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BOCA RATON, FL—NOVEMBER 3, 2004 -- Airspan Networks Inc. (Nasdaq: AIRN) today announced third quarter financial results for the period ending October 3, 2004. The Company reported revenues for the third quarter of $26.5 million, up 45% from the second quarter of 2004 and up 320% versus the third quarter of 2003. The net loss attributable to common stockholders for the third quarter was $0.09 per share versus a loss of $0.12 in the second quarter of 2004 and $0.19 in the third quarter 2003. Business Highlights
Financial Highlights
Financial Results Third quarter revenue of $26.5 million was 45% higher than the $18.3 million recorded for the second quarter of 2004 and 320% higher than the $6.3 million in the third quarter of 2003. The Company recorded a gross profit of $7.1 million. Gross profit as a percentage of revenue was 27% after providing $1.1 million for excess and obsolete inventory in the third quarter relating to our older product lines. This compared to a gross profit of $6.1 million, or 33%, for the second quarter of 2004 and an eleven fold improvement on the gross profit of $0.6 million recorded for the third quarter of 2003. The Company’s third quarter operating expenses of $11.1 million were $0.1 million lower than the second quarter. Net loss for the third quarter of 2004 was $3.5 million, or $0.09 per share, compared to a loss of $4.4 million, or $0.12 per share, in the second quarter of 2004 and a loss of $6.8 million, or $0.19, in the third quarter of 2003. The Company’s cash balance, including restricted cash, at the end of the third quarter stood at $68.4 million. Total cash grew in the third quarter by $21.1 million, mainly due to the sale of 73,000 shares of Series A Preferred Stock for $29.2 million as announced in September. As expected, restricted cash fell by $8.4 million to $16.4 million at the end of the third quarter, reflecting deliveries of equipment that had been prepaid. “I’m delighted that we can report a third consecutive record level of quarterly revenues.” said Eric Stonestrom, Airspan’s president and chief executive officer. “Our revenue continues to grow as planned with record sales supported by a continued influx of new customers, particularly in our WipLL product line. The sale of Preferred Stock in the third quarter puts us in a good position to be able to continue to invest for ongoing growth. We are excited about our leadership position in WiMAX and the recently-announced relationship with picoChip, which has created a strong upgradeable WiMAX technology platform to meet the evolution of the IEEE 802.16 standard to mobile applications. We have also received the first sample chips from Intel for our customer premise terminals, and we expect to begin commercial WiMAX deployments in the second half of 2005.” “Our operational costs remained high as we continue to work towards Sarbanes Oxley compliance and invest in developing our next-generation portfolio of products,” said Peter Aronstam, chief financial officer. “These are important factors for our longer term position and cannot be compromised, but we believe both are at their peak currently. We felt pressure on gross margins in the third quarter due to supply chain issues and a provision on older inventory, but we closed the third quarter with inventory levels $4.8 million lower than the previous quarter, reflecting our increased efficiency in total inventory utilization. Cash management continues to be strong, with additional funds coming in and reduced inventory both helping improve our liquidity position, despite the expected reduction in customer advances.” Fourth Quarter and Full year Outlook Stonestrom also commented that he expects revenue for the fourth quarter to be in the range of $30 to $32 million, and to exceed $86 million for the full year. “We are still targeting a profitable fourth quarter as previously advised and, based on our assumptions of increased revenues, sustained average 2004 margins and declining operating expenses, we believe this is an achievable objective.” Investor Conference 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 1-866-814-1917; international access dial-in number is 1-703-639-1361. Reference the Airspan Networks quarterly conference call. There will be a live webcast of the conference call available on the investor relations section of the Airspan Web site at http://www.airspan.com. The webcast will also be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at http://www.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network such as America Online's Personal Finance Channel, Fidelity Investments(R) (http://www.fidelity.com) and others. Institutional investors can access the call via CCBN's password protected event management site, StreetEvents (http://www.streetevents.com). For those who cannot listen to the live broadcast, an audio replay of the call will be available on the Airspan Web site for 30 days. The US toll-free number for the replay is 1-888-266-2081; international access number for the replay is 1-703-925-2533. Please use access code 577149.
About Airspan Networks, Inc. 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 inventory 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 for the year ended December 31, 2003. 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,
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