Financial Highlights
-- WiMAX represented 64% of revenue at $14.1 million for the quarter
-- WiMAX product shipments in the second quarter amounted to $16.6
million, including $2.5 million of deferred revenue
-- Total revenue decreased by 51% quarter over quarter, largely driven by
a decrease in non-WiMAX business and the winding down of the Yozan contract
-- Non-WiMAX inventory provision taken in the quarter of $5.9 million
-- Total OPEX decreased year over year by 19%
-- Customers - shipped over $1 million to each of four WiMAX customers
-- Cash at $24.4 million (includes cash equivalents, short-term
investments, and restricted cash)
Business Highlights
-- Secured $4.5 million Guyana Telephone and Telegraph and $2.7 million
Multimedia Polska orders
-- Expanded success in the North Africa/Middle East region, securing a
Tier 1 incumbent account, a mobile carrier, and a government expansion
project, for total orders exceeding $5 million
-- Awarded supply contract with Northern European Tier 1 carrier for 2
year term
-- Won bid for 5.8 GHz WiMAX for launch in BigAir's Australian network
following extensive competitive evaluation
-- Received two expansion orders with significant operators in 3.5 GHz in
Russia
-- Launched Vodafone Malta network
-- Continued expansion with award of Phase One of Pipex's commercial
rollout in the UK
Airspan Networks Inc. (
Key Figures Second Qtr Second Qtr First Half First Half
In $US thousands except
for EPS 2007 2006 2007 2006
---------- ---------- ---------- ----------
Total Revenue 22,073 45,435 48,733 69,235
---------- ---------- ---------- ----------
WiMAX Revenue 14,147 24,743 28,827 26,764
---------- ---------- ---------- ----------
Non-WiMAX Revenue 7,926 20,692 19,906 42,471
---------- ---------- ---------- ----------
Gross profit 1,850 8,725 10,102 15,163
---------- ---------- ---------- ----------
Operating Expenses 13,703 17,011 27,369 32,199
---------- ---------- ---------- ----------
Loss from Operations (11,853) (8,286) (17,267) (17,036)
---------- ---------- ---------- ----------
Net Loss (11,676) (7,674) (16,804) (15,961)
---------- ---------- ---------- ----------
EPS $ (0.29) $ (0.19) $ (0.41) $ (0.40)
---------- ---------- ---------- ----------
Weighted Average
Common Shares
Outstanding (1) 40,820,968 39,902,699 40,674,533 39,817,995
---------- ---------- ---------- ----------
(1) Excludes shares of common stock issuable on exercise of stock options
and 20,069,000 shares of common stock issuable on conversion of the
Company’s Series B preferred stock.
"We continue to grow our WiMAX business and the wins we have recorded
during the quarter affirm our product strategy," said Eric Stonestrom,
Airspan's president and chief executive officer. "We have won contracts
with incumbent carriers as well as with innovative mobile operators
expanding their subscriber footprint."
"We are optimistic about the WiMAX market in general, and the positioning
of our products in the mobile as well as the fixed application space. Our
non-WiMAX products that address licensed spectrum with proprietary
technology continue to decline at a rapid pace as many current and
potential customers are in a WiMAX decision making phase. This is clearly
a transition year for our customer base and, accordingly, for our
business."
"The significant decline in non-WiMAX revenues for the second quarter in a
row resulted in an inventory write-down of $5.9 million for the quarter as
we reassessed the ongoing demand for these products," commented David
Brant, Airspan's chief financial officer. "As a result, the gross margin
came in at 8% of revenue. Excluding the inventory write-down, the non-GAAP
gross margin was 35%, due to a favorable product mix with a higher
percentage of WiMAX revenue and a continued push on manufacturing
efficiencies. Total operating expense decreased by 19% over the same
period last year in line with our cost reduction initiatives."
Cash and cash equivalents (includes cash equivalents, short-term
investments, and restricted cash) amounted to $24.4 million at July 1,
2007. On August 7, 2007, we signed an amendment with Silicon Valley Bank
to increase the facility from $10 million to $20 million, capped primarily
by a percentage of eligible receivables, which at the end of the second
quarter 2007 were approximately $13 million. Borrowing under this facility
at the end of the second quarter 2007 was $7.5 million.
Outlook
"The widespread acceptance of our products confirms Airspan as a leading
WiMAX supplier. We expect to continue to grow our WiMAX business as the
market evolves," said Mr. Stonestrom. "We believe we have a solid pipeline
and we expect WiMAX growth in the second half, accelerating towards the end
of the year as we ship more of our newer mobile-ready products and achieve
revenue recognition milestones. For the full year 2007, we continue to
expect strong WiMAX growth over 2006 and expect full year WiMAX revenue to
be approximately $65 million. In addition to the $65 million, we expect to
deliver WiMAX products for some projects with revenue criteria that will
result in a deferral of revenue to 2008. We expect our non-WiMAX business
to generate approximately $10 million in revenue in the second half
resulting in a full year total revenue expectation of approximately $95
million."
"In addition, we anticipate third quarter 2007 revenue to be comparable to
the second quarter 2007 revenue with increasing sales of WiMAX products
being offset by a continued decline in non-WiMAX sales."
Conference Call
The Company has scheduled an investor conference call for 5 p.m. EDT today.
The dial-in numbers for the live conference call are as follows: US
toll-free number is (888) 443-9987; the international access dial-in number
is +1 (706) 634-0598. Please reference the Airspan Networks quarterly
conference call Conference ID # 5930654. Investors may register for the
live web cast of the conference call under the 'financial calendar' tab of
the Investor Relations section of the Airspan Web site at
http://www.visualwebcaster.com/event.asp?id=41677
For those who cannot listen to the live broadcast, an audio replay of the
call will be available under the 'audio archives' section of the Investor
Relations section the Airspan Web site. The US toll-free number for the
replay is (800) 642-1687; international access number for the replay is +1
(706) 645-9291. Please use access code 5930654.
About Airspan Networks Inc.
Airspan Networks provides wireless voice and broadband data systems and
solutions for the fixed and mobile WiMAX and Wi-Fi markets, including Voice
Over IP (VoIP). Its wireless products serve operators around the world in
both licensed and unlicensed frequency bands between 700 MHz and 6 GHz.
Airspan has a strong wireless product roadmap that includes WiMAX Forum
Certified equipment and products meeting 802.11 a/b/g Wi-Fi standards,
Airspan's HiperMAX and MicroMAX base station products support portable and
mobile 802.16e-2005 WiMAX alongside fixed and nomadic 802.16-2004 products.
Airspan products also include "self install" and professionally installed
customer premise equipment. Airspan is on the Board and is a founder member
of the WiMAX Forum and a member of the Wi-Fi Alliance. The Company has
deployments in more than 100 countries with more than 400 operators, 100 of
which use Airspan's WiMAX Forum Certified and non-certified products.
Airspan's wireless systems are based on radio technology that delivers
excellent area coverage, high security and resistance to fading. These
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 an international telecommunications equipment
provider headquartered in Boca Raton, Florida.
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 "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. The
Company is 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 31 December, 2006. 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.
Airspan Networks Inc.
Consolidated Statements of Operations
(in thousands except for share and per share data)
Quarter End Year-to-Date
---------------------- ----------------------
July 2, July 1, July 2, July 1,
2006 2007 2006 2007
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Revenue $ 45,435 $ 22,073 $ 69,235 $ 48,733
Cost of revenue (36,710) (20,223) (54,072) (38,631)
---------- ---------- ---------- ----------
Gross profit 8,725 1,850 15,163 10,102
---------- ---------- ---------- ----------
Operating expenses:
Research and development 6,675 5,781 12,785 11,387
Sales and marketing 5,026 3,508 9,531 6,870
Bad debt provision 715 723 1,251 955
General and administrative 4,320 3,982 8,082 8,174
Amortization of intangibles 275 234 550 468
Restructuring - (525) - (485)
---------- ---------- ---------- ----------
Total operating expenses 17,011 13,703 32,199 27,369
---------- ---------- ---------- ----------
Loss from operations (8,286) (11,853) (17,036) (17,267)
Interest expense (72) (48) (84) (71)
Interest and other income 689 223 880 571
---------- ---------- ---------- ----------
Loss before income taxes (7,669) (11,678) (16,240) (16,767)
Income tax (credit)/charge (5) 2 279 (37)
---------- ---------- ---------- ----------
Net loss $ (7,674) $ (11,676) $ (15,961) $ (16,804)
========== ========== ========== ==========
Net loss per share - basic
and diluted $ (0.19) $ (0.29) $ (0.40) $ (0.41)
Weighted average shares
outstanding- basic and
diluted 39,902,699 40,820,968 39,817,995 40,674,533
Airspan Networks Inc.
Consolidated Balance Sheets
(in thousands)
December 31, 2006 July 1, 2007
----------------- -----------------
(audited) (unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 15,890 $ 13,257
Restricted cash 1,111 628
Short-term investments 10,233 10,519
Accounts receivable, less allowance
for doubtful accounts 31,063 27,143
Unbilled accounts receivable 711 58
Inventory 23,624 16,465
Prepaid expenses and other current
assets 5,935 4,490
----------------- -----------------
Total Current Assets 88,567 72,560
Property, plant and equipment, net 5,705 5,581
Goodwill 10,231 10,231
Intangible assets, net 2,806 2,337
Other non-current assets 3,245 3,150
----------------- -----------------
Total Assets $ 110,554 $ 93,859
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 15,940 $ 11,692
Accrued taxes 687 646
Deferred revenue 6,656 3,770
Customer advances 1,665 1,856
Other accrued expenses 16,197 13,388
Short-term debt - 7,500
----------------- -----------------
Total Current Liabilities 41,145 38,852
----------------- -----------------
Non Current Liabilities
Long-term debt 1,707 1,760
Stockholders’ Equity
Common stock 12 12
Note receivable - stockholder (87) (87)
Additional paid in capital 308,768 311,117
Accumulated deficit (240,991) (257,795)
----------------- -----------------
Total Stockholders’ Equity 67,702 53,247
----------------- -----------------
----------------- -----------------
Total Liabilities and
Stockholders’ Equity $ 110,554 $ 93,859
================= =================
Airspan Networks Inc.
Reconciliation of adjusted non-GAAP to GAAP Gross Margin %
(in thousands except for percentages)
Quarter End
--------------------------
July 2, 2006 July 1, 2007
------------ ------------
(unaudited)
GAAP gross profit as reported $ 8,725 $ 1,850
Add:
Inventory provision 4,280 5,898
------------ ------------
Adjusted gross margin (non-GAAP) $ 13,005 $ 7,748
(Excluding inventory provision)
GAAP gross margin % as reported 19% 8%
Adjusted non-GAAP gross margin % 29% 35%
Contact Information: For Investor Relations and Media Inquiries, contact: David Brant Senior Vice President & Chief Financial Officer Airspan Networks Inc. Tel: +1 561 893-8650 Fax: +1 561 893-8681 Email: