SOURCE: Airspan Networks Inc.

August 06, 2008 07:30 ET

Airspan Announces Second Quarter 2008 Results

BOCA RATON, FL--(Marketwire - August 6, 2008) - Airspan Networks Inc. (NASDAQ: AIRN)

Highlights

--  $21.4 million in revenues for second quarter 2008
--  Net cash used in the quarter of $0.9 million
--  Cash, cash equivalents, short-term investments and restricted cash
    amounted to $33.1 million at the end of the quarter
--  Revenue derived from over 90 WiMAX customers in the second quarter
    2008
--  Increased WiMAX deployments in the US with new FCC approved products
--  WiMAX Network expansions in Middle East, Eastern Europe and Latin
    America
--  WiMAX Forum® Wave II certification for Mobile WiMAX USB
    

Airspan Networks Inc. (NASDAQ: AIRN), a leading provider of WiMAX based broadband wireless access networks, today announced results for the second quarter ending June 29, 2008. Second quarter 2008 total revenues decreased by 3% to $21.4 million compared to $22.1 million for the second quarter of 2007. The second quarter gross margin was 32%, compared to 8% in the second quarter of 2007, which included a significant inventory write-down. Net loss attributable to common stockholders was $8.8 million or $0.15 per share for the second quarter of 2008, compared with a loss of $11.7 million or $0.29 per share in the second quarter of 2007.

Key Figures
                                        Second Qtr  Second Qtr  First Qtr
In $US thousands except for EPS            2008        2007        2008
                                        ----------  ----------  ----------

Total Revenue                               21,391      22,073      17,159
                                        ----------  ----------  ----------

WiMAX Revenue                               12,708      14,125      13,321
                                        ----------  ----------  ----------

Non-WiMAX Revenue                            8,683       7,948       3,838
                                        ----------  ----------  ----------

Gross profit                                 6,744       1,850       5,236
                                        ----------  ----------  ----------

Operating Expenses                          15,735      13,707      15,596
                                        ----------  ----------  ----------

Net Loss                                    (8,820)    (11,676)    (10,052)
                                        ----------  ----------  ----------

Net loss per share (basic and diluted)  $    (0.15) $    (0.29) $    (0.17)
                                        ----------  ----------  ----------
Weighted Average Common Shares
 Outstanding (1)                        58,682,735  40,820,968  58,599,702
                                        ----------  ----------  ----------

(1) Excludes shares of common stock issuable on exercise of stock options and 21,630,856 shares of common stock issuable on conversion of the Company's Series B preferred stock.

"We have registered a well executed quarter in a dynamic market environment. Our fixed network business continues to be strong. We see great potential across all regions for our products, winning new customers and growing incumbent accounts. Our relationships with Fujitsu, Gilat, and Nortel continue to grow revenues and new customers. In addition, our mobile products are advancing rapidly evidenced by our successful mobile WiMAX certification," commented Eric Stonestrom, Airspan's president and chief executive officer.

"Commercial activity in the quarter included several expansion contracts in the Middle East, Eastern Europe and Latin America. These contract extensions underscore our customers' reliance on Airspan products to grow their businesses. We are winning new contracts globally which highlights our competitive product offerings in both emerging and fully developed economies.

"We are increasingly confident as we move into the second half of the year. The WiMAX market holds significant growth potential and while we will continue to target operational efficiencies, we will also aggressively pursue business opportunities, invest in our technology and marketing, and continue to work with our strategic partners to grow our business," Mr. Stonestrom continued.

Second Quarter Financial details

Total second quarter revenues decreased year over year by 3% to $21.4 million compared with $22.1 million in the second quarter of 2007. Compared to the first quarter 2008 revenues of $17.2 million, second quarter revenues increased 25%, driven by a significant increase in non-WiMAX revenues, which amounted to $8.7 million in the quarter. WiMAX revenues were down 5% at $12.7 million in the second quarter of 2008, compared to $13.3 million in the first quarter 2008.

Gross margin was 32% compared to 8% recorded in the same quarter of 2007. Total operating expenses for the second quarter of 2008 were $15.7 million, a 15% increase over the same period last year. A restructuring charge of $0.6 million was recorded in the quarter related to cost cutting initiatives, compared to a credit of $0.5 million in the corresponding second quarter of 2007.

Geographically, in the second quarter of 2008, approximately 35% of revenue was derived from customers in Mexico, Latin America and the Caribbean, 24% from customers in Europe, 21% from customers in Africa and the Middle East, 13% from customers in the United States and Canada and 7% from customers in Asia.

Cash, cash equivalents, short-term investments, and restricted cash amounted to $33.1 million compared to $34.0 million at March 30, 2008, resulting in cash usage for the quarter of $0.9 million. Days Sales Outstanding (DSOs) were 67 at the end of the second quarter, down significantly from 110 at the end of 2007.

"We are very focused on growing our revenues and efficiently managing our costs and cash resources. We are increasing our sales and marketing activity around our award winning WiMAX products while reducing expenditures in other non-core areas," commented David Brant, Airspan's chief financial officer.

Outlook

"The business outlook in the second half looks improved from the recent past as more operators utilize fixed WiMAX, and mobile WiMAX increases in momentum. Given the current market perspectives, we anticipate that our full year revenue will be in the range of $90 million and WiMAX will continue to increase as a percentage of our customer wins and revenues," commented Mr. Stonestrom.

Conference Call

The Company has scheduled an investor conference call for 8:30 a.m., EDT today. Please call the following dial-in number to participate in the call: 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 55751459. A replay of the call will be available approximately two hours following the live session through September 6, 2008. The U.S. toll-free number for the replay is (800) 642-1687; international dial-in number for the replay is +1 (706) 645-9291. Please use access code 55751459.

Investors may also register for the audio webcast 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=49900.

About Airspan Networks Inc.

Airspan is the industry's leading WiMAX pure player, ranked #1 for IEEE802.16-2004 WiMAX revenue in 2007 and has now been selected for some of the world's largest mobile WiMAX deployments. With direct sales offices throughout Asia, EMEA and the Americas, a worldwide network of resellers and agents, and partnership alliances with major OEMs, Airspan boasts over 100 commercial WiMAX deployments worldwide. 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 December 31, 2007 and Quarterly Reports on Form 10-Q for 2008. 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
                  ---------------------------  ---------------------------
                  June 29, 2008  July 1, 2007  June 29, 2008  July 1, 2007
                  -------------  ------------  -------------  ------------
                          (unaudited)                  (unaudited)
Revenue           $      21,391  $     22,073  $      38,550  $     48,733
Cost of revenue         (14,647)      (20,223)       (26,570)      (38,631)

                  -------------  ------------  -------------  ------------
Gross profit              6,744         1,850         11,980        10,102
                  -------------  ------------  -------------  ------------

Operating
 expenses:
Research and
 development              6,738         5,844         13,674        11,387
Sales and
 marketing                4,302         3,508          8,541         6,870
Bad debt
 provision                  426           723            473           955
General and
 administrative           3,395         3,923          7,535         8,164
Amortization of
 intangibles                234           234            468           468
Restructuring               640          (525)           640          (485)

                  -------------  ------------  -------------  ------------
Total operating
 expenses                15,735        13,707         31,331        27,359
                  -------------  ------------  -------------  ------------

Loss from
 operations              (8,991)      (11,857)       (19,351)      (17,257)

Interest income,
 net                        117           207            233           487

Other income, net            71           (28)           313             3

                  -------------  ------------  -------------  ------------
Loss before
 income taxes            (8,803)      (11,678)       (18,805)      (16,767)

Income tax
 (provision)/
 benefit                    (17)            2            (67)          (37)

                  -------------  ------------  -------------  ------------
Net loss          $      (8,820) $    (11,676) $     (18,872) $    (16,804)
                  =============  ============  =============  ============


Net loss per
 share - basic
 and diluted      $       (0.15) $      (0.29) $       (0.32) $      (0.41)

Weighted average
 shares
 outstanding -
 basic and
 diluted             58,682,735    40,820,968     58,641,218    40,674,533








                           Airspan Networks Inc.

                       Consolidated Balance Sheets
                              (in thousands)



                                        June 29, 2008    December 31, 2007
                                      -----------------  -----------------
                                          Unaudited           Audited
                ASSETS
Current Assets
Cash and cash equivalents             $          25,710  $          30,815
Restricted cash                                     544                393
Short-term investments                            6,860              5,504
Accounts receivable, less allowance
 for doubtful accounts                           18,625             33,853
Inventory                                        13,351             16,720
Prepaid expenses and other current
 assets                                           3,939              5,338
                                      -----------------  -----------------
  Total Current Assets                           69,029             92,623

Property, plant and equipment, net                5,316              5,895
Goodwill                                         11,633             10,231
Intangible assets, net                            3,480              1,870
Other non-current assets                             --              3,402

                                      -----------------  -----------------
  Total Assets                        $          89,458  $         114,021
                                      =================  =================

   LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

Accounts payable                      $           7,728  $          11,938
Deferred revenue                                  2,858              5,125
Customer advances                                   781                892
Other accrued expenses                           12,497             13,063
Short-term debt                                   7,500              7,500
                                      -----------------  -----------------
  Total Current Liabilities                      31,364             38,518
                                      -----------------  -----------------

Non Current Liabilities
Long-term debt                                    1,787              1,787
Accrued interest on long term debt                  193                191
                                      -----------------  -----------------
Total Liabilities                                33,344             40,496
                                      -----------------  -----------------

Stockholders’ Equity
Common stock                                         17                 17
Note receivable - stockholder                       (87)               (87)
Additional paid in capital                      351,179            349,718
Accumulated deficit                            (294,995)          (276,123)
                                      -----------------  -----------------
  Total Stockholders’ Equity                     56,114             73,525
                                      -----------------  -----------------

                                      -----------------  -----------------
  Total Liabilities and Stockholders’
   Equity                             $          89,458  $         114,021
                                      =================  =================

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: dbrant@airspan.com

    Charlotte Laurent-Ottomane
    Investor Relations
    Email: clottomane@airspan.com
    Tel. +561 395 4581