Airspan Networks Inc. Announces Record Third Quarter Results

London, October 17, 2000 – Airspan Networks Inc. (Nasdaq: AIRN) today reported record results for its third quarter ended October 1, 2000. Revenue totaled $8.8 million, a 151 percent increase from third quarter 1999 and a 28 percent increase from second quarter 2000. Gross profit was $3.3 million, or 37 percent of revenue, while net loss decreased to $5.9 million from $7.0 million in the second quarter 2000.

Airspan recorded its fourth consecutive quarter with record revenue driven by significant network shipments to customers in Ireland, Poland and the U.S. During the quarter, sales were recorded to a record 26 customers including nine new customers, representing almost 30 percent of revenue.

A significant milestone during the quarter was the first commercial shipment of PacketDrive. “We are extremely pleased with the market reaction to PacketDrive which expands our portfolio of wireless DSL offerings by providing higher IP speeds.” said Eric Stonestrom, Airspan president and CEO.  “We see growing momentum in operators building the local wireless Internet and our PacketDrive product positions us well for future growth.”

On a year-to-date basis, revenue totaled $21.3 million; up over 200 percent from the comparable 1999 period, while gross profit was 36 percent of revenue and net loss aggregated $20.0 million.

Details

For the three months ended October 1, 2000, European sales were $ 4.9 million, up 229 percent from third quarter 1999. Sales to customers in Asia totaled $ 2.0 million, a 53 percent increase from third quarter 1999, while revenue from U.S. customers was $1.2 million and included shipments of the new PacketDrive product. Gross profit totalled 37 percent of revenue, essentially unchanged from the third quarter 1999, but up 2.1 points from the second quarter 2000, helped by lower product costs and favourable product mix.

Operating expenses aggregated $10.3 million, compared to $8.4 million during third quarter 1999. Increased expenditures occurred in sales and marketing, up $1.1 million, mainly additional sales personnel costs, higher commissions based on additional revenue and increased trade show expenses, and research and development, up $0.9 million, mainly increased project activity focused on new product development and product cost reductions. In addition, general and administration increased $0.4 million, mainly growth related.

Net interest and other income totaled $1.1 million for the quarter, a $1.1 million increase from the third quarter 1999. Net loss was $5.9 million or $0.17 per share compared to a pro-forma net loss per share of $0.35 for the prior year quarter, assuming conversion of convertible preferred shares into common stock that occurred in conjunction with the Company’s initial public offering during July 2000.

“Our third quarter results reflect the strong and growing demand for our wireless DSL products,” said Joe Caffarelli, Airspan’s CFO. “Airspan continues to achieve key objectives in the areas of product development, product delivery capability and infrastructure expansion required to meet this growing demand. We are pleased with our team’s ability to manage our growth. Expense levels are clearly on plan while cash usage was well below expectations.”

Year-to-date revenue aggregated $21.3 million a 209 percent increase from 1999 while gross margin was 36 percent of revenue, compared to 39 percent during 1999. The decline in gross margin was driven by the planned increase in subscriber terminal shipments as service providers accelerated network build-outs. Year-to-date 2000 operating expenses aggregated $29.9 million and were essentially equal to forecast but up $6.5 million compared to year-to-date 1999. Increases occurred in sales and marketing, up $3.9 million mainly due to additional sales personnel costs, additional commissions and higher exhibition and product demonstration costs, and research and development, up $2.7 million, mainly new product development programs and cost reduction projects.

Net interest and other income for year-to-date 2000 totaled $2.1 million, up $2.0 million from 1999 year-to-date, and reflected increased interest income on greater cash balances on deposit with financial institutions. Net loss was $20.0 million or $0.67 on a pro-forma per share basis compared to $20.6 million for 1999 year-to-date, or $1.02 per share pro-forma.

A conference call is scheduled for Tuesday, October 17 at 5 p.m. EDT. The call-in number for within the U.S. is 800 482 5519. For access internationally, dial +1 303 224 6998. Callers should reference the Airspan Networks conference. Replay of the conference can be accessed by dialling 800 625 5288 from the U.S. and +1 303 804 1855 internationally. Please reference pass code 830414. The replay will be available for 48 hours after the live conference.

About Airspan Networks

Airspan is dedicated to providing wireless DSL systems and solutions to communications service providers around the world with licenses in frequency bands between 900 MHz to 4.0 GHz, including both PCS and MMDS. The company has deployments with more than 40 communications service providers in more than 30 countries. Airspan’s systems are based on DS-CDMA technology that provides wide area coverage, 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. More information on Airspan can be found at http://www.airspan.com

This press release contains forward-looking statements relating to future events or future financial performance that involve risks and uncertainties. Such statements can be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or comparable terms. These statement are only predictions and actual results could differ materially from those anticipated in these statements based upon a number of factors including the projected increase in demand for high-speed data transmission in Europe, demand in the Czech Republic and those identified in the Company's filings with the SEC.

For further information contact:
Airspan Networks Inc                                                            
Joseph Caffarelli                                                                                
Chief Financial Officer                                                          
Tel:   +1 425 637 5614                                                                       
Fax:  +44 1895 467 202
Email: jcaffare@airspan.com