Aether Systems Inc. of Owning Mills, MD, reported its first quarter results as well as massive write-downs related to acquisitions that were made last year.

Even though revenues rose to $30.7-million for the quarter, compared with $5.4-million for the same quarter last year, net losses dropped to $1.2-billion for the first three months of this year, compared with $33.3 million for the 2000 quarter.

With a positive demeanor, chairman and CEO David Osos, said, "With revenues at an all-time high and more and more companies in diverse industries turning to Aether for wireless solutions, we remain extremely upbeat about our position in the marketplace."

After a year of completing several acquisitions coupled with declining valuations for high tech companies, the Owning Mills-based company has had to take more than a $1-billion in charges to write down the value of its investments.

Losses included non-cash impairment charges of $959.4-million to write down goodwill associated with acquisitions for 2000 and non-cash charges of $88.8-million to write down for other company investments.

Commenting the non-cash charges and one-time adjustments, Osos said, "By absorbing a series of significant one-time charges related to acquisitions and investments made in 2000, we are able to move forward with a clean slate. We do so as the recognized industry leader with significant cash reserves. As we evolve to a software licensing model and the market for mobile and wireless solutions continues to grow, Aether is extremely well positioned for long-term success."

The company also highlighted its investment in Aether Fusion™ technology foundation, which unifies a broad array of Aether and industry standard technology components. Based on the high margin software licensing model, Aether Fusion could deliver a greater percentage of revenue to the company, helping it along the path toward profitability.

For more information: http://www.aethersystems.com/news_events/index.asp

Mobileinfo Comments and Advisory: There are a number of conclusions we can draw from Aether's financial and marketing performance. Number one, heady days of last year when Aether very valiantly acquired a lot of companies are over. They must face hard facts of business life in building and operating profitably a large multi-domain systems integration company. Aether was lucky in getting investor's cash, rather than a bank loan. It will take them a long time to build a revenue stream that will give these investors any dividend in the near future. Fortunately, the second conclusion is that Aether is in the right space of systems integration which is growing. They have strong building blocks, technology components and technical expertise to deliver on its vision of building well-integrated end-to-end solutions. Third conclusion is that operating profitability for Aether will come before return on investment on investor's original equity.