Aether Systems, Inc., a provider of wireless data products and services, announced March 18 that it has expanded its products, services, and customer base in its Transportation & Logistics division through the acquisition of certain assets and licenses from @Track Communications, Inc.
Based in Richardson, Texas, @Track is a provider of wireless-based vehicle fleet management and intelligent mobile-asset-tracking solutions.
Under terms of the $15 million agreement with @Track, Aether will assume management of the portion of the @Track product suite that provides solutions for the long-haul trucking and asset tracking industries. Through its existing product suite including MobileMax2 and e-Mobile, Aether currently has a strong presence in the transportation industry with over 200 customers and more than 20,000 subscribers. With this agreement, Aether now has the opportunity to support and retain the business of approximately 400 new customers representing an additional subscriber base of more than 25,000.
“This agreement demonstrates Aether’s ability to execute on its plan to invest in core areas of strength, including Transportation & Logistics, Mobile Government and Enterprise Solutions,” said Chairman and CEO Dave Oros. “The outstanding products and services that we have added bring an EBITDA positive revenue stream with good gross margins and will enhance Aether’s ability to address the estimated 10 million vehicles in the U.S. commercial trucking market*. What’s more, the asset tracking and fleet management products that we have added enhance not only our Transportation and Logistics division, but are also applicable to other areas including Homeland Security and Enterprise Solutions.”
Aether Systems Announces Addition of New Transportation Products, Services and Customers Following Agreement With @Track Communications
Under terms of the sale, Aether acquired assets and related license rights to the following products and services:
-a trailer-tracking product featuring Cellemetry® Data Service technology, that allows users to monitor the location and status of their trailer fleets. Integrated sensors can detect whether a trailer is loaded or empty, whether it is connected or disconnected from a tractor and whether its doors are open or closed.
– a GPS asset tracking solution featuring Cellemetry® Data Service technology, that is ideally suited for small fleets to improve management of their dispersed mobile assets.
– an information management system that provides trucking companies with support for a wide variety of operational needs including electronic data interchange (EDI) for load tendering, billing, shipment status, funds transfer, dispatch, logs, vehicle maintenance, and customer service.
Aether and @Track will also work together to support the customer base of several hundred long-haul trucking companies and thousands of users of @Track’s HighwayMaster Series 5000 (HM 5000) product. HM 5000 is a fleet management solution combining voice and data communications with satellite-based GPS location technology.
Under terms of the agreement, @Track will assign to Aether all service revenues from HM 5000 customers following closing. Aether, in turn, will reimburse @Track for the network and airtime service costs related to providing the HM 5000 service. Over time, Aether will continue to provide customer care support for the HM 5000 customers while working with new customers to introduce them to Aether’s enhanced products and services, according to Bill Hannon, president of Aether Transportation & Logistics.
“Aether Systems is committed to serving the wireless communications needs of the transportation industry and this agreement is another important step toward this goal,” Hannon said. “We have strengthened our business by adding not only new products and services, but also new customers who already understand the value of wireless communications. Aether is uniquely positioned to offer a greater choice of technology and solutions to an industry that has not historically had as many options.”
In addition to the relationships with new customers, Aether will gain a team of customer service, business operations and product management employees, according to Hannon.
“This agreement with Aether is another key step in @Track’s business strategy to focus its resources on aggressively penetrating the metro marketplace with Minorplanet VMI, which we believe is the key to @Track’s future growth,” said Jana Ahlfinger Bell, @Track’s president and chief executive officer. “In addition, we will continue to provide mobile communication solutions to member companies of SBC Communications, Inc., our largest metro marketplace customer”.
“At the same time, we will help to ensure that our long-haul trucking customer base will continue to receive quality service and support for their HM5000 mobile units, as well as provide the opportunity for these customers to move to the next-generation products and services of Aether, a company that is strategically committed to the businesses of long-haul trucking data and voice communications and intelligent asset-tracking solutions,” added Bell.
At the closing of the $15 million transaction, @Track received $3 million in cash, of which $1 million will be held in escrow and released to @Track over a 12-month period. $12 million was paid in the form of a note that is payable, at Aether's option, in either preferred stock convertible into registered common stock of Aether that could be sold over the next two quarters, or cash.
Management Guidance (Including This Transaction)
Aether also announced updated revenue and operating expense guidance for the first half 2002 as well as operating expense guidance for the second half of 2002.
In Q1 2002, Aether said it expects revenues of approximately $23 million and operating expenses in the low $40s million range.
In Q2, 2002, Aether said it expects revenues to be approximately $27 million, which will include core growth, and operating expenses to decrease to the mid to upper $30s million range.
By Q4 2002, Aether said it expects continued revenue growth and operating expenses to continue to trend downward to the upper $20s million range.
“Aether’s aggressive cost-reduction efforts will result in significantly reduced operating expenses," said Aether Chairman and CEO Dave Oros. “They were difficult yet necessary measures that did have a short-term impact on revenue. We now look forward to growth. The new products we have added through this agreement with @Track, as well as new Aether products targeting the mobile workforce including field service and sales force automation, will help fuel this growth. We are focusing on our core areas of strength while broadening our product set and maintaining our focus on cost containment,” Oros said.
About Aether Systems
Aether Systems says it helps enterprise customers improve efficiency and profitability by providing the services, software and support necessary to extend existing and future applications from the desktop to any wireless device.
Through Aether Fusion™, Aether's wireless enabling technology foundation, Aether develops, deploys and manages wireless solutions built on industry standard technology and backed by Aether's expertise in wireless hosting, software and services.
Aether says it provides the worlds of business and government with a single source for reliable, scalable and cost effective wireless solutions.
For more information, visit www.aethersystems.com
About @Track Communications
@Track Communications (www.at-track.com
) provides intelligent wireless communications products and services by combining wireless data and voice technologies with GPS-satellite-tracking capabilities.
Headquartered in Richardson, Texas, the company offers mobile communications, emergency dispatch and fleet management systems to a wide variety of companies, including member companies of SBC Communications.