share amounts were based on 23.5 million weighted average shares for the nine
months ended September 30, 2000, compared to 0.4 million weighted shares in the
same period last year.
Commenting on the results, Lee Hamilton, president and chief executive
officer, stated, "AirNet's products continued to gain momentum both
internationally as well as domestically. This is evident by our growing customer
base and recent penetration into key GSM markets."
AirNet Continues To Gain Global Momentum
In addition to its third quarter results, AirNet announced several major
new global opportunities, including; a marketing and distribution agreement with
a large Chinese telecommunications manufacturer; a $32.5 million order from a
wireless operator in Africa; and its first demonstration agreement in the fast
growing Middle East market.
AirNet Enters Chinese Markets
AirNet announced a marketing and distribution agreement with Great Dragon
Telecom/Snow City of Beijing to market and distribute AirNet's products in
China. GDT is a government-owned operation with annual sales of more than US$500
million. Snow City is GDT's private distribution arm. GDT/Snow City will assist
AirNet in obtaining a network entry license to market under AirNet's brand name,
and then begin marketing and distributing the products. This agreement gives
AirNet access and distribution in China and, since the product will be
distributed under the AirNet name, helps build AirNet's brand awareness in this
large market.
China is the world's largest user of GSM technology, with more than 50
million subscribers. With more than 1.3 billion people, it is also generally
acknowledged as the largest GSM market opportunity, with demand for wireless
service constantly increasing faster than systems can be built.
"We are especially pleased to announce this strategic partnership with
GDT/Snow City. This agreement gives us immediate market access and distribution
capability in China, and marks a key milestone in our growth progress," said Mr.
Hamilton. "As our products are distributed throughout China under the AirNet
brand, this agreement will create an opportunity for us to grow awareness of our
award winning technology, and at the same time, increase brand awareness in a
rapidly growing GSM market."
Mid East Demonstration
AirNet announced it will also conduct its first system demonstration in the
rapidly growing Middle East market. The demonstration represents the company's
first opportunity to show that its products interoperate with the widely
deployed Siemen's switch.
The demonstration, being conducted with an existing GSM operator in the
Middle East, is scheduled to begin later this year, and be completed in early
2001. The operator in the region has licenses throughout the region with over
300,000 subscribers and high growth potential.
The demonstration will include its broadband, software-defined AdaptaCell
BTSs, the AirSite(R) Backhaul Free Base Stations(TM) and associated common
equipment. One of the major advantages for the operator is AirNet's ability to
deploy a network using its AirSite products, which carry wireless voice and data
signals back to the wireline network without a physical communications link -
usually a digital T1/E1 phone line. This greatly reduces the time and cost
involved in installing and operating the network.
"The Middle East is a significant growth opportunity for AirNet. Moreover,
it has geographical issues, like other emerging markets, that make landlines and
traditional wireless base stations impractical," added Mr. Hamilton. "This
demonstration opens up the Middle East market for AirNet products, and
highlights our lowest cost of coverage solution to operators trying to build out
their networks.
"Additionally, connecting to a Siemens switch adds to our list of major,
third-party equipment that our base stations can be bolted onto - opening up new
opportunities with other customers with these popular switches," he added.
Further Expansion on the African Continent
AirNet has also announced today that it has been awarded new orders valued
at $32.5 million from a major wireless operator in Africa. The contract, for
which AirNet will facilitate financing, will provide the operator with AirNet's
full suite of software upgradeable products, enabling new services and broader
coverage.
AirNet expects shipments to this operator to take place beginning in the
fourth quarter of 2000 and continue through the second quarter of 2001.
"This customer chose AirNet because our broadband, software-defined base
stations provide them with the solution to provide a wide range of services now,
and a software path to the wireless Internet," Mr. Hamilton explained.
Legal Action Against Lucent Technologies
After successfully completing the deployment of the Carolina PCS Phase I
contract earlier this year, Carolina PCS rewarded AirNet with approximately $10M
in Phase II purchase orders that were to be deployed in the second and third
quarter of 2000. Despite properly performing under the contract, Lucent
Technologies, with full awareness of the existence of the contract and purchase
orders, has induced Carolina PCS to purportedly cancel all Phase II purchase
orders for AirNet products. Consistent with the company's rights in the purchase
agreement, AirNet has disputed Carolina's right to cancel these purchase orders.
AirNet has filed a lawsuit against Lucent alleging Lucent tortuously
interfered with AirNet's purchase contracts and is seeking injunctive relief and
damages. Despite the loss of revenue associated with the cancellation of the
Phase II purchase orders, AirNet has exceeded its goal for the third quarter.
The company continues to broaden its customer base, as evidenced by recent
announcements relating to domestic and international opportunities. About AirNet
Communications Corporation.
AirNet Communications Corporation provides wireless base stations and other
telecommunications equipment designed to allow service operators to
cost-effectively offer simultaneous wireless high-speed Internet and voice
services to mobile subscribers. The Company's AdaptaCell(TM) base station
incorporates a patented radio architecture that is designed to enable operators
to offer these services by upgrading base station software rather than deploying
new base station hardware. The Company's AirSite Backhaul Free Base Station
carries wireless voice and data signals back to the wireline network without a
physical communications link - usually a digital T1 phone line. As a result, an
operator's fixed network operating costs may decrease substantially.
AirNet Communications Corporation's award winning wireless base station
products, based on over 60 patents either issued or filed, provide a cost
effective, future proof solution for wireless operators as they deploy and
expand their networks. AirNet's patented broadband, software-defined AdaptaCell
base station provides a high capacity base station with a software upgrade path
to the wireless Internet.
The patented technology of the AdaptaCell product means no more time
consuming and expensive hardware upgrades - the wireless Internet is only a
software upgrade away. And, with software control, AirNet lets operators support
multiple protocols simultaneously avoiding costly overlays.
The AirSite Backhaul Free Base Station has award-winning architecture that
eliminates the need for a physical backhaul link, thus reducing operating costs.
AirNet base station products won the prestigious "GSM World Award" for technical
innovation for AdaptaCell software upgrade to the wireless Internet and for
AirSite's revolutionary wireless backhaul capability. AirNet is a wireless base
station technology leader. AirNet can be contacted in the U.S. at 321-984-1990
or visit us at www.airnetcom.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The statements contained in this press release that are not historical
information are forward-looking statements that relate to future events or our
future financial performance, including statements regarding our expectations,
beliefs, plans, estimates, intentions or strategies for the future. Forward
looking statements include statements regarding the transition and evolution to
high-speed data and wireless Internet services, future sales to customers and
customer deployment plans. All forward-looking statements included in this
release are based upon information available to AirNet Communications
Corporation as of the date hereof and we assume no obligation to update any such
forward-looking statements. Forward-looking statements involve risks and
uncertainties, which could cause our actual results to differ materially from
those projected. Potential risks and uncertainties include, but are not limited
to, our historical and future losses, our limited operating history, and
fluctuations in our quarterly revenues and operating results. These and other
risks are discussed in Company filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended December
31, 1999.
AirNet(R) and AirSite(R) are registered trademarks with the U.S. Patent and
Trademark Office. AdaptaCell(TM), Backhaul Free Base Station(TM), and We're
Ready for Anything(TM) are trademarks of AirNet Communications Corporation.
Other names are registered trademarks or trademarks of their respective
companies or organizations.
# # #
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AIRNET COMMUNICATIONS CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 1999 SEPTEMBER 30, 2000 SEPTEMBER 30, 1999
------------------------------------- -------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net revenues $ 13,597 $ 6,704 $ 28,850 $ 11,077
Cost of revenues 8,639 4,172 18,520 7,084
--------- ------------ --------- --------
Gross profit 4,958 2,532 10,330 3,993
Operating expenses:
Research and development 7,395 3,382 20,388 10,576
Sales and marketing 2,666 985 7,230 2,741
General and administrative 1,367 761 3,654 1,903
Stock-based compensation 109 91 327 211
--------- ------------ --------- --------
Total costs and expenses 11,537 5,219 31,599 15,431
--------- ------------ --------- --------
Loss from operations (6,579) (2,687) (21,269) (11,438)
Other income, net 1,363 11 3,826 105
--------- ------------ --------- ---------
Net loss $ (5,216) $ (2,676) $ (17,443) $(11,333)
Preferred dividends (1) -- 1,699 -- 5,097
Series G Preferred Deemed Dividend (1) 11,716 11,716
--------- ------------ --------- --------
Net loss attributable to common stockholder (5,216) $ (16,091) $ (17,443) $ (28,146)
========= ============= ========== ==========
Net loss per share attributable to common
stockholders-basic and diluted $ (0.22) $ (36.27) $ (0.74) $ (70.95)
Weighted average shares used in calculating
basic and diluted loss per common share 23,669,169 443,622 23,528,820 396,719
(1) All accumulated dividends were cancelled when the Company closed on its initial public offering in December 1999.
This is a non-cash item
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AIRNET COMMUNICATIONS CORPORATION
CONDENSED BALANCE SHEETS
(In thousands)
UNAUDITED AUDITED
SEPTEMBER 30, 2000 DECEMBER 31, 1999
--------------------------- -----------------------------
Assets
<S> <C> <C>
Cash and cash equivalents $ 52,695 $ 100,423
Accounts receivable, net 13,732 10,122
Notes receivable 9,015 -
Inventories 29,967 15,978
Other 1,543 500
--------------------------- -----------------------------
Total Current Assets 106,952 127,023
Property and equipment, net 7,297 3,968
Long term notes receivable 1,712 -
Other long-term assets 400 22
--------------------------- -----------------------------
Total asset $ 116,361 $ 131,013
=========================== =============================
Liabilities and Stockholders' Equity
Accounts payable $ 11,012 $ 6,464
Accrued expenses 3,301 2,101
Current portion of capital lease obligations 144 540
Customer deposits 2,127 5,234
Deferred revenues 7,635 8,209
--------------------------- -----------------------------
Total current liabilities 24,219 22,548
Capital lease obligations 430 202
Stockholders' equity 91,712 108,263
--------------------------- -----------------------------
Total liabilities and stockholders' equity $ 116,361 $ 131,013
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