EXHIBIT 99.1
[LOGO] AIRSPAN
PRESS RELEASE
Airspan Networks Announces Fourth Quarter
and Full Year 2004 Financial Results
Record Sales and Net Profit for the Quarter
BOCA RATON, Fla.--February 9, 2005 - Airspan Networks Inc. (Nasdaq: AIRN) today
announced fourth quarter financial results for the period ending December 31,
2004. The Company reported revenues for the fourth quarter of $37.5 million, up
42% from the third quarter of 2004 and up 316% versus the fourth quarter of
2003. The net profit attributable to common stockholders for the fourth quarter
was $0.07 per share on a diluted basis, versus a loss of $(0.09) per share in
the third quarter of 2004 and a loss of $(0.19) per share in the fourth quarter
2003. Full year reported revenues for 2004 were $94.6 million, over three times
the $30.7 million of reported revenue in 2003. The net loss per share for the
full year 2004 was $(0.27) versus $(0.84) for 2003.
Business Highlights
o Airspan continued to make substantial deliveries of Proximity
products to Axtel in Mexico. New Proximity orders were also placed
by Lanka Bell and Telstra in the fourth quarter.
o Sales of the WipLL product line reached their highest quarterly
level. The product line continued to enjoy an increasing level of
orders from customers in all geographic regions. In the past two
years, the Company has grown the customer base from an initial five
customers to more than 200 direct and indirect customers, including
over 65 in the USA. Significant repeat business occurred in the
quarter in North America, Europe and Asia, while Airspan announced
the signing of new contracts with SES, Impsat and Newcom in Latin
America in the fourth quarter.
o Cash, including restricted cash, stood at $68.0 million at the end
of the fourth quarter, compared with $68.4 million at the end of the
third quarter of 2004 and $35.5 million at the end of the fourth
quarter of 2003. Cash spent on the business for the full year was
approximately $1.0 million, down from $19.9 million in 2003.
o Growing support for WiMAX across the telecommunications industry was
the backdrop
Fourth Quarter 2004 Earnings - page 2 of 6
for Airspan's continued investment in research and development for
new products and the announcement in October 2004 of a strategic
partnership with picoChip to deliver the first fully upgradeable
reference designs for WiMAX base stations.
o The Company announced its intention in the fourth quarter to acquire
Arelnet for $8.7M in cash and stock. Arelnet's leading capabilities
in Voice over IP softswitch and media gateways are expected to
strengthen the Airspan WiMAX product offerings. The acquisition is
expected to be accretive for the year and to close early in the
second quarter of 2005.
Financial Results
Fourth quarter revenue of $37.5 million was 42% higher than the $26.5 million
recorded for the third quarter of 2004 and 316% higher than the $9.0 million in
the fourth quarter of 2003. The Company recorded a gross profit of $10.5 million
in the quarter. Gross profit as a percentage of revenue was 28%. This compared
to a gross profit of $7.1 million, or 27%, for the third quarter of 2004 and a
gross profit of $2.3 million, or 26% recorded for the fourth quarter of 2003.
Full year 2004 revenues totaled $94.6 million, over three times the $30.7
million recorded in 2003. Gross profits for the year of $27.4 million were more
than nine times the $3.0 million recorded in 2003.
The Company's fourth quarter operating expenses of $10.4 million were $0.7
million lower than the third quarter's operating expenses. Net profit for the
fourth quarter of 2004 was $3.3 million, or $0.07 per share, compared to a loss
of $3.5 million, or $(0.09) per share, in the third quarter of 2004 and a loss
of $6.7 million, or $(0.19) per share, in the fourth quarter of 2003. Full year
2004 net loss was $10.0 million, or $(0.27) per share, compared to $29.5
million, or $(0.84) per share, for 2003. In the fourth quarter of 2004 the
Company recognized a tax credit of $2.0 million, relating primarily to losses
given up for cash payments for research and development activities in the United
Kingdom.
The Company's cash balance, including restricted cash, stood at $68.0 million at
the end of 2004. Cash grew in the year from $35.5 million at the end of 2003,
due primarily to the sale of 73,000 shares of series A preferred stock for $29.2
million in the third quarter and the sale of 834,560 shares of treasury stock
for $4.4 million in the fourth quarter.
"We are very pleased to have exceeded our quarterly and full-year guidance and
to have achieved profitability in the fourth quarter, as previously predicted,"
said Eric Stonestrom,
Fourth Quarter 2004 Earnings - page 3 of 6
Airspan's president and chief executive officer. "A fourth consecutive quarter
of record revenues saw the top line grow by another 40%. This was achieved by
strong performances across most of our product lines. At the same time we were
able to reduce the level of operating expenses, while we continued to invest in
the next-generation WiMAX platform. I'm proud of what we have been able to
achieve in 2004. Our revenues have trebled versus 2003, and in 2004 we
consistently narrowed the operating loss quarter over quarter. We also spent
approximately $1 million on operations for the full year 2004, ending the year
with $68.0 million of cash and no long term debt, and well capitalized to take
advantage of the opportunities being presented by the growing market. We have
established a strong and diverse portfolio of products and customers that, with
the expected addition of the ArelNet portfolio, will continue to be the core of
our business as we move towards the release of next-generation WiMAX products."
"Reporting our first net profit from operations is a landmark event for the
Company, and it was achieved by improvements in many areas," said Peter
Aronstam, chief financial officer. "The top line continued to grow, driving
gross profits higher. Operational expenses have stabilized as we deliver
customer requirements more efficiently. Cash management is strong, with a low
operational cash burn achieved by a continued emphasis on the collection of
receivables and sound inventory management. These are all areas we will continue
to focus on in 2005."
Outlook
Mr. Stonestrom also commented that the Company expects revenues for the first
quarter to be in the range of $22 million, and to show growth in the first half
of 2005 of 50% over the first half of 2004. The loss in the first quarter is
expected to be in the range of $3.0 to $3.5 million. "We enter the new year with
good prospects for growth in 2005, through organic expansion of our business,
new acquisitions, and the introduction of WiMAX products."
Investor Conference
The Company has scheduled an investor conference call for 5 p.m. EST today. The
dial-in numbers for the live conference call are as follows: US toll-free number
is 1-866-814-1916; international access dial-in number is 1-703-639-1360.
Reference the Airspan Networks quarterly conference call.
There will be a live webcast of the conference call available on the
Investors/Presentations section of the Airspan Web site at
http://www.airspan.com. The webcast will also be distributed
Fourth Quarter 2004 Earnings - page 4 of 6
over CCBN's Investor Distribution Network to both institutional and individual
investors. Individual investors can listen to the call through CCBN's individual
investor center at http://www.companyboardroom.com or by visiting any of the
investor sites in CCBN's Individual Investor Network such as America Online's
Personal Finance Channel, Fidelity Investments(R) (http://www.fidelity.com) and
others. Institutional investors can access the call via CCBN's password
protected event management site, StreetEvents (http://www.streetevents.com).
For those who cannot listen to the live broadcast, an audio replay of the call
will be available on the Airspan Web site for 30 days. The US toll-free number
for the replay is 1-888-266-2081; international access number for the replay is
1-703-925-2533. Please use access code 622830.
About Airspan Networks Inc.
Airspan Networks provides wireless voice and data systems and solutions,
including Voice Over IP (VoIP), to operators around the world in both licensed
and unlicensed frequency bands between 700 MHz and 6 GHz, including both PCS and
3.5GHz international bands. Airspan has a strong product roadmap that includes
offerings compliant with the new WiMAX 802.16-2004 standard, and software
upgradeability to 802.16e from the time the WiMAX products are introduced.
Airspan is on the Board and a founder member of the WiMAX Forum. The Company has
deployments with more than 200 operators in more than 100 countries. Airspan's
systems are based on radio technology that delivers excellent area coverage,
high security and resistance to fading. Airspan's systems can be deployed
rapidly and cost effectively, providing an attractive alternative to traditional
wired communications networks. Airspan also offers radio planning, network
installation, integration, training and support services to facilitate the
deployment and operation of its systems. Airspan is headquartered in Boca Raton,
Florida with its main operations center in Uxbridge, United Kingdom.
More information on Airspan can be found at http://www.airspan.com
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical facts,
including statements regarding our strategy, future operations, financial
position, future revenues, projected costs, prospects, plans and objectives of
management, may be deemed to be forward-looking statements. The words "targets",
"anticipates," "believes," "estimates," "expects," "intends," "may," "plans,"
"projects," "will," "would" and similar expressions or negative variations
thereof are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We may not actually
achieve the plans, intentions or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our forward-looking
statements. There are a number of important factors that could cause actual
results or events to differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make. Investors and
others are therefore cautioned that a variety of factors, including certain
risks, may affect our business and cause actual results to differ materially
from those set forth in the forward-looking statements. These risk factors
include, without limitation, (i) a slowdown of expenditures by communication
service providers; (ii) increased competition from alternative communication
systems; (iii) the failure of our existing or prospective customers to purchase
products as projected; (iv) our inability to successfully implement cost
reduction or containment programs; (v) a loss of any of our key customers; (vi)
our ability to retain Axtel, Mexico, as our largest customer; and (vii) our
ability to continue to sell the Proximity products on terms and conditions
comparable to those currently utilized. The Company is also subject to the risks
and uncertainties described in its filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended December
31, 2003. You should read those factors as being applicable to all related
forward-looking statements wherever they appear in this press release. We do not
assume any obligation to update any forward-looking statements.
For Investment and Media Inquiries, contact:
- --------------------------------------------
Peter Aronstam
Senior Vice President & Chief Financial Officer
Airspan Networks, Inc.
Tel: +1 561 893-8682
Fax: +1 561 893-8681
Email: paronstam@airspan.com
Fourth Quarter 2004 Earnings - page 5 of 6
Airspan Networks Inc
Consolidated Statements of Income
(in thousands except for share and per share data)
Three months ended Year to date
December December December December
31, 2003 31, 2004 31, 2003 31, 2004
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Revenue $ 9,023 $ 37,523 $ 30,651 $ 94,647
Cost of revenue (6,332) (26,975) (22,945) (66,144)
Inventory provision (348) -- (4,746) (1,099)
------------ ------------ ------------ ------------
Gross profit 2,343 10,548 2,960 27,404
------------ ------------ ------------ ------------
Operating expenses:
Research and development 3,593 4,510 14,395 18,794
Sales and marketing 2,860 2,919 10,389 11,013
Bad debt provision 946 -- 946 549
General and administration 2,066 2,821 8,741 11,042
Amortization of intangibles 41 144 172 723
Restructuring provision 431 -- 750 413
------------ ------------ ------------ ------------
Total operating expenses 9,937 10,394 35,393 42,534
------------ ------------ ------------ ------------
(Loss) / profit from operations (7,594) 154 (32,433) (15,130)
Net interest and other income 921 1,133 2,983 3,217
------------ ------------ ------------ ------------
(Loss) / profit before tax (6,673) 1,287 (29,450) (11,913)
------------ ------------ ------------ ------------
Income tax charge / (credit) 1 (1,988) 5 (1,938)
------------ ------------ ------------ ------------
Net (loss) / profit $ (6,674) $ 3,275 $ (29,455) $ (9,975)
============ ============ ============ ============
Net (loss) / profit per share - basic $ (0.19) $ 0.09 $ (0.84) $ (0.27)
Weighted average shares outstanding - basic 35,436,133 37,259,980 35,073,315 36,441,932
Net (loss) / profit per share - diluted $ (0.19) $ 0.07 $ (0.84) $ (0.27)
Weighted average shares outstanding - diluted 35,436,133 47,005,638 35,073,315 36,441,932
Fourth Quarter 2004 Earnings - page 6 of 6
Airspan Networks Inc
Consolidated Balance Sheets
(in thousands)
December December
31, 2003 31, 2004
------------ ------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 33,926 $ 66,296
Restricted cash 1,588 1,687
Accounts receivable 12,509 20,947
Unbilled accounts receivable 54 43
Inventory 18,215 12,834
Prepaid expenses and other current assets 4,570 5,702
------------ ------------
Total Current Assets 70,862 107,509
Property, plant and equipment, net 3,736 3,707
Goodwill, net 3,136 789
Intangible assets, net 4,554 1,672
Long-term accounts receivable -- 305
Other non-current assets 984 1,216
------------ ------------
Total Assets $ 83,272 $ 115,198
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 7,751 $ 24,615
Accrued taxes 449 653
Deferred revenue 989 627
Customer Advances 15,070 4,789
Other accrued expenses 10,000 11,349
------------ ------------
Total Current Liabilities 34,259 42,033
------------ ------------
Stockholders' Equity
Preferred Stock -- --
Common stock 11 11
Note receivable - stockholder (130) (87)
Additional paid in capital 215,209 249,917
Treasury stock (797) --
Other comprehensive income 1,839 418
Accumulated deficit (167,119) (177,094)
------------ ------------
Total Stockholders' Equity 49,013 73,165
------------ ------------
------------ ------------
Total Liabilities and Stockholders' Equity $ 83,272 $ 115,198
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