-- Launch of the HiperMAX Base Station platform, the industry's first
software-defined product for Mobile WiMAX.
-- Record WiMAX revenue through our OEM channel partners, including
HiperMAX customer wins with major Tier 1 carriers in Europe and Latin
America.
-- Development of the Triband USB subscriber device, which will enable
WiMAX services to be delivered to portable devices such as laptop
computers, continued on schedule; the product remains on track for end of
2007 introduction.
-- Addition of the 5.8GHz frequency band to the MicroMAX Base Station
product to address the unlicensed frequency market.
-- WiMAX Forum Certification™ of the MicroMAX 3.5GHz FDD Base Station.
-- Successful interoperability testing of Airspan Wave 2 WiMAX at WiMAX
Mobile plugfests.
Financial Results
Full year reported revenues for 2006 were $127.8 million, up 15% from the
$111.0 million reported for 2005. Gross profit of $32.9 million for 2006
was 4% higher than the $31.5 million recorded in 2005. The gross profit
margin for 2006 was 26% versus 28% in 2005. The small decline in margin
occurred as higher margins generated by increased WipLL, WiMAX and AS.NET
sales were offset by lower pricing of ASX and Proximity products, an
increase in inventory provisions and by higher freight and warranty
expenses that grew as a result of the change in mix of products sold.
Fourth quarter revenues of $31.3 million were 17% lower than the $37.9
million we reported in the fourth quarter of 2005, but 15% higher than the
$27.3 million recorded in the third quarter of 2006. The Company recorded a
gross profit of $10.4 million in the fourth quarter, and gross profit as a
percentage of revenue (the "gross profit margin") was 33%. This compared to
a gross profit of $10.1 million and a gross profit margin of 27% recorded
for the fourth quarter of 2005, and a gross profit of $7.3 million and a
gross profit margin of 27%, for the 2006 third quarter. The improvement in
gross profit margin in the fourth quarter of 2006 over prior periods
resulted primarily from increased sales of higher-margin WipLL, WiMAX and
AS.NET products, which more than offset a decline in sales of lower-margin
Proximity and ASX products, and higher period costs.
The Company's fourth quarter 2006 operating expenses of $15.1 million were
9% greater than the fourth quarter 2005 operating expenses of $13.8 million
and $1.2 million lower than the operating expenses in the 2006 third
quarter. Full year operating expenses were $63.5 million, an increase of
31% over the $48.5 million recorded in 2005. The main increases from 2005
to 2006 related to increased costs of sales and marketing activities and
development efforts on our WiMAX product portfolio, the full-year impact of
our 2005 Arelnet and Radionet acquisitions, recording of stock compensation
costs and increased debt reserve and restructuring charges. In response to
these increases, in the third quarter 2006 the Company implemented expense
reduction efforts that resulted in reduced quarterly operating expenses in
the fourth quarter of 2006.
Net loss for the fourth quarter of 2006 was $4.1 million, or $(0.10) per
common share, compared to a net loss of $3.3 million, or $(0.08) per common
share, in the fourth quarter of 2005, and a net loss of $18.3 million or
$(0.46) per share in the third quarter of 2006. The net loss attributable
to common stockholders for the full year 2006 was $38.4 million, or $(0.96)
per common share compared to a 2005 full year net loss of $15.1 million or
$(0.39) per common share. The increase in net loss in 2006 was due to
higher 2006 operating expenses and the deemed dividend on the issuance and
exchange of preferred stock referred to above.
At the end of 2006, the Company's held cash and cash equivalents,
restricted cash and short term investments of $27.2 million.
"We were very pleased to have ended 2006 with our fourth consecutive year
of double-digit revenue growth and record revenues," said Eric Stonestrom,
Airspan's president and chief executive officer. "2006 was a year of
transition, as we moved the product portfolio from proprietary
technologies, mostly based on circuit switching, to open-standard
Internet-Protocol based products. The revenue growth in IP products more
than offset the declines in the sales of proprietary technologies. We saw
strength in all IP-based product lines, and revenue growth in all
geographic regions. Our expanding WiMAX portfolio has opened up many sales
opportunities, and we continue to work to be first to market with
innovative standards-compliant WiMAX products.
"We believe our development work and new product enhancements in 2006 kept
us at the forefront of the broadband wireless technology race," Stonestrom
continued. "We maintained our ability to leverage our WiMAX products with
voice over the Internet and Wi-Fi capabilities in turnkey solutions. Our
WiMAX development activities led to increased operational spending this
year. That level of spending placed us in a strong position to take
advantage of the rollout of WiMAX mobility technologies."
"We are pleased to be able to report another year of record revenue," said
David Brant, Airspan's chief financial officer. "As expected, our revenues
from legacy products has begun to erode, but sales of WiMAX and other
IP-based technologies more than made up for that erosion."
Outlook
The Company continues to expect growth in 2007 over 2006, with a goal of
double-digit percent revenue growth for the full year. It expects revenues
for the first quarter of 2007 to be in the range of $26 and $28 million,
which would represent, if achieved, an increase from the first quarter of
2006. Sales volumes in the first quarter of each year are generally lower
than for the fourth quarter, reflecting seasonal buying patterns in the
industry. In addition, revenues from legacy Proximity, ASX and ASTone
products are expected to decline by approximately $5.0 million in the first
quarter 2007 from the fourth quarter 2006, as the Company implements phase
out of these 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 888-443-9987; international access dial-in number is
+1-706-634-0598. Reference the Airspan Networks quarterly conference call
ID 5613108.
Investors may register for the live webcast of the conference call at
http://www.visualwebcaster.com/event.asp?id=37946. For those who cannot
listen to the live broadcast, an audio replay of the call will be available
for 30 days. The US toll-free number for the replay is 1-800-642-1687;
international access number for the replay is +1-706-645-9291. Please use
access code 5613108.
About Airspan Networks
Airspan Networks provides fixed and wireless voice and data systems and
solutions, 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, including both PCS and 3.5GHz international
bands. Airspan has a strong wireless product roadmap that includes products
meeting 802.11 a/b/g Wi-Fi standards, and WiMAX Forum Certified equipment
that includes software upgradeability to the Mobile WiMAX 802.16e-2005
standard. 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's AS.TONE VoIP system
is a carrier class, turnkey solution that provides carriers with Class 4,
Class 5 and IP-Centrex solutions and has a Softswitch and Gateways
supporting SIP/H323 and SIP. 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.
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, 2005, its Form 10-Q for the
quarters ended April 2, 2006, July 2, 2006 and October 1, 2006 and its Form
S-3 Registration Statement filed on January 24, 2007. 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)
Three months ended Year to date
December December December December
31, 2005 31, 2006 31, 2005 31, 2006
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Revenue $ 37,894 $ 31,275 $ 110,966 127,812
Cost of revenue $ (27,756) (20,828) (79,467) (94,948)
---------- ---------- ---------- ----------
Gross profit 10,138 10,447 31,499 32,864
---------- ---------- ---------- ----------
27% 33% 28% 26%
Operating expenses:
Research and development 6,099 5,946 21,157 24,797
Sales and marketing 3,359 3,621 11,464 17,203
Bad debt provision 313 709 1,115 2,257
General and administration 3,636 3,885 12,682 16,039
Amortization of intangibles 349 234 942 1,060
Restructuring provision - 655 1,150 2,183
---------- ---------- ---------- ----------
Total operating expenses 13,756 15,050 48,510 63,539
---------- ---------- ---------- ----------
Loss from operations (3,618) (4,603) (17,011) (30,675)
Interest expense (9) (94) (9) (362)
Interest and other income 329 595 1,397 1,589
---------- ---------- ---------- ----------
Loss before income taxes (3,298) (4,102) (15,623) (29,448)
Income tax charge / (credit) 16 16 (546) (246)
---------- ---------- ---------- ----------
Net loss (3,314) (4,118) (15,077) (29,202)
========== ========== ========== ==========
Preferred stock deemed
dividend - - - (9,179)
---------- ---------- ---------- ----------
Net loss attributable to
common stockholders $ (3,314) $ (4,118) $ (15,077) $ (38,381)
========== ========== ========== ==========
Net loss attributable to
common stockholders per
share - basic and diluted $ (0.08) $ (0.10) $ (0.39) $ (0.96)
Weighted average shares
outstanding - basic and
diluted 39,515,854 40,332,136 38,736,939 40,026,411
Airspan Networks Inc.
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2005 2006
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 44,140 $ 15,890
Restricted cash 2,003 1,111
Short term investments 6,020 10,233
Accounts receivable, less allowance for
doubtful debts 24,348 31,063
Unbilled accounts receivable 273 711
Inventory 16,850 23,624
Prepaid expenses and other current assets 3,722 5,935
-------------- --------------
Total Current Assets 97,356 88,567
Property, plant and equipment, net 5,268 5,705
Goodwill, net 10,231 10,231
Intangible assets, net 3,865 2,806
Other non-current assets 3,732 3,245
-------------- --------------
Total Assets $ 120,452 $ 110,554
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 24,678 $ 15,940
Accrued taxes 1,156 687
Deferred revenue 1,514 6,656
Customer Advances 13,935 1,665
Other accrued expenses 13,113 16,197
Current portion of long-term debt 96 -
-------------- --------------
Total Current Liabilities 54,492 41,145
-------------- --------------
Non current liabilities
Long-term debt 1,296 1,554
Accrued interest on long-term debt 53 153
-------------- --------------
Total Non Current Liabilities 1,349 1,707
-------------- --------------
Stockholders' Equity
Preferred Stock - -
Common stock 12 12
Note receivable - stockholder (87) (87)
Additional paid in capital 267,426 308,768
Other comprehensive income (130) -
Accumulated deficit (202,610) (240,991)
-------------- --------------
Total Stockholders' Equity 64,611 67,702
-------------- --------------
-------------- --------------
Total Liabilities and Stockholders'
Equity $ 120,452 $ 110,554
============== ==============
Contact Information: For Investment and Media Inquiries, contact: Airspan Networks Inc: David Brant Chief Financial Officer Tel: (561) 893-8650 Fax: (561) 893-8671 Email: Email Contact