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Netro Reports Q2

Netro Corp. reports revenues up 13% over first quarter; initial shipments of Angel product ahead of plan

July 19, 2002

3 Min Read

SAN JOSE, Calif. -- Netro Corporation (Nasdaq:NTRO) a leading provider of broadband fixed wireless networks, today announced its financial results for the second quarter ending June 30, 2002. Netro's revenue for the quarter ending June 30, 2002 was $5.7 million, a sequential increase of 13 percent from revenues of $5.0 million in the first quarter of 2002 and an increase of 177 percent from the same period in 2001. Net loss for the second quarter of 2002 was $18.5 million or $(0.30) per share, compared to a net loss of $32.4 million or $(0.57) per share for the first quarter of 2002 and $29.8 million, or $(0.57) for the second quarter of 2001. Cash and liquid securities balances as of June 30, 2002 were $278.1 million, or $4.56 per basic share, reflecting a use of $16.6 million in cash during the period. Commenting on financial results, Sanjay Khare, Netro's Chief Financial Officer said: "The 13% increase in revenues from the first to second quarter was primarily attributable to the addition of new customers and systems integration partners in the Middle East, China and North America. Gross margin also improved as compared to the first quarter, increasing by approximately 6 percent, reflecting a modest increase in average selling prices and the impact of initial shipments of our new cost reduced AirStar platform at the end of the quarter. Although we experience price pressure on an ongoing basis, with the continued roll-out of our new cost reduced AirStar platform, we expect margins to improve by 700 to 800 basis points before the end of the year. Cash use in the second quarter was $16.6 million. Use of cash in the quarter was within our guided range of $15-20 million, which is where we expect use of cash to be on a quarterly basis until Angel begins to contribute significantly to gross margin." Commenting on the company's outlook for the third and fourth quarters of 2002, Khare added: "Our strategy going forward is to focus on three primary market segments: carriers serving the voice and high-speed data market for residential and small business applications, which we serve with our Angel product, mobile operators who require infrastructure for their GSM and 3G networks, which we address with our AirStar product and carriers serving small to medium-sized businesses, which we also address with our AirStar product. The company's future results will be driven primarily by the emergence of revenues from the Angel product, the roll-out of third generation cellular networks in Europe, the emergence of the market for both access and backhaul in China, and a general worldwide economic recovery, particularly in Latin America. While the level of interest we are receiving for our Angel product is encouraging, we continue to be dependent on orders for large projects for which the sales cycles are quite long. The UMTS infrastructure front for the AirStar product and China revenue are showing positive signs as well, although delays in UMTS rollout and the China licensing process seem to be continuing. Similarly, a recovery in the Latin American economy has also not begun at this time. Until some of these issues are resolved, we continue to take a cautious outlook for the second half of the year, although we do anticipate that fourth quarter revenues will be higher than the current period as a result of the contribution of Angel revenues." Netro Corp.

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