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EXHIBIT
99.1
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Airspan
Networks Announces Results for the Third Quarter of 2005
Sales
across all product lines strong
BOCA
RATON, Fla.—November 2, 2005
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Airspan Networks Inc. (Nasdaq: AIRN)
today
announced significant increases in revenue and operating cash flow, and
reduction of losses, in its financial results for the third quarter ending
October 2, 2005. The Company reported revenues for the third quarter of $30.5
million, up 15% versus the third quarter of 2004 and up 50% over the preceding
quarter. The net loss attributable to common stockholders for the third quarter
was $(0.05) per share versus a loss of $(0.38) per share in the third quarter
2004 and a loss of $(0.17) in the preceding quarter.
Third
Quarter Business Highlights Included:
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Sales
Records Beaten
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Non-Proximity
sales grew by over 15% to their highest-ever quarterly level.
WipLL sales
were particularly strong, driven by continued worldwide growth.
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WiMAX
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Significant
WiMAX shipments in all regions. WiMAX
product was shipped to customers in the Americas, Europe, Middle
East and
Africa, and the Asia Pacific regions.
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Addition
of Nortel to OEM Partner list, and first shipments to OEM partners
Ericsson and Marconi. Traction
in over 8 markets with these partners in the third quarter, including
significant contract with operator owned by major Western European
incumbent operator. Additional markets added in
October.
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WiMAX
Certification.
The certification process for WiMAX equipment was initiated with
Cetecom,
the WiMAX Forum certification laboratory in Spain. It will continue
in the
fourth quarter together with a Plugfest being conducted in Beijing.
Initial certifications are expected
shortly.
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Expansion
of Yozan WiMAX Contact.
An
increase in announced orders under the Yozan contract to $17
million for
the rollout of a WiMAX network in Tokyo, Japan. Shipments will
commence in
the fourth quarter of 2005, with revenue to be recorded in the
first
quarter of 2006. This represents one of the world’s first metropolitan
Metrozone network combining WiMAX, Wi-Fi, and VoIP in a common
packaging.
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Third
Quarter 2005 Earnings - page 2 of
6
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Proximity
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Continued
strong sales to Axtel, backed up by new orders in the quarter,
giving
improved visibility through the end of 2005 and into the start
of 2006.
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Grant
Thornton confirmed as new independent auditor. The
firm will complete the full year 2005 and 2006 audits.
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Financial
Results
Third
quarter revenue of $30.5 million was 15% higher than the $26.5 million
in the
third quarter of 2004, and more than 50% higher than the $20.3 million
of the
preceding quarter, exceeding the guidance provided earlier in the year.
The
Company recorded a gross profit of $9.1 million in the quarter, and gross
profit
as a percentage of revenue (the “gross profit margin”) was 30%. This compared to
a gross profit of $7.1 million and a gross profit margin 27%, for the third
quarter of 2004, and a gross profit of $5.4 million and a gross profit
margin of
27% recorded for the second quarter of 2005. Margin improvement resulted
mainly
from the record level of non-Proximity sales in the third quarter.
The
Company’s third quarter 2005 operating expenses of $12.1 million were up $1.1
million from the third quarter 2004 and down $0.1 million from the prior
quarter’s level. In the third quarter the company incurred unexpected accounting
charges associated with the change of the independent auditor, and also
an
increase in operating expenses and amortization of intangibles arising
out of
the ArelNet acquisition. Net loss for the third quarter of 2005 was $(2.1)
million, or $(0.05) per share, compared to a net loss of ($13.9) million,
or
$(0.38) per share, in the third quarter of 2004. Included in the net loss
for
the third quarter of 2005 is a tax refund of $0.6 million, reflecting a
refund
by the UK tax authorities for prior years’ research and development
expenditures. The results of a year ago included a deemed preferred stock
dividend charge of $10.4 million.
The
Company’s cash balance, including restricted cash, stood at the end of the third
quarter at $52.3 million. Cash increased by $4.8 million over the end of
the
second quarter, primarily because of an increase in customer deposits and
the
tax refund by the UK tax authorities.
Third Quarter 2005 Earnings - page 3 of 6
“Airspan had another quarter of solid revenue growth,” said Eric Stonestrom, Airspan’s president and chief executive officer. “We were pleased to have exceeded our guidance. Good news came from several areas. Our WiMAX certification trials are progressing well, and major operators are showing increasing interest in the product line. We have now delivered WiMAX equipment to customers in every sales region. The growth of our WiMAX order book is very encouraging, driven both by our new OEM partnership agreements and by our direct WiMAX sales efforts. Proximity sales continue to provide a solid platform for sustained business, while WipLL shows steady growth in all geographies and frequencies. The next few quarters look promising.”
“This
was
a successful quarter for both the income statement and the balance sheet,” said
Peter Aronstam, chief financial officer. “The growth and diversification of our
products has provided a stable and increasing source of revenues. Our cash
position benefited from a very strong quarter of collections, and our inventory
turns again were improved. We were also very pleased to announce that Grant
Thornton has agreed to be our independent accounting firm.”
Outlook
Mr.
Stonestrom also gave guidance that the Company expects revenues for the
full
year 2005 to be approximately $106 million.“With
the
increasing demand for WiMAX and strong order books from our other products,
we
expect to see revenues of approximately $33 million in the fourth quarter.
As we
continue to invest in people and infrastructure to support our leading
position
in WiMAX, we expect the Company to report a reduced loss in the fourth
quarter
of approximately $(0.04) per common share.”
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 (866) 261-3330; international access dial-in number is 1-703-639-1224.
Reference the Airspan Networks quarterly conference call.
There
will be a live webcast of the conference call available at http://www.visualwebcaster.com/event.asp?regd=y&id=30885.
Please
register in advance of the webcast at: http://www.visualwebcaster.com/event.asp?id=30885®d=n
Third
Quarter 2005 Earnings - page 4 of
6
For
those
who cannot listen to the live conference call, an audio replay of the call
will
be available for 30 days. The US toll-free number for the replay is (888)
266-2081; the international access number for the replay is 1-703-925-2533.
Please use access code 793314.
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 300 operators in more than 95 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, as
amended by Amendment No.1 on Form 10-K/A, for the year ended 31 December,
2004.
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
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