Aether Reports Lower Q1 LossAether Reports Lower Q1 Loss

Aether Systems reports revenues of $29.2M, up from $23.7M in 1Q02, for a net loss of $12.4M ($0.29 per share), up from a loss of $55.6M ($1.32)

May 7, 2003

3 Min Read

OWINGS MILLS, Md. -- Aether Systems, Inc. (Nasdaq: AETH), a leading provider of wireless and mobile data solutions, today reported financial results for the first quarter ended March 31, 2003. Revenues for the first quarter were $29.2 million. The results include subscriber revenue of $19.0 million, engineering services revenue of $79,000, software product revenue of $5.8 million, and device sales of $4.3 million. In the same period last year, revenues were $23.7 million, including subscriber revenue of $12.3 million, engineering services revenue of $1.7 million, software product revenue of $6.0 million, and device sales of $3.7 million. In Q4 2002, revenues were $29.5 million.

Based on Generally Accepted Accounting Principles (GAAP), net loss including non-cash charges, was ($.29) per share or ($12.4 million) in Q1 2003. In the same period last year, net loss was ($1.32) per share or ($55.6 million). Aether reported a Q1 2003 net operating loss, excluding certain non-cash and other charges, of ($0.22) per share or a total of ($9.3 million). These results were a significant improvement over management's first quarter 2003 guidance provided in its fourth quarter 2002 results press release. In the same period last year, Aether reported a net operating loss, excluding certain non-cash and other charges, of ($0.82) per share or a total of ($34.5 million). Non-cash and other charges includes restructuring charges associated with Aether's expense reduction efforts, the amortization of intangibles and other non-cash items primarily relating to acquisitions, the Company's share of losses in joint ventures under equity method accounting, and non-cash expenses relating to options and warrants. Aether considers net operating loss, excluding certain non-cash and other charges, to be an important metric of performance because it reflects the Company's actual operational performance. Additionally, net operating loss, excluding certain non-cash and other charges, is an important metric used by investors to evaluate the performance of the Company and is the measurement investment analysts use to create consensus estimates for the Company.

"Aether continues to move closer to profitability," said Chairman and CEO Dave Oros. "This quarter marks two years of steady improvement in many key financial metrics including gross margins and adjusted operating expenses (consisting of research and development, general and administrative, and selling and marketing costs). For the seventh consecutive quarter, we have shown improvement in operating loss per share before non-cash and other charges. The Company has demonstrated resiliency through a challenging environment and we continue to market and sell proven solutions in areas such as asset monitoring and public safety. Aether will continue to strengthen the areas of our business that directly contribute to the bottom line, while continually evaluating our presence in areas that may not sufficiently enhance our path to profitability."

Based on Generally Accepted Accounting Principles (GAAP), operating expenses (which include research and development expenses, general and administrative expenses, selling and marketing expenses, depreciation and amortization, option and warrant expense, impairments of intangibles and other assets, early extinguishment of debt, and restructuring charges) were $25.4 million in Q1 2003. By comparison, operating expenses were $36.0 million in Q4 2002 and $57.8 million in Q1 2002. Adjusted operating expenses (consisting of research and development, general and administrative, and selling and marketing costs) continued to decrease for the eighth consecutive quarter, improving from $21.2 million in Q4 2002 to $19.5 million this quarter. In Q1 2002, adjusted operating expenses were $36.2 million. Aether has reduced adjusted operating expenses by over 45 percent from Q1 2002. Aether considers adjusted operating expenses that consist of research and development, general and administrative, and selling and marketing costs to be a direct measurement of a company's operations, as it excludes the effects of non-cash charges.

Management Guidance

For Q2 2003, Aether expects revenues of approximately $29 million, plus or minus 2 percent, with a return to slight revenue growth in Q3. For Q2 and Q3, the Company expects further improvements in operating loss, excluding certain non-cash and other charges, as Aether executes its plan to reach profitability.

Aether Systems Inc.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like